$196,057 for the three months ended March 31, 2020, a decrease of $154,615, or 79%. Gross profit was $128,991 for the three months ended March 31, 2021, compared to $259,782 for the three months ended March 31, 2020, a decrease of $130,792, or 50%. \nCost of revenue as a percentage of revenues was 24% for the three months ended March 31, 2021, compared to 343% for the three months ended March 31, 2020. \n\nGeneral and administrative expenses were $716,087 for the three months ended March 31, 2021, compared to $207,632 for the three months ended March 31, 2020. In the three months ended March 31, 2021, general and administrative expenses consisted mainly of consulting fees $172,500, professional fees $368,960, salary and wages $30,446, advertising $82,729, and postage $7,625. In the three months ended March 31, 2020, general and administrative expenses consisted mainly of professional fees $15,122, consulting fees $73,754, salary and wages $39,727, postage $7,501, advertising $19,551, and transfer agent and filing fees of $1,470. \nOther Income (Expense) \nOther income (expense) was $(706,540) for the three months ended March 31, 2021, compared to $572,660 for the three months ended March 31, 2020, a decrease of $1,279,200, or 223%. In the three months ended March 31, 2021, other income (expense) consisted of interest expense, net of interest income of $(15,759) and change in fair value on derivative of $(690,780). Change in fair value of derivative was related to the conversion of convertible debts into common stock shares \nIn the three months ended March 31, 2020, other income (expense) consisted of interest expense, net of interest income of $(42,476) and change in fair value on derivative of $615,136. \n### Net Income (Loss) \nNet income (loss) was $(1,293,636) and $624,811, or $0.00 and $0.01 per share, for the three months ended March 31, 2021 and 2020. \nOur net income (loss) various from period to period primarily because of the change in fair value on derivative. \n\nIntroduction \nDuring the three months ended March 31, 2021, we were unable to generate sufficient revenues and had negative operating cash flows. , and as of March 31, 2021 was $232,932. The increase in cash on hand was primarily from our net cash used in operating activities of $(635,261), offset by net cash provided by financing activities of $846,880. Our monthly cash flow burn rate for 2020 (not including inventory purchases) was approximately $192,000, and for the three months ended March 31, 2021 it was approximately $212,000. We have strong short and medium term cash needs. We anticipate that these needs will be satisfied through increased revenues and the issuance of debt or the sale of our securities until such time as our cash flows from operations will satisfy our cash flow needs. \nOur cash, current assets, total assets, current liabilities, and total liabilities as of March 31, 2021 and December 31, 2020, respectively, are as follows: \nOur total current assets and total assets increased during the three months ended March 31, 2021 primarily as a result of our increase in cash of $173,731 and inventory of $61,961. Our total current and total liabilities increased by $1,070,436 during the three months ended March 31, 2021 primarily because of an increase in convertible debt of $340,000, derivative liabilities of $690,780, and accrued liabilities of $50,298. Our accumulated deficit increased during the three months ended March 31, 2021 by $1,293,636 to $14,250,134. \n\n### Cash Requirements \nOur cash on hand as of March 31, 2021 was $232,932. Based on our current level of revenues and monthly burn rate of approximately $212,000 per month, we will need to continue to fund operations by raising capital from the sale of our stock and debt financings. \nSources and Uses of Cash \n### Operating Activities \nWe had net cash used in operating activities of $(635,261) for the three months ended March 31, 2021, compared to $(175,395) for the three months ended March 31, 2020. We use our cash for normal business operations. Our net cash used in operating activities for the three months ended March 31, 2021 consisted of our net loss of $1,293,636, plus a decrease in inventory of $61,961, offset by a change in fair value on derivative liability of $690,780 and accrued interest payable of $50,298. \nInvesting Activities \nWe had $(37,888) in cash flows provided by investing activities for the three months ended March 31, 2021, compared to $zero for the three months ended March 31, 2020. \n### Financing Activities \nOur net cash provided by financing activities for the three months ended March 31, 2021 was $846,880, compared to $109,607 for the three months ended March 31, 2020. Our net cash provided by financing activities consisted of proceeds from the issuance of common stock of $506,880 and proceeds from the issuance of convertible debt of $340,000. \n\n### Introduction \nWe had revenues of $1,276,559 for the year ended December 31, 2020, as compared to $748,377 for the year ended December 31, 2019, an increase of $528,182, or 71%. Our cost of revenue was $1,855,001 for the year ended December 31, 2020, as compared to $524,494 for the year ended December 31, 2019, an increase of $1,330,506, or 254%. Our cost of revenue exceeded revenue for the year ended December 31, 2020 because we built up our inventory of bergamot product. \nRevenues and Net Operating Loss \nOur revenues, operating expenses, and net operating loss for the years ended December 31, 2020 and 2019 were as follows: \n### Revenues \nWe had revenues of $1,276,559 and $748,377 for the years ended December 31, 2020 and 2019, respectively, an increase of 71%. \nCost of Revenue \nCost of revenue was $1,855,001 and $524,494 for the years ended December 31, 2020 and 2019, respectively, an increase of 254%, and consisted of wholesale product costs and packaging. Our cost of revenue exceeded revenue for the year ended December 31, 2020 because we wrote off $1,389,991 in raw bergamot product. \n\nGeneral and administrative expense was $1,474,891 and $1,163,745 for the years ended December 31, 2020 and 2019, an increase of $311,146, or 27%. The increase was related to our acquisition of UBN, and increased administrative costs associated with being a public company. In the year ended December 31, 2020, general and administrative expenses consisted main of consulting of $607,197, selling expenses of $239,296, accounting and legal fees of $192,198, salary and wages of $156,250, and transfer agent and filing fees of $41,431. In the year ended December 31, 2019, general and administrative expense consisted mainly of consulting $435,357, selling expenses of $114,680, salary and wages of $158,950, transfer agent and filing fees of $8,002, and accounting and legal fees of $216,546. \nImpairment of Assets \nFor the year ended December 31, 2020, we recorded an impairment of the goodwill in the UBN acquisition of $1,579,883. \n### Net Operating Gain/Loss \nAs a result of the items discussed above, our net operating loss was $3,633,216 and $939,863 for the years ended December 31, 2020 and 2019, respectively, a gain of $2,693,353. \nOther Income and Expense \nOther income (expense) was $1,056,841 and $1,572,639 for the years ended December 31, 2020 and 2019, respectively, a decrease of $515,798. \n### Net Gain/(Loss) \nOur net gain (loss) for the year ended December 31, 2020 was $(2,576,375), or $(0.01) per share, and our net gain (loss) for the year ended December 31, 2019 was $632,776, or $0.01 per share. \n\n### Introduction \nDuring the years ended December 31, 2020 and 2019, we had negative operating cash flows. We anticipate that these needs will be satisfied through the issuance of debt or the sale of our securities until such time as our cash flows from operations will satisfy our cash flow needs. With the acquisitions of BergaMet and UBN, we expect to see an increase in revenues over the next few years that will help us maintain the cash we need to operate our business. However, we have incurred additional expenses in these acquisitions and the additional costs to be incurred through this expansion of our operations will increase our need for additional cash flow. \nOur cash, current assets, total assets, current liabilities, and total liabilities as of December 31, 2020 and 2019 are as follows: \nOur cash decreased by $74,250 as of December 31, 2020 as compared to December 31, 2019. Our total current assets decreased by $750,925, as a result of our decrease in inventory. Our total assets decreased by $334,096 despite our increase in patents/trademarks of $425,877 from the UBN acquisition. \nOur current and total liabilities decreased by $4,053,532, from $4,315,136 as of December 31, 2019 to $261,604 as of December 31, 2020. Our total liabilities as of the year ended December 31, 2020 consisted primarily of notes payable related party of $170,866 and accounts payable of $64,836. \n\n### Cash Requirements \nWe anticipate that these needs will be satisfied through the sale of our securities until such time as our cash flows from operations will satisfy our cash flow needs. \nSources and Uses of Cash \n### Operations \nOur net cash used in operating activities for the years ended December 31, 2020 and 2019 was $1,902,758 and $1,730,788, respectively, an increase of $171,970. Our net cash used in operating activities for the year ended December 31, 2020 consisted primarily of a net loss of $2,576,375, plus a change in fair value on derivative liability of $1,053,186 and accrued interest to related party of $490,703 offset in part by impairment of goodwill of $1,579,883. Our net cash used in operating activities for December 31, 2019 consisted primary of net income of $632,776, offset by inventory expense of $(3,080,658) and a change in fair value on derivative liability of $(1,652,931). \nInvestments \nOur cash flow provided by (used in) investing activities for the years ended December 31, 2020 and 2019 was $(115,740) and $56,310, respectively, a decrease of $172,050. The decrease in 2020 was primarily due to the addition of patents and trademarks. \n### Financing \nOur net cash provided by financing activities for the years ended December 31, 2020 and 2019 was $1,944,248 and $1,807,444, respectively, an increase of $136,804. The increase in 2020 was primarily due to proceeds from the issuance of common stock of $4,405,791, offset by proceeds from the issuance of convertible debt of $(1,501,876) and proceeds from issuance of notes payable - related party of $(880,000). \n\nGAAP requires management to make estimates and assumptions that affect the reported amounts in our consolidated financial statements and related notes. Our significant accounting policies are described in Note 2 to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2018. Management bases its estimates on historical experience and on various other assumptions it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results may differ from these estimates and such differences may be material. \nManagement considers the following policies critical because they are both important to the portrayal of our financial condition and operating results, and they require management to make judgments and estimates about inherently uncertain matters. \n### Use of Estimates \nActual results could differ from these good faith estimates and judgments. \n\nOur management has considered all recent accounting pronouncements issued since the last audit of our financial statements. Our management believes that these recent pronouncements will not have a material effect on our financial statements. \nITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA \n\nTo the shareholders and the board of directors of Healthy Extracts Inc. (Formerly Grey Cloak Tech, Inc.) \n\nWe have audited the accompanying consolidated balance sheets of Healthy Extracts Inc. (the \"Company\") as of December 31, 2020 and 2019, the related statements of operations, stockholders' equity (deficit), and cash flows for the years then ended, and the related notes (collectively referred to as the \"financial statements\"). \nBasis for Opinion \nWe are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (\"PCAOB\") and are required to be independent with respect to the Company in accordance with the<|endoftext|>A reduction in force. \nExecutives are entitled to full acceleration of unvested RSUs in the event of a termination of employment due to death or disability, or upon a termination of employment by the Company other than for cause or by the executive for good reason, in each case within two years following a change in control. For the unvested PSUs, acceleration occurs upon a change in control (except to the extent the Committee provides for a replacement award that satisfies certain requirements specified in the PSU award agreement, in which case the award will remain outstanding after the change in control and subject to acceleration in connection with a qualifying termination of the holders employment). \n### RESTORATION PLAN \nUnder our Restoration Plan, an executives Company matching account and Company service-based account become fully vested on, among other events, a change in control or the date of the executives death or disability. Mr. Morgan is 100% vested in his Restoration Plan accounts as of December31, 2020. Accordingly, none of the amounts in his Company matching accounts and Company service-based accounts would be subject to accelerated vesting. \nCEO PAY RATIO \nPursuant to the Exchange Act, we are required to disclose in this proxy statement the ratio of the total annual compensation of our CEO to the median of the total annual compensation of all of our employees (excluding our CEO). Based on SEC rules for this disclosure and applying the methodology described below, we have determined that our CEOs total compensation for 2020 was $1,977,204, and the median of the total 2020 compensation of all of our employees (excluding our CEO) was $50,823. Accordingly, we estimate the ratio of our CEOs total compensation for 2020 to the median of the total 2020 compensation of all of our employees (excluding our CEO) to be 39 to 1. \nApplicable SEC rules permit us to use the same median employee in calculating the pay ratio above as the median employee we identified in 2020 in presenting the pay ratio in our proxy statement for our annual meeting of stockholders held in 2020 (the 2020 median employee) if there have been no changes that we reasonably believe would significantly affect this pay ratio disclosure. We believe that there have been no changes to our employee population or compensation arrangements that would result in a significant change to the pay ratio disclosure. Accordingly, we used the 2020 median employee to calculate the pay ratio above. The median employees total annual compensation for 2020 used in presenting the pay ratio above was determined using the same rules that apply to reporting the compensation of our NEOs (including our CEO) in the Total column of the 2020 Summary Compensation Table. \nWe note that, due to our permitted use of reasonable estimates and assumptions in preparing this pay ratio disclosure, the disclosure may involve a degree of imprecision, and thus this ratio disclosure is a reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation S-K using the data and assumptions described above. The SEC rules for identifying the median compensated employee and calculating the pay ratio based on that employees annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions. As such, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies may have different employment and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios. \n\nThe compensation reflected below summarizes the compensation earned by or paid to our non-employee directors for services as members of the Board during fiscal year 2020. Directors who were also our employees did not receive any compensation for their service as directors. \n\n(1) \nMessrs. Avril, Kahn, Riley, and Siegel and Ms. Dubin resigned as directors effective September 2, 2020. Ms. Stahl and Messrs. Moeller and Tato became directors effective September 2, 2020. \n(2) \nMessrs. Avril, Howe, Kahn, and Siegel, and Ms. Dubin, were awarded 38,000 fully vested shares of our common stock on August 25,2020. Represents the aggregate grant date fair value of stock awards granted to the non-employee directors in 2020 computed in accordance with FASB ASC Topic 718. For additional information on the valuation of our equity awards, see Note 17 to our audited financial statements for the fiscal year ended December 31, 2020, included in our annual report on Form 10-K for the year ended December 31, 2020 10-K and Stock-Based Compensation. \n### Fees Earned or Paid in Cash \nUnder our current director compensation program, which was recommended by the Compensation Committee and approved by the Board, non-employee directors are eligible to receive an annual retainer of $85,000, paid in quarterly installments and prorated for partial terms. \nThe chairs of Board committees, and any Lead Independent Director or independent Chairman of the Board, received additional annual retainers, paid in quarterly installments, as follows (prorated for partial terms): the chair of the Audit and Finance Committee: $20,000; the chair of each of the Compensation and Governance Committees: $10,000; the Lead Independent Director (if any): $20,000; and the Independent Chairman (if any): $100,000. \n### Stock Awards \nOur stock ownership guidelines require that non-employee directors own stock valued at five times their annual retainer, and they have five years from the date of joining the Board to acquire the required number of shares. All directors are currently in compliance with our stock ownership guidelines. \nIn addition to the cash payments provided to our directors, our practice has been for each non-employee director to receive an annual stock award in the form of a number of fully vested shares equal to $95,000 divided by the closing price of our common stock on the grant date, rounded down to the nearest whole share (and prorated for partial terms). Under our 2015 LTIP, directors may elect to defer payment of all or a portion of their stock awards, but none of the directors elected to do so. Messrs. Moeller, Stahl and Tato joined the Board during fiscal year 2020 and will receive their initial stock awards during fiscal year 2021. \n### Outstanding Option Awards \nAs of December 31, 2020, the following non-employee directors held the following numbers of outstanding stock options, each with an exercise price of $41.70 per share: Mr. Avril, 3,639; Ms. Dubin, 3,639; Mr. Kahn, 3,639; and Mr. Siegel, 2,729. No non-employee director held any other outstanding awards on that date. \nConsulting Arrangement with Henry Bartoli \nMr. Bartolis employment with us, and his service as our Chief Strategy Officer, ended as of December 31, 2020. Mr. Bartoli entered into a consulting agreement with The Babcock & Wilcox Company in November 2020 pursuant to which he continues to provide services through 2021 (or until the completion of services, whichever occurs first), which may be terminated by either party with thirty days written notice. As consideration for his consulting services, during the period of the consulting engagement Mr. Bartoli (1) receives a $18,750 monthly consulting fee, (2) received 50,000 restricted stock units which will vest 50% on June 30, 2021 and 50% on December 31, 2021, subject to Mr. Bartolis continued service through the applicable vesting date, (3) has an opportunity to earn incentive awards of $50,000 for each specified project booked or completed during 2021 and while Mr. Bartoli is serving as a consultant, and (4) an additional incentive opportunity based on achievement of certain gross margin targets on one of the specified projects reference in clause (3), up to a maximum incentive opportunity of $250,000 (including $50,000 of the incentive award opportunity referenced in clause (3)) for that specified project. The total incentive opportunity if all specified projects are booked and the maximum gross margin target is achieved on one of the projects is $350,000. \nItem 12. \n\nThe following table sets forth information with respect to the beneficial ownership of our common stock by the following: each stockholder who beneficially owns more than 5% of our common stock; each current executive officer named in the 2020 Summary Compensation Table; each of our directors; and all of our executive officers, director nominees and directors as a group. \nFor the institutional beneficial owners listed below, we have based their respective number of shares of our common stock beneficially owned on the most recently reported Schedule 13D or 13G filed by such owners. \nFor the executive officers and directors listed below, we have based their respective number of shares of our common stock on the number of shares beneficially owned as of March 23, 2021 (unless noted otherwise). The number of shares beneficially owned by each stockholder, director or officer is determined according to the rules of the SEC and the information is not necessarily indicative of beneficial ownership for any other purpose. The mailing address for each of the directors and executive officers is 1200 East Market Street, Suite 650, Akron, Ohio 44305. \n* \nRepresents less than 1.0 percent \n(1) \nPercent is based on 85,663,813 outstanding shares of our common stock on March 23, 2021. \n(2) \nThe Schedule 13D/A reports beneficial ownership of 10,720,785 shares of our common stock by Vintage Capital Management, LLC and Kahn Capital Management, LLC, which each have sole voting power over zero shares and shared voting and dispositive power over 10,720,785 shares. The Schedule 13D/A reports beneficial ownership of 10,785,214 shares of our common stock by Brian R. Kahn who has sole voting and dispositive power over 64,429 shares and shared voting and dispositive power over 10,720,785 shares. The reporting persons address is 4705 S. Apopka Vineland Road, Suite 206, Orlando, FL 32819. \n(3) \nThe Schedule 13D/A reports beneficial ownership of 18,237,319 shares of our common stock by B. Riley Financial, Inc. which has shared voting and dispositive power over 5,776,423 shares and sole voting and dispositive power over 12,460,896 shares. The Schedule 13D/A reports beneficial ownership of 3,409,659 shares of our common stock by B. Riley Securities, Inc., which has shared voting and dispositive power over 4,409,659 shares. The Schedule 13D/A reports beneficial ownership of 2,370,764 shares of our common stock by B. Riley Capital Management, LLC, BRC Partners Opportunities Fund, LP and BRC Partners Management GP, LLC, which each have shared voting and dispositive power over 2,370,764 shares. The Schedule 13D/A reports beneficial ownership of 18,633,718 shares of our common stock by Bryant R. Riley, who had sole voting and dispositive power over 396,399 shares and shared voting and dispositive power over 18,237,319 shares. The reporting persons address is 21255 Burbank Blvd., Suite 400, Woodland Hills, CA 91367. Riley FBR, Inc. \n(4) \nShares owned by Mr. Avril include 3,639 shares of common stock that he may acquire on the exercise of stock options. \n(5) \nShares owned by Mr. Bartoli include 3,639 shares of common stock that he may acquire on the exercise of stock options. \n(6) \nShares owned by Ms. Dubin include 3,639 shares of common stock that he may acquire on the exercise of stock options. \n(7) \nShares owned by Mr. Kahn also include shares beneficially owned by Vintage Capital Management, LLC, as disclosed in footnote 2 above. \n(8) \nShares owned by Mr. Riley include shares beneficially owned by B. Riley Financial, Inc., as disclosed in footnote 3 above. Riley FBR, Inc. \n(9) \nShares owned by Mr. Siegel include 2,729 shares of common stock that he may acquire on the exercise of stock options. \n(10) \nShares owned by Mr. Morgan include 7,234 shares of common stock that he may acquire on the exercise of stock options. \n(11) \nShares owned by all directors, director nominees and officers as a group include 20,880 shares of common stock that may be acquired on the exercise of stock options and 2.25 shares of common stock held in The B&W Thrift Plan. Shares owned by Mr. Dziewisz include 4,118 shares of common stock that he may acquire on the exercise of stock options and 2.25 shares of common stock held in our Thrift Plan. \nItem 13. \n### DIRECTOR INDEPENDENCE<|endoftext|>[\n\nGp Strategies Corp\n]\n\n### EXPLANATORY NOTE \nReferences in this report to GP Strategies, the Company, we and our are to GP Strategies Corporation and its subsidiaries, collectively. This Amendment No. 1 on Form 10-K/A (the Amendment) amends our annual report on Form 10-K for the year ended December 31, 2020, originally filed on March 12, 2021 (the Original Filing). We are filing this Amendment to include the information required by Part III and not included in the Original Filing as we will not file our definitive proxy statement within 120 days of the end of our fiscal year ended December 31, 2020. In addition, in connection with the filing of this Amendment and pursuant to the rules of the Securities and Exchange Commission (SEC), we are including with this Amendment certain currently dated certifications. \nUnless expressly stated, this Amendment continues to speak as of the date of the Original Filing, and we have not updated the disclosures contained therein to reflect any events which occurred at a date subsequent to the filing of the Original Filing. \n### Part III \nItem 10. \nThe following table sets forth certain information regarding our directors and executive officers as of the date of this filing. \n_______________________ \n(1) \nMember of the Executive Committee. \n(2) \n\n(3) \nMember of the Nominating / Corporate Governance Committee. \n(4) \nMember of the Audit Committee. \n(5) \nMember of Government Security Committee. \n### Directors of the Registrant \nWe seek persons to serve as directors who possess qualifications and expertise that will enhance the composition of the Board, applying considerations set forth in our Corporate Governance Guidelines (a copy of which may be viewed on our website and is available in print, without charge, upon request to our Corporate Secretary). Those considerations include personal integrity, character, background, achievements, experience, leadership ability, intelligence, ability to make independent analytical inquiries, ability to exercise sound business judgment, potential conflicts of interest and independence, ability to devote adequate time and energy to Board activities, diversity of age, gender and ethnicity, and legal and regulatory requirements. \nThe following includes a brief biography of each member of our Board of Directors. Each biography includes information regarding the specific experience, qualifications, attributes or skills that led the Board of Directors to determine that the applicable director should be re-nominated or elected to serve as a member of our Board of Directors as of the date of this report. \nScott N. Greenberg was Chief Executive Officer of the Company from April 2005 until June 2020, at which time he stepped down from the CEO role and became a senior advisor to the Company. He has been Chairman of the Board since August 2018. He was President of the Company from 2001 until 2006, Chief Financial Officer from 1989 until 2005, Executive Vice President from 1998 to 2001, Vice President from 1985 to 1998, and held various other positions since joining the Company in 1981. Mr. Greenberg has served on the Board of Directors of VerifyMe, Inc. since December 2019. Mr. Greenberg was also a Director of Wright Investors Service Holdings Inc., from 2004 to 2015. Mr. Greenberg brings to the Board significant experience and expertise in management, acquisitions and strategic planning, as well as many years of finance and related transaction experience. Mr. Greenberg has served on our board of directors since 1987. Having been our Chief Executive Officer for over 15 years, he brings to the Board extensive knowledge of the Companys structure, history, major stockholders and culture. \nSamuel D. Robinson is President of Sagard Holdings ULC (\"Sagard\") and its subsidiary, Sagard Capital Partners Management Corporation, and a Vice President of Power Corporation of Canada (\"Power\"). He joined Sagard and Power in 2016 after an 18 year career at Goldman Sachs. Mr. Robinson currently serves on the board of Sagard. He holds a M. A. and a M. Phil., both from Christ Church, Oxford University. Mr. Robinson has served on our Board of Directors since August 2016 and was appointed Lead Independent Director in August 2018. Mr. Robinson brings to the Board experience in strategy, business operations, M&A, capital raising, and in working closely with leaders to maximize their own strategic and operational impact. \nDr. Tamar Elkeles is currently the Chief Human Resources Officer at XCOM Labs, Inc., a wireless technology company. Previously, she was Chief Talent Executive for Atlantic Bridge Capital. Prior to that she was the Chief People Officer at Quixey, Inc. from 2015 to 2016, and from 1992 to 2015, was a human resources executive leading learning, organization development and employee communications at Qualcomm, including 17 years as Qualcomm's Chief Learning Officer. She currently serves on the Board of Advisors of the Forbes School of Business & Technology at the University of Arizona and the Advisory Board for \"Chief Learning Officer\", a multimedia publication focused on the enterprise learning market. Previously, she was on the Board of Directors, and is still an active member of, the Association for Talent Development. Dr. Elkeles also serves as a strategic advisor to several start-up companies in the education technology sector. She holds a B.A. in both Psychology and Human Development from the University of Kansas, and both a M.S. and PhD in industrial and organizational psychology from the California School of Professional Psychology. Dr. Elkeles has served on our Board of Directors since August 2018 and brings experience as a Chief Learning Officer and human resource executive, and relationships with other learning executives at global Fortune 500 companies and in the overall human capital field. \nMarshall S. Geller was a Founder of St. Cloud Capital, a Los Angeles based private equity fund, and Senior Investment Advisor from December 2001 until September 2017. He has spent more than 50 years in corporate finance and investment banking, including 21 years as a Senior Managing Partner of Bear, Stearns & Co., with oversight of all operations in Los Angeles, San Francisco, Chicago, Hong Kong and the Far East. Mr. Geller is currently on the Board of Directors of UCLA Health System and VerifyMe, Inc. and is on the Board of Governors of Cedars Sinai Medical Center, Los Angeles. Mr. Geller also serves on the Dean's Advisory Council for the College of Business & Economics at California State University, Los Angeles. Previously Mr. Geller was a director of Guidance Software, Inc., National Holdings Corporation, California Pizza Kitchen and Wright Investors' Services Holdings, Inc. Mr. Geller has served on our Board of Directors since 2002. As the managing partner of a private equity fund and a director of other public companies, Mr. Geller brings to the Board many years of experience and expertise as an investor in and adviser to companies in various sectors. \nDr. Steven E. Koonin is a University Professor at New York University (NYU), where he is also Professor of Information, Operations, and Management Sciences in the Stern School of Business and of Civil and Urban Engineering in the Tandon School of Engineering. Dr. Koonin served as the Founding Director of NYU's Center for Urban Science and Progress from April 2012 through August 2018. Prior to joining NYU, Dr. Koonin served as Undersecretary for Science at the U.S. Department of Energy from May 2009, following his confirmation by the U.S. Senate, until November 2011. Before joining the government, Dr. Koonin spent five years, from March 2004 to May 2009, as Chief Scientist for BP, p.l.c. From September 1975 to July 2006, Dr. Koonin was a professor of theoretical physics at Caltech and was the institutes Provost from February 1995 to January 2004. Dr. Koonin was a director of CERES, Inc., a publicly traded company pursuing genetically enhanced bioenergy crops, from 2012 to 2015. His memberships include the U.S. National Academy of Sciences, the American Academy of Arts and Sciences, the Council on Foreign Relations, and previously the Trilateral Commission. He has been a member of the JASON advisory group from July 1988 to May 2009, and from November 2011 to present, and served as the groups chair from 1998 to 2004. He also has served as an independent governor of the Lawrence Livermore National Security LLCs since July 2012, of the Los Alamos National Laboratory LLC from 2012 to 2018, and of the Sandia Corporation from 2016 to 2017, as well as serving on the Secretary of Energys Advisory Board from 2013 to 2016. Dr. Koonin holds a B.S. in Physics from Caltech and a Ph.D. in Theoretical Physics from MIT and has been a Trustee of the Institute for Defense Analyses since 2014. Dr. Koonin has served on our Board of Directors since June 2016 and brings extensive experience in science, education, energy and government to our Board of Directors. \nJacques Manardo is a former CEO and Managing Partner of Deloitte Europe. After 33 years in the audit and consulting profession, Mr. Manardo retired in 2001 from Deloitte, where he was the founding partner of the French practice, the CEO for Europe and global managing partner for services to the firm's top 300 clients. In 2001, he became an angel investor, director and advisor, and has since conducted special consulting assignments on mergers and acquisitions and other complex transactions. Mr. Manardo is currently a board member of a private investment fund, Yam Invest, in Amsterdam, and a trustee of the French Institute-Alliance Francaise, Chair of the Finance Committee in New York City. He was a member of the Board of the Banking and Insurance Fortis Group from 2004 until 2009, was a senior advisor to HIG, a Miami based hedge fund from 2006 to 2012, and previously served on the boards of several other commercial and non-profit entities. Mr. Manardo is a CPA and a Doctor in Law of Paris University. Mr. Manardo has served on our Board of Directors since August 2018 and brings previous board experience and business leadership experience in the global services industry, which we believe will be beneficial as we continue to expand globally. \nRichard C. Pfenniger, Jr is currently a private investor who previously served as a senior executive at several companies. He served as Interim Chief Executive Officer of Vein Clinics of America, Inc. from May 2014 to February 2015 and as Interim Chief Executive Officer of Integramed America, Inc., a manager of outpatient fertility centers, from January to June 2013. From 2003 until 2011, Mr. Pfenniger served as the Chairman of the Board, President and Chief Executive Officer of Continucare Corporation, a provider of primary care physician services. Mr. Pfenniger was the Chief Executive Officer and Vice Chairman of Whitman Education Group, Inc., a provider of career-oriented higher education, from 1997 until 2003. From 1994 to 1997, Mr. Pfenniger served as the Chief Operating Officer of IVAX Corporation, and from 1989 to 1994 he served as the Senior Vice President-Legal Affairs and General Counsel of IVAX Corporation, a multi-national pharmaceutical company. Mr. Pfenniger currently serves as a Director of TransEnterix, Inc. (a medical device company) and Opko Health, Inc. (a multi-national pharmaceutical and diagnostics company). Previously, he was a director of BioCardia, Inc. (a regenerative medicine company) and Wright Investors' Services Holdings, Inc. Mr. Pfenniger also serves as Vice Chairman of the Board of Trustees of the Frost Science Museum in Miami, Florida. Mr. Pfenniger holds a B.B.A. from Florida Atlantic University and a J. D. from the University of Florida. Mr. Pfenniger has served on our Board of Directors since 2005. Mr. Pfennigers prior experience as a Chief Executive Officer of a public company and prior experience in the education industry brings relevant experience managing a growth-oriented business and balancing the demands of clients, employees and investors. \nAdam H. Stedham became Chief Executive Officer in July 2020, after serving as Interim CEO from June 2020 and has been the President of the Company since November 2017. Prior to this role, he served as a Senior Vice President of GP Strategies since 2012 and as a Vice President from 2008 to 2012. Mr. Stedham has served as a leader of GP Strategies in roles of increasing responsibility since joining the company in 1997, including<|endoftext|>Require positive revenue growth in order to receive any payout of PSU and PSO awards. For Revenue CAGR at or below 0% or Change in EBIT as a % of Revenue below \n-4%, \nPSU/PSO payout is 0%. Payouts for intermediate results are determined by linear interpolation. For the PSU/PSO awards, EBIT is calculated as earnings before reduction for interest and taxes, subject to adjustments adopted by the Compensation Committee at the time the goals were set. \n### Relative TSR Modifier \nIn response to stockholder feedback, we refined the Relative TSR Modifier for fiscal year 2020 awards to eliminate the minimum payout feature for top quartile TSR results. Instead, for fiscal year 2020 awards, PSU and PSO payouts will be: \nReduced by 25percent if \n3-year \nTSR ranks below the 25 th percentile of Business Model peers. \n### Increased by 25percent if \n3-year \nTSR ranks above the 75 th percentile of Business Model peers. \n### Unchanged if \n3-year \nTSR ranks between 25 th and 75 th percentiles of Business Model peers. \nThe Business Model Peers were selected from companies in the healthcare industry based on ten financial and scope metrics, which include size, growth, margins, returns, reinvestment rates, R&D reinvestment rates, reinvestment effectiveness, asset intensity, economic profit volatility, and TSR. The peers selected were similar to Varian on at least five of the ten criteria. The Compensation Committee believes that the 48 companies in the Business Model Peer Group at fiscal year-end \n2020 represent a relevant and sufficiently broad group of companies for the purposes of calibrating the PSU/PSO performance matrix (presented above) and ranking Varian TSR for the Relative TSR Modifier. \n* \nApproved by the Committee but removed after being acquired or taken private during fiscal year 2018 to 2020. \n### Vesting of PSUs and PSOs \nIf the Merger is not consummated, all PSUs and PSOs earned will vest at the end of the three-year performance period provided the recipient is employed by the Company throughout the performance period, except in cases involving retirement, death, disability, a qualified termination that occurs in connection with a change in control, or if the award is not assumed in connection with certain corporate transactions. \nIf the Merger is consummated, because the awards are not being assumed, each PSO and PSU that is outstanding immediately prior to the effective time of the Merger will become fully vested, based on the target number of PSOs/PSUs, and be converted into the right to receive a cash payment equal to the product of (i)the Merger Consideration (less the applicable exercise price in the case of PSOs) and (ii)the target number of shares subject to the award. \nSettlement of PSUs and PSOs Awarded in Fiscal Year 2018 \nPSUs and PSOs granted in fiscal year 2018 were subject to attainment of revenue growth and EBIT margin goals with potential modification based on relative TSR results as summarized below. The number of shares earned from the fiscal year 2018 PSU and PSO awards was calculated as follows: \n### Matrix Results. \nThe number of PSUs and PSOs earned was calculated from the following performance matrix: \nRelative TSR Modifier \nThe relative TSR modifier for PSUs and PSOs granted in fiscal year 2018 (the \n### Relative TSR Modifier \n) provided for maximums and minimums for the number of PSUs and PSOs earned based on Varians \n3-year \nTSR rank relative to its Business Model Peers (see above). \n### A 100% payout maximum when Varians \n3-year \n### TSR ranks below 25 th percentile \nA 100% payout minimum when Varians \n3-year \n### TSR ranks above 75 th percentile \nThe Relative TSR Modifier did not apply if Varians \n3-year \n### TSR ranked between 25 th and 75 th percentiles \nPayout Calculation. \nVarian did not make any changes to the performance metrics or final results to offset the pandemic impact, despite the fact that the fiscal year 2018 PSUs/PSOs were trending significantly above target payout over the \n3-year performance period prior to the onset of the \nCOVID-19 pandemic. The Companys fiscal year 2018 to 2020 revenue growth and EBIT margin achievements, inclusive of the pandemic impact, resulted in a payout of 73.8% of target. Varians fiscal year 2018 to fiscal year 2020 TSR ranked 73 rd percentile among the Business Model Peers and therefore the TSR Modifier did not apply. \nThe number of fiscal year 2018 PSUs that were earned by each NEO in 2020 are summarized below: \n### Stock Options (SOs) \nThe stock options granted in fiscal year 2020 have an exercise price equal to the Companys closing stock price on the date of grant and have a seven-year term. The intended grant value was converted into stock options using the Black Scholes value and assumptions described in footnote5 of the Summary Compensation Table (refer to Summary Compensation Table below). \nIf the Merger is not consummated, the first 33 1/3% of the stock options will vest 12 months from the grant date, and the remainder vest in equal monthly installments during the following \n24-month period. A recipient must be employed by us throughout each vesting date for vesting to occur on such date, except in cases involving retirement, death, disability, a qualified termination that occurs in connection with a change in control, or if the award is not assumed in connection with certain corporate transactions. \nIf the Merger is consummated, in accordance with the terms of the 2005 Stock Plan and the Merger Agreement, all stock options granted during or prior to fiscal year 2020 that are outstanding immediately prior to the effective time of the Merger will become fully vested and be converted into the right to receive a cash payment equal to the product of (i)the Merger Consideration less the applicable exercise price and (ii)the number of shares subject to the stock option. No stock options are anticipated to be granted in fiscal year 2021. \n\nIf the Merger is not consummated, RSUs granted in fiscal year 2020 will vest and be settled in equal numbers of shares of our common stock on approximately the first, second and third anniversaries of the date of grant. The intended grant value was converted into RSUs using the Companys closing stock price on the date of grant. As is the case with stock options, a recipient must be employed by us through each vesting date for vesting to occur on such date, except in cases involving retirement (for grants made prior to August 2020), death, disability, or a qualified termination that occurs in connection with a change in control like the Merger. \nIf the Merger is consummated, in accordance with the terms of the 2005 Stock Plan and the Merger Agreement, RSUs granted during or prior to fiscal year 2020 that are outstanding immediately prior to the effective time of the Merger will become fully vested and be converted into the right to receive a cash payment equal to the product of the Merger Consideration and the number of shares subject to the RSUs. RSUs granted during fiscal year 2021 will convert at the effective time of the Merger to the right to a cash award equal to the product of the Merger Consideration and the number of shares subject to the RSUs and payable based on the original vesting schedule and terms. \n### Other Elements of Executive Compensation \nBecause our philosophy is to emphasize pay for performance, we provide retirement, group benefits and perquisites of relatively minor value to our executives. \n401(k) Contributions. \nThe Company makes matching contributions to the NEOs contributions to the Companys 401(k) plan, matched at the same level and subject to the same caps as for all employees. \n\nWe offer a Deferred Compensation Plan ( \nDCP \n) to certain employees, including eligible NEOs, under which participants may elect to defer a portion of their base salary and annual performance-based cash bonus. We offer the DCP because we believe it is a competitive element of compensation for eligible participants. \n### Group Benefits and Perquisites. \nOur NEOs are eligible to participate in the same employee benefit plans and on the same basis as all other Company employees. In addition, our NEOs receive limited supplemental benefits and perquisites. During fiscal year 2020, we provided (i)reimbursement to the CEO for financial counseling and reimbursement of up to $6,500 to other NEOs for financial counseling, and (ii)reimbursement of up to $4,000 for an annual executive physical. NEOs may participate in the Companys charitable giving program, in which the company will match donations dollar for dollar up to a maximum of $10,000 per employee per year. In addition, for employees including NEOs who choose to contribute to the Companys Political Action Committee, the contribution will be matched with a charity or educational institution contribution, dollar for dollar up to $5,000. Mr.Wilsons spouse and family members are permitted to ride along on the Companys leased aircraft when the aircraft is already going to a specific destination for a business purpose, provided there is no more than de minimis incremental cost. \nPursuant to our policy, the Company does not provide executives tax gross-ups or reimbursements for any taxable income from these benefits and perquisites, except for tax restoration benefits in connection with the relocation of new executives. \nChange in Control Agreements. \nWe maintain change-in-control agreements with 10 executives, including our NEOs, other than Mr. Bischoping. We entered into these agreements to attract and retain highly-qualified executives and to incentivize executives who might be involved in acquisition or merger discussions with another entity to make decisions that are in the best interest of the Company and our stockholders, without being unduly distracted by the impact of such a transaction on their personal situations. These agreements do not factor into our decisions surrounding the executives cash and equity compensation. \nThe change-in-control agreements are intended to provide an appropriate level of compensation for a specified time interval for executives who would likely be involved in activities regarding a change in control and are personally at risk for job loss in the event of a change in control. Our change-in-control agreements are double-trigger meaning that to receive benefits under the agreements there must be a change-in-control event and the executive must either: \n(1) Be terminated by us or the successor company without cause within a specified time interval in connection with a change in control, or \n(2) Terminate employment for good reason, as defined in the agreements, within a specified time interval in connection with a change in control. \nOn August1, 2020, the Company entered into amended and restated change-in-control agreements with each covered executive including our NEOs, other than Mr. Bischoping. The material terms of the restated change-in-control agreements are generally similar to those of the prior change-in-control agreements except that the restated agreements (1)extend the period of severance protection from 18 months following a change in control to 24 months following a change in control; (2)reduce the period of the COBRA benefits continuation of the severance benefits from 24 months following termination to 18 months following termination; (3)revise the definition of good reason; and (4)provide for make-whole payments to indemnify the NEOs for any negative economic impact resulting from the application of the excise tax under Section4999 of the Internal Revenue Code in connection with the Merger. These revisions resulted from a combination of planned changes identified prior to the Merger discussions as a result of a periodic market review, along with additional refinements in connection with the pending Merger to further ensure management continuity and stability and to ensure that covered executives are incented to make decisions that are in the best interest of the Company and our stockholders, without being unduly distracted by the impact of such a transaction on their personal situation. \nIn approving the excise tax make-whole payment provision, the Compensation Committee reviewed projections prepared by Company advisors of the expected impact of the excise tax in connection with the Merger, and concluded that the vagaries of the excise tax rules would result in an unintended and inequitably applied personal tax burden that could undermine the intended purpose of the change<|endoftext|>European works comprise at least thirty (30) percent of media service providers catalogs, and to require prominence of those works. \nOur failure to manage any of these risks successfully could harm our international operations and could have an adverse effect on our overall business and results of operations. \nWe are potentially subject to taxation related risks in multiple jurisdictions, and changes in U.S. tax laws, in particular, could have a material adverse effect on our business, cash flow, results of operations or financial condition. \nWe are a U.S.-based company potentially subject to tax in multiple U.S. and non-U.S. tax jurisdictions. Significant judgment will be required in determining our global provision for income taxes, deferred tax assets or liabilities and in evaluating our tax positions on a worldwide basis. While we believe our tax positions are consistent with the tax laws in the jurisdictions in which we conduct our business, it is possible that these positions may be overturned by jurisdictional tax authorities, which may have a significant impact on our global provision for income taxes. \nTax laws are dynamic and subject to change as new laws are passed and new interpretations of the law are issued or applied. In particular, the UnitedStates recently enacted significant U.S. federal income tax reform, and certain provisions of this new U.S. federal income tax law may adversely affect us. This new U.S. federal income tax law requires complex computations that were not previously provided for under U.S. tax law. Furthermore, this new U.S. federal income tax law requires significant judgments to be made in interpretation of the law and significant estimates in the calculation of the provision for income taxes. Additional interpretive guidance may be issued by the U.S. Internal Revenue Service, the U.S. Department of the Treasury or another governing body that may significantly differ from the Companys interpretation of this new U.S. federal income tax law, which may result in a material adverse effect on our business, cash flow, results of operations or financial condition. In addition, governmental tax authorities are increasingly scrutinizing the tax positions of companies. Many countries in the EU, as well as a number of other countries and organizations such as the Organization for Economic Cooperation and Development, are actively considering changes to existing tax laws that, if enacted, could increase our tax obligations in countries where we do business. If U.S. or non-U.S. tax authorities change applicable tax laws, our overall taxes could increase, and our business, financial condition or results of operations may be adversely impacted. \n### Risks Related to Human Resources \nWe may lose key employees or may be unable to hire qualified employees. \nWe rely on the continued service of our senior management and other key individuals, our Chairman and the founder of our predecessor CuriosityStream LLC, John Hendricks and our President and Chief Executive Officer, Clint Stinchcomb, members of our executive team and other key employees and the hiring of new qualified employees. In our industry, there is substantial and continuous competition for highly skilled business, product development, technical and other personnel. We may not be successful in recruiting new personnel and in retaining and motivating existing personnel, which may be disruptive to our operations. In addition, from time to time, there may be changes in our management team that may be disruptive to our business. If our management team, including any new hires that we make, fails to work together effectively and to execute our plans and strategies on a timely basis, our business could be harmed. Our effort to retain and develop personnel may also result in significant additional expenses, which could adversely affect our profitability. \n### Risks Relating to Ownership of Our Common Stock \nBecause there are no current plans to pay cash dividends on our Common Stock for the foreseeable future, you may not receive any return on your investment in our Common Stock unless you sell your shares of our Common Stock for a price greater than that which you paid for it. \nWe intend to retain future earnings, if any, for future operations, expansion and debt repayment (for any debt we may incur in the future) and there are no current plans to pay cash dividends on shares of our Common Stock for the foreseeable future. The declaration, amount and payment of any future dividends on shares of our Common Stock will be at the sole discretion of our Board. Our Board may take into account general and economic conditions, our financial condition and results of operations, our available cash and current and anticipated cash needs, capital requirements, contractual, legal, tax, and regulatory restrictions, implications on the payment of dividends by us to our stockholders or by our subsidiaries to us and such other factors as our Board may deem relevant. In addition, our ability to pay dividends is limited by covenants of our existing and outstanding indebtedness and may be limited by covenants of any future indebtedness we incur. As a result, you may not receive any return on an investment in our Common Stock unless you sell your shares of our Common Stock for a price greater than that which you paid for it. \n\n\nAs of May 5, 2021, we had 52,565,276 shares of our Common Stock outstanding. All of these shares are freely tradable without restriction or further registration under the Securities Act, except for shares of Common Stock held by certain of our affiliates, as that term is defined in Rule144 under the Securities Act (Rule144). \nIn connection with the Offering we consummated on February 8, 2021, our directors and executive officers entered into customary lock-up agreements with Bank of America Securities, Inc., the representative of the underwriters in the Offering, the term of which is 90 days following the pricing of the Offering (with the exception of certain directors who are subject to a 60-day lock-up). \nIn connection with the Business Combination, the directors and officers of Legacy CuriosityStream agreed with SAQN not to dispose of or hedge any of their common stock or securities convertible into or exchangeable for shares of our Common Stock, subject to certain exceptions for PIPE Shares. The term of this lock-up is 180days on October 14, 2020. \nPrior to the Business Combination, in connection with SAQNs IPO, the Sponsor agreed to a lock-up of the 3,593,750 shares that were originally issued to the Sponsor by SAQN in June 2019 for an aggregate purchase price of $25,000 in cash (and any shares of common stock issuable upon conversion thereof). On November 18, 2020, in connection with the Sponsors distribution of these shares to its members, each member agreed to become subject to this lock-up. The term of this lock-up is the earlier of one year or the date on which the last sale price of our Common Stock is at least $12 per share for any 20 trading days within a 30 trading-day period commencing March 13, 2021. All of these shares will be eligible for resale, subject to volume, manner of sale and other limitations under Rule144 on October 15, 2021 and once the lock-ups described above have expired or have been waived. \nIn addition, pursuant to the Investor Rights Agreement, dated October 14, 2020, by and among the Sponsor, SAQN, HFM, CuriosityStream Inc. and the officers and directors of Legacy CuriosityStream party thereto (the Investor Rights Agreement), the officers and directors party to the Investor Rights Agreement will have the right, subject to certain conditions, to require us to register the sale of their shares of our Common Stock under the Securities Act on or after April 12, 2021. By exercising their registration rights and selling a large number of shares, these stockholders could cause the prevailing market price of our Common Stock to decline. \nIn addition, the shares of our Common Stock reserved for future issuance under our Omnibus Incentive Plan will become eligible for sale in the public market once those shares are issued, subject to provisions relating to various vesting agreements, lock-up agreements and, in some cases, limitations on volume and manner of sale applicable to affiliates under Rule144, as applicable, and the general availability of Rule 144 to such affiliates. A total of 7,725,000 shares of our Common Stock were reserved for issuance under our Omnibus Incentive Plan at inception. The compensation committee of our Board may determine the exact number of shares to be reserved for future issuance under our Omnibus Incentive Plan at its discretion. These shares were registered under a Registration Statement on FormS-8 (File No.333-249556) on December 14, 2020. \nThe amount of shares of our Common Stock issued in connection with an investment or acquisition could constitute a material portion of our then-outstanding shares of Common Stock. \nCertain of our stockholders may engage in business activities that compete with us or otherwise conflict with our interests. \nCertain of our stockholders are in the business of making investments in companies and may from time to time acquire and hold interests in businesses that compete directly or indirectly with us. Our Charter provides that none of the stockholder parties, any of their respective affiliates or any director who is not employed by us (including any non-employee director who serves as one of our officers in both his director and officer capacities) or his or her affiliates will have any duty to refrain from engaging, directly or indirectly, in the same business activities or similar business activities or lines of business in which we operate. The stockholder parties also may pursue acquisition opportunities that may be complementary to our business and, as a result, those acquisition opportunities may not be available to us. \nWe are an emerging growth company, and the reduced disclosure requirements applicable to emerging growth companies may make our Common Stock less attractive to investors. \nWe are an emerging growth company, as defined in the JOBS Act, and may remain an emerging growth company for up to five years. For so long as we remain an emerging growth company, we are permitted and plan to rely on exemptions from certain disclosure requirements that are applicable to other public companies that are not emerging growth companies. These exemptions include not being required to comply with the auditor attestation requirements of the Sarbanes-Oxley Act Section404, not being required to comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditors report providing additional information about the audit and the financial statements, reduced disclosure obligations regarding executive compensation, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. As a result, the information we provide stockholders will be different than the information that is available with respect to other public companies. For example, in the proxy for our upcoming 2021 annual meeting, we will not include all of the executive compensation related information that would be required if we were not an emerging growth company. We cannot predict whether investors will find our Common Stock less attractive if we rely on these exemptions. If some investors find our Common Stock less attractive as a result, there may be a less active trading market for our Common Stock, and our stock price may be more volatile. \nWe have elected to avail ourselves of this exemption from new or revised accounting standards. \n\nOur Common Stock and Warrants are listed on the NASDAQ. We cannot assure you that our securities will continue to be listed on the NASDAQ in the future. In order to continue listing our securities on the NASDAQ, we must maintain certain financial, distribution and stock price levels. Generally, we must maintain a minimum amount in stockholders equity (generally $2,500,000 for companies trading on the NASDAQ) and a minimum number of holders of our securities (generally 300 public holders). \na determination that our Common Stock is a penny stock which will require brokers trading in our Common Stock to adhere<|endoftext|>Written agreement with us, that they will not propose any amendment to our amended and restated memorandum and articles of association to (A)modify the substance or timing of our obligation to provide for the redemption of our public shares in connection with an initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination by May27, 2022 or (B)with respect to any other material provisions relating to shareholders rights or pre-initial business combination activity, unless we provide our public shareholders with the opportunity to redeem their ClassA ordinary shares upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account including interest earned on the funds held in the Trust Account and not previously released to us to pay our taxes, divided by the number of then outstanding public shares. However, we will only redeem our public shares so long as (after such redemption) our net tangible assets will be at least $5,000,001 either immediately prior to or upon consummation of our initial business combination and after payment of deferred underwriters fees and commissions (so that we are not subject to the SECs penny stock rules). \n\nIf we were to expend all of the net proceeds from the IPO and the sale of the Private Warrants, other than the proceeds deposited in the Trust Account, and without taking into account interest, if any, earned on the Trust Account, the per-share redemption amount received by shareholders upon our dissolution would be approximately $10.15. We cannot assure you that the actual per-share redemption amount received by shareholders will not be substantially less than $10.15. \nAlthough we will seek to have all vendors, service providers, prospective target businesses and other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the Trust Account for the benefit of our public shareholders, such parties may not execute such agreements or even if they execute such agreements, they may not be prevented from bringing claims against the Trust Account, including, but not limited to, fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain advantage with respect to a claim against our assets, including the funds held in the Trust Account. If any third party refuses to enter into an agreement waiving such claims to the monies held in the Trust Account, our management will consider whether competitive alternatives are reasonably available to the Company, and will only enter into an agreement with such third party if our management believes that such third partys engagement would be in the best interests of the Company under the circumstances. \nPursuant to our letter agreement with the Sponsor, the form of which is filed as Exhibit 3.1 to this Annual Report on Form \n10-K \n(the Letter Agreement), our Sponsor has agreed that it will be liable to us if and to the extent any claims by a third party for services rendered or products sold to us, or a prospective target business with which we have entered into a written letter of intent, confidentiality or similar agreement or business combination agreement, reduce the amount of funds in the Trust Account to below the lesser of (i) $10.15 per public share and (ii)the actual amount per public share held in the Trust Account as of the date of the liquidation of the Trust Account, if less than $10.15 per share due to reductions in the value of the trust assets, less taxes payable; provided that such liability will not apply to any claims by a third party or prospective target business who executed a waiver of any and all rights to the monies held in the Trust Account (whether or not such waiver is enforceable) nor will it apply to any claims under our indemnity of the underwriters of the IPO against certain liabilities, including liabilities under the Securities Act. However, we have not asked our Sponsor to reserve for such indemnification obligations, nor have we independently verified whether our Sponsor has sufficient funds to satisfy their indemnity obligations, and believe that our Sponsors only assets are securities of our company. \nIn the event that the proceeds in the Trust Account are reduced below (i) $10.15 per public share or (ii)such lesser amount per public share held in the Trust Account as of the date of the liquidation of the Trust Account, due to reductions in value of the trust assets, in each case net of the amount of interest which may be withdrawn to pay taxes, and our Sponsor asserts that it is unable to satisfy its indemnification obligations or that it has no indemnification obligations related to a particular claim, our independent directors would determine whether to take legal action against our Sponsor to enforce its indemnification obligations. We have not asked our Sponsor to reserve for such indemnification obligations and we cannot assure you that our Sponsor would be able to satisfy those obligations, and believe that our Sponsors only assets are securities of our company. Accordingly, we cannot assure you that due to claims of creditors the actual value of the per-share redemption price will not be less than $10.15 per public share. \nOur Sponsor will also not be liable as to any claims under our indemnity of the underwriters of IPO against certain liabilities, including liabilities under the Securities Act. We will have access to up to approximately $1,000,000 from the proceeds of the IPO with which to pay any such potential claims (including costs and expenses incurred in connection with our liquidation, currently estimated to be no more than approximately $100,000). \nTo the extent any bankruptcy or insolvency claims deplete the Trust Account, we cannot assure you we will be able to return $10.15 per share to our public shareholders. Furthermore, our board of directors may be viewed as having breached its fiduciary duty to our creditors and/or may have acted in bad faith, thereby exposing itself and our company to claims of punitive damages, by paying public shareholders from the Trust Account prior to addressing the claims of creditors. \nOur public shareholders will be entitled to receive funds from the Trust Account only upon the earlier to occur of: (i)the completion of our initial business combination, (ii)the redemption of any public shares properly submitted in connection with a shareholder vote to amend any provisions of our amended and restated memorandum and articles of association to (A)modify the substance or timing of our obligation to provide for the redemption of our public shares in connection with an initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination by May27, 2022 or (B)with respect to any other material provisions relating to shareholders rights or pre-initial business combination activity, and (iii)the redemption of all of our public shares if we are unable to complete our business combination by May27, 2022, subject to applicable law. In the event we seek shareholder approval in connection with our initial business combination, a shareholders voting in connection with the initial business combination alone will not result in a shareholders redeeming its shares to us for an applicable pro rata share of the Trust Account. Such shareholder must have also exercised its redemption rights as described above. \n### Competition \n\nHuman Capital Resources \n\n### ITEM 1A. RISK FACTORS \nYou should consider carefully all of the risks described below, together with the other information contained in this Annual Report on Form 10-K, including our audited financial statements and related notes, before making a decision to invest in our securities. For risk factors related to our proposed business combination with Redwire, see the Risk Factors section of our preliminary prospectus/proxy statement to be included in a Registration Statement on Form S-4 that we will file with the SEC. \nRisk Factors Specific to Our Business \n\nOur amended and restated memorandum and articles of association provide that we must complete our initial business combination by May27, 2022. For example, the outbreak of \nCOVID-19 continues to grow both in the United States and globally and, while the extent of the impact of the outbreak on us will depend on future developments, it could limit our ability to complete our initial business combination, including as a result of increased market volatility, decreased market liquidity and third-party financing being unavailable on terms acceptable to us or at all. \nIf we have not completed our initial business combination within such time period, we will: (i)cease all operations except for the purpose of winding up, (ii)as promptly as reasonably possible but not more than 10 business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account and not previously released to us to pay our taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public shareholders rights as shareholders (including the right to receive further liquidating distributions, if any), and (iii)as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders and our board of directors, liquidate and dissolve, subject in the case of clauses (ii)and (iii) to our obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law. In such case, our public shareholders may receive only $10.15 per share, and our warrants will expire worthless. See If third parties bring claims against us, the proceeds held in the Trust Account could be reduced and the per-share redemption amount received by shareholders may be less than $10.15 per share and other risk factors below. \n\nWe may choose not to hold a shareholder vote to approve our initial business combination unless the initial business combination would require shareholder approval under applicable law or stock exchange listing requirements. In such case, the decision as to whether we will seek shareholder approval of a proposed initial business combination or will allow shareholders to sell their shares to us in a tender offer will be made by us, solely in our discretion, and will be based on a variety of factors, such as the timing of the transaction and whether the terms of the transaction would otherwise require us to seek shareholder approval. Accordingly, we may complete our initial business combination even if holders of a majority of our issued and outstanding public shares do not approve of the initial business combination we complete. Please see the section herein entitled Shareholders May Not Have the Ability to Approve Our Initial Business Combination for additional information. \nWe may also issue ClassA ordinary shares upon the conversion of the ClassB ordinary shares at a ratio greater than one-to-one at the time of our initial business combination as a result of the anti-dilution provisions contained in our amended and restated memorandum and articles of association. \nOur amended and restated memorandum and articles of association authorizes the issuance of up to 230,000,000 ClassA ordinary shares, par value $0.0001 per share, 20,000,000 ClassB ordinary shares, par value $0.0001 per share, and 2,000,000 preference shares, par value $0.0001 per share. As of December31, 2020, there are 215,000,000 and 16,250,000 (assuming, in each case, that the underwriters have not exercised their over-allotment option) authorized but unissued ClassA ordinary shares and ClassB ordinary shares, respectively, available for issuance, which amount does not take into account the ClassA ordinary shares reserved for issuance upon exercise of outstanding warrants or the ClassA ordinary shares issuable upon conversion of ClassB ordinary shares. As of December31, 2020, there are no preference shares issued and outstanding. ClassB ordinary shares are convertible into ClassA ordinary shares<|endoftext|>"},"task":{"kind":"string","value":"{\"file\": \"/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz\"}"}}},{"rowIdx":67,"cells":{"text":{"kind":"string","value":"<|endoftext|>Growth and a public listing. \n\nGeneral \nWe intend to effectuate our initial business combination using cash from the proceeds of the IPO and the private placement of the private warrants, our shares, new debt, or a combination of these, as the consideration to be paid in our initial business combination. We may seek to consummate our initial business combination with a company or business that may be financially unstable or in its early stages of development or growth (such as a company that has begun operations but is not yet at the stage of commercial manufacturing and sales), which would subject us to the numerous risks inherent in such companies and businesses, although we will not be permitted to effectuate our initial business combination with another blank check company or a similar company with nominal operations. \nIf our initial business combination is paid for using shares or debt securities, or not all of the funds released from the trust account are used for payment of the purchase price in connection with our business combination or used for redemptions of purchases of our common stock, we may apply the cash released to us from the trust account that is not applied to the purchase price for general corporate purposes, including for maintenance or expansion of operations of acquired businesses, the payment of principal or interest due on indebtedness incurred in consummating our initial business combination, to fund the purchase of other companies or for working capital. \nWe have not identified any acquisition targets. Subject to the requirement that our initial business combination must be with one or more target businesses or assets having an aggregate fair market value of at least 80% of the value of the trust account (excluding any taxes payable) at the time of the agreement to enter into such initial business combination, we have virtually unrestricted flexibility in identifying and selecting one or more prospective target businesses. Accordingly, there is no current basis for our shareholders to evaluate the possible merits or risks of the target business with which we may ultimately complete our initial business combination. Although our management will assess the risks inherent in a particular target business with which we may combine, this assessment may not result in our identifying all risks that a target business may encounter. \nWe may seek to raise additional funds through a private offering of debt or equity securities in connection with the consummation of our initial business combination, and we may effectuate our initial business combination using the proceeds of such offering rather than using the amounts held in the trust account. \n\nWe anticipate that target business candidates will be brought to our attention from various unaffiliated sources, including investment bankers, venture capital funds, private equity groups, leveraged buyout funds, management buyout funds and other members of the financial community. These sources also may introduce us to target businesses in which they think we may be interested on an unsolicited basis, since many of these sources will have read this annual report and know what types of businesses we are targeting. Our officers and directors, as well as their affiliates, also may bring to our attention target business candidates that they become aware of through their business contacts as a result of formal or informal inquiries or discussions they may have, as well as attending trade shows or conventions. Although some of our officers and directors may enter into employment or consulting agreements with the acquired business following our initial business combination, the presence or absence of any such arrangements will not be used as a criterion in our selection process of an acquisition candidate. \nIn the event we seek to complete our initial business combination with such a company, we, or a committee of independent directors, would obtain an opinion from an independent investment banking firm or another independent entity that commonly renders valuation opinions on the type of target business we seek to acquire that such an initial business combination is fair to our unaffiliated stockholders from a financial point of view. \n\nSubject to the requirement that our initial business combination must be with one or more target businesses or assets having an aggregate fair market value of at least 80% of the value of the trust account (excluding any taxes payable) at the time of the agreement to enter into such initial business combination, our management will have virtually unrestricted flexibility in identifying and selecting one or more prospective target businesses. In any case, we will only consummate an initial business combination in which we become the majority shareholder of the target (or control the target through contractual arrangements in limited circumstances for regulatory compliance purposes as discussed below) or are otherwise not required to register as an investment company under the Investment Company Act or to the extent permitted by law we may acquire interests in a variable interest entity, in which we may have less than a majority of the voting rights in such entity, but in which we are the primary beneficiary. There is no basis for our shareholders to evaluate the possible merits or risks of any target business with which we may ultimately complete our initial business combination. To the extent we effect our initial business combination with a company or business that may be financially unstable or in its early stages of development or growth (such as a company that has begun operations but is not yet at the stage of commercial manufacturing and sales), we may be affected by numerous risks inherent in such company or business. Although our management will endeavor to evaluate the risks inherent in a particular target business, we may not properly ascertain or assess all significant risk factors. \nIn evaluating a prospective target business, we expect to conduct a thorough due diligence review that will encompass, among other things, meetings with incumbent management and employees, document reviews, interviews of customers and suppliers, inspection of facilities, as well as a review of financial and other information which will be made available to us. \nAny costs incurred with respect to the identification and evaluation of a prospective target business with which a business combination is not ultimately completed will result in our incurring losses and will reduce the funds we can use to complete another business combination. We will not pay any finders or consulting fees to members of our management team, or any of their respective affiliates, for services rendered to or in connection with our initial business combination. \nFair Market Value of Target Business or Businesses \nThe target business or businesses or assets with which we effect our initial business combination must have a collective fair market value equal to at least 80% of the value of the trust account (excluding any taxes payable) at the time of the agreement to enter into such initial business combination. If we acquire less than 100% of one or more target businesses in our initial business combination, the aggregate fair market value of the portion or portions we acquire must equal at least 80% of the value of the trust account at the time of the agreement to enter into such initial business combination. However, we will always acquire at least a controlling interest in a target business. The fair market value of a portion of a target business or assets will likely be calculated by multiplying the fair market value of the entire business by the percentage of the target we acquire. We may seek to consummate our initial business combination with an initial target business or businesses with a collective fair market value in excess of the balance in the trust account. In order to consummate such an initial business combination, we may issue a significant amount of debt, equity or other securities to the sellers of such business and/or seek to raise additional funds through a private offering of debt, equity or other securities. If we issue securities in order to consummate such an initial business combination, our stockholders could end up owning a minority of the combined companys voting securities as there is no requirement that our stockholders own a certain percentage of our company (or, depending on the structure of the initial business combination, an ultimate parent company that may be formed) after our business combination. Because we have no specific business combination under consideration, we have not entered into any such arrangement to issue our debt or equity securities and have no current intention of doing so. \nThe fair market value of a target business or businesses or assets will be determined by our board of directors based upon standards generally accepted by the financial community, such as actual and potential gross margins, the values of comparable businesses, earnings and cash flow, book value, enterprise value and, where appropriate, upon the advice of appraisers or other professional consultants. Investors will be relying on the business judgment of our board of directors, which will have significant discretion in choosing the standard used to establish the fair market value of a particular target business. If our board of directors is not able to independently determine that the target business or assets has a sufficient fair market value to meet the threshold criterion, we will obtain an opinion from an unaffiliated, independent investment banking firm or another independent entity that commonly renders valuation opinions on the type of target business we seek to acquire with respect to the satisfaction of such criterion. Notwithstanding the foregoing, unless we consummate a business combination with an affiliated entity, we are not required to obtain an opinion from an independent investment banking firm, or another independent entity that commonly renders valuation opinions on the type of target business we seek to acquire, that the price we are paying is fair to our stockholders. \n\nBy consummating our initial business combination with only a single entity, our lack of diversification may: subject us to negative economic, competitive and regulatory developments, any or all of which may have a substantial adverse impact on the particular industry in which we operate after our initial business combination, and cause us to depend on the marketing and sale of a single product or limited number of products or services. \n\nThe future role of members of our management team, if any, in the target business cannot presently be stated with any certainty. Consequently, members of our management team may not become a part of the targets management team, and the future management may not have the necessary skills, qualifications or abilities to manage a public company. Further, it is also not certain whether one or more of our directors will remain associated in some capacity with us following our initial business combination. Moreover, members of our management team may not have significant experience or knowledge relating to the operations of the particular target business. Our key personnel may not remain in senior management or advisory positions with the combined company. \nWe may not have the ability to recruit additional managers, or that additional managers will have the requisite skills, knowledge or experience necessary to enhance the incumbent management. \n\nIn connection with any proposed business combination, we will either (1) seek stockholder approval of our initial business combination at a meeting called for such purpose at which public stockholders may seek to convert their public shares, regardless of whether they vote for or against the proposed business combination, into their pro rata share of the aggregate amount then on deposit in the trust account (net of taxes payable) or (2) provide our public stockholders with the opportunity to sell their public shares to us by means of a tender offer (and thereby avoid the need for a stockholder vote) for an amount equal to their pro rata share of the aggregate amount then on deposit in the trust account (net of taxes payable), in each case subject to the limitations described herein. If we determine to engage in a tender offer, such tender offer will<|endoftext|>2020. Mr. Dussault has served as Executive Vice President, Chief Operating Officer and Chief Financial Officer of Nasuni Corporation since January 2015. He was previously Executive Vice President and Chief Financial Officer at Demandware, Inc. Prior to Demandware, Mr. Dussault was CFO at Archivas, and was also Chief Financial Officer at Astra Tech, Inc., a wholly owned subsidiary of Astra Zeneca, and StorageNetworks. Mr. Dussault began his career with Ernst & Young LLP. Mr. Dussault holds a Bachelor of Science degree in Business Administration and Accounting from Stonehill College. We believe Mr. Dussault is qualified to serve on our Board of Directors due to his extensive leadership and management history as the chief financial officer, together with his background in public accounting. \n### Dayna Grayson \nMs. Grayson has served as a member of our Board of Directors since December 2020. Ms. Grayson is a Managing Partner of Construct Capital, a venture capital firm she co-founded in 2020. Prior to that, Ms. Grayson served as a Partner of New Enterprise Associates from 2012 to 2020. Ms. Grayson currently serves on the boards of directors of numerous private companies. Ms. Grayson holds an M.S. from Harvard Business School. We believe Ms. Grayson is qualified to serve on our Board of Directors due to her extensive experience in identifying, investing in and building next-generation technologies and companies. \nLeo Hindery, Jr. \nMr. Hindery has served as a member of our Board of Directors since September 2018. From September 2018 until December 2020, Mr. Hindery served as our CEO and Chairman. In January 1988, Mr. Hindery founded, and ran as Managing Partner, InterMedia Partners, a series of media industry investment funds. In February 1997, he was named President and CEO of Tele-Communications, Inc. In March 1999, TCI merged into AT&T and Mr. Hindery became President and CEO of AT&T Broadband. In November 1999, Mr. Hindery was named Chairman and CEO of GlobalCenter Inc., an Internet services company, which merged into Exodus Communications, Inc. Following this merger, until October 2004, he was the founding Chairman and CEO of The YES Network, after which he reconstituted and ran InterMedia Partners until our incorporation. He is a member of the Council on Foreign Relations and a Director of Hemisphere Media Group, Inc. Mr. Hindery has an MBA from the Stanford University Graduate School of Business and received an undergraduate degree from Seattle University. We believe Mr. Hindery is qualified to serve on our Board of Directors due to his extensive industry and board experience. \n### Wen Hsieh \nMr. Hsieh has served as a member of our Board of Directors since December 2020. Mr. Hsieh serves as General Partner of Kleiner Perkins Caufield & Byers, a venture capital firm he joined in 2006. Mr. Hsieh currently serves on the boards of directors of numerous private companies. Mr. Hsieh holds a B.S., M.S. and Ph.D. We believe Mr. Hsieh is qualified to serve on our Board of Directors due to his extensive experience in identifying, investing in and building next-generation technologies and companies. \n### Jeff Immelt \nMr. Immelt has served as a member of our Board of Directors since December 2020. Mr. Immelt serves as Venture Partner at New Enterprise Associates, a venture capital firm he joined in 2018. Mr. Immelt previously served as Chief Executive Officer of General Electric Co. from 2001 to 2017. Mr. Immelt currently serves on the boards of directors at Twilio Inc. Mr. Immelt holds a B.A. from Harvard Business School. We believe Mr. Immelt is qualified to serve on our Board of Directors due to his extensive leadership and management history as the chief executive officer of a Fortune 500 company and his experience as a director of numerous public and private companies, together with his background in public company governance. \nByron Knight \nMr. Knight has served as a member of our Board of Directors since December 2020. Mr. Knight serves as Managing Director of Koch Disruptive Technologies, LLC, a subsidiary and the venture capital arm of Koch Industries, Inc., which he joined in March 2018. Mr. Knight previously worked at Georgia-Pacific, LLC as Vice President, eCommerce from 2016 to 2018 and as General Partner, Emerging Business from 2014 to 2016. Mr. Knight serves on the boards of directors of numerous private companies. Mr. Knight holds a B.S. We believe Mr. Knight is qualified to serve on our Board of Directors due to his extensive management history and experience in identifying and investing in manufacturing and logistics technologies and companies. \n### Stephen Nigro \nMr. Nigro has served as a member of our Board of Directors since December 2020. Mr. Nigro served as a consultant to Legacy Desktop Metal from August 2020. He most recently served as President, 3D Printing at HP, Inc., an information technology and services company, from 2015 until 2019. Mr. Nigro previously served as the Senior Vice President of HP, Inc.s Imaging & Printing business. Mr. Nigro serves on the board of directors of Kornit Digital Ltd. Mr. Nigro holds a B.S. from Stanford University. We believe Mr. Nigro is qualified to serve on our Board of Directors due to his extensive management history and his leadership experience in the additive manufacturing industry. \nSteve Papa \nMr. Papa has served as a member of our Board of Directors since December 2020. Mr. Papa serves as the chief executive officer of Parallel Wireless, a company he founded in 2012. Mr. Papa serves on the boards of directors of numerous private companies. Mr. Papa holds a B.S. from Harvard Business School. We believe Mr. Papa is qualified to serve on our Board of Directors due to his extensive management history as the founder and chief executive officer of multiple companies and his experience in identifying, investing in and building next-generation technologies and companies. \n### Andy Wheeler \nMr. Wheeler has served as a member of our Board of Directors since December 2020. Mr. Wheeler serves as general partner of GV, a venture capital firm he joined in 2012. Mr. Wheeler currently serves on the board of directors of numerous private companies. Mr. Wheeler holds an S.B. and M.Eng. from MIT. We believe Mr. Wheeler is qualified to serve on our Board of Directors due to his extensive management history as the chief technology officer of multiple companies and his experience in identifying, investing in and building next-generation technologies and companies. \nBilal Zuberi \nMr. Zuberi has served as a member of our Board of Directors since December 2020. Mr. Zuberi serves as a partner at Lux Capital, a venture capital firm he joined in 2013. Mr. Zuberi currently serves on the boards of directors of numerous private companies. Mr. \nZuberi holds a B.S. from MIT. We believe Mr. Zuberi is qualified to serve on our Board of Directors due to his extensive experience in identifying, investing in and building next-generation technologies and companies. \n### Corporate Governance \n\nDussault, Immelt and Zuberi, with Mr. Dussault serving as chair. Rule 10A-3 of the Exchange Act and the NYSE rules require that our Audit Committee have at least one independent member, have a majority of independent members and be composed entirely of independent members. Our Board of Directors has affirmatively determined that Messrs. Dussault, Immelt and Zuberi each meet the definition of independent director for purposes of serving on the Audit Committee under Rule 10A-3 of the Exchange Act and the NYSE rules. In addition, our Board of Directors has determined that Messrs. Dussault and Immelt each qualify as an audit committee financial expert, as such term is defined in Item 407(d)(5) of Regulation S-K. \n### Item11. Executive Compensation \n\nExecutive Compensation \n### Overview \nOur Named Executive Officers for the year ended December 31, 2020, include Ric Fulop, our Chief Executive Officer, Elizabeth Linardos, our former Chief Financial Officer, and Steve Billow, our President. \n\nThe following table presents information regarding the total compensation of our Named Executive Officers for the year ended December 31, 2020. \n(1) \nFor Ms. Linardos and Mr. Billow, the amounts shown for 2020 also include $137,745 for Ms. Linardos and $2,273,983 for Mr. Billow, which represents the incremental fair value attributable to the repricing of stock options during 2020, computed as of the repricing date in accordance with ACS topic 718. \n\n(2) \nAmounts shown for Mr. Fulop and Ms. Linardos reflect one-time cash bonus payments awarded in connection with the Business Combination. For Mr. \n\n(3) \n\n### Narrative to \nBase Salaries \nFor 2020, the annual base salaries for Mr. Fulop and Mr. Billow remained at their prior year levels of $350,000 and $325,000, respectively, and the annual base salary for Ms. Linardos was set at $280,000 in connection with her transition to the role of Chief Financial Officer during 2020. \nFrom May through July 2020 we implemented temporary salary reductions due to the impact of the COVID-19 pandemic on our business. \n### Cash Bonus Compensation \nMr. Fulop and Ms. Linardos received performance bonuses of $150,000 and $40,000, respectively, in connection with the successful completion of the Business Combination during 2020. Pursuant to his offer letter, Mr. Billow received a discretionary performance bonus of $150,000, which was based on individual and company performance in 2020, as determined by Mr. Fulop. \nEquity Compensation \nFrom time to time, our Board of Directors may also construct alternate vesting schedules as it determines appropriate to motivate particular employees. \nIn June 2020, Mr. Billow was granted an option to purchase 610,609 shares of our common stock (as converted in connection with the Business Combination), which vests as to 75% of the shares pursuant to our standard time-based vesting schedule described above and as to 25% of the shares based on the attainment of an adjusted EBITDA breakeven threshold by June 30, 2022. \nIn June 2020 and August 2020, Ms. Linardos was granted options to purchase 30,530 and 512,912 shares of our common stock (as converted in connection with the Business Combination), respectively. \nIn July 2020, the board approved a stock option repricing in which the strike price of employees unvested stock options was modified to the strike price consummate with the recent third-party stock valuation. Mr. Billow and Ms. Linardos participated in the repricing. \nIn connection with the Business Combination, we began granting restricted stock units as the long-term incentive component of our compensation program. No restricted stock units were granted to our named executive officers during 2020. \n\nIn connection with his commencement of employment with us in March 2019, we entered into an offer letter with Mr. Billow pursuant to which he serves as our President. Under the offer letter, in the event Mr. Billow is laid off, terminated by us without cause, or if he resigns for good reason, he will be entitled to receive base salary continuation for a period of 12 months. Upon a change in control, 50% of the unvested shares subject to Mr. Billows then- outstanding options would vest. If Mr. Billow is terminated by us without cause or he resigns for good reason, in either case, within six months following a change in control, the remaining 50% of the unvested shares subject to his then-outstanding options would vest. Mr. Billow waived any potential accelerated vesting of his outstanding options in connection with the Business Combination. \nFor purposes of Mr. Billows offer letter cause generally means his (i) violation of a company policy or rule, (ii) breach, attempted breach or violation of his restrictive covenant agreement with us, (iii) failure to materially perform job duties and responsibilities reasonably expected of his position, (iv) arrest for, conviction of, or plea of guilty or no contest to any felony or to a misdemeanor involving moral turpitude, deceit, dishonesty or fraud, (v) dishonest statements or acts with respect to or affecting the company, (vi) gross negligence, willful misconduct or insubordination, or (vii) other conduct that could be harmful to our business, interests or reputation. For purposes of Mr. Billows offer letter, good reason means (i) our requirement that he relocate to a location more than 35 miles from our current location in Burlington, Massachusetts, (ii) a material reduction in his job<|endoftext|>Agreements or even if they execute such agreements that they would be prevented from bringing claims against the trust account including but not limited to fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain an advantage with respect to a claim against our assets, including the funds held in the trust account. The underwriters of the IPO will not execute agreements with us waiving such claims to the monies held in the trust account. In order to protect the amounts held in the trust account, our sponsor has agreed that it will be liable to us if and to the extent any claims by a third party for services rendered or products sold to us, or a prospective target business with which we have entered into a written letter of intent, confidentiality or other similar agreement or business combination agreement, reduce the amount of funds in the trust account to below the lesser of (i)$10.00 per public share and (ii)the actual amount per public share held in the trust account as of the date of the liquidation of the trust account, if less than $10.00 per public share due to reductions in the value of the trust assets, less taxes payable, provided that such liability will not apply to any claims by a third party or prospective target business who executed a waiver of any and all rights to the monies held in the trust account (whether or not such waiver is enforceable) nor will it apply to any claims under our indemnity of the underwriters of the IPO against certain liabilities, including liabilities under the Securities Act. \n\nOur sponsor will also not be liable as to any claims under our indemnity of the underwriters of the IPO against certain liabilities, including liabilities under the Securities Act. \nThe prorata portion of the funds in our trust account distributed to our public stockholders upon the redemption of our public shares in the event we do not complete our initial business combination within 18months from the closing of the IPO may be considered a liquidating distribution under Delaware law. \nFurthermore, if the prorata portion of the funds in our trust account distributed to our public stockholders upon the redemption of our public shares in the event we do not complete our initial business combination within 18months from the closing of the IPO, is not considered a liquidating distribution under Delaware law and such redemption distribution is deemed to be unlawful (potentially due to the imposition of legal proceedings that a party may bring or due to other circumstances that are currently unknown), then pursuant to Section174 of the DGCL, the statute of limitations for claims of creditors could then be sixyears after the unlawful redemption distribution, instead of threeyears, as in the case of a liquidating distribution. If we do not complete our initial business combination within 18months from the closing of the IPO, we will: (i)cease all operations except for the purpose of winding up, (ii)as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account including interest earned on the funds held in the trust account (net of permitted withdrawals and up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders rights as stockholders (including the right to receive further liquidating distributions, if any) and (iii)as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. Accordingly, it is our intention to redeem our public shares as soon as reasonably possible following our 18th month and, therefore, we do not intend to comply with those procedures. \nFurther, our sponsor may be liable only to the extent necessary to ensure that the amounts in the trust account are not reduced below (i)$10.00 per public share or (ii)such lesser amount per public share held in the trust account as of the date of the liquidation of the trust account, due to reductions in value of the trust assets, in each case net of the amount of interest withdrawn to pay taxes and will not be liable as to any claims under our indemnity of the underwriters of the IPO against certain liabilities, including liabilities under the Securities Act. \n\nOur public stockholders will be entitled to receive funds from the trust account only (i)in the event of the redemption of our public shares if we do not complete our initial business combination within 18months from the closing of the IPO, (ii)in connection with a stockholder vote to amend our amended and restated certificate of incorporation to modify the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial business combination within 18months from the closing of the IPO or with respect to any other material provisions relating to stockholders rights or pre-initial business combination activity or (iii)if they redeem their respective shares for cash upon the completion of our initial business combination. \n### Competition \n\nFacilities \nWe currently sub-lease our executive offices at 452 Fifth Avenue, 21stFloor, New York, NY 10018 from our sponsor and our phone number is 646-793-3510. \n### Employees \nWe currently have two executive officers: Kevin Rakin and Matt Zuga. \n\nWe will register ourunits, ClassA common stock and warrants under the Exchange Act and have reporting obligations, including the requirement that we file annual, quarterly and current reports with the SEC. \nWe will provide stockholders with audited financial statements of the prospective target business as part of the proxy solicitation materials or tender offer documents sent to stockholders to assist them in assessing the target business. \n\nWe will file a Registration Statement on Form 8-A with the SEC to voluntarily register our securities under Section12 of the Exchange Act. \n\n\nWe will remain an emerging growth company until the earlier of (1)the last day of the fiscal year (a)following the fifth anniversary of the completion of the IPO, (b)in which we have total annual gross revenue of at least $1.07billion, or (c)in which we are deemed to be a large accelerated filer, which means the market value of our shares of ClassA common stock that are held by non-affiliates exceeds $700million as of the prior June30th, and (2)the date on which we have issued more than $1.0billion in non-convertible debt securities during the prior three-year period. \n### Item 1A.Risk Factors. \nYou should carefully consider all of the following risk factors and all other information contained in this Report including the financial statements. The risk factors described below are not necessarily exhaustive and you are encouraged to perform your own investigation \nRisk Factors Relating to HighCape and the Business Combination \n\nOn January 31, 2020, U.S. \nDirectors and officers of HighCape have potential conflicts of interest in recommending that stockholders vote in favor of approval of the Business Combination and approval of the other proposals described in the Companys proxy statement/prospectus filed as part of the Companys Form S-4 on March 1, 2021 (the Form S-4). \nWhen considering the recommendation of the HighCape Board that the HighCape stockholders vote in favor of approval of the Business Combination, HighCape stockholders should be aware that HighCapes initial stockholders, including its directors and officers, have interests in the Business Combination that may be different from, or in addition to, the interests of HighCape stockholders and warrant holders generally. These interests include, among other things, the interests listed below: \nIf we are unable to complete our initial business combination by September9, 2022, we will: (i)cease all operations except for the purpose of winding up, (ii)as promptly as reasonably possible but not more than 10 business days thereafter, redeem 100% of the public shares, at a per share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account and not previously released to us to pay our franchise and income taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders rights as stockholders (including the right to receive further liquidating distributions, if any), and (iii)as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and the HighCape Board, liquidate and dissolve, subject in each case to our obligations under the DGCL to provide for claims of creditors and the requirements of other applicable law. \nThere will be no liquidating distributions from the Trust Account with respect to our founder shares if we fail to complete our initial business combination by September9, 2022. Our initial stockholders purchased the founder shares prior to our initial public offering for an aggregate purchase price of $25,000. \nIn connection with the closing of our initial public offering, we consummated the sale of 405,000 private placementunits at a price of $10.00 per unit in a private placement to our Sponsor. Each unit is composed of one share of ClassA common stock par value $0.0001 and one third of one warrant, at a price of $10.00 per unit. Thewarrants are each exercisable commencing the later of 30days following the consummation of the Business Combination and 12months from the closing of our initial public offering, which occurred on September9, 2020, for one share of HighCape ClassA common stock at $11.50 per share. If we do not consummate a business combination transaction by September9, 2022, then the proceeds from the sale of the private placementunits will be part of the liquidating distribution to the public stockholders and theunits held by our initial stockholders will be worthless. Theunits held by our initial stockholders had an aggregate market value of approximately $6.3 million based upon the closing price of $15.64 per unit on Nasdaq on February26, 2021. \nOur initial stockholders, officers and directors will lose their entire investment in us if we do not complete a business combination by September9, 2022. \nConcurrently with the execution of the Business Combination Agreement, HighCape entered into the PIPE Investor Subscription Agreements with the PIPE Investors, pursuant to which the PIPE Investors have agreed to purchase, immediately prior to the Closing, an aggregate of 42,500,000 shares of HighCape ClassA common stock at a purchase price of $10.00 per share. \nConcurrently with the execution of the Business Combination Agreement, HighCape entered into the Subscription Agreements with the Foresite Funds, pursuant to which the Foresite Funds have agreed to purchase, immediately prior to the Closing, an aggregate of 696,250 shares of HighCape ClassA common stock at a price of $0.001 per share for aggregate gross proceeds of $696.25 after a corresponding number of shares of HighCape ClassB common stock are irrevocably forfeited by the Sponsor to HighCape for no consideration and automatically cancelled. \nCertain of our officers and directors may continue to serve as directors of New Quantum-Si after the Closing. As such, in the future they may receive any cash fees, stock options or stock awards that the New Quantum-Si Board determines to pay to its directors. \nIn order to protect the amounts held in the Trust Account, the Sponsor has agreed that it will indemnify us if and to the extent any claims by a third party for services rendered or products sold to us, or a prospective target business with which we have entered into a written letter of intent, confidentiality or other similar agreement or business combination agreement, reduce the amount of funds in the Trust Account to below (1)$10.00 per public share or (2)such lesser amount per public share held in the Trust Account as of the<|endoftext|>Rights, whether they are record holders or hold their shares in street name, to, at the holders option, either deliver their stock certificates to our transfer agent, or to deliver their shares to our transfer agent electronically prior to the date set forth in the proxy materials or tender offer documents, as applicable. In addition, if we conduct redemptions in connection with a shareholder vote, we intend to require a public shareholder seeking redemption of its public shares to also submit a written request for redemption to our transfer agent two business days prior to the vote in which the name of the beneficial owner of such shares is included. \n\nOur public shareholders will be entitled to receive funds from the trust account only upon the earliest to occur of: (i) our completion of an initial business combination, and then only in connection with those ClassA ordinary shares that such shareholder properly elected to redeem, subject to the limitations and on the conditions described herein, (ii) the redemption of any public shares properly submitted in connection with a shareholder vote to amend our amended and restated memorandum and articles of association (A) to modify the substance or timing of our obligation to allow redemption in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination by December 21, 2022 or (B) with respect to any other material provisions relating to shareholders rights or pre-initial business combination activity, and (iii) the redemption of our public shares if we are unable to complete an initial business combination by December 21, 2022, subject to applicable law and as further described herein. \n\n\n\nIf we seek shareholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our amended and restated memorandum and articles of association provides that a public shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a group (as defined under Section 13 of the Exchange Act), will be restricted from seeking redemption rights with respect to more than an aggregate of 15% of the shares sold in the initial public offering without our prior consent, which we refer to as the Excess Shares. \n\n\n\nWe believe that, upon closing of the initial public offering, the funds available to us outside of the trust account will be sufficient to allow us to operate for at least until December 21, 2022; \n\n\n\n\n\nPursuant to the letter agreement the form of which is filed as an exhibit to the registration statement, our Sponsor has agreed that it will be liable to us if and to the extent any claims by a third party for services rendered or products sold to us, or a prospective target business with which we have entered into a written letter of intent, confidentiality or other similar agreement or business combination agreement, reduce the amount of funds in the trust account to below the lesser of (i) $10.00 per public share and (ii) the actual amount per public share held in the trust account as of the date of the liquidation of the trust account, if less than $10.00 per share due to reductions in the value of the trust assets, less taxes payable, provided that such liability will not apply to any claims by a third party or prospective target business who executed a waiver of any and all rights to the monies held in the trust account (whether or not such waiver is enforceable) nor will it apply to any claims under our indemnity of the underwriters of the initial public offering against certain liabilities, including liabilities under the Securities Act of 1933, as amended (Securities Act). \n\nIn the event that the proceeds in the trust account are reduced below the lesser of (i) $10.00 per share and (ii) the actual amount per public share held in the trust account as of the date of the liquidation of the trust account if less than $10.00 per share due to reductions in the value of the trust assets, in each case less taxes payable, and our Sponsor asserts that it is unable to satisfy his obligations or that he has no indemnification obligations related to a particular claim, our independent directors would determine whether to take legal action against our Sponsor to enforce its indemnification obligations. \n\n\n\n\n\n\n\n\n\n\n\nOur management team has extensive experience in identifying and executing strategic investments globally and has done so successfully in a number of sectors, including global technology sectors. \n\nIn the event we elect to pursue a business combination outside of the areas of our managements expertise, our managements expertise may not be directly applicable to its evaluation or operation, and the information regarding the areas of our managements expertise would not be relevant to an understanding of the business that we elect to acquire. \n\n\n\n\n\n\n\n\n\n\n\nIn addition, our amended and restated memorandum and articles of association requires us to provide our public shareholders with the opportunity to redeem their public shares for cash if we propose an amendment to our amended and restated memorandum and articles of association (A) to modify the substance or timing of our obligation to allow redemption in connection with our initial business combination or to redeem 100% of our public shares if we do not complete an initial business combination by December 21, 2022 or (B) with respect to any other material provisions relating to shareholders rights or pre-initial business combination activity. To the extent any of such amendments would be deemed to fundamentally change the nature of the securities offered in the initial public offering, we would register, or seek an exemption from registration for, the affected securities. \n\nOur amended and restated memorandum and articles of association provide that any of its provisions related to pre-business combination activity (including the requirement to deposit proceeds of the initial public offering and the private placement of warrants into the trust account and not release such amounts except in specified circumstances, and to provide redemption rights to public shareholders as described herein) may be amended if approved by special resolution, under Cayman Islands law being the affirmative vote of a majority of at least two-thirds of the shareholders who attend and vote at a general meeting of the company, and corresponding provisions of the trust agreement governing the release of funds from our trust account may be amended if approved by holders of 65% of our ordinary shares. Our initial shareholders, who will collectively beneficially own 20% of our ordinary shares upon the closing of the initial public offering (assuming they do not purchase any units in the initial public offering), will participate in any vote to amend our amended and restated memorandum and articles of association and/or trust agreement and will have the discretion to vote in any manner they choose. \nOur Sponsor, officers and directors have agreed, pursuant to a written agreement with us, that they will not propose any amendment to our amended and restated memorandum and articles of association (A) to modify the substance or timing of our obligation to allow redemption in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination by December 21, 2022 or (B) with respect to any other material provisions relating to shareholders rights or pre-initial business combination activity, unless we provide our public shareholders with the opportunity to redeem their Class A ordinary shares upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account and not previously released to us to pay our taxes, divided by the number of then outstanding public shares. \n\nWe have not selected any specific business combination target but intend to target businesses with enterprise values that are greater than we could acquire with the net proceeds of the initial public offering and the sale of the private placement warrants and the forward purchase securities. \n\nNeither our initial shareholders nor, to our knowledge, any of our officers or directors, have any current intention to purchase additional securities, other than as disclosed in this Annual Report on Form 10-K. \n\nOrION has the right to purchase up to $200,000,000 of additional forward purchase units concurrently with the closing of our initial business combination. If our board of directors determines that additional capital is needed in order to consummate our initial business combination or for other reasons and OrION does not purchase the up to $200,000,000 of additional forward purchase units or such amount as our board of directors has determined may be needed, we may not have sufficient capital to satisfy certain conditions to consummate our initial business combination. \n\n\n\n\n\n\n\n\n\ntariffs and trade barriers; longer payment cycles; rates of inflation; employment regulations; corruption; terrorist attacks and wars; \n\ninvestors. \nWe urge U.S. \n\n\n\n\n\n\n\nThe net proceeds from the initial public offering and the private placement provided us with $575,000,000 that we may use to complete our initial business combination (after taking into account the $20,125,000 of deferred underwriting commissions being held in the trust account). \n\n\n\n\n\n\n\n\n\n\n\nSince our Sponsor, officers and directors will lose their entire investment in us if our initial business combination is not completed (other than with respect to public shares they may acquire during or after the initial public offering), a conflict of interest may arise in determining whether a particular business combination target is appropriate for our initial business combination. \nOn October 7, 2020, our Sponsor paid $25,000, or approximately $0.002 per share, to cover certain of our offering costs in exchange for 14,375,000 founder shares. \nThe number of founder shares outstanding was determined based on the expectation that the total size of the initial public offering would be a maximum of 57,500,000 units if the underwriters over-allotment option is exercised in full, and therefore that such founder shares would represent 20% of the outstanding shares after the initial public offering. In addition, our Sponsor purchased an aggregate of 9,000,000 warrants for an aggregate purchase price of $13,500,000, or $1.50 per warrant. This risk may become more acute as December 21, 2022 nears, which is the deadline for our completion of an initial business combination. \n\n\n\n\n\n\nIf this were the case, it would be a breach of their fiduciary duties to us as a matter of Delaware law and we or our shareholders might have a claim against such individuals for infringing on our shareholders rights. \n\nDespite our agreement to obtain an opinion from an independent investment banking firm which is a member of FINRA or a valuation or appraisal firm regarding the fairness to our company from a financial point of view of a business combination with one or more domestic or international businesses affiliated with our Sponsor, executive officers, directors or existing holders, potential conflicts of interest still may exist and, as a result, the terms of the business combination may not be as advantageous to our public shareholders as they would be absent any conflicts of interest. \n\n\n\n\n\n\n\n\n(ii) the redemption of any public shares properly submitted in connection with a shareholder vote to amend our amended and restated memorandum and articles of association (A) to modify the substance or timing of our obligation to allow redemption in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination by December 21, 2022 or (B) with respect to any other material provisions relating to shareholders rights or pre-initial business combination activity; or (iii) absent an initial business combination by December 21, 2022, our return of the funds held in the trust account to our public shareholders as part of our redemption of the public shares. \n\nAlthough after giving effect to the initial public offering we expect to<|endoftext|>Losses are largely due to increases in market interest rates over the yields available at the time the underlying securities were purchased. The unrealized losses noted are primarily interest rate related due to the level of interest rates as of December 31, 2020, compared to the time of purchase. The Company has reviewed the ratings of the issuers and has not identified any issues related to the ultimate repayment of principal as a result of credit concerns on these securities. The Companys mortgage related securities are backed by the Government National Mortgage Association and the Federal National Mortgage Association, or are collateralized by securities backed by these agencies. Management believes the fair value is expected to recover as the securities approach their maturity date or repricing date or if market yields for such investments decline. \nThe amortized cost and estimated fair value of securities at December 31, 2020 are presented below by contractual maturity. Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations. Residential mortgage backed securities are shown separately since they are not due at a single maturity date. \n### Note 4. Loans and Allowance for Loan Losses \nMajor classifications of loans held for investment are as follows: \nOn March27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was signed by the President of the United States in response to the COVID-19 pandemic, which established the Paycheck Protection Program (PPP). The PPP is administered by the SBA with support from the Department of the Treasury. The PPP is a federally-guaranteed, low-interest rate loan program that is designed to provide a direct incentive for small businesses to keep workers on the payroll. Businesses may use PPP loan funds to pay up to twenty-four weeks of payroll costs as well as to cover other eligible business expenses. PPP loans may be partially or fully forgiven by the SBA if the funds are used for eligible expenses during the relevant forgiveness period and the borrower meets the employee retention criteria. PPP loans will carry an interest rate of 1.00% to be paid either by the SBA in the event of forgiveness or by the borrower for the term of the loan, which may be two or five years. PPP loans that the SBA approved on or after June 5, 2020 will have a maturity date of five years. Payments for PPP loans are deferred until the SBA issues a forgiveness decision or ten months after the end of the forgiveness period if the borrower fails to apply for forgiveness. Included in SBA 7(a) guaranteed loans at December 31, 2020, were $82.5 million of loans originated under the PPP. As mentioned above, the PPP loans may be forgiven by the SBA and are 100 percent guaranteed by the SBA. Therefore, no allowance for loan losses is allocated to PPP loans. \nAs of December 31, 2020, our loan portfolio included $67.2 million of loans, approximately 16.8% of our total funded loans, and 21.1% of total funded loans, net of the SBA PPP loans of $82.5 million, to the dental industry, as compared to $69.2 million of loans, or 23.8% of total funded loans, at December 31, 2019. The Bank believes that these loans are to credit worthy borrowers and are diversified geographically. \nThe Company serves the small business community by offering loans promulgated under the SBAs 7(a) and 504 loan programs, and loans guaranteed by the USDA. SBA 7(a) and USDA loans are typically guaranteed by each agency in amounts ranging from 75% to 80% of the principal balance. For SBA construction loans, the Company records the guaranteed funded portion of the loans as held for sale. When the SBA loans are fully funded, the Company may sell the guaranteed portion into the secondary market, on a servicing-retained basis, or reclassify from loans held for sale to loans held for investment if the Company determines that holding these loans provide better long-term risk adjusted returns than selling the loans. In calculating gain on the sale of loans, the Company performs an allocation based on the relative fair values of the sold portion and retained portion of the loan. The Companys assumptions are validated by reference to external market information. \nThe Company had $14.9 million and $9.9 million of SBA loans held for sale as of December 31, 2020 and 2019, respectively. During the year ended December 31, 2020, the Company sold $9.8 million of SBA loans, resulting in a gain on sale of loans of $722,000. In connection with the sales, the Company recorded a servicing asset of $152,000. The Company elected to reclassify $26.4 million of the SBA 7(a) loans held for sale to loans held for investment during the year ended December 31, 2020. \nDuring the year ended December 31, 2019, the Company sold $6.2 million of SBA loans, resulting in a gain on sale of loans of $427,000. In connection with the sales, the Company recorded a servicing asset of $93,000. The Company elected to reclassify $36.5 million of the SBA 7(a) loans held for sale to loans held for investment during the year ended December 31, 2019. \n### Loan Origination/Risk Management \nThe Company maintains written loan origination policies, procedures, and processes which address credit quality at several levels including individual loan level, loan type, and loan portfolio levels. \nCommercial and industrial loans, which are predominantly loans to dentists, are underwritten based on historical and projected income of the business and individual borrowers and guarantors. The Company utilizes a comprehensive global debt service coverage analysis to determine debt service coverage ratios. This analysis compares global cash flow of the borrowers and guarantors on an individual credit to existing and proposed debt after consideration of personal and business related other expenses. Collateral is generally a lien on all available assets of the business borrower including intangible assets. Credit worthiness of individual borrowers and guarantors is established through the use of credit reports and credit scores. \nConsumer loans are evaluated on the basis of credit worthiness as established through the use of credit reports and credit scores. Additional credit quality indicators include borrower debt to income ratios based on verifiable income sources. \nReal estate mortgage loans are evaluated based on collateral value as well as global debt service coverage ratios based on historical and projected income from all related sources including the collateral property, the borrower, and all guarantors where applicable. \nThe Company originates SBA loans which are sometimes sold into the secondary market. The Company continues to service these loans after sale and is required under the SBA programs to retain specified amounts. The two primary SBA loan programs that the Company offers are the basic 7(a) loan guaranty program and the 504 loan program in conjunction with junior lien financing from a Certified Development Company (CDC). \nThe 7(a) program serves as the SBAs primary business loan program to help qualified small businesses obtain financing when they might not be eligible for business loans through normal lending channels. Loan proceeds under this program can be used for most business purposes including working capital, machinery and equipment, furniture and fixtures, land and building (including purchase, renovation and new construction), leasehold improvements and debt refinancing. Loan maturity is generally up to 10 years for non-real estate collateral and up to 25 years for real estate collateral. The 7(a) loan is approved and funded by a qualified lender, partially guaranteed by the SBA and subject to applicable regulations. In general, the SBA guarantees up to 75% (100% for PPP loans) of the loan amount depending on loan size. The Company is required by the SBA to service the loan and retain a contractual minimum of 5% on all SBA 7(a) loans, but generally retains 25% (the unguaranteed portion). The servicing spread is 1% of the guaranteed portion of the loan that is sold in the secondary market. Included in the 7(a) loans reflected in this Form 10-K are the PPP loans originated by the Company as of December 31, 2020. \nThe 504 program is an economic development-financing program providing long-term, low down payment loans to businesses. Typically, a 504 project includes a loan secured from a private-sector lender with a senior lien, a loan secured from a CDC (funded by a 100% SBA-guaranteed debenture) with a junior lien covering up to 40% of the total cost, and a contribution of at least 10% equity from the borrower. Debenture limits are $5.0 million for regular 504 loans and $5.5 million for those 504 loans that meet a public policy goal. \nThe SBA has designated the Bank as a Preferred Lender. As a Preferred Lender, the Bank has been delegated loan approval, closing and most servicing and liquidation authority from the SBA. \nThe Company also offers Business & Industry (B&I) program loans through the USDA. These loans are similar to the SBA product, except they are guaranteed by the USDA. The guaranteed amount is generally 80%. B&I loans are made to businesses in designated rural areas and are generally larger loans to larger businesses than the SBA 7(a) loans. Similar to the SBA 7(a) product, they can be sold into the secondary market. These loans can be utilized for rural commercial real estate and equipment. The loans can have maturities up to 30 years and the rates can be fixed or variable. \nConstruction and land development loans are evaluated based on the borrowers and guarantors credit worthiness, past experience in the industry, track record and experience with the type of project being considered, and other factors. Collateral value is determined generally by independent appraisal utilizing multiple approaches to determine value based on property type. \nFor all loan types, the Company establishes guidelines for its underwriting criteria including collateral coverage ratios, global debt service coverage ratios, and maximum amortization or loan maturity terms. \nAt the portfolio level, the Company monitors concentrations of loans based on several criteria including loan type, collateral type, industry, geography, and other factors. The Company also performs periodic market research and economic analysis at a local geographic and national level. Based on this research, the Company may from time to time change the minimum or benchmark underwriting criteria applied to the above loan types. \nLoans are placed on non-accrual status when, in managements opinion, the borrower may be unable to meet payment obligations as they become due, as well as when required by regulatory provisions. Loans may be placed on non-accrual status regardless of whether or not such loans are considered past due. When interest accrual is discontinued, all unpaid accrued interest is reversed. A loan may be returned to accrual status when all the principal and interest amounts contractually due are brought current and future principal and interest amounts contractually due are reasonably assured, which is typically evidenced by a sustained period of repayment performance by the borrower. \nCertain borrowers are currently unable to meet their contractual payment obligations because of the adverse effects of COVID-19. To help mitigate these effects, loan customers may apply for a deferral of payments, or portions thereof, for up to 90 days. After 90 days, customers may apply for an additional deferral, and a small proportion of our customers have requested such an additional deferral. In the absence of other intervening factors, such short-term modifications made on a good faith basis are not categorized as troubled debt restructurings, nor are loans granted payment deferrals related to COVID-19 reported as past due or placed on non-accrual status (provided the loans were not past due or on non-accrual status prior to the deferral). At December31, 2020, there were 11 loans in COVID-19 related deferment with an aggregate outstanding balance of approximately $4.3 million. \nNon-accrual loans, segregated by class of loans, were as follows: \nThe Companys impaired loans and related allowance is summarized in the following table: \nLoans are considered past due if the required principal and interest payments have not been received as of the date such payments were due. The Companys past due loans are as<|endoftext|>Estimates, we or our joint venture partner may not have sufficient resources to fund the project, and fluctuations in local and regional economic conditions due to the time lag between commencement and completion of the project. \nWe may be adversely affected if this re-development is further delayed or is unsuccessful. See \n### Item2. Properties and \nItem7. for further information about the Manahawkin Property. \nRisks Related to Our Financing Activities, Indebtedness and Capital Resources \nIf we are unable to refinance our mortgage loans at maturity, we may be forced to sell properties at disadvantageous terms, which would result in the loss of revenues and in a decline in the value of our portfolio. \nWe had, as of December31, 2020, $433.5 million in mortgage debt outstanding (all of which is non-recourse subject to standard carve- outs) and our ratio of debt to total market capital was 51.9%. The risks associated with our mortgage debt, include the risks that cash flow from properties securing the indebtedness and our available cash and cash equivalents will be insufficient to meet required payments of principal and interest. \nGenerally, only a portion of the principal of our mortgage indebtedness will be repaid prior to or at maturity and we do not plan to retain sufficient cash to repay such indebtedness at maturity. Accordingly, to meet these obligations if they cannot be refinanced at maturity, we will have to use funds available under our credit facility, if any, and our available cash and cash equivalents to pay our mortgage debt or seek to raise funds through the financing of unencumbered properties, sale of properties or the issuance of additional equity. From 2021 through 2025, approximately $205.0 million of our mortgage debt maturesspecifically, $22.6 million in 2021, $46.1 million in 2022, $30.3 million in 2023, $63.0 million in 2024 and $43.0 million in 2025. If we are unsuccessful in refinancing or extending existing mortgage indebtedness or financing unencumbered properties, selling properties on favorable terms or raising additional equity, our cash flow will be insufficient to repay all maturing mortgage debt when payments become due, and we may be forced to dispose of properties on disadvantageous terms or convey properties secured by mortgages to the mortgagees, which would lower our revenues and the value of our portfolio. \nWe may find that the value of a property could be less than the mortgage secured by such property. We may also have to decide whether we should refinance or pay off a mortgage on a property at which the mortgage matures prior to lease expiration and the tenant may not renew the lease. In these types of situations, after evaluating various factors, including among other things, the tenants competitive position in the applicable sub-market, our and our tenants estimates of its prospects, consideration of alternative uses and opportunities to re-purpose or re-let the property, we may seek to renegotiate the terms of the mortgage, or to the extent that the loan is non-recourse and the terms of the mortgage cannot be satisfactorily renegotiated, forfeit the property by conveying it to the mortgagee and writing off our investment. \nIf interest rates increase or credit markets tighten, it may be more difficult for us to secure financing, which may limit our ability to finance or refinance our real estate properties, reduce the number of properties we can acquire, sell certain properties, and decrease our stock price. \nIncreases in interest rates or reduced access to credit markets may make it difficult for us to obtain financing, refinance mortgage debt, limit the mortgage debt available on properties we wish to acquire and limit the properties we can acquire. Even in the event that we are able to secure mortgage debt on, or otherwise finance our real estate properties, due to increased costs associated with securing financing and other factors beyond our control, we may be unable to refinance the entire outstanding loan balance or be subject to unfavorable terms (such as higher loan fees, interest rates and periodic payments). In addition, an increase in interest rates could decrease the amount third parties are willing to pay for our assets, thereby limiting our ability to reposition our portfolio promptly in response to changes in economic or other conditions. \nWhile interest rates have been at historically low levels the past several years, they could become increasingly volatile. During the three years ended December31, 2020, the interest rate on the 10-year treasury note ranged from 0.51% to 3.24%. If we are required to refinance mortgage debt that matures over the next several years at higher interest rates than such mortgage debt currently bears, the funds available for dividends may be reduced. The following table sets forth, as of December31, 2020, the principal balance of the mortgage payments due at maturity on our properties and the weighted average interest rate thereon (dollars in thousands): \nWe manage a substantial portion of our exposure to interest rate risk by accessing debt with staggered maturities, obtaining fixed rate mortgage debt and by fixing the interest rate on variable rate debt through the use of interest rate swap agreements. However, no amount of hedging activity can fully insulate us from the risks associated with changes in interest rates. Swap agreements involve risk, including that counterparties may fail to honor their obligations under these arrangements, and these arrangements have caused us to pay higher interest rates on our debt obligations than would otherwise be the case. Failure to hedge effectively against interest rate risk could adversely affect our results of operations and financial condition. \nBecause REIT stocks are often perceived as high-yield investments, investors may perceive less relative benefit to owning REIT stocks as interest rates and the yield on government treasuries and other bonds increase. Accordingly, an increase in interest rates could reduce the amount investors are willing to pay for our common stock. \nIf our borrowings increase, the risk of default on our repayment obligations and our debt service requirements will also increase. \nAt December 31, 2020, we had $446.5 million of debt outstanding, including $433.5 million of mortgage debt and $13.0 million of debt incurred pursuant to our credit facility. Increased leverage, whether pursuant to our credit facility or mortgage debt, could result in increased risk of default on our payment obligations related to borrowings and in an increase in debt service requirements, which could reduce our net income and the amount of cash available to meet expenses and to pay dividends. \nA breach of our credit facility could occur if a significant number of our tenants default or fail to renew expiring leases, or we take impairment charges against our properties. \nOur credit facility includes covenants that require us to maintain certain financial ratios and comply with other requirements. If our tenants default under their leases or fail to renew expiring leases, generally accepted accounting principles may require us to recognize impairment charges against our properties, and our financial position could be adversely affected causing us to be in breach of the financial covenants contained in our credit facility. \nFailure to meet interest and other payment obligations under our revolving credit facility or a breach by us of the covenants to maintain the financial ratios would place us in default under our credit facility, and, if the banks called a default and required us to repay the full amount outstanding under the credit facility, we might be required to rapidly dispose of our properties, which could have an adverse impact on the amounts we receive on such disposition. If we are unable to dispose of our properties in a timely fashion to the satisfaction of the banks, the banks could foreclose on that portion of our collateral pledged to the banks, which could result in the disposition of our properties at below market values. The disposition of our properties at below our carrying value would adversely affect our net income, reduce our stockholders equity and adversely affect our ability to pay dividends. \nThe phasing out of LIBOR may adversely affect our cash flow and financial results. \nAt December 31, 2020, our variable rate debt that bears interest at the one month LIBOR rate plus a negotiated spread is in principal amount of $97.7 million ( i.e \n, $84.7 million of mortgage debt and $13.0 million of credit facility debt). We hedged our exposure to the fluctuating interest payments on this mortgage debt by entering into interest rate swaps with the counterparties (or their affiliates) to such debt these swaps effectively fix our interest payments under the related debt. At December 31, 2020, we have 23 swaps with 6 separate counterparties and an aggregate notional amount of $84.7 million. The fluctuating interest payments on the credit facility debt are not hedged. The authority regulating LIBOR announced it intends to stop compelling banks to submit rates for the calculation of LIBOR after June 2023 and it is possible that LIBOR will become unavailable at an earlier date. Approximately $68.7 million of this mortgage debt and the related notional amount of interest rate swaps mature after June 2023. Accordingly, there is uncertainty as to how the interest rate on this mortgage debt, the related swaps and the credit facility debt will be determined when LIBOR is unavailable. Though these agreements, and instruments provide for alternative methods of calculating the interest rate if LIBOR is unavailable, such alternative rates may be unavailable (or the alternative rate provided for in the variable rate mortgage debt may be inconsistent with the alternative rate provided for by the related swap), in which case we may have to negotiate an alternative rate with the counterparties to such debt, the related swaps and the credit facility debt - we can provide no assurance that we and our counterparties will be able to agree to alternative rates. Even if alternative rates are available, the swaps may not effectively hedge our interest payment obligation on this variable rate mortgage debt and may result in fluctuating interest payments with respect to such debt. Our cash flow and financial results may be adversely affected if we are unable to arrange a mutually satisfactory alternative rate to LIBOR for our variable rate mortgage debt and the credit facility debt. Further, the absence of LIBOR or a generally acceptable alternative thereto may make it difficult to hedge our interest rate exposure on variable rate mortgage debt that we incur in the future which in turn may make it more difficult to acquire properties. \nCertain of our net leases and our ground leases require us to pay property related expenses that are not the obligations of our tenants. \nUnder the terms of substantially all of our net leases, in addition to satisfying their rent obligations, our tenants are responsible for the payment of real estate taxes, insurance and ordinary maintenance and repairs. However, under the provisions of certain net and ground leases, we are required to pay some expenses, such as the costs of environmental liabilities, roof and structural repairs, insurance premiums, certain non-structural repairs and maintenance. If our properties incur significant expenses that must be paid by us under the terms of our leases, our business, financial condition and results of operations will be adversely affected and the amount of cash available to meet expenses and pay dividends may be reduced. \n### Risks Related to Real Estate Investments \nOur revenues and the value of our portfolio are affected by a number of factors that affect investments in leased real estate generally. \nWe are subject to the general risks of investing in leased real estate. These include the non-performance of lease obligations by tenants, leasehold improvements that will be costly or difficult to remove should it become necessary to re-rent the leased space for other uses, covenants in certain retail leases that limit the types of tenants to which available space can be rented (which may limit demand or reduce the rents realized on re-renting), rights to terminate leases due to co-tenancy provisions, events of casualty or condemnation affecting the leased space or the property or due<|endoftext|>### EXPLANATORY NOTE \nWorthington Industries, Inc. (Worthington Industries) hereby amends its Annual Report on Form 10-K for the fiscal year ended May 31, 2021, filed with the Securities and Exchange Commission (the SEC) on July30, 2021 (the Form 10-K), as set forth in this Annual Report on Form 10-K/A (Amendment No. 1) (this Form 10-K/A). \nThis Form 10-K/A is being filed solely to modify hyperlinks within the Index to Exhibits to include the Consent of Independent Registered Public Accounting Firm as Exhibit 23.1 and the Consent of Independent Auditors as Exhibit 23.2.The inclusion of the Consent of Independent Registered Public Accounting Firm does not affect the report of KPMG LLP dated July 30, 2021, with respect to the consolidated financial statements and financial statement schedule II of Worthington Industries and the effectiveness of internal control over financial reporting included in the Form 10-K.The inclusion of the Consent of Independent Auditors as Exhibit 23.2 does not affect the report of KPMG LLP dated February 16, 2021, with respect to the consolidated financial statements of Worthington Armstrong Venture and its subsidiaries. \nThis Form 10-K/A also includes currently-dated certifications by Worthington Industries Principal Executive Officer and Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 and Rule 13a-14(a)/15d-14(a) under the Securities Exchange Act of 1934, as amended, in addition to the Exhibit 23.1 and the Exhibit 23.2 referred to above.Accordingly, Part IV, Item 15 of the Form 10-K is amended to reflect the filing of these exhibits. \nNo other changes are being made to the Form 10-K by means of this Form 10-K/A.This Form 10-K/A does not reflect subsequent events occurring after the original filing date of the Form 10-K or update in any way disclosures made in the Form 10-K other than as described above.This Form 10-K/A should be read in conjunction with Worthington Industries filings with the SEC subsequent to the filing of the Form 10-K. \n### PART IV \nItem 15. \n(a) \nThe following documents were filed as a part of the Form 10-K or are filed as a part of this Form 10-K/A as noted: \n(1) \n\nThe consolidated financial statements (and report thereon) listed below were filed as a part of the Form 10-K: \nReport of Independent Registered Public Accounting Firm (KPMG LLP) \nConsolidated Balance Sheets as of May 31, 2021 and 2020 \nConsolidated Statements of Earnings for the fiscal years ended May 31, 2021, 2020 and 2019 \nConsolidated Statements of Comprehensive Income for the fiscal years ended May 31, 2021, 2020 and 2019 \nConsolidated Statements of Equity for the fiscal years ended May 31, 2021, 2020 and 2019 \nConsolidated Statements of Cash Flows for the fiscal years ended May 31, 2021, 2020 and 2019 \nNotes to Consolidated Financial Statements fiscal years ended May 31, 2021, 2020 and 2019 \n(2) \nFinancial Statement Schedule \n: \nThe financial statement schedule listed below was filed as a part of the Form 10-K: \n\nAll other financial statement schedules for which provision is made in the applicable accounting regulations of the SEC were omitted from the Form 10-K because they are not required or the required information has been presented in the aforementioned consolidated financial statements or notes thereto. \n(3) \nExhibits Required by Item 601 of Regulation S-K \n: \nThe documents listed in the Index to Exhibits that immediately precedes the signatures page ofthis Form 10-K/A (i) were filed or furnished with the Form 10-K as exhibits or incorporated by reference therein, in each case as noted, or (ii) are filed with this Form 10-K/A as exhibits.Each management contract or compensatory plan or arrangement is identified as such in the Index to Exhibits. \n(b) \n### Exhibits \n:The documents listed in the Index to Exhibits that immediately precedes the Signatures page of this Form 10-K/A (i) were filed or furnished with the Form 10-K as exhibits or incorporated into the Form 10-K by reference, in each case as noted, or (ii) are filed with this Form 10-K/A as exhibits. \n(c) \n\n:The financial statement schedule listed in Item 15(a)(2) above was filed with the Form 10-K. \n[Remainder of page intentionally left blank] \n### INDEX TO EXHIBITS \nExhibit \nDescription of Exhibit \nLocation \n3.1 \nAmended Articles of Incorporation of Worthington Industries, Inc., as filed with the Ohio Secretary of State on October 13, 1998 P \nIncorporated herein by reference to Exhibit 3(a) to the Registrants Quarterly Report on Form 10-Qfor the quarterly period ended August31, 1998 (SEC File No. 0-4016) \n3.2 \nCode of Regulations of Worthington Industries, Inc. (reflecting all amendments through the date of this Annual Report on Form 10-K) [This document represents the Code of Regulations of Worthington Industries, Inc. in compiled form incorporating all amendments.] \nIncorporated herein by reference to Exhibit3(b) to the Registrants Quarterly Report on Form 10-Q for the quarterly period ended August31, 2000 (SEC File No. 1-8399) \n4.1 \nSecond Amended and Restated Credit Agreement, dated as of February 16, 2018, among Worthington Industries, Inc., as a Borrower; Worthington Industries International S..r.l., as a Borrower; PNC Bank, National Association, as a Lender, and the Swingline Lender, an Issuing Bank and the Administrative Agent; JPMorgan Chase Bank, N.A., as a Lender and the Syndication Agent; Bank of America, N.A.; Branch Banking and Trust Company; U.S. Bank National Association; Wells Fargo Bank, National Association; Fifth Third Bank; The Huntington National Bank; and The Northern Trust Company, as Lenders (collectively with PNC Bank, National Association and JPMorgan Chase Bank, N.A., the Lenders); with Bank of America, N.A., Branch Banking and Trust Company, U.S. Bank National Association and Wells Fargo Bank, National Association serving as Co-Documentation Agents; and JPMorgan Chase Bank, N.A. and PNC Capital Markets LLC serving as Joint Bookrunners and Joint Lead Arrangers \nIncorporated herein by reference to Exhibit4.1 to the Registrants Current Report on Form 8-K dated February 22, 2018 and filed with the SEC on the same date (SEC File No.1-8399) \n4.2 \nIndenture, dated as of April 13, 2010, between Worthington Industries, Inc. and U.S. \nIncorporated herein by reference to Exhibit 4.1 to the Registrants Current Report on Form 8-K dated April 13, 2010 and filed with the SEC on the same date (SEC File No. 1-8399) \n4.3 \nFirst Supplemental Indenture, dated as of April 13, 2010, between Worthington Industries, Inc. and U.S. [Note: The First Supplemental Indenture relates to the 6.50% Notes Due April 15, 2020 that were redeemed in full on August 30, 2019.] \nIncorporated herein by reference to Exhibit 4.2 to the Registrants Current Report on Form 8-K dated April 13, 2010 and filed with the SEC on the same date (SEC File No. 1-8399) \n4.4 \nForm of 6.50% Global Note Due April 15, 2020 (included as Exhibit A in Exhibit 4.3 incorporated by reference in this Annual Report on Form 10-K) [ \n### NOTE \n: The 6.5% Notes Due April 15, 2020 were redeemed in full on August 30, 2019.] \nIncorporated herein by reference to Exhibit 4.3 (included in Exhibit 4.2) to the Registrants Current Report on Form 8-K dated April 13, 2010 and filed with the SEC on the same date (SEC File No. 1-8399) \n### Exhibit \nDescription of Exhibit \nLocation \n4.5 \nSecond Supplemental Indenture, dated as of April 15, 2014, between Worthington Industries, Inc. and U.S. \nIncorporated herein by reference to Exhibit4.2 to the Registrants Current Report on Form 8-K dated April15, 2014 and filed with the SEC on the same date (SEC File No. 1-8399) \n4.6 \nForm of 4.55% Global Note Due April 15, 2026 (included as Exhibit A in Exhibit 4.5 incorporated by reference in this Annual Report on Form 10-K) \nIncorporated herein by reference to Exhibit 4.3 (included in Exhibit4.2) to the Registrants Current Report on Form 8-K dated April15, 2014 and filed with the SEC on the same date (SEC File No. 1-8399) \n4.7 \nThird Supplemental Indenture, dated as of July 28, 2017, between Worthington Industries, Inc. and U.S. \nIncorporated herein by reference to Exhibit 4.2 to the Registrants Current Report on Form 8-K dated July 28, 2017 and filed with the SEC on the same date (SEC File No. 1-8399) \n4.8 \nForm of 4.300% Global Note due August 1, 2032 (included as Exhibit A in Exhibit 4.7 incorporated by reference in this Annual Report on Form 10-K) \nIncorporated herein by reference to Exhibit 4.3 (included in Exhibit 4.2) to the Registrants Current Report on Form 8-K dated July 28, 2017 and filed with the SEC on the same date (SEC File No. 1-8399) \n4.9 \nNote Agreement, dated as of August10, 2012, between Worthington Industries, Inc. and The Prudential Insurance Company of America, Pruco Life Insurance Company of New Jersey, Pruco Life Insurance Company, Prudential Arizona Reinsurance Universal Company, Prudential Annuities Life Assurance Corporation, The Prudential Life Insurance Company, Ltd. and The Gibraltar Life Insurance Co., Ltd. \n1-8399) \n4.10 \nForm of 4.60% Senior Note due August 10, 2024 (included as Exhibit A in Exhibit 4.9 incorporated by reference in this Annual Report on Form 10-K) \n1-8399) \n4.11 \nAmendment No. 1 to Note Agreement, dated June10, 2015, among Worthington Industries, Inc., on the one hand, and The Prudential Insurance Company of America, Pruco Life Insurance Company of New Jersey, Pruco Life Insurance Company, Prudential Arizona Reinsurance Universal Company, Prudential Annuities Life Assurance Corporation, The Prudential Life Insurance Company, Ltd. \nIncorporated herein by reference to Exhibit 4.9 to the Registrants Annual Report on Form 10-K for the fiscal year ended May31, 2015 (SEC File No. 1-8399) \n### Exhibit \nDescription of Exhibit \nLocation \n4.12 \nAmendment No. 2 to Note Agreement, dated August 23, 2019, with reference to the Note Agreement, dated as of August 10, 2012 (as amended by Amendment No. 1 to Note Agreement dated June 10, 2015), among Worthington Industries, Inc., on the one hand, and The Prudential Insurance Company of America, Pruco Life Insurance Company of New Jersey, Pruco Life Insurance Company, Prudential Arizona Reinsurance Universal Company, Prudential Annuities Life Assurance Corporation, The Prudential Life Insurance Company, Ltd. \nIncorporated herein by reference to Exhibit 4.5 to the Registrants Current Report on Form 8-K dated August 28, 2019 and filed with the SEC on the same date (SEC File No. 1-8399) \n4.13 \nNote Purchase and Private Shelf Agreement, dated as of August 23, 2019, among Worthington Industries, Inc., Worthington Industries International S. r.l. and Worthington Cylinders GmbH, on the one hand, and PGIM, Inc., The Prudential Insurance Company of America, Pruco Life Insurance Company and Prudential Legacy Insurance Company of New Jersey, on the other hand \nIncorporated herein by reference to Exhibit 4.1 to the Registrants Current Report on Form 8-K dated August 28, 2019 and filed with the SEC on the same date (SEC File No., 1-8399) \n4.14 \nForm of 1.56% Series A Senior Note due August 23, 2021 issued on August 23, 2019 by Worthington Industries International S. r.l. (included as Exhibit A-1 within Exhibit 4.13 incorporated by reference in this Annual Report on Form 10-K) \nIncorporated herein by reference to Exhibit 4.2 (and included as Exhibit A-1 within Exhibit 4.1) to the Registrants Current Report on Form 8-K dated August 28, 2019 and filed with the SEC on the same date (SEC File No. 1-8399) \n4.15 \nForm of 1.90% Series B Senior Note due August 23, 2034 issued on August 23, 2019 by Worthington Cylinders GmbH (included as Exhibit A-2 within Exhibit 4.13 incorporated by reference in this Annual Report on Form 10-K) \nIncorporated herein by reference to Exhibit 4.3 (and included as Exhibit A-2 within Exhibit 4.1) to the Registrants Current Report on Form 8-K dated August 28, 2019 and filed with the SEC on the same date (SEC File No. 1-8399) \n4.16 \nGuaranty Agreement, dated as of August 23, 2019, from Worthington Industries, Inc. in favor of the Holders (as defined in the Guaranty Agreement) \nIncorporated herein by reference to Exhibit 4.4 to the Registrants Current Report on Form 8-K dated August 28, 2019 and filed with the SEC on the same date (SEC File No. 1-8399) \n4.17 \nAgreement to furnish instruments and agreements defining rights of holders of long-term debt to the Securities and Exchange Commission upon request \nPreviously filed as Exhibit 4.17 with the<|endoftext|>Earned and unpaid amounts owed to him under the employment agreement and such other accrued benefits as may be provided for under the agreement. For purposes of Mr. Boegners employment agreement, good reason means a material breach by the Company of its obligations to Mr. Boegner under the agreement. In addition, for purposes of the agreement, cause exists if Mr. Boegner (i) acted dishonestly or incompetently or engaged in willful misconduct in performance of his executive duties, (ii) breached fiduciary duties owed to the Company, (iii) intentionally failed to perform reasonably assigned duties, (iv) willfully violated any law, rule or regulation, or court order (other than minor traffic violations or similar offenses), or otherwise committed any act which would have a material adverse impact on the business of the Company, and/or (v) is in breach of his obligations under the agreement and fails to cure such breach within thirty (30) days after receiving notice of the breach from the Company. \nWe are also obligated under Mr. Boegners employment agreement to provide certain payments to Mr. Boegner in the event of his death or termination by reason of his incapacity. In the event of Mr. Boegners death, we are obligated to pay his estate all accrued sums due and owing to Mr. Boegner with respect to his salary and such other benefits as may be provided under his agreement. In addition, in the event we terminate Mr. Boegners employment by reason of his incapacity, Mr. Boegner is entitled to any accrued amounts due and owing to him with respect to his salary and such other benefits as may be provided under his agreement. \nPursuant to Mr. Majors employment agreement with the Company, in the event of a change in control that results in Mr. Major being terminated, or if the Senior Vice President of Finance position is eliminated without Mr. Major being offered a mutually-agreed comparable opportunity at an affiliate of the Company, Mr. Major will be entitled to severance equal to one year of his base salary. In addition, Mr. Majors $30,000 cash signing bonus is subject to forfeiture in the event Mr. \nThe employment agreement for Mr. Roberson does not provide for any specified severance benefits. However, Mr. Roberson, along with Mr. Cerminara, would have been entitled during the 2019 fiscal year to severance and other benefits, such as accrued vacation, pursuant to the Companys then-existing severance policy available to all salaried employees. \nMr. Cerminara resigned as the Companys Chief Executive Officer on April 13, 2020. He continues to serve as the Companys Chairman. In connection with Mr. Cerminaras resignation, 120,000 stock options granted under the 2010 Plan were either forfeited or expired. Equity awards granted to Mr. Cerminara under the 2017 Plan, consisting of 20,000 vested stock options, 60,000 unvested stock options and 88,334 unvested restricted stock units as of April 13, 2020, remain outstanding and continue to vest in accordance with their terms due to Mr. Cerminaras continued service as a member of the Board. On June 12, 2020, the Compensation Committee of the Board approved the treatment of Mr. Cerminaras outstanding equity awards. Following his resignation as Chief Executive Officer, Mr. , as described below under Director Compensation. \n2017 Omnibus Equity Compensation Plan Change in Control Provisions \nOur 2017 Plan, which was initially approved by our stockholders on June 15, 2017, with the amendment and restatement of the 2017 Plan, effective as of October 28, 2019, approved by our stockholders on December 17, 2019, generally provides for double-trigger vesting of equity awards in connection with a change in control of the Company, as described below. \nTo the extent that outstanding awards granted under the 2017 Plan are assumed in connection with a change in control, except as otherwise provided in the applicable award agreement or in another written agreement with the participant, all outstanding awards will continue to vest and become exercisable (as applicable) based on continued service during the remaining vesting period, with performance-based awards being converted to service-based awards at the target level. Vesting and exercisability (as applicable) of awards that are assumed in connection with a change in control generally would be accelerated in full on a double-trigger basis, if, within two years after the change in control, the participants employment is involuntarily terminated without cause, or by the participant for good reason. Any stock options or stock appreciation rights (SARs) that become vested on a double-trigger basis generally would remain exercisable for the full duration of the term of the applicable award. \nTo the extent outstanding awards granted under the 2017 Plan are not assumed in connection with a change in control, then such awards generally would become vested in full on a single-trigger basis, effective immediately prior to the change in control, with performance-based awards becoming vested at the target level. Any stock options or SARs that become vested on a single-trigger basis generally would remain exercisable for the full duration of the term of the applicable award. \nThe Compensation Committee has the discretion to determine whether or not any outstanding awards granted under the 2017 Plan will be assumed by the resulting entity in connection with a change in control, and the Compensation Committee has the authority to make appropriate adjustments in connection with the assumption of any awards. The Compensation Committee also has the right to cancel any outstanding awards in connection with a change in control, in exchange for a payment in cash or other property (including shares of the resulting entity) in an amount equal to the excess of the fair market value of the shares subject to the award over any exercise price related to the award, including the right to cancel any underwater stock options and SARs without payment therefor. \nFor purposes of the 2017 Plan, subject to the exceptions set forth in the 2017 Plan, a change in control generally includes (a) the acquisition of more than 50% of the voting power or value of the Companys stock; (b) the incumbent board of directors ceasing to constitute a majority of the board of directors during a twelve-month period; and (c) the acquisition of 50% or more of the gross fair market value of the Companys assets over a twelve-month period. The full definition of change in control is set out in the 2017 Plan. \nFor purposes of the 2017 Plan, unless otherwise defined in a written agreement with the participant or an applicable severance plan, cause, as a reason for the Companys termination of a participants employment, generally means that the participant (a) acted dishonestly or incompetently or engaged in willful misconduct in performance of his or her duties; (b) breached fiduciary duties owed to the Company; (c) intentionally failed to perform reasonably assigned duties, which the participant did not satisfactorily correct within 30 calendar days following written notification; (d) was convicted or entered a plea of guilty or nolo contendere of any felony crime involving dishonesty; or (e) otherwise committed any act which could have a material adverse impact on the business of the Company. \nFor purposes of the 2017 Plan, unless otherwise defined in a written agreement with the participant or an applicable severance plan, good reason, as a reason for a participants termination of his or her employment, generally means the occurrence of any of the following without the participants consent (and unless timely cured by the Company following notice from the participant): (a) any material diminution in the participants compensation or benefits, unless generally applicable to all similarly situated employees of the Company; (b) the assignment to the participant of any duties inconsistent with, or substantially adverse to, his or her status and duties, or a reduction in title; (c) a material breach by the Company or a subsidiary of its obligations under the participants employment agreement, if any; or (d) the relocation of the participants primary work location to a location more than fifty miles away from the current location. \nExcept as described above with respect to a change in control, unexercisable stock options, unvested restricted shares and unvested RSUs generally become forfeited upon termination of employment. The stock options that are exercisable at the time of termination of employment expire within the earlier of thirty days after such termination or the expiration date of the options. Upon termination for cause, all options, whether or not exercisable, are generally automatically forfeited. \nAwards granted under the 2017 Plan may be subject to forfeiture or recoupment as determined by the Compensation Committee in the event of certain detrimental activity, such as a participants breach of applicable restrictive covenants. Awards granted under the 2017 Plan also may be subject to forfeiture or recoupment as provided pursuant to any compensation recovery (or clawback) policy that the Company may adopt or maintain from time to time. \n2010 Long-Term Incentive Plan Change in Control Provisions \nThe 2010 Plan provides that no acceleration of an award shall occur upon or after a change in control unless such acceleration is provided for in the applicable award agreement and determined by the Compensation Committee on a grant-by-grant basis or as may be provided in an after written agreement between the Company and the grantee. The award agreements for the stock options and restricted shares granted to Messrs. Cerminara and Boegner under the 2010 Plan provide for accelerated vesting of all unvested options and restricted shares upon the occurrence of a change in control while the grantee is employed by the Company or a subsidiary of the Company as of the date of the change in control. \nFor purposes of the 2010 Plan, subject to the exceptions set forth in the 2010 Plan, a change in control generally includes (i) the acquisition of more than 50% of the Companys common stock; (ii) over a twelve-month period, the acquisition of more than 50% of the Companys common stock or the replacement of a majority of the board of directors by directors not endorsed by the persons who were members of the board before the new directors appointment; and (iii) the acquisition of more than 50% of the total gross fair market value of all the assets of the Company over a twelve-month period. \n\nThe Compensation Committee of the Board of Directors consists of Messrs. Lanktree (Chair), Gerber and Roschman, none of whom has been at any time an executive officer or employee of the Company, or has any relationship requiring disclosure under Item 404 of Regulation S-K. None of our executive officers serves, or in the past has served, on the board of directors, or as a member of the compensation committee (or other committee performing an equivalent function) of the board of directors of any entity that has one or more executive officers who serve as members of our Board of Directors or Compensation Committee. \n\nThe following report of the Compensation Committee shall not be deemed to be soliciting material or to be filed with the Securities and Exchange Commission, nor shall this report be incorporated by reference into any filing made by the Company under the Securities Act of 1933, as amended, or the Exchange Act. \nThe Compensation Committee has reviewed and discussed the executive compensation, as disclosed above, with management. Based on this review and those discussions, the Compensation Committee recommended that the executive compensation be included in this report. \n### By the Compensation Committee \nCharles T. Lanktree (Chair) \nWilliam J. Gerber \n### Robert J. Roschman \nApril 28, 2021 \nDIRECTOR COMPENSATION \nThe following table sets forth the compensation paid to the Companys directors in fiscal 2020. Following Mr. Cerminaras resignation as the Companys Chief Executive Officer on April 13, 2020, Mr. \n(1) \nAlthough not included in the above table, the directors are reimbursed for their out-of-pocket expenses of attending meetings of the Board of Directors. \n(2) \nOn July 1, 2020, Messrs. Cerminara, Gerber, Lanktree, Roschman and Suh were each granted 28,662 RSUs under the 2017 Plan. The amounts shown in this column include the fair value of the annual RSU award on the date of grant, which<|endoftext|>On the resources available to us, including information provided by the target of the potential business combination and, in some circumstances, third-party investigations, and such an investigation will not necessarily result in the business combination ultimately being successful. \nMoreover, the due diligence investigation that we will carry out may not reveal or highlight all relevant facts (including bribery, fraud or other illegal activities) or risks that are necessary or helpful in evaluating such potential business combination. Instances of bribery, fraud, accounting irregularities and other improper, illegal or corrupt practices can be difficult to detect. Such misconduct may undermine our due diligence efforts with respect to the target of the potential business combination. Further, we may not identify or foresee future developments that could have a material adverse effect on the target, such as misconduct by personnel at the target. Financial fraud or other deceptive practices, or failures by such personnel to comply with anti-bribery, trade sanctions or other legal and regulatory requirements, could cause significant legal, reputational and business harm to us. \n### Table of Content \n\nOn March 11, 2020, the World Health Organization characterized the COVID-19 outbreak as a pandemic. Furthermore, we may be unable to complete a business combination if continued concerns relating to COVID-19 restrict travel, limit the ability to conduct due diligence and have meetings with potential investors or the target companys personnel, vendors and services providers are unavailable to negotiate and consummate a transaction in a timely manner, or if COVID-19 causes a prolonged economic downturn. \n\nIn addition, our ability to coordinate as a team or to consummate a business combination may be dependent on the ability to raise equity and debt financing which may be adversely impacted by COVID-19 and other events, including as a result of increased market volatility, decreased market liquidity and third party financing being available on terms acceptable to us or at all. \n\n\n### Table of Content \n\nIf we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our Sponsor, directors, officers, advisors or their affiliates may purchase Public Shares or Public Warrants or a combination thereof in privately negotiated transactions or in the open market, although they are under no obligation to do so. \n\n\n\n\n### Table of Content \n\nSince the net proceeds of the Initial Public Offering and the sale of the Private Placement Warrants are intended to be used to complete an initial business combination with a target business that has not been identified, we may be deemed to be a blank check company under the United States securities laws. However, because we had net tangible assets in excess of $5,000,000 upon the successful completion of the Initial Public Offering and the sale of the Private Placement Warrants and filed a Current Report on Form 8-K, including an audited balance sheet demonstrating this fact, we are exempt from rules promulgated by the SEC to protect investors in blank check companies, such as Rule 419. \n\n\n\n### Table of Content \n\nIf the net proceeds of the Initial Public Offering and the sale of the Private Placement Warrants not being held in the Trust Account are insufficient to allow us to operate for at least the next 24 months, we may be unable to complete our initial business combination, in which case our public stockholders may only receive $10.00 per share, or less than such amount in certain circumstances, and our Warrants will expire worthless. \nWe believe that the funds available to us outside of the Trust Account will be sufficient to allow us to operate for at least the next 24 months; \n\n### Table of Content \nAs of December 31, 2020, we had cash of $1,087,876 held outside of the trust. Up to $2,000,000 of such loans may be converted into private placement-equivalent Warrants at a price of $1.00 per Warrant at the option of the lender. \n\n\n### Table of Content \nPursuant to a letter agreement, our Sponsor has agreed that it will be liable to us if and to the extent any claims by a third party for services rendered or products sold to us, or a prospective target business with which we have entered into a written letter of intent, confidentiality or similar agreement or business combination agreement, reduce the amount of funds in the Trust Account to below the lesser of (i) $10.00 per Public Share and (ii) the actual amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account, if less than $10.00 per share due to reductions in the value of the trust assets, less taxes payable, provided that such liability will not apply to any claims by a third party or prospective target business who executed a waiver of any and all rights to the monies held in the Trust Account (whether or not such waiver is enforceable) nor will it apply to any claims under our indemnity of the Underwriters of the Initial Public Offering against certain liabilities, including liabilities under the Securities Act. \n\n\n\n### Table of Content \nor (iii) absent an initial business combination within 24 months from the closing of the Initial Public Offering or during any Extension Period, our return of the funds held in the Trust Account to our public stockholders as part of our redemption of the Public Shares. \n\nOn December 10, 2020, the SECs office of Investor Education and Advocacy issued an investor bulletin entitled \n\n\n\n### Table of Content \n\nPursuant to an agreement entered into concurrently with the issuance and sale of the securities in the Initial Public Offering, our initial stockholders and their permitted transferees can demand that we register the shares of Class A Common Stock into which our founder shares are convertible, the Private Placement Warrants, the shares of Class A Common Stock issuable upon exercise of the Private Placement Warrants held, or to be held, by them, and holders of Warrants that may be issued upon conversion of working capital loans may demand that we register such Warrants or the Class A Common Stock issuable upon exercise of such Warrants. \n\nWe will not, under the terms of our amended and restated certificate of incorporation, be permitted to effectuate our initial business combination with another blank check company or similar company with nominal operations. \n\n\n### Table of Content \nWe will consider an initial business combination outside of our management teams area of expertise if an initial business combination candidate is presented to us and we determine that such candidate offers an attractive business combination opportunity for our company or we are unable to identify a suitable candidate in our management teams area of expertise after having expended a reasonable amount of time and effort in an attempt to do so. In the event we elect to pursue a business combination outside of the areas of our management teams expertise, our management teams expertise may not be directly applicable to its evaluation or operation, and the information contained in this Form 10-K regarding the areas of our management teams expertise would not be relevant to an understanding of the business that we elect to acquire. \n\n\n\n\n\n### Table of Content \n\n\nOur amended and restated certificate of incorporation authorizes the issuance of up to 200,000,000 shares of Class A Common Stock, par value $0.0001 per share, 20,000,000 shares of Class B common stock, par value $0.0001 per share, and 1,000,000 shares of preferred stock, par value $0.0001 per share. As of today there are 155,000,000 and 8,750,000 authorized but unissued shares of Class A Common Stock and Class B common stock, respectively, available for issuance, which amount does not take into account the shares of Class A Common Stock reserved for issuance upon exercise of outstanding Warrants. \nWe may also issue shares of Class A Common Stock to redeem the Warrants in certain circumstances as described in this Form 10-K or upon conversion of the Class B common stock at a ratio greater than one-to-one at the time of our initial business combination as a result of the anti-dilution provisions contained in our amended and restated certificate of incorporation. However, our officers and directors have agreed, pursuant to a written agreement with us, that they will not propose any amendment to our amended and restated certificate of incorporation (A) to modify the substance or timing of our obligation to allow redemption in connection with our initial business combination or to redeem 100% of our Public Shares if we do not complete our initial business combination within 24 months from the closing of the Initial Public Offering or (B) with respect to any other provision relating to stockholders rights or pre-initial business combination activity, unless we provide our public stockholders with the opportunity to redeem their shares of common stock upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest (which interest shall be net of taxes payable), divided by the number of then outstanding Public Shares. \nTable of Content may significantly dilute the equity interest of our investors; \n\n\nWe may engage in a business combination with one or more target businesses that have relationships with entities that may be affiliated with our Sponsor, its members or officers, directors or existing holders, which may raise potential conflicts of interest. \nIn light of the involvement of our Sponsor, its members, and our officers and directors with other businesses, we may decide to acquire one or more businesses affiliated with or competitive with our Sponsor, any of its members, our officers or directors and their respective affiliates. Our directors also serve as officers and/or board members for other entities. Such entities and entities affiliated with our Sponsor and its members, may compete with us for business combination opportunities. Our officers and directors are not currently aware of any specific opportunities for us to complete our initial business combination with any entities with which they are affiliated, and there have been no substantive discussions concerning an initial business combination with any such entity or entities. Although we will not be specifically focusing on, or targeting, any transaction with any affiliated entities, we would pursue such a transaction if we determined that such affiliated entity met our criteria for an initial business combination and such transaction was approved by a majority of our independent and disinterested directors. Despite our agreement to obtain an opinion from an independent investment banking firm or from an independent accounting firm, regarding the fairness to our company from a financial point of view of a business combination with one or more domestic or international businesses affiliated with our Sponsor, officers, directors or existing holders, potential conflicts of interest still may exist and, as a result, the terms of the business combination may not be as advantageous to our public stockholders as they would be absent any conflicts of interest. \n### Table of Content \nAlthough we expect to benefit from PJT Partners LPs network of relationships and processes for sourcing and assessing potential acquisition targets, neither PJT Partners LP nor any of its affiliates has any legal or contractual obligation to provide such support with or to present to us any investment opportunities that might be suitable as our initial business combination. \nAlthough we expect to benefit from PJT Partners LP network of relationships and processes for sourcing and assessing potential acquisition targets, neither PJT Partners LP nor any of its affiliates has any legal or contractual obligation to provide such support with or to present to us any investment opportunities that might be suitable as our initial business combination. We have no advisory or other arrangement in place with PJT Partners LP that would obligate it to undertake any such efforts on our behalf or that govern the manner in which PJT Partners LP will allocate investment opportunities. Even if PJT Partners LP refers an opportunity to us, no assurance can be<|endoftext|>Had management and deal execution experience with acquisitions in the past. You should not rely on the historical record of performance of BOC or our management team and members of our Board as indicative of our future performance of an investment in us or the returns we will, or are likely to, generate going forward. Additionally, in the course of their respective careers, members of our management team and Board have been involved in businesses and deals that were unsuccessful. \nOur public stockholders may not be afforded an opportunity to vote on our proposed Business Combination, which means we may complete our initial Business Combination even though holders of a majority of our common stock do not support such a combination. \nWe may not hold a stockholder vote to approve our Business Combination unless the initial Business Combination would require stockholder approval under applicable law or stock exchange listing requirements, or if we decide to hold a stockholder vote for business or other legal reasons. Please refer to Item 1. Business - Stockholders May Not Have the Ability to Approve Our Initial Business Combination for additional information. \nIf we seek stockholder approval of our initial Business Combination, our sponsor has agreed to vote in favor of such initial Business Combination, regardless of how our public stockholders vote \nUnlike many other blank check companies in which the initial stockholders agree to vote their founder shares in accordance with the majority of the votes cast by the public stockholders in connection with our initial Business Combination, our sponsor agreed, and their permitted transferees will agree, to vote their founder shares, as well as any public shares purchased during or after our Public Offering, in favor of our Business Combination. Our sponsor and their permitted transferees, if any, will own shares representing at least 20% of our outstanding shares of common stock at the time of any such stockholder vote. Accordingly, if we seek stockholder approval of our initial Business Combination, it is more likely that the necessary stockholder approval will be received than would be the case if our sponsor agreed to vote their founder shares in accordance with the majority of the votes cast by our public stockholders. \n\nAt the time of your investment in us, you were not provided with an opportunity to evaluate the specific merits or risks of one or more target businesses. Since our Board may complete a Business Combination without seeking stockholder approval in certain circumstances, public stockholders may not have the right or opportunity to vote on the Business Combination, unless we seek such stockholder vote. \n\nFurthermore, in no event will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 upon completion of our initial Business Combination (so that we are not subject to the SECs penny stock rules) or any greater net tangible asset or cash requirement that may be contained in the agreement relating to our initial Business Combination. \n\nThe amount of the deferred underwriting commissions payable to the underwriters will not be adjusted for any shares that are redeemed in connection with the consummation of a Business Combination. \n\n\n\nAny potential target business with which we enter into negotiations concerning a Business Combination will be aware that we must complete our initial Business Combination by January 25, 2022. \nWe may not be able to complete our initial Business Combination within the prescribed time frame, in which case we would cease all operations except for the purpose of winding up and we would redeem our public shares and liquidate, in which case our public stockholders may only receive $10.20 per share, or less than such amount in certain circumstances, and our warrants will expire worthless. \nOur amended and restated certificate of incorporation provides that we must complete our initial Business Combination by January 25, 2022. For example, the coronavirus (COVID-19) outbreak continues on a large scale both in the U.S. If we have not completed our initial Business Combination within such time period, we will: (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account and not previously released to us to pay our franchise and income taxes as well as expenses relating to the administration of the trust account (less up to $100,000 of interest released to us to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our Board, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. In such case, our public stockholders may only receive $10.20 per share, and our warrants will expire worthless. \nIf we seek stockholder approval of our initial Business Combination, our sponsor, directors, officers, advisors and their affiliates may elect to purchase shares or public warrants from public stockholders or public warrant holders, which may influence a vote on a proposed Business Combination and reduce the public float of our Class A common stock. \nIf we seek stockholder approval of our initial Business Combination and we do not conduct redemptions in connection with our Business Combination pursuant to the tender offer rules, our sponsor, directors, officers, advisors or their affiliates may purchase shares or public warrants or a combination thereof in privately negotiated transactions or in the open market either prior to or following the completion of our initial Business Combination, although they are under no obligation to do so. \n\n\nSee Item 1. Business - for additional information. \n\nOur public stockholders will be entitled to receive funds from the trust account only upon the earliest to occur of: (i) our completion of an initial Business Combination, and then only in connection with those shares of our common stock that such stockholder properly elected to redeem, subject to certain limitations, (ii) the redemption of any public shares properly submitted in connection with a stockholder vote to amend our amended and restated certificate of incorporation (x) to modify the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial Business Combination by January 25, 2022 or (y) with respect to any other provision relating to stockholders rights or pre-initial Business Combination activity, and (iii) the redemption of our public shares if we are unable to complete an initial Business Combination by January 25, 2022, subject to applicable law and as further described herein. In addition, if we are unable to complete an initial Business Combination by January 25, 2022 for any reason, compliance with Delaware law may require that we submit a plan of dissolution to our then-existing stockholders for approval prior to the distribution of the proceeds held in our trust account. In that case, public stockholders may be forced to wait beyond January 25, 2022 before they receive funds from our trust account. \nNASDAQ may delist our securities from trading on its exchange, which could limit stockholders ability to make transactions in our securities and subject us to additional trading restrictions. \nGenerally, we must maintain a minimum amount in stockholders equity (generally $2,500,000) and a minimum number of holders of our shares of common stock (generally 300 round-lot holders) and our warrants (generally 100 round-lot holders). For instance, our stock price would generally be required to be at least $4.00 per share and our stockholders equity would generally be required to be at least $5 million. \n\nOur units, Class A common stock and warrants are listed on NASDAQ and are covered securities. \n\nBecause we have net tangible assets in excess of $5,000,000 and timely filed a Current Report on Form 8-K after the completion of our IPO, including an audited balance sheet demonstrating this fact, we are exempt from rules promulgated by the SEC to protect stockholders in blank check companies, such as Rule 419. Accordingly, stockholders are not afforded the benefits or protections of those rules. Among other things, this means our units were immediately tradable on October 21, 2020 and we will have a longer period of time to complete our initial Business Combination than do companies subject to Rule 419. \n\nIf we seek stockholder approval of our initial Business Combination and we do not conduct redemptions in connection with our initial Business Combination pursuant to the tender offer rules, our amended and restated certificate of incorporation provides that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a group (as defined under Section 13 of the Exchange Act), will be restricted from seeking redemption rights with respect to the Excess Shares. \nIf we are unable to complete our initial Business Combination, our public stockholders may receive only approximately $10.20 per share on our redemption of our public shares, or less than such amount in certain circumstances, and our warrants will expire worthless \nWhile we believe there are numerous target businesses we could potentially acquire with the net proceeds from our IPO and the sale of the private placement warrants, our ability to compete with respect to the acquisition of certain target businesses that are sizable will be limited by our available financial resources. \nFurthermore, because we are obligated to pay cash for the shares of Class A common stock that our public stockholders redeem in connection with our initial Business Combination, target companies will be aware that this may reduce the resources available to us for our initial Business Combination. \nIf the net proceeds of our IPO and the sale of the p rivate p lacement w arrants not being held in the t rust a ccount are insufficient to allow us to operate until January 25, 2022 \n, we may be unable to complete our initial Business Combination, in which case our public stockholders may only receive $10.20 per share, or less than such amount in certain circumstances, and our warrants will expire worthless \nAs of December 31,2020, we had $1,115,282 available to us outside the trust account to fund our working capital requirements. The funds available to us outside of the trust account may not be sufficient to allow us to operate through January 25, 2022 assuming that our initial Business Combination is not completed during that time. \nIf the net proceeds of our \nIPO and the sale of the private placement warrants not being held in the trust account are insufficient, it could limit the amount available to fund our search for a target business or businesses and complete our initial Business Combination and we will depend on loans from our sponsor or management team to fund our search for a Business Combination, to pay our franchise and income taxes as well as expenses relating to the administration of the trust account and to complete our initial Business Combination. \nOf the net proceeds from our IPO and the sale of the private placement warrants, only $1,115,282is available to us as of December 31, 2020outside the trust account to fund our working capital requirements. Consequently, our public stockholders may only receive approximately $10.20 per share on our redemption of our public shares, and our warrants will expire worthless. \nOur search for a Business Combination, and any target business with which we ultimately consummate a Business Combination, may be materially adversely affected by the recent COVID-19 outbreak and the status of debt and equity markets. \nOn January 31, 2020, U.S. A significant outbreak of COVID-19 and other infectious diseases has resulted in a widespread<|endoftext|>In the amount of $250 per month for an eight-month period beginning on May 1, 2020. The $2,000 prepayment was applied to the initial $35,000 amount decreasing the balance to $33,000. Additionally, the Company agreed to pay an increased interest rate of 12.25% on the final $10,000 of the loan until such time as this amount has been paid down with the initial $33,000 amount continuing to be subject to the original 10.25% interest rate. \nIn December 2020, the loan was amended to allow for the release of collateral for the sale lease back transactions with Innovative Industrial Properties, Inc. (IIPR). The amendment increased both interest rates by 2.5% on the loan amounts but allowed the payments resulting from the incremental interest to be deferred until January 1, 2022. The Company elected to defer payment, and the additional 2.5% interest is accrued each month and added to the balance of the loan. The Company is still required to make interest-only payments monthly of 10.25% on the initial $33,000 and 12.25% on the final $10,000 of the loan until January 1, 2022 when the interest rates of 12.75% for the initial $33,000 and 14.75% for the final $10,000 will take effect for the remaining term. \nThe loan matures on May 10, 2024. An exit fee of 20% of the principal balance will be due as principal is repaid. Monthly interest-only payments are required and the Company has paid all interest due as of December 31, 2020. \nThe Company is subject to certain restrictions under the loan agreement, which include the segregation of the proceeds, the use of the funds for permitted uses, and providing security interest on assets acquired with the proceeds. On December 31, 2019, $2,352 of the funds advanced were shown as Restricted Cash on the Consolidated Balance Sheets. \n4FRONT VENTURES CORP. \n\n\n\n\n### Other \nOutstanding as of December 31, 2020 were other payables totaling $6,931 which include notes issued as part of the acquisitions of Healthy Pharms and Arkansas entities as follows: \nFuture minimum payments on the notes payable and convertible debt are as follows: \n### GENERAL AND ADMINISTRATIVE EXPENSES \nFor the year ended December 31, 2020 and 2019, general and administrative expenses were comprised of: \n4FRONT VENTURES CORP. \n\n\n\n\n### SHARE CAPITAL AND EQUITY \nThe Company has authorized an unlimited number of Class A Subordinate Voting Shares (SVS) and Class C Multiple Voting Shares (MVS), all with no par value. In December 2020, the shareholders of the Company passed a resolution to permit the Company to convert all Class B Subordinate Voting Shares (PVS) shares into Class A shares and cancel the Class B PVS equity class, which occurred in 2020 \nAll share classes are included within share capital in the consolidated statements of shareholders equity on an as converted basis. Each share class is entitled to notice of and to attend at any meeting of the shareholders, except a meeting of which only holders of another particular class of shares will have the right to vote. All share classes are entitled to receive dividends, as and when declared by the Company, on an as-converted basis, and no dividends will be declared by the Company on any individual class unless the Company simultaneously declares or pays dividends on all share classes. No subdivision or consolidation of any share class shall be made without simultaneously subdividing or consolidating all share classes in the same manner. \n### Class A Subordinate Voting Shares \nHolders of Class A Subordinate Voting Shares are entitled to one vote in respect of each SVS. \nClass C Multiple Voting Shares \nHolders of Class C Multiple Voting Shares are entitled to 800 votes in respect of each MVS. One MVS can convert to one SVS but are not convertible until the later of the date that (i) the aggregate number of PVS and MVS held by the Initial Holders (being the MVS holders on their initial issuance) are reduced to a number which is less than 50% of the aggregate number of PVS and MVS held by the Initial Holders on the date of completion of the Business Combination with Cannex, and (ii) 3 years following the date of the business combination with Cannex. \nOn November 23, 2020, the Company closed a brokered private placement and issued 24,644,500 Units at a price of C$ 0.70 per Unit. Each Unit is comprised of one subordinate voting share of the Company and one-half of a subordinate voting share purchase warrant. Each whole warrant entitles the holder to purchase one subordinate voting share for a period of two years from the date of issuance at an exercise price of C$ 0.90 per subordinate voting share. Net proceeds from this transaction were $11,557 net of share issuance costs of $690. \nBecause of the Canadian dollar denominated exercise price, these warrants do not qualify to be classified within equity and are therefore classified as derivative liabilities at fair value through profit or loss FVTPL.On November 23, 2020, the warrants were valued using the Black Scholes option pricing model at $4,229 using the following assumptions: Share Price: C$0.94; Exercise Price: C$0.90; Expected Life: 2 years; Annualized Volatility: 87.73%; Dividend yield: 0%; Discount Rate: 0.16%; C$ Exchange Rate: 1.31. \nOn December 31, 2020, the warrants were revalued using the Black Scholes option pricing model, using the following assumptions:Share Price:C$1.15;Expected Life:1.89 years;Annualized Volatility:87.73%; Dividend yield: 0%; Discount Rate: 0.13%; C$ Exchange Rate: 1.27. The increase in the value of the derivative \n4FRONT VENTURES CORP. \n\n\n\nliability of $ \n1,578 is reflected in the statement of comprehensive loss as a \n$ \n78 loss o n the change in fair value of the derivative liability \nAs of December 31, 2020, there were share purchase warrants outstanding to purchase up to 42,772,992 SVS shares: \nAs of December 31, 2020, the Company has the following warrants outstanding and exercisable. \n### NON-CONTROLLING INTERESTS \nThe non-controlling interests of the Company for each affiliate before intercompany elimination are summarized in the tables below: \n4FRONT VENTURES CORP. \n\n\n\n\n18. \n### SHARE-BASED COMPENSATION \nThe Company adopted two equity incentive plans where the Company may grant Class A stock options.Under the terms of the plans, the maximum number of stock options which may be granted are a total of ten percent of the number of shares outstanding assuming conversion of all shares to SVS. The exercise price for stock options issued under the plans will be set by the compensation committee of the board of directors but will not be less than 100% of the fair market value of the Companys shares on the grant date. Stock options have a maximum term of 10 years from the date of grant. Stock options vest at the discretion of the Board. \n4FRONT VENTURES CORP. \n\n\n\n\nAs of December 31, 2020, the Company had the following options outstanding and exercisable on an as-converted basis: \n### Stock option activity is summarized as follows: \nThrough December 31, 2020, 8,792,360 stock options were expired, cancelled or forfeited. During the year ended \nDecember 31, 2020 and 2019, the Company recognized share-based compensation of $5,306 and $5,913 respectively. \nIn determining the amount of equity-based compensation during the year, the Company used the Black-Scholes option pricing model to establish fair value of options granted during the year with the following key assumption: \n4FRONT VENTURES CORP. \n\n\n\n\n19. \n### RELATED PARTIES \nCertain subsidiaries which were acquired in the business combination with Cannex have contractual relationships with two licensed Washington cannabis producer/processors: Superior Gardens LLC (d/b/a Northwest Cannabis Solutions) (NWCS) and 7Point Holdings LLC (7Point). \n\nFor the twelve months ended December 31, 2020 the Company recognized $1,190 from interest revenue on lease receivable for this lease. \nThe Company has entered into a service agreement with NWCS to provide consulting and personnel services for growing and processing cannabis for $30 per month and to act as exclusive purchasing agent for equipment, machinery, and other supplies for $20 per month for a three-year term that expired on January 1, 2021 and automatically renewed for an additional three-year term. \nNWCS and the Company have entered into a packaging supply agreement under commercially reasonable pricing terms by which NWCS submits packaging and equipment orders for Company-designed packaging sold by NWCS under an exclusive license to use Company brands and recipes in the state of Washington. \nAs of December 31, 2019, the Company held three notes receivable from these related parties with a balance of $586. \nAs of December 31, 2020, $597 of the Companys trade receivables were due from NWCS and 7Point (collected in the following year). \nAn officer of the Company is a part-owner of a LI Lending LLC which extended the Company a real estate improvement/development loan of $45,000 of which $43,000 was outstanding as of December 31, 2020. \nAn officer of the Company holds an interest in an online marketing company serving the online CBD market which provides online marketing services for Pure Ratios. Pure Ratios paid $4,875 (2019 - $1,101) for the year ended December 31, 2020 to this vendor for management fees, pass through marketing costs and customer service. \nThe Company had $nil and $696 in such notes at December 31, 2020 and 2019, respectively. \n4FRONT VENTURES CORP. \n\n\n\n\n### CONTINGENCIES \n(a) \nCannabis Industry \nCannabis is still considered a Schedule 1 substance under the Controlled Substance Act. As such, there is an inherent risk related to the federal governments position on cannabis; additionally, the risk exists, due to the Companys business in cannabis, that third party service providers could suspend or withdraw services and as well as the risk that regulatory bodies could impose certain restrictions on the issuers ability to operate in the U.S.; however, the Company has deemed it not reasonable to estimate a potential liability related to the possible enforcement of laws against the medical cannabis industry. \n(b) \n### Contingent consideration payable \nAs part of the acquisition of Om of Medicine, LLC and Cannexs prior acquisition of Pure Ratios, the Company is subject to contingent consideration payable to the sellers. The fair value of the contingent consideration, which is based on specific revenue levels achieved over a 2-3-year period, is as follows: \nThe contingent consideration payable is measured at fair value based on unobservable inputs and is considered a Level 3 financial instrument. The determination of the fair value of these liabilities is primarily driven by the Companys expectations of the respective subsidiaries achieving certain milestones. The expected milestones were assigned probabilities and the expected related cash flows were discounted to derive the fair value of the contingent consideration. \n### OM of Medicine: \nThe contingent consideration payable is determined as the amount in excess of gross sales of $3,400 (for fiscal 2020 and 2021) and $3,500 (2022) to a maximum payable of $6,000. At December 31, 2019, the probability of achieving all milestones to Om of Medicines contingent consideration payable was estimated to be 57%. During 2020, the probability was increased to 100% and the contingent liability was increased by $774 and a loss on the fair value adjustment was recorded to Other in Other Income (Expense) on the Consolidated Statements of Operations and Comprehensive Loss. \nPure Ratios: \nContingent consideration of $750 was earned during 2019 due to CBD sales reaching a milestone, and stock was issued to the seller with a value of $94. Per an amendment to the agreement, $656 of the earned consideration was used to reduce the principal of the Accucanna note receivable. In 2020 an additional $750 was earned due to CBD sales and was used to pay down the Accucanna note. \n4FRONT VENTURES CORP. \n\n\n\n\n(c) \n### Legal Matters \nIn June 2020, the Company sold a legal claim on a consulting client to a third party for $2,480 in cash. Under certain circumstances, the Company will receive additional consideration. The Company is unable to estimate the value of this contingent consideration. The Company recorded a gain of $2,480 that was recorded to Other in Other Income (Expense) on the Consolidated Statements of Operations and Comprehensive Loss. \nFrom time to time, the Company may be involved in certain disputes arising in the ordinary course<|endoftext|>On investments net unrealized gain/(loss) on swap contracts on the statements of operations. \nThe Trust assesses the levels of the investments at each measurement date, and transfers between levels are recognized on the actual date of the event or change in circumstances that caused the transfer in accordance with the Trusts accounting policy regarding the recognition of transfers between levels of the fair value hierarchy. During the years ended December 31, 2020 and 2019, the Trust did not transfer any assets between Levels 1, 2 and 3. \nThe total change in unrealized appreciation (depreciation) included in the statements of operations attributable to level 3 investments still held at December 31, 2020: Swaps ($4,384,210). \nThe total change in unrealized appreciation (depreciation) included in the statements of operations attributable to level 3 investments still held at December 31, 2019: Swaps $1,429,999. \n4. \n### Swap Contracts \nIn addition to authorizing Trading Advisors to manage pre-determined investment levels of futures and forward contracts, certain Series of the Trust will strategically invest a portion or all of their assets in total return swaps, selected at the direction of the Managing Owner. \nThe Trusts investment in swaps will likely differ substantially over time due to cash flows, portfolio management decisions and market movements. The swaps serve to diversify the investment holdings of the Trust and to provide access to programs and advisors that would not be otherwise available to the Trust and are not used for hedging purposes. \nAs of December 31, 2020, All swaps were sold so that no Trusts assets were deposited with over-the-counter counterparties. As of December 31, 2019, approximately 2.4% or $1,177,400 respectively, of the Trusts assets were deposited with over-the-counter counterparties in order to initiate and maintain swaps and is recorded as swap contracts, at fair value on the of the Trust. This cash held with the counterparty is not restricted. \nThe Trust strategically invests assets in one or more swaps linked to certain underlying investments or indices at the direction of the Managing Owner. The Trading Company in which the assets of the Trust will be invested will not own any of the investments or indices referenced by any swap entered into by the Trust. In addition, neither the swap counterparty nor any advisor referenced by any such swap is a Trading Advisor to the Trust. \n\nThe Trust had invested in the following swaps as of and for the year ended December 31, 2020: \nThe Trust had invested in the following swaps as of and for the year ended December 31, 2019: \n5. \nprivate investment companies allocate trading profits or losses on the basis of the proportion of the Trusts capital allocated for trading to each respective private investment company, which bears no relationship to the amount of cash invested by the Trust in the private investment companies. \nThe Galaxy Plus entities are made up a feeder funds in which the Trust invests and master trading entities into which the feeder funds invest. No investment held by the Galaxy Plus master trading entity is greater than 5% of the Trusts total capital. \nThe Trusts investments in private investment companies have certain redemption and liquidity restrictions which are described in the following table: \n\n\n\n\n\n\n6. Transactions with Affiliates \nThe Managing Owner contributes funds to the Trust in order to have a 1% interest in the aggregate capital, profits and losses and in return will receive units designated as general units in the Series of the Trust in which the Managing Owner invests such funds. The general units may only be purchased by the Managing Owner and may be subject to no advisory fees or management advisory fees at reduced rates. The Managing Owner is required to maintain at least a 1% interest (Minimum Purchase Commitment) in the aggregate capital, profits and losses of the Trust so long as it is acting as the Managing Owner of the Trust. Additionally, the Managing Owner agreed with certain regulatory bodies to maintain a 1% interest specifically in the Frontier Balanced Fund Class 1AP Units and Frontier Balanced Fund Class 2a Units, aggregated, and each of the Frontier Long/Short Commodity Fund, Frontier Diversified Fund, and Frontier Masters Fund. The 1% interest in these specific Series of the Trust is included in computing the Minimum Purchase Commitment in aggregate capital. Principals of the Managing Owner or affiliates are allowed to own beneficial interests in the Trust, as well. \n### Expenses \nManagement Fees \nThe annual rate of the management fee is: 0.5% for the Frontier Balanced Fund Class 1 and Class 2, 1.0% for the Frontier Balanced Fund Class 1AP, Class 2a and Class 3a, 2.0% for the Frontier Global Fund, Frontier Long/Short Commodity Fund Class 1a, Class 2a and Class 3a and Frontier Masters Fund, 0.75% for Frontier Diversified Fund, 2.5% for the Frontier Heritage Fund and Frontier Select Fund, and 3.5% for the Frontier Long/Short Commodity Fund Class 2 and Class 3. As of the date of this report, for a Series that has invested in a swap, the Managing Owner or Trading Advisor(s) do not receive any management fees directly from the Series for such swap, and instead the relevant Trading Advisor receives compensation via the fees embedded in the swap. As of December 31, 2020 and 2019, the range of management fees embedded based on fair value of swaps in (i) swaps owned by Frontier Diversified Fund was 1.00% per annum, (ii) swaps owned by Frontier Balanced Fund was 1.00% per annum, (iii) swaps owned by Frontier Long/Short Commodity Fund was 1.50% per annum, and (iv) swaps owned by Frontier Heritage Fund was 1.00% per annum, and the Managing Owner has waived the entire management fee due to it from those Series in respect of such Series investment in swaps. \n\n### Trading Fees \nIn connection with each Series trading activities the Frontier Balanced Fund, Frontier Select Fund, Frontier Global Fund (formerly Frontier Winton Fund) and Frontier Heritage Fund pays to the Managing Owner an FCM Fee of up to 2.25% per annum of notional assets allocated to the trading advisors, including through investments in commodity pools available on the Galaxy Plus Platform, and any reference programs of the applicable Series. \nIncentive Fees \n\n### Service Fees \nWith respect to Class 2 Units of each Series of the Trust, as applicable, the Series pays monthly or quarterly to the Managing Owner a service fee of up to 0.25% annually, for the closed Series and open Series, respectively, which the Managing Owner pays to selling agents of the Trust. \nAs of December 31, 2020, the Trust had a payable to the Managing Owner in the amounts of $0, $8,854, $2,107, $81,698 and $36,705 for incentive fees, management fees, interest, trading fees, and service fees, respectively. \nAs of December 31, 2019, the Trust had a payable to the Managing Owner in the amounts of $0, $8,795, $327, $160,907 and $68,762 for incentive fees, management fees, interest, trading fees, and service fees, respectively. \nAs of December 31, 2018, the Trust had a payable to the Managing Owner in the amounts of \n$ \n10,897, $78,045, $10,852, $222,241, and $96,152 for incentive fees, management fees, interest, trading fees, and service fees, respectively. \nFor the year ended December 31, 2020, the Managing Owner earned $0, $19,600, $597,679 and $1,311,400 for incentive fees, management fees, service fees, and trading fees, respectively. \nFor the year ended December 31, 2019, the Managing Owner earned $0, $78,678, $1,028,325 and $2,216,815for incentive fees, management fees, service fees, and trading fees, respectively. \nFor the year ended December 31, 2018, the Managing Owner earned $137,543, $838,497, $1,604,307 and $3,040,016 for incentive fees, management fees, service fees, and trading fees, respectively. \nConsequently, the Managing Owner bears the risk and enjoys the benefit of the upside potential of any difference between the amount of the initial service fee prepaid by it and the amount of the reimbursement thereof, which may result from variations in NAV over the following 12 months. \nTreasury Securities assets net of premiums and cash held at clearing brokers, of up to the first 2% (annualized) is paid to the Managing Owner by the Frontier Balanced Fund (Class 1 and Class 2 only), Frontier Long/Short Commodity Fund (Class 2 and Class 3), Frontier Global Fund, Frontier Select Fund, and Frontier Heritage Fund. \nDuring the years ended December 31, 2020, 2019 and 2018, the Trust paid $1,563,079, $42,605, and $221,534, respectively of such interest income to the Managing Owner. Such amounts are not included in the consolidated statements of operations of the Trust. All other interest income is recorded by the Trust on the consolidated statements of operations. \n\n7. Financial Highlights \nThe following information presents the financial highlights of the Trust for the years ended December 31, 2020, 2019 and 2018. This data has been derived from the information presented in the consolidated financial statements. \n(1) \nAnnualized with the exception of incentive fees. \n(2) \n\n(3) \nExpense ratios do not reflect interest allocated to the Managing Owner as such expenses are not included in the of the Trust. See footnote 5. \n\nThe Trust financial highlights are calculated based upon the Trusts consolidated financial statements. The consolidated Trust does not issue units and therefore the financial highlights do not disclose any unitized data. \n8. \nThe Trusts primary business is to engage in speculative trading of a diversified portfolio of futures, forwards (including interbank foreign currencies), options contracts and other derivative instruments (including swap contracts). The Trust does not enter into or hold positions for hedging purposes as defined under ASC 815. The detail of the fair value of the Trusts derivatives by instrument types as of December 31, 2020 and 2019 is included in the Consolidated Condensed Schedules of Investments. See Note 4 for further disclosure related to the Trusts positions in swap contracts. \nFor the years ended December 31, 2020, 2019 and 2018, the monthly average of futures, forwards and options contracts bought was approximately 613, 1,321, and 2,684 respectively and the monthly average of futures, forwards, and options contracts sold was approximately 612, 1,515, and 2,482, respectively. \nThe following tables summarize the trading revenues for the years ended December 31, 2020, 2019 and 2018 by contract type: \n(1) \n\n(1) \n\nThe Trusts open trade equity/(deficit), options written, and receivables from futures commission merchants (each, an FCM) are subject to master netting arrangements and collateral arrangements and meet the GAAP guidance to qualify for offset. The Trusts policy is to recognize amounts subject to master netting arrangements on a net basis on the consolidated statements of financial condition. \nThe following tables present gross and net information about the Trusts assets and liabilities subject the master netting arrangements as disclosed on the consolidated statements of financial condition as of December 31, 2020 and 2019: \n### As of December 31, 2020 \nAs of December 31, 2019 \n8. \n\nEach Trading Company and Galaxy Plus entity expects to trade in futures, options, forward and swap contracts and will therefore be a party to financial instruments with elements of off-balance sheet market and credit risk. If the markets should move against all of the futures positions held by a Trading Company or Galaxy Plus entity in respect of any Series at the same time, and if the Trading Advisor(s) of such Trading Company or Galaxy Plus entity are unable to offset such futures interests positions, such Trading Company or Galaxy Plus entity could lose all of its assets and the holders of Units of such Series would realize a 100% loss. It is anticipated that any Trading Advisors margin- to-equity ratio will typically not exceed approximately 35% although the actual ratio could be higher or lower from time to time. \nIn addition to market risk, trading futures, forward and swap contracts entails credit risk that a counterparty will not be able to meet its obligations to a Trading Company or Galaxy Plus entity. In general, clearinghouses are backed by the corporate members of the clearinghouse who are required to share any financial burden resulting from the non- performance by one of their members and, as such,<|endoftext|>"},"task":{"kind":"string","value":"{\"file\": \"/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz\"}"}}},{"rowIdx":68,"cells":{"text":{"kind":"string","value":"<|endoftext|>Regarding the parcel. BBC, PE1, and PE2 attempted to resolve the matter amicably with UPCDHS and the ultimate acquirer of the parcel, which gained the benefit of the development costs expended by BBC, PE1, and PE2 in improving the value of the parcel as well as the conditional use permit tied to the real estate. As a result, BBC, PE1, and PE2 were sold by us to a related party and our majority shareholder, Jaime Ortega. Mr. Ortega, the new owner of BBC, PE1, and PE2, advised management that he would address the matter with UPCDHS as well as the purchaser of the parcel, and also resolve any debts to vendors that went unpaid, through litigation. As of this date, this action was found to be the culmination of a multiplicity of actions and cross-actions arising from the claims to title relating to certain real property more commonly known as 65241 San Jacinto Lane, Desert Hot Springs, California, 92240-5014 and construction disputes for building projects thereon. BBC, PE1 and PE2 were dismissed from this action and will only be subject to a deficiency judgment, if any, when the property is sold. \nOn April 5, 2017, the Company entered into a real estate purchase transaction for a 1.26-acre parcel of land in Desert Hot Springs, CA (the Desert Hot Springs Property). The Desert Hot Springs Property purchase was finalized on July 24, 2017 for $700,000 and the Company took possession of the Desert Hot Springs Property. In order to finance this purchase, the Company borrowed $700,000 from a related party entity, Sky Island, Inc., controlled by our majority shareholder, Jaime Ortega. \nOn June 20, 2017, the Desert Hot Springs Property was sold to Hawkeye, LLC in order to reduce a debt owed to them by the Company. \nIn March 2019, PVI entered into lease agreements related to two new locations, 9367 Cassia Road and 16441 Beaver Road in Adelanto CA, totaling 37,750 SF of rentable warehouse space. PVI and its tenants of these properties never moved in and eventually moved the project to Chatsworth, CA. \nIn October 2020, PVI entered into a lease agreement related to a location at 1704 Vine Street in Hollywood CA, totaling 3,600 SF of rentable retail space. This property is currently under construction and is expected to be ready to operate in April 2021. \n### Employees \nAs of December 31, 2019, the Company, excluding its subsidiaries, had two full-time employees, one independent contractor, and no part-time employees. \nITEM 1A. RISK FACTORS \n### Risks Related to Our Company and Our Business \nLimited interim historical information. \nThis comprehensive Annual Report on Form 10-K contains summarized quarterly financial information for each of the quarters ended (i) March 31, June 30 and September 30, 2019, and (ii) March 31, June 30 and September 30, 2018. As the complete periodic filings for those periods have not been filed, certain financial information, disclosures and discussions normally contained in a Form 10-Q are not included in this Form 10-K. The omission of the information that would have been contained in these periodic filings leaves current and prospective investors, customers, employees and others without this source of information about the Companys business achievements and prospects and may negatively impact the Companys business opportunities and its ability to raise capital. There can be no assurances that the Company will be able to remain current with its required SEC filing obligations in the future. \nFollowing the filing of this Annual Report, we will remain delayed in our SEC reporting obligations, we cannot assure you when we will complete our remaining SEC filings for periods subsequent to those included in this Annual Report, and we are likely to continue to face challenges until we complete these filings. \nWe continue to face challenges with regard to completing our remaining SEC filings for periods subsequent to those included in this Annual Report. We remain delayed with our SEC reporting obligations as of the filing date of this Annual Report and we cannot assure you that we will be able to complete our remaining filings for periods subsequent to those included in this Annual Report. Until we complete these remaining filings, we expect to continue to face many of the risks and challenges we have experienced during our extended filing delay period, which include but are not limited: to continued concern on the part of customers, partners, investors, and employees about our financial condition and extended filing delay status; additional significant time and expense required to complete our remaining filings and the process of seeking the resumption of quotation of our common stock on OTC Markets; continued distraction of our senior management team and our board of directors as we work to complete our remaining filings and seek to for our common stock to resume being quoted on the OTC Markets; limitations on our ability to raise capital and make acquisitions; and general reputational harm as a result of the foregoing. \nEven if we complete our remaining filings for periods subsequent to those included in this Annual Report and our common stock resumes being quoted on OTC Markets, we cannot assure you that all of the risks and challenges described above will be eliminated. \nWe have a limited operating history and operate in a new industry, and we may not succeed. \nWe have a limited operating history and may not succeed. We are subject to all risks inherent in a developing business enterprise. Our likelihood of continued success must be considered in light of the problems, expenses, difficulties, complications, and delays frequently encountered in connection with manufacturing specialty products and the competitive and regulatory environment in which we operate. For example, the cannabis industry is a new industry that may not succeed, particularly should the Federal government change course and decide to prosecute those dealing in medical or recreational cannabis. In such event, there may not be an adequate market for our products. As a new industry, there are few established players whose business models we can follow. Similarly, there is little information about comparable companies for potential investors to review in making a decision about whether to invest in the Company. \nPotential investors should consider, among other factors, our prospects for success in light of the risks and uncertainties encountered by companies that, like us, are in their early stages. For example, unanticipated expenses, unexpected problems, and technical difficulties may occur and they may result in material delays in the operation of our business, in particular with respect to our new products. We may not successfully address these risks and uncertainties or successfully implement our operating strategies. If we fail to do so, it could materially harm our business to the point of having to cease operations and could impair the value of our Common Stock to the point investors may lose their entire investment. \nWe have incurred significant losses since our inception, have generated minimal revenues to date and anticipate that we will continue to incur significant losses for the foreseeable future; our auditors have included in their audit report for the fiscal year ended December 31, 2019 an explanatory paragraph as to substantial doubt as to our ability to continue as a going concern. \nWe have incurred significant net losses in each year since our inception, including net losses of $1,168,462 for the fiscal year ended December 31, 2019, and $1,365,141, $1,099,982, and $8,596,968 for the fiscal years ended December 31, 2018, 2017 and 2016, respectively. As of December 31, 2019, we had an accumulated deficit of $13,418,661. We anticipate incurring additional losses until such time we can generate significant revenues, and/or reduce operating costs. To date, we have generated minimal revenues and have financed our operations exclusively through the sale of our equity and debt securities (including convertible securities). The size of our future net losses will depend, in part, on the rate of future expenditures and our ability to generate revenue. We expect to continue to incur substantial and increased expenses as we grow our business. We also expect a continued increase in our expenses associated with our operations as a currently reporting publicly-traded company. We may incur significant losses in the future for a number of other reasons, including unsuccessful acquisitions, costs of integrating new business and assets, expenses, difficulties, complications, delays and other unknown events. As a result of the foregoing, we expect to continue to incur significant losses for the foreseeable future and we may not be able to achieve or sustain profitability. \nOur auditors have included in their audit report for the fiscal year ended December 31, 2019 a going concern explanatory paragraph as to substantial doubt as to our ability to continue as a going concern. Our ability to meet our total liabilities of $11,288,259 as of December 31, 2019, and to continue as a going concern, is dependent on us generating substantial revenues and/or obtaining adequate capital to fund operating losses until we become profitable. We may never achieve profitability, and even if we do, we may not be able to sustain being profitable. As a result of our going concern qualification, there is an increased risk that you could lose the entire amount of your investment in our Company, which assumes the realization of our assets and the satisfaction of our liabilities and commitments in the normal course of business. \n### Uncertainty of profitability. \nAs we will only develop a limited number of products and services at a time, our overall success will depend on a limited number of products and services, which may cause variability and unsteady profits and losses depending on the products and services offered and their market acceptance. \nOur revenues and our profitability may be adversely affected by economic conditions and changes in the market for medical and recreational marijuana. \nBecause of the anticipated nature of the products and services that we offer and attempt to develop, it is difficult to accurately forecast revenues and operating results and these items could fluctuate in the future due to a number of factors. \n\n\n\nThe acceptance of the terms and conditions of our services. \n\n\n\n\nAdverse developments in the efforts to legalize marijuana or increased federal enforcement. \n\n\n### Cannabis remains illegal under federal law. \nCannabis is a categorized as a Schedule I controlled substance by the Drug Enforcement Agency and the United States Department of Justice and is illegal to grow, possess and consume under federal law. Even in those jurisdictions in which the use of medical cannabis has been legalized at the state level, its use remains a violation of federal law. The United States Supreme Court has ruled in United States v. Oakland Cannabis Buyers Coop. and Gonzales v. Raich that it is the federal government that has the right to regulate and criminalize cannabis, even for medical purposes. Therefore, federal law criminalizing the use of cannabis preempts state laws that legalize its use for medicinal or adult-retail purposes. Strict enforcement of federal law regarding cannabis would likely result in our inability to proceed with our business plan. \nThe previous Obama administration has effectively stated that it is not an efficient use of resources to direct federal law enforcement agencies to prosecute those lawfully abiding by state-designated laws allowing the use and distribution of medical cannabis. In furtherance thereof, on August 29, 2013, the Department of Justice provided guidance to all U.S. federal prosecutors with respect to the enforcement of laws regarding cannabis via the publication of a memorandum authored by former US Attorney General James M. Cole (the Cole Memo). The Cole Memo stated that enforcement should be focused on eight priorities, which is to prevent: (1) distribution of cannabis to minors; (2) revenue from sale of cannabis to criminal enterprises, gangs and cartels; (3) transfer of cannabis from states where it is legal to states where it is illegal; (4) cannabis activity from being a pretext for trafficking of other illegal drugs or illegal activity; (5) violence of use of firearms in cannabis growth and distribution; (6) drugged driving and adverse public health consequences<|endoftext|>Respective legal counsel and financial advisors held certain conference calls to finalize the terms of the Merger Agreement and related documentation, including the lock-up agreement and the voting agreement. \nOn October 7, 2020, Albertons board of directors and SolarMax management had another discussion about SolarMax development plan for the next five years in connection with the potential business combination. SolarMax also made its unaudited financial statements for the quarter ended June 30, 2020 available to Alberton and subsequently made its financial statements for the nine months ended September 30, 2020 available to Alberton. \nOn October 8, 2020, we engaged Donohoe Advisory for preparing of the compliance plan with Nasdaq. \nOn October 9, 2020, we held a board meeting to update the status of SolarMax business combination. \nOn October 12, 2020, a meeting of the board of directors was called to discuss and approve the business combination with SolarMax. \nOn the same day, Donohoe Advisory started to coordinate with EGS and the representative of SolarMax to collect supporting documents for the preparation of the plan of compliance to Nasdaq. \nOn October 16, 2020, Ogier, the British Virgin Islands counsel of us sent a further revised draft of the Merger Agreement to HTFL and EGS. \nLater on October 16, 2020, HTFL assisted to establish the Merger Sub in connection with the Business Combination. \nOn the same day, Donohoe Advisory, on behalf of Alberton, submitted its plan of compliance to Nasdaq to regain compliance with Minimum Public Holders Rule. \nOn October 19, 2020, Alberton and SolarMax entered into an amendment to SolarMax LOI, pursuant to which, Alberton and SolarMax agreed to amend and restate some paragraphs of SolarMax LOI, including the exclusivity provisions which were extended to October 30, 2020 and related provisions. \nOn the same day, Mr. John W. Allen resigned from his positions as an independent director and the chairman of the compensation committee of Alberton and Mr. Harry Edelson resigned from his positions as an independent director and the chairman of audit committee of Alberton. Their resignation did not result from a disagreement with Alberton on any matter relating to Albertons operations, policies or practices. \nOn October 20, 2020, the board of directors of Alberton appointed Mr. William Walter Young as an independent director and the chairman of the compensation committee and Mr. Qing S. Huang as an independent director and the chairman of the audit committee of the board of directors of Alberton to fill the vacancies created by Mr. Allen and Mr. Edelson, effective immediately. Immediately after the appointment, Alberton management team and HTFL sent over the documents and information regarding the business combination with SolarMax to the new board members for them to review and digest. \nOn October 22, 2020, a meeting of the board of directors were called to introduce the new independent directors to the board of directors of Alberton and update them the current status of business combination with SolarMax. \nOn October 23, 2020, EGS sent a further revised draft of the Merger Agreement to HTFL to reflect that SolarMax financial statements ended June 30, 2020 were delivered. \nOn October 24, 2020, HTFL sent a further revised draft of the Merger Agreement to EGS. \nOn October 26, 2020, we held a special shareholder meeting, at which the proposal to extend the date by which Alberton must complete its initial business combination from October 26, 2020 to April 26, 2021 or such earlier date as determined by the board of directors of Alberton was voted on and approved. \nOctober 27, 2020, a meeting of the board of directors were called to discuss and approve the Merger Agreement and related transactions. HTFL submitted a draft of the Merger Agreement substantially the same in the final form of the Merger Agreement tothe board of directors of Alberton. After considering the proposed terms of the Merger Agreement and other related transaction agreements and taking into account the other factors described below under the caption Albertons Board of Directors Reasons for the Approval of the Business Combination, the board of directors of Alberton unanimously approved the Merger Agreement and related agreements and determined that it was advisable and in the best interests of Alberton to consummate the Business Combination and other transactions contemplated by the Merger Agreement and related agreements, directed that the Merger Agreement and the other proposals described in this proxy statement/prospectus be submitted to Albertons shareholders for approval and adoption, and recommended that Albertons shareholders approve and adopt the Merger Agreement and such other proposals. \nLater on October 27, 2020, we and SolarMax entered into the Merger Agreement. \nOn October 28, 2020, a press release was issued announcing the execution of the Merger Agreement and the Business Combination. On the same day, we filed with the SEC a Current Report on Form 8-K attaching the press release. \nOn October 29, 2020, we received a notification letter from theListing Qualifications Department of The Nasdaq stating that the Nasdaq Staff had determined to grant Alberton an extension of time through March 1, 2021 to regain compliance with Minimum Public Holders Rule. \nOn November 1, 2020, HTFL circulated the initial draft of the Alberton preliminary proxy statement/prospectus to EGS. \nOn November 3, 2020, we filed with the SEC a Current Report on Form 8-Kto disclose such granted extension. \nOn November 15, 2020, EGS circulated the SolarMax related disclosure to update Alberton preliminary proxy statement/prospectus. \nOn November 10, 2020, Alberton, Merger Sub and SolarMax entered into an amendment (the Amendment) to the Merger Agreement to increase certain Extension Loans (as defined in the Merger Agreement) to be provided by SolarMax from $60,000 monthly to $70,674 monthly. As a result, the Amendment increases the monthly payments due on or after November 10, 2020 to $70,674 and provides that, to the extent that the payments made by SolarMax exceed the $60,000 amount provided in the Merger Agreement, Alberton shall, at the Closing, cause to be delivered to the Successor for cancellation, such number of sponsor shares as have a value, determined as provided in the Merger Agreement, equal to such excess. \nOn December 18, 2020 and December 28, 2020, SolarMax made non-interest bearing loans to Sponsor in the aggregate principal amount of $128,466, to enable the sponsor to provide Alberton with funds to pay for our operating costs. At the Closing, these notes are to be satisfied by the delivery of sponsor shares having a value equal to the principal amount of the notes. \n\nOn January 19, 2021, the board of Alberton approved the issuance of 1,414,480 dividend warrants to those public shareholders who were shareholders on April 21, 2020 and did not exercise their right of redemption in connection with the April 2020 extension, and Alberton instructed such issuance (the Extension Warrants). Alberton was advised the Extension Warrants were processed on or about February 5, 2021, although the date of delivery may be delayed as a result of processing time by DTC, broker and dealer, and other relevant parties. \n\nOn March16, 2021, after our submission of a plan to regain compliance with Annual Meeting Requirement, we received a notification letter from Nasdaq stating that the Nasdaq Staff had determined to grant us an extension of time through June29, 2021 to regain compliance with the Annual Meeting Requirement. \nOn March 19, 2021, Alberton, Merger Sub and SolarMax entered into an amendment (the Second Amendment) to the Merger Agreement. Pursuant to the Second Amendment, Alberton agrees to make up to two additional Extension Loans (Additional Loans) in the amount $70,674 per month, but no more than two Additional Loans. The first Additional Loan was made on the date of the Second Amendment and the second Additional Loan will be made in April 2021. At the Closing, Alberton shall cause to be delivered to the Successor for cancellation, such number of sponsor shares as have a value, determined as provided in the Merger Agreement, equal to the amount of each $70,674 loan, which was the amount Alberton had initially agreed to pay. \n\nFrom November 1, 2020 through the date hereof, Alberton and SolarMax and their representatives continued to correspond regarding updates to the Alberton preliminary proxy statement/prospectus. \n### April 2020 and October 2020 Extensions \nOn April 23, 2020, we filed an amendment to our articles of association with the Registrar of the British Virgin Islands to extend the time that we need to complete an initial business combination from April 27, 2020 to October 26, 2020 or such an earlier date as determined by the board of directors of Alberton (the April 2020 Extension). In connection with the April 2020 Extension, shareholders holding 10,073,512 public shares exercised their right to redeem such shares for a pro rata portion of the Trust Account. As a result, an aggregate of $105,879,188 (or $10.51 per share) was removed from the Trust Account to pay such shareholders. \nIn connection with the April 2020 Extension, an aggregated amount of $360,000 was deposited into the Trust Account as additional interest on the proceeds in the Trust Account and will be distributed pro rata as a part of redemption amount to each public share in connection with a future redemption. In addition, we have committed to issue a Extension Warrant to purchase one-half of one ordinary share for each public share not redeemed in connection with the April 2020 Extension. Each such Extension Warrant will be identical to the warrants included in the Units sold our Initial Public Offering. \nOn October 26, 2020, we filed an amendment to our articles of association with the Registrar of the British Virgin Islands to extend the time that we need to complete an initial business combination from October 26, 2020 to April 26, 2021, or such an earlier date as determined by the board of directors of Alberton (the October 2020 Extension). In connection with the October 2020 Extension, shareholders holding 1,000 public shares exercised their right to redeem such shares for a pro rata portion of the Trust Account. As a result, an aggregate of $10,770 (or $10.51 per share) was removed from the Trust Account to pay such shareholders. \nAs the date hereof, in connection with the April 2021 Extension, an aggregated amount of $2,572,276 was deposited into the Trust Account as additional interest on the proceeds in the Trust Account and will be distributed pro rata as a part of redemption amount to each public share in connection with a future redemption. \n### Outstanding Promissory Notes \nAs the date hereof, we have outstanding loans from various parties in the aggregated amount of $3,302,170 which include (i) unsecured promissory notes in the amount of $300,000 and $780,000issued by Alberton to its Sponsors on July 6, 2018 and January 24, 2020, respectively (collectively, the Sponsor Notes), (ii) unsecured promissory notes in the amount of $1,148,800 and $500,000 issued by Alberton to Global Nature Investment Holdings Limited on September 18, 2019 and December 3, 2019, respectively (collectively, the GN Notes); (iii) an unsecured promissory note in the aggregate principal amount of $500,000 payable upon demands, the outstanding principal of which is $100,000 issued by Alberton to Qingdao Zhongxin Huirong Distressed Asset Disposal Co., Ltd on April 17, 2020 (the AMC Note) and (iv) unsecured promissory notes in the aggregate principal amount of $473,370 issued by Alberton to SolarMax in connection with the extension of the date that Alberton must complete its initial business combination, each in the amount of $60,000 on September 4, 2020 and October 8, 2020, and each in the amount of $70,674 on November 10, 2020, December 9, 2020, January 11, 2021, February 11, 2021, and March 19, 2021, and excluded up to one additional note of $70,674 which may be issued to SolarMax in April 2021 (collectively, the SolarMax Notes). \nImpact of COVID-19 Pandemic \nOn January 31, 2020, U.S. \n\nGeneral \nWe intend to utilize cash derived from the proceeds of the IPO and the private placement of private units, our capital stock, debt or a combination of these in effecting a business combination. A business combination may involve the acquisition<|endoftext|>### EXPLANATORY NOTE \nMMA Capital Holdings, Inc., (the \nCompany \n, \nMMA \n, we \n, our or us \n) is amending its Annual Report on Form 10-K for the year ended December31, 2020 (this \n### Amendment No. 1 \n), originally filed with the Securities and Exchange Commission (the \nSEC \n) on March31, 2021 (the \n### Original Form 10-K \n), to include the information required by Items 10 through 14 of Part III of Form 10-K. We are filing this Amendment No.1 to provide the information required in Part III of Form 10-K because a definitive proxy statement containing such information will not be filed by us within 120 days after the end of the fiscal year covered by the Original Form 10-K. \n\n\nPART III \nITEM 10. \n### INFORMATION ABOUT THE COMPANYS DIRECTORS \nThe name and principal occupation for the last five years, period of service as a director of the Company and certain other directorships of each director are set forth below. \nClass III - Directors with Terms Expiring at the 2021 Annual Meeting \n### J. P. Grant \n, 67, has served on the Companys board of directors ( \n### Board \n) since January 1, 2013. \nMr. Grant is the founder, President and Chief Executive Officer ( \nCEO \n) of Grant Capital Management, Inc., where he has specialized in providing tax-exempt financing to city and state governments since the companys founding in 2000. Prior to that, he held positions in major account sales for IBM Corporation and Federal Data Corporation. \nMr. Grants qualifications to serve as a director include his extensive experience in the field of municipal finance, as well as his executive leadership experience and entrepreneurial background. Mr. Grant is the Chair of the Companys Governance Committee and Lead Independent Director for the Board. \n### Michael L. Falcone \n, 59, has been a member of our Board since 1999 and was elected Chairman of the Board on March 3, 2021. He was the CEO of the Company from January 1, 2005 through August 12, 2020 and served in various roles with affiliates of Hunt Investment Management, LLC (our \nExternal Manager \n) from January 8, 2018 through August 12, 2020. Prior to his appointment as our CEO, he served as the Companys Chief Operating Officer ( \nCOO \n) since 1997. Prior to joining MMA, he was a Senior Vice President of Shelter Development Corporation, where he was employed from 1983 to 1996. Mr. Falcone is a graduate of Dartmouth College and the Harvard Business School. \nMr. Falcones qualifications to serve as a director include his extensive executive experience with the Company and his broad familiarity with the real estate and renewable energy development and finance industries. \n### Suzanne G. Kucera \n, 59, was elected to the Board on January 28, 2020. Ms. Kucera has been Chief Financial Officer ( \nCFO \n) of Bright Power, Inc., an energy efficiency company with national operations, since January 2020. Prior to Bright Power, she was Co-Founder and CEO of Mackworth Capital, LLC, a money management firm with a unique model for direct private investment and financial advisor to growth companies and start-ups, from 2015 through 2019. Prior to founding Mackworth in 2015, Ms. Kucera was CFO of Now Computing and BBH Group and CEO of Art + Commerce. She has a Masters of Business Administration from Harvard University and a Bachelor of Science in Accounting and Finance from the University of Illinois at Urbana-Champaign. Ms. Kucera most recently completed a Diploma in Clean Energy from New York University leading to an interim CFO/COO position for a solar developer. \nMs. Kuceras qualifications to serve as a director include her C-suite experience creating value in companies through proven leadership, strategic planning, management and operating skills. She is an agile leader of growth companies and start-ups who has successfully navigated diverse industries including technology, media, marketing, clean energy, consumer products, asset management and real estate. She is an experienced investment banker with nine years at Goldman Sachs, followed by five years at Allen & Company. \nClass I - Directors with Terms Expiring at the 2022 Annual Meeting \n### Frederick W. Puddester \n, 66, has served on the Board since August 10, 2011. Since July 1, 2011, Mr. Puddester has been the Vice President for Finance and Administration for Williams College where he is responsible for financial reporting, planning and forecasting as well as debt financing and tax compliance. From 2007 to 2011, Mr. Puddester served as senior associate dean for finance and administration at the Johns Hopkins University Zanvyl Krieger School of Arts and Sciences. From 2000 to 2007, Mr. Puddester served as the executive director of budget and financial planning for Johns Hopkins University. From 2000 until 2011, Mr. Puddester served on the board of MuniMae TE Bond Subsidiary, LLC, an entity whose common shares were wholly owned by the Company prior to selling those shares to a third party in 2013. \nMr. Puddesters qualifications to serve as a director include his extensive financial management expertise and his familiarity with the Company through his service on the board of MuniMae TE Bond Subsidiary, LLC. Mr. Puddester is the Chair of the Companys Compensation Committee and former Chair of the Audit Committee. \nClass II - Directors with Term Expiring at the 2023 Annual Meeting \n### Cecil E. Flamer \n, 73, was elected to the Board on January 28, 2020. Mr. Flamer has served since 2004 as a Managing Director and Chief Administrative Officer of Brown Capital Management, Inc., a private company that provides equity investment management services. In his capacity as Managing Director, he serves on the Management Committee, which is the firms governing body. Prior to joining the firm, Mr. Flamer was a partner at Ernst & Young, LLP. He has a Bachelor of Science in Business Administration (Accounting concentration) from Morgan State University. He is also a member of the American Institute of Certified Public Accountants and the Maryland Association of Certified Public Accountants. \nMr. Flamers qualifications to serve as a director include his significant executive experience with an investment management company and his public accounting background. The Governance Committee of the Board waived the Boards age restriction with respect to Mr. Flamers service on the Board. \n### James C. Hunt \n, 50, was elected to the Board on June 25, 2018. Since 2015, Mr. Hunt has served as CEO and President of Hunt Companies, Inc. and its affiliates (individually and collectively \nHunt \n) and has been a member of the Hunt board of directors since 2001. In addition, Mr. Hunt also oversees Hunt's private market real estate development and acquisition activities, which include market rate residential properties and mixed-use retail developments. Mr. Hunt is responsible for establishing relationships with development and financial partners. Mr. Hunt began his career at Hunt in 1993 as a Project Developer for Hunt's construction division, was later appointed Vice President, Executive Vice President and subsequently President. Mr. Hunt received a B.A. in Economics and an MBA from the University of Texas, Austin. \nMr. Hunts qualifications to serve as a director include his extensive experience in real estate, real estate finance and corporate governance and management. \nMr. Hunt also serves on the board of directors for one other public company, Lument Finance Trust, since January 2018. Mr. Hunt also serves as Chief Executive Officer and a director for Hunt Companies Acquisition Corp. I, a blank check special purpose acquisition company sponsored by Hunt, which has filed a registration statement for its initial public offering. \n### Lisa Kay \n, 53, has served on the Board since August 3, 2016. Since 2015, Ms. Kay has been an independent consultant and business advisor focusing on accounting and public company matters, with emphasis on the finance and real estate sectors. Previously, Ms. Kay was CFO and Executive Vice President of the Company from August 23, 2011 through August 18, 2015. Prior to her appointment as the Companys CFO, Ms. Kay served as Corporate Controller and Senior Vice President of the Company beginning in November 2007. From 2006 and until joining the Company, Ms. Kay was a Managing Director within the Financial Services practice of Navigant Consulting, Inc., a global consulting firm providing operational, dispute, investigative, risk management and financial advisory solutions to the market. Prior to Navigant, Ms. Kay was Vice President and head of Corporate Accounting for Freddie Mac and was an auditor for Arthur Andersen LLP. Ms. Kay is a graduate of Virginia Tech with a B.A. in Economics and a Masters in Accounting. \nMs. Kays qualifications to serve as a director include her prior service and understanding of the Companys operations due to her former service as the Companys CFO and Corporate Controller, as well as her extensive experience in accounting and auditing. Ms. Kay is the Chair of the Audit Committee. \n### INFORMATION ABOUT THE COMPANYS EXECUTIVE OFFICERS \nGary A. Mentesana \n, 56, has been the Companys CEO since March 3, 2021 having served in an interim capacity since August 12, 2020, in addition to serving as President and COO of the Company since 2018. In addition to his roles at the Company he has been an Executive Vice President of the Renewables Division of our External Manager since January 2018. He had been an Executive Vice President of the Company since 2003 and had been in various leadership positions since joining the Company in 1996. Mr. Mentesana joined the Company in 1996 from the Companys predecessor, the SCA Tax-Exempt Fund Limited Partnership, which he had been with since 1988. Before SCA Tax-Exempt Fund Limited Partnership, Mr. Mentesana was an active Certified Public Accountant and worked for Coopers and Lybrand. Mr. Mentesana graduated from the University of Rhode Island. \n### David C. Bjarnason, CPA \n, 51, was appointed CFO and Executive Vice President of the Company on August 17, 2015 and, in addition to being our CFO, is the CFO of the Renewables Division of our External Manager. Mr. Bjarnason joined the Company from Fannie Mae, where he was a finance officer who served in senior management roles in accounting policy, external reporting and financial planning and analysis functions. Prior to joining Fannie Mae, Mr. Bjarnason served in senior finance, consulting and financial statement audit roles with JPMorgan Chase & Co., CapitalSource, Inc., Freddie Mac, Deloitte LLP and KPMG LLP. Mr. Bjarnason earned his B.B.A. in accounting from the College of William & Mary and is licensed as a Certified Public Accountant in the State of New York. \nBOARD OF DIRECTORS MATTERS \n### Board Composition \nOur Board currently consists of seven members, six of whom have been elected by the Companys shareholders. The remaining director, Suzanne Kucera, will be considered for election at the 2021 annual meeting. \n\nWe have (Guidelines), which are available on our website at www.mmacapitalholdings.com under Leadership Governance, then Corporate Governance Guidelines. These Guidelines contain general principles regarding the function of our Board and Board committees. The Guidelines are reviewed on an annual basis by the Governance Committee of the Board, which submits to the Board for approval any changes deemed desirable or necessary. \n\nOur Guidelines require that a majority of the Board be comprised of independent directors. The listing rules of the Nasdaq Stock Market (Nasdaq) for director independence are incorporated in our Guidelines, which are used by the Board in making independence determinations. For a director to be considered independent under the Nasdaq listing rules, the Board must affirmatively determine that the director has no relationship with the Company that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. In assessing director independence, the Board concluded that the independent directors have no conflict that might discourage critical review of the Companys management and operations. As of this filing, the Board has determined that the following directors are independent: Cecil Flamer, J.P. Grant III, Lisa Kay, Suzanne Kucera and Frederick Puddester. \nBoard Leadership Structure \nOur Boards role in the Company is to provide general oversight of strategy and operations. Our Board leadership structure currently separates the roles of Chairman of<|endoftext|>Local taxes. In the event of death prior to the completion of all payments, the remaining payments shall be made to the executives beneficiary. \nTermination Vesting Provision for the 2018, 2019 and 2020 LTIP Grants \nIn accordance with the terms of the LTIP, if the NEOs (but not the CEO) are terminated for cause or voluntarily separate from service prior to the end of the applicable performance period, they shall forfeit any right to unvested awards, unless otherwise authorized by the Committee in its sole discretion. Otherwise, participants are entitled to a prorated award at the end of the performance period, provided the performance targets have been met. \nBased on the total number of days they were employed during the performance period, in the event of a participants death, the participants estate will be eligible to receive an amount not greater than 100% of the participants target award, with such amount determined in the Compensation Committees sole discretion. Payment will be made in the year following the participants death. \nAssuming that the termination without cause occurred on December31, 2020, and that our closing stock price at December31, 2020, was $11.13, the targeted payments to the NEOs (excluding the CEO), are set forth in the following table: \n(1) \nThese payments were based on accrued vacation hours at December31, 2020, pursuant to the vacation policy for the NEOs. \n(2) \nThese amounts represent the cost of continuation of health benefits for the Severance Period provided to the NEOs. \n(3) \nThese amounts represent the actual STIP award paid to the NEOs for 2020. The Companys performance for 2020 resulted in payment at 79.3% of the STIP target. \n(4) \nPursuant to the terms of the LTIP, the NEOs were entitled to 94.4% of the target award for the performance-based 2018 grant, 66% of the target award for the 2019 grant and 33% of the target award for the 2020 grant. Payment for awards with performance obligations are not made until the end of the applicable performance period; however, for purposes of this table, we have included the value of the target number of performance-based RSUs, pro-rated for the 2019 and 2020 grants. The amounts represent the market values at December31, 2020, for the RSUs based on our closing stock price on such date of $11.13. \n(5) \n\nChange in Control Arrangements NEOs (Excluding the CEO) \nUnder the Severance Agreements, if a change in control with respect to the Company occurs, and following such change in control, the applicable NEO (other than the CEO) experiences a termination of employment by the Company without cause or resigns for good reason as defined in the Severance Agreements, then, the NEOs (other than the CEO) would be entitled to the following severance benefits, subject to their executing a release of claims. \nThe severance benefits upon a termination without cause or resignation for good reason occurring after a change in control, subject to execution of a release of claims would be: \n(1) \nA cash lump sum payment equal to a minimum of 1.5 times the executives base salary, plus an additional two weeks of base salary for each year of service, up to a maximum payment of two times the executives base salary; \n(2) \nAccident and health insurance benefits substantially similar to those that the executive was receiving immediately prior to termination until the earlier to occur of 18 months following termination or such time as the executive is covered by comparable programs of a subsequent employer, reduced to the extent of any comparable benefits received from another source; and \n(3) \nAn amount equal to 100% of the executives target award under the annual STIP for the calendar year in which the termination occurred. \nIn addition, in accordance with the terms of the LTIP, the NEOs (but not the CEO), will be entitled to the following accelerated vesting schedule in the event of a change in control, but only if the Compensation Committee determined that the Company was on track to meet the applicable performance goals under the LTIP: \n(1) \n50% of the participants target award shall vest if a change in control occurs during the first year of the performance period; \n(2) \n75% of the participants target award shall vest if a change in control occurs during the second year of the performance period; or \n(3) \n100% of the participants target award shall vest if a change in control occurs during the third year of the performance period. \nAdditionally, one hundred percent (100%) of the participant's unvested time-based equity awards will be entitled to accelerated vesting in the event of a change in control. Payment will be made on the earlier of: (1)a change in control of the Company (as defined in the 2012 Equity Plan); or (2)on or after the third business day following the day that the Company filed its 2020 Annual Report with the SEC. \nAssuming a termination without cause or resignation for good reason following a change in control occurred on December31, 2020, and that our closing stock price at December31, 2020, was $11.13, the targeted payments to the NEOs (excluding the CEO) are set forth in the following table: \n(1) \nThese amounts assume the NEOs have been paid their pro rata base salaries from January1, 2020, through December31, 2020. \n(2) \nThese payments were based on accrued vacation hours at December31, 2020 pursuant to the vacation policy for the NEOs. \n(3) \nThese amounts represent the cost of continuation of health benefits provided to the NEOs for 18 months. \n(4) \nThese amounts represent the 2020 STIP award at the target level. \n(5) \nThese amounts represent the portion of the RSUs under the LTIP that were eligible to vest based on our closing stock price on December31, 2020, of $11.13. These amounts would be payable without regard to termination of employment, but with respect to performance-based RSUs, only if the Compensation Committee determined that the Company was on track to meet the applicable performance goals under the LTIP. \n(6) \nThese amounts represent cumulative cash dividends of $1.50 per share accrued for NEOs for RSUs granted in 2018, $1.00 per share for RSUs granted in 2019, and $0.50 per share for RSUs granted in 2020. \nWe did not pay or accrue any amounts relating to termination and change in control payments for the NEOs for the year ended \n### December31, 2020. \nThe LTIP contains a forfeiture policy for termination with cause. Under these provisions, executives (including NEOs) who are terminated upon failure to substantially perform duties, failure to carry out any lawful and reasonable directive, conviction or plea of nolo contendere to a felony or crime of moral turpitude, material breach of their obligations as an employee or commission of an act of fraud, embezzlement, misappropriation or otherwise acting in a manner detrimental to the Companys interests as determined by the Board, will forfeit any outstanding awards as of the date of termination. These provisions serve to help ensure that executives act in the best interest of the Company and its stockholders. \nSEVERANCE RECOVERY POLICY \nWe maintain a clawback provision regarding severance benefits. Under the clawback provision, executives (including NEOs) who violate non-competition, non-solicitation or confidentiality agreements forfeit all severance amounts paid or to be paid by the Company. Further, it is our policy to seek the reimbursement of severance benefits paid to executives (including NEOs) who violate non-competition, non-solicitation or confidentiality agreements, or otherwise breach the Separation Agreements and Release between themselves and the Company. \nThe Companys Restricted Stock Agreement under the 2012 and 2020 Equity Plans includes a Spendthrift Clause to protect unvested restricted stock against any interest or transfer. \nITEM12. \n\nDIRECTORS, OFFICERS AND CERTAIN OTHER BENEFICIAL OWNERS \nThe following table provides summary information regarding beneficial ownership of our common stock as of April 2, 2021, for: \nEach person or group who beneficially owns more than 5% of our common stock on a fully diluted basis including restricted stock granted; \n### Each of the NEOs; \nEach of the directors;and \nAll of the directors and executive officers as a group. \nBeneficial ownership of shares is determined under the rules of the SEC and generally includes any shares over which a person exercises sole or shared voting and/or investment power. The information on beneficial ownership in the table is based upon the Companys records and the most recent Form 3, Form 4, Schedule13D or Schedule 13G filed by each such person or entity reporting ownership on or before April2, 2021. Except as indicated by footnote, and subject to applicable community property laws, each person identified in the table possesses sole voting and investment power with respect to all shares of common stock shown as beneficially owned by them. Unless otherwise noted, the address for each director and executive officer is c/oSpok Holdings, Inc., 5911 Kingstown Village Parkway, 6th Floor, Alexandria, Virginia 22315. \n* Denotes less than 1%. \n(1) \nVincent D. Kelly, Trustee of the Vincent DePaul Kelly Third Amended and Restated Revocable Trust has sole voting and sole dispositive power with respect to all shares reported herein. \n(2) \n\n(3) \nThe information regarding this stockholder is derived from a Form 4 filed by the stockholder with the SEC on January 5, 2021. \n(4) \nAll directors and executive officers as a group consists of all members of the Board of Directors and all current executive officers. \n(5) \nThe information regarding this stockholder is derived from an amended Schedule 13G filed by the stockholder with the SEC on January 26, 2021. BlackRock Inc. has sole voting power with respect to 2,888,152 shares and sole dispositive power with respect to all shares reported herein. BlackRock Inc.s address is as follows: 55 East 52nd Street, New York, NY 10055. \n(6) \nThe information regarding this stockholder is derived from an amended Schedule 13G filed by the stockholder with the SEC on February 10, 2021. The Vanguard Group, Inc. has shared voting power with respect to 12,483 shares, sole dispositive power with respect to 1,257,596 shares and shared dispositive power with respect to 12,273 shares. The Vanguard Group, Inc.s address is as follows: 100 Vanguard Blvd., Malvern, PA 19355. \n(7) \nThe information regarding this stockholder is derived from an amended Schedule 13G filed by the stockholder with the SEC on February 12, 2021. The Dimensional Fund Advisors LP, has sole voting power with respect to 1,473,551 shares and sole dispositive power with respect to all shares reported herein. The Dimensional Fund Advisors LP's address is as follows: Building One, 6300 Bee Cave Road, Austin, Texas, 78746. \n(8) \nThe information regarding this stockholder is derived from an amended Schedule 13G filed by the stockholder with the SEC on February 13, 2021. Renaissance Technologies LLC has sole voting power with respect to 1,379,609 shares, and sole dispositive power with respect to 1,550,993 shares. Renaissance Technologies LLC's address is as follows: 800 Third Avenue, New York, NY 10022. \n(9) \nThe information regarding this stockholder is derived from a Form 4 filed by Todd Stein with the SEC on April 2, 2021. Braeside Investments, LLC, Steven McIntyre and Todd Stein have shared voting and shared dispositive power with respect to all shares reported herein. Braeside Investments, LLC, Steven McIntyre and Todd Steins address is as follows: 5430 LBJ Freeway, Suite 1555 Dallas, TX 75240. \n(10) \n, and includes the shares held by Braeside Investments, LLC as described in footnote 9 above. \n(11) \nN. Blaire Butterfield, Trustee of the Butterfield Joint Revocable Trust has sole voting and sole dispositive power with respect to all shares reported herein. \n\nThe following table sets forth, as of December31, 2020, the number of securities outstanding under our currently authorized equity compensation plans, the weighted-average exercise price of such securities and the number of securities available for grant under these plans: \n### Plan Category \n\n(a) \n\n(b) \n\n(c) \nEquity compensation plan approved by security holders: \n(1) \n2012 Spok Holdings, Inc. Equity Incentive Plan \n(2) \n2020 Spok Holdings, Inc. Equity Incentive Plan \n(2) \nEquity compensation plan not approved by security holders: \n### None \nTotal \n(1) \nThe 2012 and 2020 Equity Plans provide that common stock authorized for issuance<|endoftext|>To complete a business combination if concerns relating to COVID-19 continue to restrict travel, limit the ability to have meetings with potential investors or the target companys personnel, vendors and services providers are unavailable to negotiate and consummate a transaction in a timely manner. \nMoreover, the COVID-19 pandemic and the measures implemented to contain it have had, and are expected to continue to have, a significant negative effect on the travel industry, having led to unprecedented levels of cancellations and limited new travel bookings. According to the October 2020 issue of the World Tourism Barometer, international tourist arrivals declined 70% in the first eight months of 2020 as compared with the same period in 2019. According to forecasts published by Statista in October 2020, global revenue for the travel and tourism industry will be an estimated US$396.3 billion in 2020, a decrease of around 42.1% from the previous year. In addition, the duration and severity of the COVID-19 pandemic are uncertain and difficult to predict. The pandemic could continue to impede global economic activity for an extended period, even as restrictions are beginning to be lifted in many jurisdictions, leading to decreased per capita income and disposable income, increased and sustained unemployment or a decline in consumer confidence, all of which could significantly reduce discretionary spending by individuals and businesses on travel. \nFurthermore, we may be unable to complete a business combination if continued concerns relating to COVID-19 restrict travel, limit the ability to have meetings with potential investors or the personnel of any target business, vendors and services providers are unavailable to negotiate and complete a transaction in a timely manner. The extent to which COVID-19 impacts our search for a target business will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of the COVID-19 pandemic and the actions to contain COVID-19 or treat its impact, among others. If the disruptions posed by COVID-19 or other matters of global concern continue for an extended period of time, it could have a material adverse effect on our ability to complete a business combination, or the operations of a target business with which we ultimately complete a business combination. \nWe may not be able to complete our initial business combination by May 27, 2022, in which case we would cease all operations except for the purpose of winding up and we would redeem our public shares and liquidate. \nWe may not be able to find a suitable target business and complete our initial business combination by May 27, 2022. Our ability to complete our initial business combination may be negatively impacted by general market conditions, volatility in the capital and debt markets and the other risks described herein. If we have not completed our initial business combination within such time period, we will: (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account including interest earned on the funds held in the trust account (which interest shall be net of taxes payable and up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders rights as stockholders (including the right to receive further liquidating distributions, if any), and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, liquidate and dissolve, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. \nIf we seek stockholder approval of our initial business combination, our Sponsor, initial stockholders, directors, executive officers, advisors and their affiliates may elect to purchase shares or public warrants from public stockholders, which may influence a vote on a proposed business combination and reduce the public float of our Class A common stock. \nIf we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our Sponsor, initial stockholders, directors, executive officers, advisors or their affiliates may purchase shares or public warrants in privately negotiated transactions or in the open market either prior to or following the completion of our initial business combination, although they are under no obligation to do so. There is no limit on the number of shares our initial stockholders, directors, officers, advisors or their affiliates may purchase in such transactions, subject to compliance with applicable law and the Nasdaq rules. However, other than as expressly stated herein, they have no current commitments, plans or intentions to engage in such transactions and have not formulated any terms or conditions for any such transactions. None of the funds in the trust account will be used to purchase shares or public warrants in such transactions. \nSuch purchases may include a contractual acknowledgment that such stockholder, although still the record holder of our shares, is no longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights. \nIn the event that our Sponsor, initial stockholders, directors, executive officers, advisors or their affiliates purchase shares in privately negotiated transactions from public stockholders who have already elected to exercise their redemption rights, such selling stockholders would be required to revoke their prior elections to redeem their shares. The purpose of any such purchases of shares could be to vote such shares in favor of the business combination and thereby increase the likelihood of obtaining stockholder approval of the business combination or to satisfy a closing condition in an agreement with a target that requires us to have a minimum net worth or a certain amount of cash at the closing of our initial business combination, where it appears that such requirement would otherwise not be met. The purpose of any such purchases of public warrants could be to reduce the number of public warrants outstanding or to vote such warrants on any matters submitted to the warrantholders for approval in connection with our initial business combination. We expect any such purchases of our securities may result in the completion of our initial business combination that may not otherwise have been possible. Any such purchases will be reported pursuant to Section 13 and Section 16 of the Exchange Act to the extent such purchasers are subject to such reporting requirements. \nIn addition, if such purchases are made, the public float of our Class A common stock or public warrants and the number of beneficial holders of our securities may be reduced, possibly making it difficult to obtain or maintain the quotation, listing or trading of our securities on a national securities exchange. \nIf a stockholder fails to receive notice of our offer to redeem our public shares in connection with our initial business combination or fails to comply with the procedures for tendering its shares, such shares may not be redeemed. \nWe will comply with the proxy rules or tender offer rules, as applicable, when conducting redemptions in connection with our initial business combination. Despite our compliance with these rules, if a stockholder fails to receive our proxy materials or tender offer documents, as applicable, such stockholder may not become aware of the opportunity to redeem its shares. In addition, proxy materials or tender offer documents, as applicable, that we will furnish to holders of our public shares in connection with our initial business combination will describe the various procedures that must be complied with in order to validly tender or submit public shares for redemption. For example, we intend to require our public stockholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in street name, to, at the holders option, either deliver their stock certificates to our transfer agent, or to deliver their shares to our transfer agent electronically prior to the date set forth in the proxy materials or tender offer documents, as applicable. In the case of proxy materials, this date may be up to two business days prior to the vote on the proposal to approve the initial business combination. In addition, if we conduct redemptions in connection with a stockholder vote, we intend to require a public stockholder seeking redemption of its public shares to also submit a written request for redemption to our transfer agent two business days prior to the vote in which the name of the beneficial owner of such shares is included. In the event that a stockholder fails to comply with these or any other procedures disclosed in the proxy or tender offer materials, as applicable, its shares may not be redeemed. \n\nSince the net proceeds of the initial public offering and the sale of the private placement warrants are intended to be used to complete an initial business combination with a target business that has not been selected, we may be deemed to be a blank check company under the United States securities laws. However, because we will have net tangible assets in excess of $5,000,000 upon the completion of the initial public offering and the sale of the private placement warrants and will file a Current Report on Form 8-K, including an audited balance sheet demonstrating this fact, we are exempt from rules promulgated by the SEC to protect investors in blank check companies, such as Rule 419. Accordingly, investors will not be afforded the benefits or protections of those rules. Among other things, this means our units will be immediately tradable and we will have a longer period of time to complete our initial business combination than do companies subject to Rule 419. Moreover, if the initial public offering were subject to Rule 419, that rule would prohibit the release of any interest earned on funds held in the trust account to us unless and until the funds in the trust account were released to us in connection with our completion of an initial business combination. \nIf we seek stockholder approval of our initial business combination and we do not conduct redemptions pursuant to the tender offer rules, and if you or a group of stockholders are deemed to hold in excess of 15% of our Class A common stock, you will lose the ability to redeem all such shares in excess of 15% of our Class A common stock. \nIf we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our amended and restated certificate of incorporation provides that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a group (as defined under Section 13 of the Exchange Act), will be restricted from seeking redemption rights with respect to more than an aggregate of 15% of the shares sold in the initial public offering without our prior consent, which we refer to as the Excess Shares. Your inability to redeem the Excess Shares will reduce your influence over our ability to complete our initial business combination and you could suffer a material loss on your investment in us if you sell Excess Shares in open market transactions. Additionally, you will not receive redemption distributions with respect to the Excess Shares if we complete our initial business combination. And as a result, you will continue to hold that number of shares exceeding 15% and, in order to dispose of such shares, would be required to sell your shares in open market transactions, potentially at a loss. \n\nWe expect to encounter competition from other entities having a business objective similar to ours, including private investors (which may be individuals or investment partnerships), other blank check companies and other entities, domestic<|endoftext|>We may pay a finders fee, consulting fee or other compensation to be determined in an arms length negotiation based on the terms of the transaction. In no event, however, will our sponsor or any of our existing officers or directors, or their respective affiliates paid by us any finders fee, consulting fee or other compensation prior to, or for any services they render in order to effectuate, the completion of our initial business combination (regardless of the type of transaction that it is). We have agreed to pay an affiliate of our sponsor a total of up to $10,000 per month for office space, secretarial and administrative support and to reimburse our sponsor for any out-of-pocket expenses related to identifying, investigating and completing an initial business combination. \n\n\n\nIn evaluating a prospective target business, we conduct an extensive due diligence review which may encompass, as applicable and among other things, meetings with incumbent management and employees, document reviews (including reports about the potential target prepared by third parties), interviews of customers and suppliers, inspection of facilities and a review of financial and other information about the target and its industry. \n\n\n\n\nAlthough we closely scrutinize the management of a prospective target business when evaluating the desirability of effecting our initial business combination with that business, our assessment of the target businesss management may not prove to be correct. \n\n\n\nWe may conduct redemptions without a shareholder vote pursuant to the tender offer rules of the SEC subject to the provisions of our amended and restated memorandum and articles of association. However, we will seek shareholder approval if it is required by applicable law or stock exchange listing requirement, or we may decide to seek shareholder approval for business or other reasons. \nUnder the NYSEs listing rules, shareholder approval would typically be required for our initial business combination if, for example: \nWe issue ordinary shares that will be equal to or in excess of 20% of the number of our ordinary shares then-outstanding (other than in a public offering); \nAny of our directors, officers or substantial security holder (as defined by the NYSE rules) has a 5% or greater interest, directly or indirectly, in the target business or assets to be acquired or otherwise and the present or potential issuance of ordinary shares could result in an increase in issued and outstanding ordinary shares or voting power of 1% or more (or 5% or more if the related party involved is classified as such solely because such person is a substantial security holder); or \nThe issuance or potential issuance of ordinary shares will result in our undergoing a change of control. \n\n\n\n\nThe purpose of any such transaction could be to (i)vote in favor of the business combination and thereby increase the likelihood of obtaining shareholder approval of the business combination, (ii)reduce the number of public warrants outstanding or vote such warrants on any matters submitted to the warrant holders for approval in connection with our initial business combination or (iii)satisfy a closing condition in an agreement with a target that requires us to have a minimum net worth or a certain amount of cash at the closing of our initial business combination, where it appears that such requirement would otherwise not be met. \n\nOur sponsor, officers, directors and/or their affiliates may identify the shareholders with whom our sponsor, officers, directors or their affiliates may pursue privately negotiated transactions by either the shareholders contacting us directly or by our receipt of redemption requests submitted by shareholders (in the case of ClassA ordinary shares) following our mailing of tender offer or proxy materials in connection with our initial business combination. \nOur sponsor, officers, directors and/or their affiliates will be restricted from making purchases of shares if the purchases would violate Section9(a)(2) or Rule \n10b-5 of the Exchange Act. We expect any such purchases would be reported by such person pursuant to Section13 and Section16 of the Exchange Act to the extent such purchasers are subject to such reporting requirements. \n\nWe will provide our public shareholders with the opportunity to redeem all or a portion of their ClassA ordinary shares upon the completion of our initial business combination at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account calculated as of two business days prior to the consummation of the initial business combination, including interest earned on the funds held in the trust account and not previously released to us to pay our income taxes, if any, divided by the number of then-outstanding public shares, subject to the limitations described herein. The amount in the trust account is initially anticipated to be $10.00 per public share. \n\nOur amended and restated memorandum and articles of association provide that in no event will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 (so that we do not then become subject to the SECs penny stock rules). However, the proposed business combination may require: (i)cash consideration to be paid to the target or its owners, (ii)cash to be transferred to the target for working capital or other general corporate purposes or (iii)the retention of cash to satisfy other conditions in accordance with the terms of the proposed business combination. In the event the aggregate cash consideration we would be required to pay for all ClassA ordinary shares that are validly submitted for redemption plus any amount required to satisfy cash conditions pursuant to the terms of the proposed business combination exceed the aggregate amount of cash available to us, we will not complete the business combination or redeem any shares, and all ClassA ordinary shares submitted for redemption will be returned to the holders thereof. \n\nWe will provide our public shareholders with the opportunity to redeem all or a portion of their ClassA ordinary shares upon the completion of our initial business combination either (i)in connection with a general meeting called to approve the business combination or (ii)by means of a tender offer. So long as we obtain and maintain a listing for our securities on the NYSE, we will be required to comply with the NYSE rules. \n\n\nAs a result, in addition to our initial purchasers founder shares, we would need 12,500,001, or 31.25% (assuming all issued and outstanding shares are voted), or 1 (assuming only the minimum number of shares representing a quorum are voted), of the 40,000,000 public shares sold in our initial public offering to be voted in favor of an initial business combination in order to have our initial business combination approved. In addition, our sponsor and each member of our management team have entered into an agreement with us, pursuant to which they have agreed to waive their redemption rights with respect to any founder shares and public shares held by them in connection with (i)the completion of a business combination and (ii)a shareholder vote to approve an amendment to our amended and restated memorandum and articles of association (A)that would modify the substance or timing of our obligation to provide holders of our ClassA ordinary shares the right to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of our initial public offering or (B)with respect to any other provision relating to the rights of holders of our ClassA ordinary shares. \nIf we conduct redemptions pursuant to the tender offer rules of the SEC, we will, pursuant to our amended and restated memorandum and articles of association: conduct the redemptions pursuant to Rule \n13e-4 and Regulation 14E of the Exchange Act, which regulate issuer tender offers; \nUpon the public announcement of our initial business combination, if we elect to conduct redemptions pursuant to the tender offer rules, we and our sponsor will terminate any plan established in accordance with Rule \n10b5-1 to purchase ClassA ordinary shares in the open market, in order to comply with Rule \n14e-5 under the Exchange Act. \nIn the event we conduct redemptions pursuant to the tender offer rules, our offer to redeem will remain open for at least 20 business days, in accordance with Rule \n14e-1(a) under the Exchange Act, and we will not be permitted to complete our initial business combination until the expiration of the tender offer period. \n\nIf we seek shareholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our amended and restated memorandum and articles of association provide that a public shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a group (as defined under Section13 of the Exchange Act), will be restricted from redeeming its shares with respect to more than an aggregate of 15% of the shares sold in our initial public offering, which we refer to as Excess Shares, without our prior consent. Absent this provision, a public shareholder holding more than an aggregate of 15% of the shares sold in our initial public offering could threaten to exercise its redemption rights if such holders shares are not purchased by us, our sponsor or our management at a premium to the then-current market price or on other undesirable terms. By limiting our shareholders ability to redeem no more than 15% of the shares sold in our initial public offering without our prior consent, we believe we will limit the ability of a small group of shareholders to unreasonably attempt to block our ability to complete our initial business combination, particularly in connection with a business combination with a target that requires as a closing condition that we have a minimum net worth or a certain amount of cash. \n\n\n\n\n\n\n\nIf our initial proposed business combination is not completed, we may continue to try to complete a business combination with a different target until 24 months from the closing of our initial public offering. \n\nOur amended and restated memorandum and articles of association provide that we have only 24 months from the closing of our initial public offering to consummate an initial business combination. If we have not consummated an initial business combination within 24 months from the closing of our initial public offering, we will: (i)cease all operations except for the purpose of winding up; (ii)as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account and not previously released to us to pay our income taxes, if any (less up to $100,000 of interest to pay dissolution expenses) divided by the number of the then-outstanding public shares, which redemption will completely extinguish public shareholders rights as shareholders (including the right to receive further liquidation distributions, if any); and (iii)as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders and our board of directors, liquidate and dissolve, subject in the case of clauses (ii)and (iii)to our obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect to our warrants, which will expire worthless if we fail to consummate an initial business combination within 24 months from the closing of our initial public offering. \nOur sponsor and each member of our management team have entered into an agreement with us, pursuant to which they have agreed to waive their rights to liquidating distributions from the trust account with respect to any founder shares they hold if we fail to consummate an initial business combination within 24 months from the closing of our initial public offering (although they will be entitled to liquidating distributions from the trust<|endoftext|>Also have the effect of heightening many of the other risks described in this Risk Factors section, such as those related to the market for our securities and cross-border transactions. \nIf we have not completed our initial business combination within such time period or during any Extension Period, we will: (1)cease all operations except for the purpose of winding up; (2)as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (which interest shall be net of taxes payable, and less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders rights as stockholders (including the right to receive further liquidating distributions, if any); and (3)as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. \nIf we seek stockholder approval of our initial business combination, our sponsors, directors, officers, advisors or any of their respective affiliates may enter into certain transactions, including purchasing shares or warrants from the public, which may influence the outcome of our proposed business combination and reduce the public float of our securities. \nIf we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our sponsors, directors, officers, advisors or any of their respective affiliates may purchase public shares or public warrants or a combination thereof in privately negotiated transactions or in the open market either prior to or following the completion of our initial business combination, although they are under no obligation or other duty to do so. In the event that our sponsors, directors, officers, advisors or any of their respective affiliates purchase public shares in privately negotiated transactions from public stockholders who have already elected to exercise their redemption rights, such selling public stockholders would be required to revoke their prior elections to redeem their shares. Additionally, at any time at or prior to our initial business combination, subject to applicable securities laws (including with respect to material nonpublic information), our sponsors, directors, officers, advisors or any of their affiliates may enter into transactions with investors and others to provide them with incentives to acquire public shares, vote their public shares in favor of our initial business combination or not redeem their public shares. However, such persons have no current commitments, plans or intentions to engage in such transactions and have not formulated any terms or conditions for any such transactions. for a description of how such persons will determine from which stockholders to enter into transactions with. \nIn addition, if such purchases are made, the public float of our ClassA common stock or warrants and the number of beneficial holders of our securities may be reduced, possibly making it difficult to maintain or obtain the quotation, listing or trading of our securities on a national securities exchange. \n\nFor example, we may require our public stockholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in street name, to either tender their certificates to our transfer agent prior to the date set forth in the tender offer or proxy materials documents mailed to such holders, or up to two business days prior to the scheduled vote on the proposal to approve the initial business combination in the event we distribute proxy materials, or to deliver their shares to the transfer agent electronically. In the event that a stockholder fails to comply with these procedures, its shares may not be redeemed. \n\nOur public stockholders will be entitled to receive funds from the trust account only upon the earliest to occur of: (1)the completion of our initial business combination, and then only in connection with those shares of ClassA common stock that such stockholder properly elected to redeem, subject to the limitations described herein; (2)the redemption of any public shares properly submitted in connection with a stockholder vote to amend our amended and restated certificate of incorporation (A)to modify the substance or timing of our obligation to allow redemptions in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination by June 10, 2022 (or December 10, 2022, as applicable) or (B)with respect to any other provision relating to stockholders rights or pre-initial business combination activity; and (3)the redemption of all of our public shares if we have not completed our initial business combination by June 10, 2022 (or December 10, 2022, as applicable), subject to applicable law and as further described herein. In addition, if we have not completed an initial business combination within the required time period for any reason, compliance with Delaware law may require that we submit a plan of dissolution to our then-existing stockholders for approval prior to the distribution of the proceeds held in our trust account. In that case, public stockholders may be forced to wait beyond the end of such period before they receive funds from our trust account. In no other circumstances will a public stockholder have any right or interest of any kind in or to the trust account. \n\n\nOur units, ClassA common stock and warrants are listed on the NYSE. We cannot assure you that our securities will continue to be listed on the NYSE in the future or prior to our initial business combination. In general, we must maintain a minimum number of holders of our securities (generally 300 public stockholders). Additionally, in connection with our initial business combination, we will be required to demonstrate compliance with the NYSEs initial listing requirements, which are more rigorous than the NYSEs continued listing requirements, in order to continue to maintain the listing of our securities on the NYSE. For instance, in order for our ClassA common stock to be listed upon the consummation of our initial business combination, at such time, our stock price would generally be required to be at least $4.00 per share, our global market capitalization would be required to be at least $200,000,000, the aggregate market value of publicly-held shares would be required to be at least $100,000,000 and we would be required to have at least 400 round lot holders. \nIf the NYSE delists any of our securities from trading on its exchange and we are not able to list such securities on another national securities exchange, we expect such securities could be quoted on an over-the-counter market. \nBecause we expect that our units and eventually our ClassA common stock and warrants will be listed on the NYSE, our units, ClassA common stock and warrants will qualify as covered securities under such statute. \n\nSince the net proceeds of our initial public offering and the sale of the private placement units are intended to be used to complete an initial business combination with a target business that has not been selected, we may be deemed to be a blank check company under the U.S. securities laws. However, because we have net tangible assets in excess of $5,000,000 and filed a Current Report on Form8-K, including an audited balance sheet of our company demonstrating this fact, we are exempt from rules promulgated by the SEC to protect investors in blank check companies, such as Rule419. Among other things, this means our units will be immediately tradable and we will have a longer period of time to complete our initial business combination than do companies subject to Rule419. Moreover, if our initial public offering were subject to Rule419, that rule would prohibit the release of any interest earned on funds held in the trust account to us unless and until the funds in the trust account were released to us in connection with our completion of our initial business combination. \n\nIf we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our amended and restated certificate of incorporation will provide that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a group (as defined under Section13 of the Exchange Act), will be restricted from redeeming its shares with respect to more than an aggregate of 15% of the shares sold in our initial public offering, which we refer to as the Excess Shares, without our prior consent. However, our amended and restated certificate of incorporation does not restrict our stockholders ability to vote all of their shares (including Excess Shares) for or against our initial business combination. \n\n\n, including Concord II and Concord III. Our sponsors or any of its affiliates may make additional investments in us, although our sponsors and its affiliates have no obligation or other duty to do so. \n\nIn light of the SEC Staff Statement, we reevaluated the accounting treatment of our warrants, and pursuant to the guidance in ASC 815, \n### Derivatives and Hedging \n\n\nSee \n\nTo respond to the material weakness we identified, we plan to incorporate enhanced communication and documentation procedures between our operations team and the individuals responsible for preparation of financial statements, as described in Part II, Item 9A: Controls and Procedures included in this Amendment. \n\nWe, and following our initial business combination, the post-business combination company, may face litigation and other risks as a result of the material weakness in our internal control over financial reporting. \nAs a result of such material weakness, the Restatement, the change in accounting for our warrants, and other matters raised or that may in the future be raised by the SEC, we face the potential for litigation or other disputes which may include, among others, claims invoking the federal and state securities laws, contractual claims or other claims arising from the Restatement and material weaknesses in our internal control over financial reporting and the preparation of our financial statements. \nIf the funds not being held in the trust account are insufficient to allow us to operate until at least June 10, 2022 (or December 10, 2022, as applicable), we may be unable to complete our initial business combination. \nThe funds available to us outside of the trust account may not be sufficient to allow us to operate until at least June 10, 2022 (or December 10, 2022, as applicable), assuming that our initial business combination is not completed by that date. Managements plans to address this need for capital through our initial public offering and potential loans from certain of our affiliates are discussed in the section of this Annual Report titled Managements Discussion and Analysis of Financial Condition and Results of Operations. \nWe believe that the funds available to us outside of the trust account will be sufficient to allow us to operate until at least June 10, 2022 (or December 10, 2022, as applicable); Of the funds available to us, we could use a portion of the funds available to us to pay commitment fees for financing, fees to consultants to assist us with our search for a target business or as a down payment or to fund a no-shop provision (a provision in letters of intent or merger agreements designed to keep target businesses from shopping around for transactions with other companies or investors on terms more favorable to such target businesses) with respect to a particular proposed business combination, although we do not have any current intention to do so. If we entered into an agreement where we paid for the right to receive exclusivity from a target business and were subsequently required to forfeit such funds (whether as a result of our breach or<|endoftext|>Controls Boxer Management. MVA Investors is the independent, personal investment vehicle of certain employees of Boxer Capital. Aaron Davis is a member of and has voting and dispositive power over securities held by MVA Investors. Christopher Fuglesang, Ph.D., a member of our board of directors, is a managing director at Boxer Capital and disclaims beneficial ownership of the shares held by Boxer Capital and MVA Investors except to the extent of his pecuniary interest therein. The address of Boxer Capital, MVA Investors and Aaron Davis is 11682 El Camino Real, Suite 320, San Diego, CA 92130. The address of Boxer Management and Joe Lewis is Cay House, EP Taylor Drive N7776, Lyford Cay, New Providence, Bahamas. \n(8) \nBased solely on a Schedule 13G filed by RA Capital Management, L.P. on February16, 2021. The general partner of RA Capital Management, L.P. is RA Capital Management GP, LLC, of which Peter Kolchinsky and Rajeev Shah are managing members. RA Capital Management, L.P., RA Capital Management GP, LLC, Peter Kolchinsky and Rajeev Shah may be deemed to have voting and investment power over the shares held of record by RA Capital Management, L.P. The address of RA Capital Management, L.P. is 200 Berkeley Street, 18th Floor, Boston MA 02116. \n(9) \nConsists of (i) 14,000 shares of common stock held by Dr.Kakkar, (ii) 702,515 shares of common stock held by Shah-Kakkar Holdings, LLC and (iii) 11,325 shares of common stock issuable upon the exercise of stock options within 60 days of February28, 2021. Shah-Kakkar Holdings, LLC is a holding company for trusts for which Dr.Kakkar and family members of Dr.Kakkar are beneficiaries. Dr.Kakkar is the manager of Shah-Kakkar Holdings, LLC. \n(10) \nConsists of (i) 503,254 shares of common stock held by Dr.Viney and (ii) 1,200 shares of common stock held by Dr.Vineys husband. \n(11) \nConsists of (i)the shares described in note (2)above, (ii) 84,158 shares of common stock held by Mr.Crane, (iii) 336,314 shares of common stock held by The Crane Family Irrevocable Trust 2002, for which family members of Mr.Crane are beneficiaries and (iv) 3,499 shares of common stock issuable upon the exercise of stock options within 60 days of February28, 2021. \n(12) \nConsists of (i)the shares described in note (4)above, (ii) 1,000 shares of common stock held by Dr.Becker and (iii) 3,499 shares of common stock issuable upon the exercise of stock options within 60 days of February28, 2021. \n(13) \nConsists of (i)the shares described in note (6)above and (ii) 3,499 shares of common stock issuable upon the exercise of stock options within 60 days of February28, 2021. \n(14) \nConsists of 3,110 shares of common stock issuable upon the exercise of stock options within 60 days of February28, 2021. \n(15) \nConsists of 61,113 shares of common stock held by Dr.Frail and (ii) 5,379 shares of common stock issuable upon the exercise of stock options within 60 days of February28, 2021. \n(16) \nConsists of (i)the shares described in note (7)above and (ii) 3,499 shares of common stock issuable upon the exercise of stock options within 60 days of February28, 2021. \n(17) \nConsists of (i)the shares described in note (1)above and (ii) 3,499 shares of common stock issuable upon the exercise of stock options within 60 days of February28, 2021. \n(18) \nConsists of (i) 1,000 shares of common stock held by Dr.Stagliano, (ii) 73,067 shares of common stock held by The Nancy E. Stagliano Trust and (iii) 6,025 shares of common stock issuable upon the exercise of stock options within 60 days of February28, 2021. The Nancy E. Stagliano Trust is a trust for which family members of Dr.Stagliano are beneficiaries. Dr.Stagliano is the trustee of The Nancy E. Stagliano Trust. \n(19) \nConsists of (i) 16,280,408 shares of common stock and (ii) 53,160 shares of common stock issuable upon the exercise of stock options within 60 days of February28, 2021. \nITEM13. \n\n\nSince January1, 2019, we have engaged in the following transactions in which the amounts involved exceeded $120,000 and any of our directors, executive officers or holders of more than 5% of our voting securities, or any member of the immediate family of, or person sharing the household with, the foregoing persons, had or will have a direct or indirect material interest. We believe that all of these transactions were on terms as favorable as could have been obtained from unrelated third parties. \nSeries A Preferred Share Financing \nIn January 2019, we issued and sold an aggregate of 15,693,109 Series A preferred shares at a price per share of $1.147 in cash, for an aggregate purchase price of $18.0million \nIn February 2020, we issued and sold an aggregate of 15,693,109 Series A preferred shares at a price per share of $1.147 in cash, for an aggregate purchase price of $18.0million. The following table sets forth the aggregate numbers of Series A preferred shares that we issued and sold to our 5% stockholders and their affiliates in these transactions and the aggregate amount of consideration for such shares: \n(1) \n\n(2) \n\n(3) \n\n(4) \n\n(5) \nOne, Limited. \n### Series B Preferred Share Financing \nIn March 2020, we issued and sold an aggregate of 19,158,922 Series B preferred shares at a price per share of $2.0878 in cash, for an aggregate purchase price of $40.0million. In June 2020, we issued and sold an aggregate of 19,158,922 Series B preferred shares in an additional closing of our Series B preferred shares at the same price per share as at the first closing for an aggregate purchase price of $40.0million. The following table sets forth the aggregate numbers of our Series B preferred shares that we sold to our 5% stockholders and their affiliates in the first and second closings and the aggregate amount of consideration for such shares: \n(1) \n\n(2) \nDaniel Becker, a member of our board of directors, is a biotechnology principal of Access Industries. \n(3) \n\n(4) \n\n(5) \n\n(6) \nOne, Limited. \n(7) \n\nThe following table sets forth the aggregate numbers of our Series B preferred shares that we sold to our executive officers in excess of $120,000 in the first and second closings and the aggregate amount of consideration for such shares: \nThe following table sets forth the aggregate numbers of our Series B preferred shares that we sold to our non-employee directors in excess of $120,000 in the first and second closings and the aggregate amount of consideration for such shares: \n### Simple Agreement for Future Equity \nIn June 2020, we entered into a simple agreement for future equity, or SAFE, with Versant Vantage I, L.P., or Versant, which is affiliated with Versant Venture Capital, pursuant to which we issued rights to Versant to receive shares of our capital stock for an aggregate purchase price of $6,000,000, or the Purchase Amount. Pursuant to the terms of the SAFE, upon the closing of the initial public offering, the rights converted into a number of shares of our common stock equal to the Purchase Amount divided by the initial public offering price per share of common stock sold in the initial public offering. Based on our initial public offering price of $18.00 per share, the rights under the SAFE converted into 333,333 shares of our common stock. \nParticipation in Initial Public Offering \nIn July 2020, we completed our initial public offering in which we issued and sold an aggregate of 7,500,000 shares of our common stock at a price to the public of $18.00 per share. Certain of our directors, officers and 5% stockholders and their affiliates purchased an aggregate of 1,210,805 shares of our common stock in the initial public offering for an aggregate purchase price of $21,794,490. Each of those purchases was made through the underwriters at the initial public offering price. The following table sets forth the number of shares of our common stock purchased by certain of our directors, officers and 5% stockholders and their affiliates and the aggregate purchase price paid for such shares. \n(1) \n\n(2) \nOne, Limited. \n(3) \nConsists of 34,863 shares purchased by Polaris Partners VIII, L.P. and 1,248 shares purchased by Polaris Entrepreneurs Fund VIII, L.P. \n(4) \n\n(5) \nRepresents shares purchased through a directed share program in connection with the initial public offering. \n(6) \nConsists of shares purchased by Dr.Mutzs wife. \n### Danforth Advisors, LLC \nIn April 2018, we engaged Danforth Advisors, LLC, or Danforth, a consulting firm specializing in providing financial and strategic support to life sciences companies and a controlled affiliate of Gregg Beloff, our interim chief financial officer. Pursuant to a consulting agreement, as amended, effective April 2018, we paid professional fees to Danforth of $417,000 and $1.0million in 2019 and 2020, respectively. \nConsulting Arrangement with Alan Crane \nWe are party to an arrangement with Alan Crane, one of our co-founders and the chairman of our board of directors, pursuant to which we compensate him for consulting services. In March 2017, we entered into a consulting agreement with Mr.Crane for the provision of consulting, advisory and related services. Pursuant to this arrangement, we paid Mr.Crane $162,500 in 2019. The consulting agreement also provided that Mr.Crane was entitled to the grant of a restricted stock award to purchase 390,238 shares of common stock at a purchase price of $0.0001 per share, which shares of restricted stock were granted in April 2017. In connection with our January 2019 reorganization into a limited liability company structure, these shares were exchanged for 390,238 restricted common shares of Pandion LLC. \n### LLC Operating Agreement \nIn conjunction with our January 2019 reorganization into a limited liability company structure, the members of Pandion LLC entered into a limited liability company agreement, or the LLC Agreement, which governed our operations prior to the consummation of the Conversion. The LLC Agreement set forth the authorized classes of Pandion LLC equity securities, the allocation of profits and losses among the classes and the preferences of the preferred classes. The LLC Agreement also set forth the rights of and restrictions on members, including rights with respect to the election of directors, management and certain transfer restrictions on the holders of shares. The LLC Agreement also provided for registration rights, preemptive rights and transfer restrictions in respect of securities held by certain holders of our capital stock, as well as rights of first refusal and co-sale rights in respect of sales of securities by certain holders of our capital stock. The LLC Agreement included indemnification and exculpation provisions applicable to the directors, officers, members, employees and agents of Pandion LLC. Concurrent with the consummation of the Conversion, the LLC Agreement terminated. \n### Registration Rights \nWe are a party to an investor rights agreement with certain holders of our common stock, including some of our 5% stockholders and their affiliates and entities affiliated with some of our directors. This investor rights agreement provides these holders the right, subject to certain conditions, beginning January13, 2021, to demand that we file a registration statement or to request that their shares be covered by a registration statement that we are otherwise filing. \nIndemnification Agreements \nOur certificate of incorporation provides that we will indemnify our directors and officers to the fullest extent permitted by Delaware law. In addition, we have entered into indemnification agreements with all of our directors and executive officers. These indemnification agreements require us, among other things, to indemnify each such director or executive officer for some expenses, including attorneys fees, judgments, fines and settlement amounts incurred by him or her in any action or proceeding arising out of his or her service as one of our directors or executive officers. \n### Corporate Conversion \nImmediately prior to our IPO, we converted from a Delaware limited liability company to a Delaware corporation, which we refer to as the Conversion. Existing holders at the time of our IPO, including certain 5% shareholders, executive officers and directors, received shares of our common stock as a result of the Conversion. \n\nOur board of directors has adopted written policies and procedures for the review of any transaction, arrangement or relationship in which our company is a participant, the amount involved exceeds the lesser of $120,000 or one<|endoftext|>Monies held in the Trust Account for the benefit of our public shareholders, there is no guarantee that they will execute such agreements or even if they execute such agreements that they would be prevented from bringing claims against the Trust Account including but not limited to fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain an advantage with respect to a claim against our assets, including the funds held in the Trust Account. Our Sponsor has agreed that it will be liable to us if and to the extent any claims by a third party (other than our independent public accountants) for services rendered or products sold to us, or a prospective target business with which we have entered into a written letter of intent, confidentiality or other similar agreement or business combination agreement, reduce the amount of funds in the Trust Account to below (i) $10.00 per public share or (ii)such lesser amount per public share held in the Trust Account as of the date of the liquidation of the Trust Account, due to reductions in value of the trust assets, in each case net of the amount of interest which may be withdrawn to pay taxes, except as to any claims by a third party or prospective target business who executed a waiver of any and all rights to the monies held in the Trust Account (whether or not such waiver is enforceable) and except as to any claims under our indemnity of the underwriters of our Initial Public Offering against certain liabilities, including liabilities under the Securities Act. \n\nAt the IPO Closing Date, we had access to up to approximately $1,000,000 from the proceeds of our Initial Public Offering with which to pay any such potential claims (including costs and expenses incurred in connection with our liquidation, currently estimated to be no more than approximately $100,000). \nIf we file a winding up petition or a winding up petition is filed against us that is not dismissed, the proceeds held in the Trust Account could be subject to applicable insolvency law, and a liquidator may determine that such funds should be included in our insolvency estate and subject to the claims of third-partycreditors with priority over the claims of our shareholders. Additionally, if we file a winding up petition or a winding up petition is filed against us that is not dismissed, any distributions received by shareholders could be subject to challenge under applicable debtor/creditor and/or insolvency laws as a voidable preference. \nOur public shareholders will be entitled to receive funds from the Trust Account only (i)in the event of the redemption of our public shares if we are unable to complete our initial business combination within 24months (or 27months, as applicable) from the closing of our Initial Public Offering, subject to applicable law, (ii)in connection with a shareholder vote to approve an amendment to our amended and restated memorandum and articles of association that would affect the substance or timing of our obligation to redeem 100% of our public shares if we have not consummated an initial business combination within 24months (or 27months, as applicable) from the closing of our Initial Public Offering or (iii)if they redeem their respective shares for cash upon the completion of the initial business combination. In the event we seek shareholder approval in connection with our initial business combination, a shareholders voting in connection with the business combination alone will not result in such shareholder redeeming its shares to us for an applicable pro rata share of the Trust Account. \n### Limited Payments to Insiders \nThere will be no finders fees, reimbursements or cash payments made by the Company to our Sponsor, officers or directors, or our or their affiliates, for services rendered to us prior to or in connection with the completion of our initial business combination, other than the following payments, none of which will be made from the proceeds of our Initial Public Offering held in the Trust Account prior to the completion of our initial business combination: repayment of up to an aggregate of $600,000 in loans made to us by our Sponsor to cover offering-related and organizational expenses; reimbursement for office space, utilities, secretarial support and administrative services provided to us by Tortoise Capital Advisors, L.L.C., an affiliate of our Sponsor, in an amount equal to $10,000 per month; and repayment of loans which may be made by our Sponsor or an affiliate of our Sponsor or certain of our officers and directors to finance transaction costs in connection with an intended initial business combination. \n### Competition \n\n\n\nOn February 7, 2021, we entered into a business combination agreement and plan of reorganization (the Business Combination Agreement) with SNPR Merger Sub I, Inc., a Delaware corporation and our wholly owned subsidiary (First Merger Sub), SNPR Merger Sub II, LLC, a Delaware limited liability company and our wholly owned subsidiary (Second Merger Sub and, together with First Merger Sub, the Merger Subs), and Volta Industries, Inc., a Delaware corporation (Volta), pursuant to which First Merger Sub will merge with and into Volta (the First Merger), with Volta surviving the First Merger as our wholly owned subsidiary (the Surviving Corporation), and the Surviving Corporation will subsequently merge with and into Second Merger Sub (the Second Merger, together with the First Merger, the Mergers, and together with the other transactions related thereto, the Proposed Transactions), with Second Merger Sub surviving the Second Merger as our wholly owned subsidiary. The announcement of the Proposed Transactions was filed with the SEC on a Current Report on Form 8-K on February 8, 2021. \n\n### Domestication \nPrior to the effective time of the First Merger (the Effective Time), we will domesticate (the Domestication) as a Delaware corporation in accordance with Section 388 of the Delaware General Corporation Law (the DGCL) and the applicable provisions of the Companies Act (2020 Revision) of the Cayman Islands (the Companies Act). \nIn connection with the Domestication, (a) our Class A ordinary shares will convert automatically, on a one-for-one basis, into shares of Class A common stock, par value $0.0001 per share (the Class A Common Stock), (b) our Class B ordinary shares will convert automatically, on a one-for-one basis, into shares of Class A Common Stock, (c) our warrants to purchase Class A ordinary shares will convert automatically into warrants to purchase Class A Common Stock (d) our Units will convert automatically into units presenting one share of Class A Common Stock and one-fourth of one redeemable warrant; (e) a dual class structure will be implemented and we will be authorized to issue shares of Class B common stock, par value $0.0001 per share (the Class B Common Stock) that will carry voting rights in the form of ten votes per such share; upon the Effective Time. \n\nIn connection with the execution of the Business Combination Agreement, we entered into a Stockholder Support Agreement (the Stockholder Support Agreement) with Volta and certain shareholders of Volta pursuant to which such shareholders agreed to vote all of their shares of Voltas Class A common stock, par value $0.001 per share (Volta Class A Common Stock) and shares of Voltas Class B common stock, par value $0.001 per share (Volta Class B Common Stock and, together with the Volta Class A Common Stock, the Volta Common Stock) and shares of Voltas preferred stock (Volta Preferred Stock) in favor of the approval and adoption of the Proposed Transactions, including agreeing to execute a written consent within forty-eight hours of a registration statement on Form S-4 filed by us becoming effective. \nLock-Up Agreement \nIn connection with the execution of the Business Combination Agreement, the founders of Volta entered into a Lock-Up Agreement (the Lock-Up Agreement) with us and Volta pursuant to which they have agreed, subject to certain customary exceptions, not to effect any (a) direct or indirect sale, assignment, pledge, hypothecation, disposition, loan or other transfer, or entry into any agreement with respect to any sale, assignment, pledge, hypothecation, disposition, loan or other transfer, with respect to any shares of Class A Common Stock or Class B Common Stock held by them immediately after the Effective Time, including any shares of Class A Common Stock or Class B Common Stock issuable upon the exercise of options or warrants to purchase shares of Class A Common Stock or Class B Common Stock held by them immediately following the closing of the Proposed Transactions (the BCA Closing) or (b) publicly announce any intention to effect any transaction specified in clause (a), in each case, until the date that is the earlier of (i) one year after the BCA Closing and (ii) the earlier to occur of, subsequent to the BCA Closing, (x) the first date on which the last reported sale price of the Class A Common Stock equals or exceeds $12.00 per share (as equitably adjusted for share sub-divisions, share dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30 trading-day period commencing at least 150 days after the BCA Closing and (y) the date on which there is consummated a subsequent liquidation, merger, share exchange or other similar transaction which results in all of our stockholders having the right to exchange their shares of Class A Common Stock for cash, securities or other property. \n\n### Sponsor Letter \nIn connection with the execution of the Business Combination Agreement, we entered into a letter agreement (the Sponsor Letter) with Volta, our Sponsor and the other holders of our Founder Shares pursuant to which, among other things, our Sponsor and each other holder agreed to (a) waive the anti-dilution rights set forth in Article 17.3 of the amended and restated memorandum and articles of association, (b) comply with the non-solicitation provisions in the Business Combination Agreement, and (c) vote all of our shares held by them in favor of the adoption and approval of the and the Proposed Transactions. \nSubscription Agreements \nIn connection with the execution of the Business Combination Agreement, we entered into separate subscription agreements (collectively, the Subscription Agreements) with a number of investors (each, a Subscriber and collectively, the Subscribers), pursuant to which the Subscribers agreed to purchase, and we agreed to sell to the Subscribers, an aggregate of 30,000,000 shares of Class A Common Stock (the Private Placement Shares), for a purchase price of $10.00 per share and an aggregate purchase price of $300,000,000, in a private placement. \n\nPursuant to the Subscription Agreements, we agreed that, within 30 calendar days after the consummation of the Proposed Transactions, we will file with the SEC (at our sole cost and expense) a registration statement registering the resale of the Private Placement Shares (the Private Placement Resale Registration Statement), and we shall use commercially reasonable efforts to have the Private Placement Resale Registration Statement declared effective as soon as practicable after the filing thereof, but no later than the earlier of (i)60 calendar days (or 90 calendar days if the SEC notifies us that it will review the Private Placement Resale Registration Statement) following the BCA Closing and (ii) the tenth business day after the SEC notifies us that the Private Placement Resale Registration Statement will not be reviewed or will not be subject to further review. \n### Employees \n\n\nWe have registered our Units, ClassA ordinary shares and public warrants under the Exchange Act and have reporting obligations, including the requirement that we file annual, quarterly and current reports with the SEC. \nWe will provide shareholders with audited financial statements of the prospective target business as part of the proxy solicitation or tender offer materials (as applicable) sent to shareholders. \n### Website \nOur corporate website address is www.tortoisespac.com \n\nOur Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, as well as any amendments and exhibits to these reports, filed or furnished pursuant to Section 13(a) or Section 15(d) of the Exchange Act, are available on<|endoftext|>It is our current intention to comply with these requirements and maintain our REIT status. As a REIT, we generally will not be subject to corporate federal, state or local income taxes on taxable income we distribute currently (in accordance with the Internal Revenue Code and applicable regulations) to our stockholders. If we fail to qualify as a REIT in any taxable year, we will be subject to federal, state and local income taxes at regular corporate rates and may not be able to qualify as a REIT for four subsequent tax years. Even if we qualify for federal taxation as a REIT, we may be subject to certain state and local taxes on our income and to federal income taxes on our undistributed taxable income (i.e.,taxable income not distributed in the amounts and in the time frames prescribed by the Internal Revenue Code and applicable regulations thereunder) and are subject to Federal excise taxes on our undistributed taxable income. \nIt is our intention to pay to our stockholders within the time periods prescribed by the Internal Revenue Code no less than 90%, and, if possible, 100% of our annual taxable income, including taxable gains from the sale of real estate. It will continue to be our policy to make sufficient distributions to stockholders in order for us to maintain our REIT status under the Internal Revenue Code. \nOf the aggregate $36.6 million of dividends declared in 2020, $6.8 million or 18.7% was paid in the form of stock (excluding $1.0 million paid in stock pursuant to our dividend reinvestment plan). We paid dividends in stock to conserve cash in response to the economic dislocations resulting from the pandemic. Our board of directors will continue to evaluate, on a quarterly basis, the amount and nature ( i.e., cash or stock) of dividend payments based on its assessment of, among other things, our short and long-term cash and liquidity requirements, prospects, debt maturities, projections of our REIT taxable income, net income, funds from operations, and adjusted funds from operations. \n\nWe are not a party to any off-balance sheet arrangements other than with respect to a land parcel owned by us and located in Beachwood, Ohio. This parcel is improved by a multi-family complex and we ground leased the parcel to the owner/operator of such complex. The ground lease generated $729,000, $783,000 and $1.4 million of rental income, net, during 2020, 2019 and 2018, respectively. \nAt December 31, 2020, the carrying value of the land on our balance sheet was $13.9 million; our leasehold position is subordinate to $67.2 million of mortgage debt incurred by our tenant, the owner/operator of the multi-family complex. In addition, as described in \nThe Vue, we have agreed to fund certain capital expenditures and operating cash flow shortfalls at this property. We do not believe that this type of off-balance sheet arrangement has been or will be material to our liquidity and capital resource positions, except to the extent we determine to continue to fund the capital expenditures required by, and the operating cash flow shortfalls at this property. See Note 6 to our consolidated financial statements for additional information regarding this arrangement. \n\nOur discussion and analysis of financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States (\"GAAP\"). The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting periods. \nWe base our estimates on historical experience, current trends and various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could materially differ from any of our estimates under different assumptions or conditions. Our significant accounting policies are discussed in Note 2 of our consolidated financial statements in this report. We believe the accounting estimates listed below are the most critical to aid in fully understanding and evaluating our reported financial results, and they require our most difficult, subjective or complex judgments, resulting from the need to make estimates about the effect of matters that are inherently uncertain. \n### Rental Income \nRental income includes: (i) base rents that our tenants pay in accordance with the terms of their respective leases reported on a straight-line basis over the non-cancellable term of each lease and (ii) reimbursements by tenants of certain real estate operating expenses. Since many of our leases provide for rental increases at specified intervals, straight-line basis accounting requires us to record as an asset and include in revenues, unbilled rent receivables which we will only receive if the tenant makes all rent payments required through the expiration of the term of the lease. Accordingly, our management must determine, in its judgment, that the unbilled rent receivable applicable to each specific tenant is collectable. We review unbilled rent receivables on a quarterly basis and take into consideration the tenants payment history and the financial condition of the tenant. In the event that the collectability of an unbilled rent receivable is unlikely, we are required to write-off the receivable, which has an adverse effect on net income for the year in which the direct write-off is taken, and will decrease total assets and stockholders equity. \nPurchase Accounting for Acquisition of Real Estate \nThe fair value of real estate acquired is allocated to acquired tangible assets, consisting of land and building, and identified intangible assets and liabilities, consisting of the value of above-market and below-market leases and other value of in-place leases based in each case on their fair values. The fair value of the tangible assets of an acquired property (which includes land, building and building improvements) is determined by valuing the property as if it were vacant, and the as-if-vacant value is then allocated to land, building and building improvements based on our determination of relative fair values of these assets. We assess fair value of the lease intangibles based on estimated cash flow projections that utilize appropriate discount rates and available market information. The fair values associated with below-market rental renewal options are determined based on our experience and the relevant facts and circumstances that existed at the time of the acquisitions. The portion of the values of the leases associated with below-market renewal options that we deem likely to be exercised are amortized to rental income over the respective renewal periods. The allocation made by us may have a positive or negative effect on net income and may have an effect on the assets and liabilities on the balance sheet. \n\nWe review our real estate portfolio on a quarterly basis to ascertain if there are any indicators of impairment to the value of any of our real estate assets, including deferred costs and intangibles, to determine if there is any need for an impairment charge. In reviewing the portfolio, we examine the type of asset, the current financial statements or other available financial information of the tenant, the economic situation in the area in which the asset is located, the economic situation in the industry in which the tenant is involved and the timeliness of the payments made by the tenant under its lease, as well as any current correspondence that may have been had with the tenant, including property inspection reports. For each real estate asset owned for which indicators of impairment exist, we perform a recoverability test by comparing the sum of the estimated undiscounted future cash flows attributable to the asset to its carrying amount. Managements assumptions and estimates include projected rental rates during the holding period and property capitalization rates in order to estimate undiscounted future cash flows. If the undiscounted cash flows are less than the assets carrying amount, an impairment loss is recorded to the extent that the estimated fair value is less than the assets carrying amount. The estimated fair value is determined using a discounted cash flow model of the expected future cash flows through the useful life of the property. Real estate assets that are expected to be disposed of are valued at the lower of carrying amount or fair value less costs to sell on an individual asset basis. We generally do not obtain any independent appraisals in determining value but rely on our own analysis and valuations. Any impairment charge taken with respect to any part of our real estate portfolio will reduce our net income and reduce assets and stockholders equity to the extent of the amount of any impairment charge, but it will not affect our cash flow or our distributions until such time as we dispose of the property. \n### Item \n7A. \nOur primary market risk exposure is the effect of changes in interest rates on the interest cost of draws on our revolving variable rate credit facility and the effect of changes in the fair value of our interest rate swap agreements. Interest rates are highly sensitive to many factors, including governmental monetary and tax policies, domestic and international economic and political considerations and other factors beyond our control. \nWe use interest rate swaps to limit interest rate risk on variable rate mortgages. These swaps are used for hedging purposes-not for speculation. We do not enter into interest rate swaps for trading purposes. At December 31, 2020, our aggregate liability in the event of the early termination of our swaps was $5.3 million. \nAt December 31, 2020, we had 23 interest rate swap agreements outstanding. The fair market value of the interest rate swaps is dependent upon existing market interest rates and swap spreads, which change over time. As of December 31, 2020, if there had been an increase of 100 basis points in forward interest rates, the fair market value of the interest rate swaps would have increased by approximately $2.9 million and the net unrealized loss on derivative instruments would have decreased by $2.9 million. If there were a decrease of 100 basis points in forward interest rates, the fair market value of the interest rate swaps would have decreased by approximately $3.1 million and the net unrealized loss on derivative instruments would have increased by $3.1 million. These changes would not have any impact on our net income or cash. \nOur variable mortgage debt, after giving effect to the interest rate swap agreements, bears interest at fixed rates and accordingly, the effect of changes in interest rates would not impact the amount of interest expense that we incur under these mortgages. \nOur variable rate credit facility is sensitive to interest rate changes. At December 31, 2020, a 100 basis point increase of the interest rate on this facility would increase our related interest costs by approximately $130,000 per year and a 100 basis point decrease of the interest rate would decrease our related interest costs by approximately $19,000 per year. \nThe fair market value of our long-term debt is estimated based on discounting future cash flows at interest rates that our management believes reflect the risks associated with long-term debt of similar risk and duration. \nThe following table sets forth our debt obligations by scheduled principal cash flow payments and maturity date, weighted average interest rates and estimated fair market value at December31, 2020: \n(1) \nOur credit facility matures on December31, 2022 and bears interest at the 30day LIBOR rate plus the applicable margin. The applicable margin varies based on the ratio of total debt to total value. See \nItem7. Managements Discussion and Analysis of Financial Conditions and Results of OperationsCredit Facility \n### Item \n8. \nThis information appears in Item15(a) of this Annual Report on Form10-K, and is incorporated into this Item8 by reference thereto. \n### Item \n9. \nNot applicable. \n### Item \n9A. Controls and Procedures. \n\nA review and evaluation was performed by our management, including our<|endoftext|>Potential claims (including costs and expenses incurred in connection with our liquidation, currently estimated to be no more than approximately $100,000). \n\n\n### Competition \n\nFacilities \n\n### Employees \n\n\n\n\n\n\n\nAs an exempted company, we applied for and received a tax exemption undertaking from the Cayman Islands government that, in accordance with Section6 of the Tax Concessions Act (As Revised) of the Cayman Islands, for a period of 20 years from the date of the undertaking, no law which is enacted in the Cayman Islands imposing any tax to be levied on profits, income, gains or appreciations will apply to us or our operations and, in addition, that no tax to be levied on profits, income, gains or appreciations or which is in the nature of estate duty or inheritance tax will be payable (i)on or in respect of our shares, debentures or other obligations or (ii)by way of the withholding in whole or in part of a payment of dividend or other distribution of income or capital by us to our shareholders or a payment of principal or interest or other sums due under a debenture or other obligation of us. \n\n\n\n\n### S-K. \n\n### Item1A. Risk Factors \n\n\n\nWe are a recently formed company, incorporated under the laws of the Cayman Islands with no operating results. \n\n\n\n\n\n\n\nAs a result, in addition to our initial shareholders founder shares, we would need 12,937,500, or 37.5% (assuming all issued and outstanding shares are voted), or 2,156,251, or 6.25% (assuming only the minimum number of shares representing a quorum are voted), of the 34,500,000 public shares sold in our initial public offering to be voted in favor of an initial business combination in order to have our initial business combination approved. \n\nIn connection with the consummation of our initial public offering, we will enter into a forward purchase agreement with our sponsor, which provides for the purchase of up to $50,000,000 of units, with each unit consisting of one ClassA ordinary share and one-third of one warrant to purchase one ClassA ordinary share at $11.50 per share, for a purchase price of $10.00 per unit, in a private placement to occur concurrently with the closing of our initial business combination. However, if the sale of the forward purchase securities does not close, we may lack sufficient funds to consummate our initial business combination. The forward purchase agreement contains customary closing conditions, the fulfilment of which is a condition for our sponsor to purchase the forward purchase securities, including that our initial business combination must be consummated substantially concurrently with, and immediately following, the purchase of forward purchase securities. \n\n\n\n\n\n\n\n\n\n\n\n\n\nOn January31, 2020, U.S. \nThe \n\nThe extent to which \n\n\nIf the disruptions posed by \n\n\n\nFinally, the outbreak of \n\n\nFor example, the outbreak of \n\n\n\n\n\n\n\n\n\n\n\n\nAs of December31, 2020, we had $1,041,923 in cash held outside the trust account to fund our working capital requirements. \n\n\n\n\n\n\n\n\n\n\n\nOur amended and restated memorandum and articles of association does provide a specified maximum redemption threshold, except that in no event will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 (so that we do not then become subject to the SECs penny stock rules). \n\nAmending our amended and restated memorandum and articles of association will require at least a special resolution of our shareholders as a matter of Cayman Islands law, meaning the approval of holders of at least two-thirds of our ordinary shares who attend and vote at a shareholder meeting of the company, and amending our warrant agreement will require a vote of holders of at least 65% of the public warrants and, solely with respect to any amendment to the terms of the private placement warrants or any provision of the warrant agreement with respect to the private placement warrants, 65% of the number of the then outstanding private placement warrants, and, solely with respect to any amendment to the terms of the forward purchase warrants or any provision of the warrant agreement with respect to the forward purchase warrants, 65% of the then-outstanding forward purchase warrants. \n\nHowever, because we have net tangible assets in excess of $5,000,000 upon the completion of our initial public offering and the sale of the private placement warrants and have filed a Current Report on Form \n\n\n\n\n\nPursuant to a letter agreement, our sponsor has agreed that it will be liable to us if and to the extent any claims by a third-party (other than our independent auditors) for services rendered or products sold to us, or a prospective target business with which we have discussed entering into a transaction agreement, reduce the amounts in the trust account to below the lesser of (i) $10.00 per public share and (ii)the actual amount per public share held in the trust account as of the date of the liquidation of the trust account if less than $10.00 per public share due to reductions in the value of the trust assets, in each case net of the interest that may be withdrawn to pay our tax obligations, provided that such liability will not apply to any claims by a third-party or prospective target business that executed a waiver of any and all rights to seek access to the trust account nor will it apply to any claims under our indemnity of the underwriter of our initial public offering against certain liabilities, including liabilities under the Securities Act. \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nOur amended and restated memorandum and articles of association authorize the issuance of up to 500,000,000 ClassA ordinary shares, par value $0.0001 per share, 50,000,000 ClassB ordinary shares, par value $0.0001 per share, and 1,000,000 preference shares, par value $0.0001 per share. There are 465,500,000 and 41,375,000 authorized but unissued ClassA ordinary shares and ClassB ordinary shares, respectively, available for issuance which amount does not take into account shares reserved for issuance upon exercise of outstanding warrants or shares issuable upon conversion of the ClassB ordinary shares, if any. \n\n\n\n\nSection404 of the Sarbanes-Oxley Act requires that we evaluate and report on our system of internal controls beginning with our Report on Form \n\n\n\n\n\n\nAs of December31, 2020, we had approximately $334,311,000 available to consummate an initial business combination after payment of the estimated expenses of our initial public offering and $12,075,000 of deferred underwriting fees. \nIn addition, in connection with the consummation of our initial public offering, we entered into a forward purchase agreement with our sponsor, which provided for the purchase by our sponsor of up to $50,000,000, of units, with each unit consisting of one ClassA ordinary share and one-third of one warrant to purchase one ClassA ordinary share at $11.50 per share, for a purchase price of $10.00 per unit, in a private placement to occur concurrently with the closing of our initial business combination. \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nOur sponsor, executive officers, and directors have agreed, pursuant to agreements with us, that they will not propose any amendment to our amended and restated memorandum and articles of association (A)that would modify the substance or timing of our obligation to provide holders of our ClassA ordinary shares the right to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of our initial public offering or (B)with respect to any other provision relating to the rights of holders of our ClassA ordinary shares, unless we provide our public shareholders with the opportunity to redeem their ClassA ordinary shares upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account and not previously released to us to pay our income taxes, if any, divided by the number of the then-outstanding public shares. Our shareholders are not parties to, or third-party beneficiaries of, these agreements and, as a result, will not have the ability to pursue remedies against our sponsor, executive officers, and directors for any breach of these agreements. \n\n\n\n\n\n\n\nWhile short-term U.S. \n\n\n\nThe warrant agreement provides that the terms of the warrants may be amended without the consent of any holder for the purpose of (i)curing any ambiguity or correct any mistake, including to conform the provisions of the warrant agreement to the description of the terms of the warrants and the warrant agreement set forth in this prospectus, or defective provision (ii)amending the provisions relating to cash dividends on ordinary shares as contemplated by and in accordance with the warrant agreement or (iii)adding or changing any provisions with respect to matters or questions arising under the warrant agreement as the parties to the warrant agreement may deem necessary or desirable and that the parties deem to not adversely affect the rights of the registered holders of the warrants, provided that the approval by the holders of at least 65% of the then-outstanding public warrants is required to make any change that adversely affects the interests of the registered holders of public warrants. Accordingly, we may amend the terms of the public warrants in a manner adverse to a holder if holders of at least 65% of the then-outstanding public warrants approve of such amendment and, solely with respect to any amendment to the terms of the private placement warrants or any provision of the warrant agreement with respect to the private placement warrants, 65% of the number of the then outstanding private placement warrants, and, solely with respect to any amendment to the terms of the forward purchase warrants or any provision of the warrant agreement with respect to the forward purchase warrants, 65% of the then-outstanding forward purchase warrants. \n\n\n\n\n\nWe have the ability to redeem the outstanding public warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01 per warrant, provided that the closing price of our ClassA ordinary shares 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 warrant pursuant to certain anti-dilution adjustments) for any 20 trading days within a 30 trading-day period ending on the third trading day prior to proper notice of such redemption and provided that certain other conditions are met. \nIn addition, we have the ability to redeem the outstanding public warrants at any time after they become exercisable and prior to their expiration, at a price of $0.10 per warrant upon a minimum of 30 days prior written notice of redemption provided that the closing price of our ClassA ordinary shares equals or exceeds $10.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant pursuant to certain anti-dilution adjustments) for any 20 trading days within a 30 trading-day period ending on the third trading day prior to proper notice of such redemption and provided that certain other conditions are met, including that holders will be able to exercise their warrants prior to redemption for a number of ClassA ordinary shares determined based on the redemption date and the fair market value of our ClassA ordinary shares. None of the private placement warrants will be redeemable by us as (except under limited circumstances described in the final prospectus related to our initial public offering) so long as they are held by our sponsor or its permitted transferees. \n\nWe issued warrants to purchase 11,500,000 of our ClassA ordinary shares as part of the units offered in our initial public offering and, simultaneously with the closing of our initial public offering, we issued in a private placement an aggregate of 5,933,333 private placement warrants, each exercisable to purchase one ClassA ordinary share at $11.50 per share, subject to adjustment. We may also issue up to 1,666,667 forward purchase warrants pursuant to the forward purchase agreement. \n\n\n\n\nUnlike most blank check companies, if (i)we issue additional ClassA ordinary shares or equity-linked securities, excluding the forward purchase securities, for<|endoftext|>Executive Officer and Chairman of the board of directors, Dr.Sunny Siu, our President and one of our directors, and Denis Tse, our Secretary and one of our directors. We believe that our success depends on the continued service of our directors and officers, at least until we have completed our initial business combination. In addition, our directors and officers are not required to commit any specified amount of time to our affairs and, accordingly, will have conflicts of interest in allocating their time among various business activities, including identifying potential business combinations and monitoring the related due diligence. We do not have an employment agreement with, or key-man insurance on the life of, any of our directors or officers. The unexpected loss of the services of one or more of our directors or officers could have a detrimental effect on us. \nThe loss of our or a targets key personnel could negatively impact the operations and profitability of our post-combination business. \n\nIn addition, the directors and officers of an acquisition candidate may resign upon completion of our initial business combination. \nOur key personnel may negotiate employment or consulting agreements with a target business in connection with a particular business combination. \nOur key personnel may be able to remain with the company after the completion of our initial business combination only if they are able to negotiate employment or consulting agreements in connection with the business combination. Such negotiations would take place simultaneously with the negotiation of the business combination and could provide for such individuals to receive compensation in the form of cash payments and/or our securities for services they would render to us after the completion of our initial business combination. The personal and financial interests of such individuals may influence their motivation in identifying and selecting a target business, subject to his or her fiduciary duties under Cayman Islands law. However, we believe the ability of such individuals to remain with us after the completion of our initial business combination will not be the determining factor in our decision as to whether or not we will proceed with any potential business combination. There is no certainty, however, that any of our key personnel will remain with us after the completion of our initial business combination. We cannot assure you that any of our key personnel will remain in senior management or advisory positions with us. The determination as to whether any of our key personnel will remain with us will be made at the time of our initial business combination. \nCertain of our directors and officers are now, and all of them may in the future become, affiliated with entities engaged in business activities similar to those intended to be conducted by us and, accordingly, may have conflicts of interest in determining to which entity a particular business opportunity should be presented. \nOur Sponsor and directors and officers are, or may in the future become, affiliated with entities that are engaged in a similar business, although they may not participate in the formation of, or become an officer or director of, any other special purpose acquisition companies with a class of securities registered under the Exchange Act until we have entered into a definitive agreement regarding our initial business combination or we have failed to complete our initial business combination within 18months after the closing of the Initial Public Offering. \nOur directors and officers also may become aware of business opportunities which may be appropriate for presentation to us and the other entities to which they owe certain fiduciary or contractual duties or otherwise have an interest in, including any other special purpose acquisition company in which they may become involved with. These conflicts may not be resolved in our favor and a potential target business may be presented to other entities prior to its presentation to us, subject to his or her fiduciary duties under Cayman Islands law. \nFor a complete discussion of our officers and directors business affiliations and the potential conflicts of interest that you should be aware of, please see Item 10. Directors, Executive Officer and Corporate Governance, Item 10. Directors, Executive Officer and Corporate GovernanceConflicts of Interest and Item 13Certain Relationships and Related Party TransactionsSupport Services Agreement. \nOur directors, officers, security holders and their respective affiliates may have competitive pecuniary interests that conflict with our interests. \nWe have not adopted a policy that expressly prohibits our directors, officers, security holders or affiliates from having a direct or indirect pecuniary or financial interest in any investment to be acquired or disposed of by us or in any transaction to which we are a party or have an interest. In fact, we may enter into a business combination with a target business that is affiliated with our sponsor, our directors or officers. \nIn particular, affiliates of our Sponsor have invested in the technology industry, including in several software companies. As a result, there may be substantial overlap between companies that would be a suitable business combination for us and companies that would make an attractive target for such other affiliates. \n\nTo liquidate your investment, therefore, you may be forced to sell your public shares and/or warrants, potentially at a loss. \nOur public shareholders will be entitled to receive funds from the Trust Account only upon the earliest to occur of: (1)our completion of an initial business combination, and then only in connection with those ClassA ordinary shares that such shareholder properly elected to redeem, subject to the limitations described herein; (2)the redemption of any public shares properly submitted in connection with a shareholder vote to amend our amended and restated memorandum and articles of association (A)to modify the substance or timing of our obligation to allow redemption in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 18months from the closing of the Initial Public Offering or (B)with respect to any other provision relating to shareholders rights or pre-initial business combination activity; and (3)the redemption of our public shares if we have not completed an initial business combination within 18months from the closing of the Initial Public Offering, subject to applicable law. In no other circumstances will a shareholder have any right or interest of any kind to or in the Trust Account. Accordingly, to liquidate your investment, you may be forced to sell your public shares and/or warrants, potentially at a loss. \n\nWe cannot assure you that our securities will continue to be listed on Nasdaq in the future or prior to our initial business combination. In general, we must maintain a minimum amount in shareholders equity (generally $2,500,000) and a minimum of 300 public shareholders. \nIf Nasdaq delists any of our securities from trading on its exchange and we are not able to list our securities on another national securities exchange, we expect such securities could be quoted on an over-the-counter market. a determination that our ClassA ordinary shares are a penny stock which will require brokers trading in our ClassA ordinary shares to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities; \nOurUnits, ClassA ordinary shares and warrants currently qualify as covered securities under such statute. Although the states are preempted from regulating the sale of covered securities, the federal statute does allow the states to investigate companies if there is a suspicion of fraud, and, if there is a finding of fraudulent activity, then the states can regulate or bar the sale of covered securities in a particular case. Further, if we were no longer listed on Nasdaq, our securities would not qualify as covered securities under such statute and we would be subject to regulation in each state in which we offer our securities. \nYou will not be permitted to exercise your warrants unless we register and qualify the issuance of the underlying Class A ordinary shares or certain exemptions are available. \nUnder the terms of the warrant agreement, we have agreed that, as soon as practicable, but in no event later than 15 business days after the closing of our initial business combination, we will use our commercially reasonable efforts to file with the SEC a registration statement covering the issuance of such shares, and we will use our commercially reasonable efforts to cause the same to become effective within 60 business days after the closing of our initial business combination and to maintain the effectiveness of such registration statement and a current prospectus relating to those ClassA ordinary shares until the warrants expire or are redeemed. We cannot assure you that we will be able to do so if, for example, any facts or events arise which represent a fundamental change in the information set forth in the registration statement or prospectus, the financial statements contained or incorporated by reference therein are not current, complete or correct or the SEC issues a stop order. If the shares issuable upon exercise of the warrants are not registered under the Securities Act in accordance with the above requirements, we will be required to permit holders to exercise their warrants on a cashless basis. However, no warrant will be exercisable for cash or on a cashless basis, and we will not be obligated to issue any shares to holders seeking to exercise their warrants, unless the issuance of the shares upon such exercise is registered or qualified under the securities laws of the state of the exercising holder, or an exemption from registration is available. Notwithstanding the above, if our ClassA ordinary shares are at the time of any exercise of a warrant not listed on a national securities exchange such that they satisfy the definition of a covered security under Section18(b)(1) of the Securities Act, we may, at our option, require holders of public warrants who exercise their warrants to do so on a cashless basis in accordance with Section3(a)(9) of the Securities Act and, in the event we so elect, we will not be required to file or maintain in effect a registration statement, but we will use our commercially reasonable efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available. In no event will we be required to net cash settle any warrant, or issue securities or other compensation in exchange for the warrants in the event that we are unable to register or qualify the shares underlying the warrants under applicable state securities laws and no exemption is available. If the issuance of the shares upon exercise of the warrants is not so registered or qualified or exempt from registration or qualification, the holder of such warrant shall not be entitled to exercise such warrant and such warrant may have no value and expire worthless. In such event, holders who acquired their warrants as part of a purchase ofunits will have paid the full unit purchase price solely for the ClassA ordinary shares included in theunits. There may be a circumstance where an exemption from registration exists for holders of our private placement warrants to exercise their warrants while a corresponding exemption does not exist for holders of the public warrants that were included as part ofUnits sold in the Initial Public Offering. In such an instance, our Sponsor and its permitted transferees (which may include our directors and executive officers) would be able to exercise their private placement warrants and sell the ordinary shares underlying such warrants while holders of our public warrants would not be able to exercise their warrants and sell the underlying ordinary shares. If and when the warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying ClassA ordinary shares for sale under all applicable state securities laws. As a result, we may redeem the warrants as set forth above even if the holders are otherwise unable to exercise their warrants.<|endoftext|>"},"task":{"kind":"string","value":"{\"file\": \"/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz\"}"}}},{"rowIdx":69,"cells":{"text":{"kind":"string","value":"<|endoftext|>Providers are unavailable to negotiate and complete a transaction in a timely manner. The extent to which \nCOVID-19 impacts our search for a target business will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of the \nCOVID-19 pandemic and the actions to contain \nCOVID-19 or treat its impact, among others. If the disruptions posed by \nCOVID-19 or other matters of global concern continue for an extended period of time, it could have a material adverse effect on our ability to successfully locate a target business or complete a business combination, or could adversely impair the operations of a target business with which we ultimately complete a business combination. \nWe may not be able to complete our initial business combination by June11, 2022, in which case we would cease all operations except for the purpose of winding up and we would redeem our public shares and liquidate. \nWe may not be able to find a suitable target business and complete our initial business combination by June11, 2022. If we have not completed our initial business combination within such time period, we will: (i)cease all operations except for the purpose of winding up, (ii)as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account including interest earned on the funds held in the trust account (which interest shall be net of taxes payable and up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders rights as stockholders (including the right to receive further liquidating distributions, if any), and (iii)as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, liquidate and dissolve, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. \nIf we seek stockholder approval of our initial business combination, our Sponsor, initial stockholders, directors, executive officers, advisors and their affiliates may elect to purchase shares or public warrants from public stockholders, which may influence a vote on a proposed business combination and reduce the public float of our ClassA common stock. \n\n\n\n\n\n\n\nHowever, because we will have net tangible assets in excess of $5,000,000 upon the completion of the initial public offering and the sale of the private placement warrants and will file a Current Report on Form \n8-K, including an audited balance sheet demonstrating this fact, we are exempt from rules promulgated by the SEC to protect investors in blank check companies, such as Rule 419. \nIf we seek stockholder approval of our initial business combination and we do not conduct redemptions pursuant to the tender offer rules, and if you or a group of stockholders are deemed to hold in excess of 15% of our ClassA common stock, you will lose the ability to redeem all such shares in excess of 15% of our ClassA common stock. \nIf we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our amended and restated certificate of incorporation provides that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a group (as defined under Section13 of the Exchange Act), will be restricted from seeking redemption rights with respect to more than an aggregate of 15% of the shares sold in the initial public offering without our prior consent, which we refer to as the Excess Shares. \n\n\nIf the net proceeds of the initial public offering not being held in the trust account are insufficient to allow us to operate until June11, 2022, it could limit the amount available to fund our search for a target business or businesses and complete our initial business combination, and we will depend on loans from our Sponsor or management team to fund our search and to complete our initial business combination. \nAs of December31, 2020, we had $764,329 available to us outside of the trust account to fund our working capital requirements. The funds available to us outside of the trust account may not be sufficient to allow us to operate until June11, 2022, assuming that our initial business combination is not completed during that time. \nIf we are unable to complete our initial business combination, our public stockholders may receive only approximately $10.00 per share (based on the trust account balance as of December31, 2020) on the liquidation of our trust account and our warrants will expire worthless. In certain circumstances, our public stockholders may receive less than $10.00 per share upon our liquidation (based on the trust account balance as of December31, 2020). \n\n\n\nOur Sponsor has agreed that it will be liable to us if and to the extent any claims by a third party for services rendered or products sold to us, or a prospective target business with which we have entered into a written letter of intent, confidentiality or other similar agreement or business combination agreement, reduce the amount of funds in the trust account to below the lesser of (i) $10.00 per public share and (ii)the actual amount per public share held in the trust account as of the date of the liquidation of the trust account, if less than $10.00 per public share due to reductions in the value of the trust assets, less taxes payable, provided that such liability will not apply to any claims by a third party or prospective target business who executed a waiver of any and all rights to the monies held in the trust account (whether or not such waiver is enforceable) nor will it apply to any claims under our indemnity of the underwriters of our initial public offering against certain liabilities, including liabilities under the Securities Act. \n\nIn the event that the proceeds in the trust account are reduced below the lesser of (i) $10.00 per share and (ii)the actual amount per public share held in the trust account as of the date of the liquidation of the trust account if less than $10.00 per public share due to reductions in the value of the trust assets, in each case less taxes payable, and our Sponsor asserts that it is unable to satisfy its obligations or that it has no indemnification obligations related to a particular claim, our independent directors would determine whether to take legal action against our Sponsor to enforce its indemnification obligations. \n\n\n\n\n\n\n\n\n\nTo this end, the proceeds held in the trust account may only be invested in United States government securities within the meaning of Section2(a)(16) of the Investment Company Act having a maturity of 185days or less or in money market funds meeting certain conditions under \nRule2a-7 promulgated under the Investment Company Act which invest only in direct U.S.(ii)the redemption of any public shares properly tendered in connection with a stockholder vote to amend our amended and restated certificate of incorporation to modify the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial business combination by June11, 2022; and (iii)absent an initial business combination by June11, 2022 or with respect to any other material provisions relating to stockholders rights or pre-initial business combination activity, our return of the funds held in the trust account to our public stockholders as part of our redemption of the public shares. \n\n\n\n\nThe pro rata portion of our trust account distributed to our public stockholders upon the redemption of our public shares in the event we do not complete our initial business combination by June11, 2022 may be considered a liquidating distribution under Delaware law. If a corporation complies with certain procedures set forth in Section280 of the DGCL intended to ensure that it makes reasonable provision for all claims against it, including a \n60-day notice period during which any third-party claims can be brought against the corporation, a \n90-day period during which the corporation may reject any claims brought, and an additional \n150-day waiting period before any liquidating distributions are made to stockholders, any liability of stockholders with respect to a liquidating distribution is limited to the lesser of such stockholders pro rata share of the claim or the amount distributed to the stockholder, and any liability of the stockholder would be barred after the third anniversary of the dissolution. \nFurthermore, if the pro rata portion of our trust account distributed to our public stockholders upon the redemption of our public shares in the event we do not complete our initial business combination by June11, 2022 is not considered a liquidating distribution under Delaware law and such redemption distribution is deemed to be unlawful (potentially due to the imposition of legal proceedings that a party may bring or due to other circumstances that are currently unknown), then pursuant to Section174 of the DGCL, the statute of limitations for claims of creditors could then be six years after the unlawful redemption distribution, instead of three years, as in the case of a liquidating distribution. \n\n\nBecause we are neither limited to evaluating a target business in a particular industry sector nor have we selected any specific target businesses with which to pursue our initial business combination \n\n\n\n\n\n\n\n\n\n\n10-K to issue any notes or other debt securities, or to otherwise incur outstanding debt following the initial public offering, we may choose to incur substantial debt to complete our initial business combination. \n\nThe net proceeds from the initial public offering and the private placement of warrants provided us with $289,500,000 that we may use to complete our initial business combination (after taking into account the $10,500,000 of deferred underwriting commissions being held in the trust account). \n\n\n\n\n\n\n\n\n\nIn addition, our amended and restated certificate of incorporation requires us to provide our public stockholders with the opportunity to redeem their public shares for cash if we propose an amendment to our amended and restated certificate of incorporation to modify the substance or timing of our obligation to redeem 100% of our public shares if we do not complete an initial business combination by June11, 2022 or with respect to any other material provisions relating to stockholders rights or pre-initial business combination activity. \n\n\nOur Sponsor, executive officers and directors have agreed, pursuant to written agreements with us, that they will not propose any amendment to our amended and restated certificate of incorporation to modify the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial business combination by June11, 2022 or with respect to any other material provisions relating to stockholders rights or pre-initial business combination activity, unless we provide our public stockholders with the opportunity to redeem their ClassA common stock upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account (which interest shall be net of taxes payable), divided by the number of then outstanding public shares. \n\n\n\n\n\nNeither our initial stockholders nor, to our knowledge, any of our officers or directors, have any current intention to purchase additional securities, other than as disclosed in this Annual Report on Form \n10-K. \nIn addition, our board of directors, whose members were elected by our sponsor, is and will be divided into three classes, each of which will generally serve for a terms for three years with only one class of directors being elected in each year. \n\n\n\n\n10-K for the year ending December31, 2020. \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\ntariffs and trade barriers; longer payment cycles; rates of inflation; employment regulations; corruption; terrorist attacks and wars; \n\n\n\n\n\n\n\nIn the event we elect to pursue a business combination outside of the<|endoftext|>Has served as the Managing Director of Strategic Philanthropy for The Kannico Agency, LLC. At the Kannico Agency, Mr. Alberttis directs strategy and execution of the firms global philanthropic consulting operations. In addition, Mr. Alberttis is an experienced commercial banking executive, and has served in a multitude of financial advisory positions for consumers and corporations for over thirteen years. He began his commercial banking career as a Senior Branch Manager with a staff of thirty and transitioned into a Senior Commercial Banker advising clients in all industries with a specialization in Government, Large Nonprofit and Educational clients across the South East U.S. As a commercial banker, Mr. Alberttis has served with JP Morgan Chase, NA (2011-2017); PNC Bank NA (2007-2011); and TD Bank, NA (2004-2007). Since 2013, he has also served as a Trustee of the Quantum Foundation, a private philanthropic foundation focused solely on supporting healthcare initiatives. Mr. Alberttis holds a B.S. in Business Management from Lynn University (2010), and a Master's Degree in Nonprofit Management from Florida Atlantic University (2013). Mr. Alberttis has not had any material direct or indirect interest in any of our transactions or proposed transactions over the last two years. \nThe Board nominated Mr. Alberttis to serve as a director of the Board because of his past experiences with small to middle market businesses providing strategic advising and consulting services. \n-33- \nLarry Wert, age 63, was appointed to our Board of Directors on April 29, 2020. Mr. Wert has over 40 years in broadcasting. He served as the President of Broadcast Media for Tribune Media Company from 2013 through September of 2019. He was responsible for overseeing the strategy and day-to-day activities of Tribune Media Companys forty-two owned or operated television stations, their related websites, digital properties and the companys Chicago radio station WGN-AM. Wert previously served on the NAB TV Board of Directors, Fox Board and the CBS Board of Governors. In 2017, he was named Broadcaster of the Year by the Illinois Broadcasters Association. In 2018, under his leadership, Tribune Broadcasting was named Station Group of the Year by Broadcasting and Cable. Prior to his time at Tribune Media, Mr. Wert served from 1998 until 2013 as the President and General Manager of WMAQ-TV, the NBC owned and operated station in Chicago. During his tenure there, he expanded local news hours, launched the first street side studio in the city and oversaw integration of WSNS-TV/Telemundo into the station. Under his leadership, he brought key events to the station including the Chicago Marathon and Chicago Auto Show. During his time at NBC, Mr. Wert also had group responsibilities. He was named president of NBC Locals central and western regions in 2008, overseeing NBC-owned stations in Los Angeles, San Francisco, San Diego, Dallas and Chicago. In September, 2011, he became executive vice president of station initiatives for all ten NBC-owned stations. Mr. Wert started his career at Leo Burnett Advertising in Chicago in 1978, and moved on to television sales with ABC, working in Los Angeles, New York and Chicago, where he became local sales manager at WLS-Ch. 7. In 1989, Mr. Wert shifted to radio as president and general manager of WLUP-97.9 FM and AM 1000 in Chicago, better known as The Loop. In 1996, he was named president of Evergreen Media. When it merged with Chancellor Broadcasting he became senior vice president of Chancellor, overseeing 13 radio properties. \nMr. Wert is very involved in the community and recently finalized his term as Chairman of the Museum of Broadcast Communications in Chicago. Currently, he serves on the Board of Directors for several charities, including the Childrens Brittle Bone Foundation, Catholic Charities, the Chicagoland Chamber of Commerce and the 100 Club. He is a member of the Governing Board of Gildas Club of Chicago, an advisor the Chicago Chapter of Make-A-Wish Foundation and an honorary board member of RAINBOWS, an organization that helps children cope with loss. In 2018, he was inducted into the Chicago Catholic League Hall of Fame. Mr. Wert also sits on Board of Trustees for Fenwick High School in Oak Park, Ill. Mr. Wert holds a BA degree in Journalism from the University of Wisconsin, Madison. \nJulian Pittam, age 51, was appointed to our Board of Directors on June 11, 2020. Mr. Pittamis an experienced advisor to start-up and fast-growing companies. From March 2019 to the present, Mr. Pittam has been a non-executive Director of Urban Markets Ltd., a company producing financial technology for the residential property market. From December 2018 to March 2019, he was a non-executive director of TCOC Ltd., a CBD wholesaler. From March 2017 to January 2019, Mr. Pittam served as a non-executive Director of Certua Ltd. a software-as-a-service firm focused on financial technology and artificial intelligence. From January 2008 to September 2018 he was a Member of The Invicta Film Partnership, a film finance firm. From February 2014 to February 2018, Mr. Pittam was a non-executive Director of We Are Infinite Ltd., an advertising technology firm. From March 2013 to March 2017, he was a non-executive Director of Disciple Media Ltd., a creator of Google and Apple-based apps for communities. From May 2015 to July of 2016, Mr. Pittam was the Managing Director for Europe and Asia for Enso Financial Management Ltd., a firm focused on balance sheet and funding optimization for hedge funds. \n\nThe following provides certain biographical information with respect to each executive officer of the Company who is not a director. \nAndrew L. Johnson \n, age 35, was appointed Chief Strategy Officer on March 11, 2019 and has been working with the company since January 2019. From November 2014 to November 2018, he served as Director of Investor Relations at ChromaDex Corp. (NASDAQ:CDXC), an integrated, global nutraceutical company devoted to improving the way people age. While at ChromaDex, the company raised over $50 million without an investment bank, transitioned from the OTC Market to the Nasdaq, significantly increased institutional ownership, and improved liquidity by over 500%. Mr. Johnson was instrumental in establishing an investor relations platform including, but not limited, to composing and disseminating corporate messaging, press releases, quarterly earnings, conference call transcripts, shareholder update letters, and marketing materials. Before joining ChromaDex, he held the role of Director of Outreach at Alliance Advisors, an investor relations consulting firm from April 2014 to July 2014. During this time, Mr. Johnson worked with various C-level management teams of small and micro-cap companies to increase investor awareness through the facilitation and attendance of non-deal roadshows, investment conferences, group meetings, and one-on-one meetings with institutional investors. From September 2011 to January 2013, he worked at Sidoti & Company, an institutional equity research firm, where he sat on the sales desk. During his time in the firm, he built relationships, presented investment ideas, and provided equity research, including corporate access to over 750 small and mid-cap companies. Mr. Johnson has over ten years of experience communicating with investors and has held the Series 3, 7, and 63 licenses in the past. He has a Bachelor of Arts degree in Social Sciences from Washington State University. \n-34- \n### Term of Office \n\nFamily Relationships \nThere are no family relationships between or among the directors, executive officers or persons nominated or chosen by the Company to become directors or executive officers. \n\n(3) being subject to any order, judgment or decree, not subsequently reversed, suspended vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his or her involvement in any type of business, securities or banking activities; \nCode of Ethics \nOn January 9, 2019, our board of directors adopted a Code of Business Conduct and Ethics applicable to all directors, executive officers, and employees of the Company. \nItem 11. \n### E xec utive Compensation \n\nWith regard to our full-time executive officer, the goal of the salary component of our compensation policy is to provide reasonable compensation for their full-time service within the constraints faced by a rapidly developing business with significant cash needs for its planned expansion. Equity grants for our full-time executive officers are currently under review by the compensation committee. The goal of our anticipated equity grants will be to provide an appropriate mixture of short term and long-term incentives to increase shareholder value. \nFor the 2019 year, he received a cash bonus of $100,000. \n-35- \nOn September 1, 2020, the Company granted John Price as a continuing director of the Company, $25,000 worth of restricted common stock under the 2019 Equity Incentive Plan with vesting period of 1/24th upon date of grant and 1/24th per month on the first day of each calendar month thereafter until fully vested so long as he continues in his service as board of directors of the Company. \nOn June 11, 2020, the Company appointed Julian Pittam as Board Chairman and granted Mr. Pittam $100,000 worth of restricted common stock under the 2019 Equity Incentive Plan with vesting period of 1/24th upon date of grant and 1/24th per month on the first day of each calendar month thereafter until fully vested so long as he continues in his service as board of directors of the Company. \nOn June 24, 2020, the Company appointed Emiliano Aloi as new board member and granted Mr. Aloi $100,000 worth of restricted common stock under the 2019 Equity Incentive Plan with vesting period of 1/24th upon date of grant and 1/24th per month on the first day of each calendar month thereafter until fully vested so long as he continues in his service as board of directors of the Company. Mr. Aloi resigned on December 8 th \n, 2020 having vested \n271,317 shares of common stock. \nOn June 24, 2020, the Company appointed Justin Viles as new board member and granted Mr. Viles $100,000 worth of restricted common stock under the 2019 Equity Incentive Plan with vesting period of 1/24th upon date of grant and 1/24th per month on the first day of each calendar month thereafter until fully vested so long as he continues in his service as board of directors of the Company. Mr. Viles resigned on September 15 th \n, 2020 having vested \n131,577 shares of common stock. \nOn January 14, 2020, the Company appointed Alvaro Alberttis as new board member and granted Mr. Alberttis $100,000 worth of restricted common stock under the 2019 Equity Incentive Plan with vesting period of 1/24th upon date of grant and 1/24th per month on the first day of each calendar month thereafter until fully vested so long as he continues in his service as board of directors of the Company. \nOn June 24, 2019, Vladislav Yampolsky was appointed to our board of directors and was awarded 1,000,000 restricted common stock as compensation with vesting term of 1/48th per month starting on October 1, 2019. Mr. Yampolsky resigned on June 11th, 2020 having vested 287,501 shares of common stock and the balance was cancelled. \n\nThe table below summarizes all compensation awarded to, earned by, or paid to our former or current executive officers for the fiscal years ended December 31, 2020 and December 31, 2019. \n-36- \n\nEmployment Agreements and Change in Control Arrangements \nAndrew Johnson, our Chief Strategy Officer, is serving under a two-year employment agreement adopted March 11, 2019 at an annual salary of $110,000, which was increased to $150,000 on January 23, 2020 \nIn addition, he will beentitled to an annual cash bonus, in an amount as determined by the board of directors, if the Company meets or exceeds criteria adopted by the Compensation Committee of the Board of Directors.For the 2020 year, he received a stock bonus of 250,000 shares of common stock with immediate vesting He shall also be eligible for grants of awards under stock option or other equity incentive plans of the Company as the Companys Compensation Committee. \nIn addition, Mr. Du Chesne. Du Chesnes stock options to 90% of the market price on the original date of grant or exercise price of $0.30 per share. In September 2020, Mr. Du Chesne tendered his resignation as<|endoftext|>Applies to our principal executive officer, principal financial officer, principal accounting officer and controller, or persons performing similar functions. The Code of Ethics is currently available at our corporate website at [IDX] \n### Board Meetings \nThe Board of Directors and its committees held the following number of meetings during 2020: \nThe above table includes meetings held by means of a conference telephone call, but not actions taken by unanimous written consent. \nEach director attended at least 75% of the total number of meetings of the Board of Directors and those committees on which he served during the year. \nFor the fiscal year ended December 31, 2020, the Board of Directors met on at least a quarterly basis. The independent directors had regularly scheduled meetings as often as necessary to fulfill their responsibilities, including at least annually in executive session without the presence of non-independent directors and management as required by Section 802(c) of the NYSE American Company Guide. \nDirectors or Executive Officers involved in Bankruptcy or Criminal Proceedings \nTo our knowledge, during the last ten years, none of our directors and executive officers (including those of our subsidiaries) has: had a bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time; been convicted in a criminal proceeding or been subject to a pending criminal proceeding, excluding traffic violations and other minor offenses; been subject to any order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; been found by a court of competent jurisdiction (in a civil action), the SEC, or the Commodities Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended or vacated; or been the subject to, or a party to, any sanction or order, not subsequently reverse, suspended or vacated, of any self-regulatory organization, any registered entity, or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member. \n\nMr. Zhenyong Liu is our chairman and chief executive officer. At the advice of other members of the management or the Board, Mr. Liu calls meetings of the Board of Directors when necessary. We have three independent directors. Our Board of Directors has three standing committees, each of which is comprised solely of independent directors with a committee chair. The Board of Directors believes that the Companys chief executive officer is best situated to serve as chairman of the Board of Directors because he is the director most familiar with our business and industry and the director most capable of identifying strategic priorities and executing our business strategy. We believe that this leadership structure has served the Company well. Our Board of Directors has overall responsibility for risk oversight. The Board of Directors has delegated responsibility for the oversight of specific risks to the committees as follows: \nThe Audit Committee oversees the Companys risk policies and processes relating to the financial statements and financial reporting processes, as well as key credit risks, liquidity risks, market risks and compliance, and the guidelines, policies and processes for monitoring and mitigating those risks. \nThe Compensation Committee oversees the compensation of our chief executive officer and our other executive officers and reviews our overall compensation policies for employees. \nThe Nominating Committee oversees risks related to the Companys governance structure and processes. \nOur Board of Directors is responsible for approving all related party transactions according to our Code of Ethics. We have not adopted written policies and procedures specifically for related person transactions. \n\nSection 16(a) of the Exchange Act, requires our executive officers and directors and persons who own more than 10% of a registered class of our equity securities to file with the SEC initial statements of beneficial ownership, reports of changes in ownership and annual reports concerning their ownership of our common stock and other equity securities, on Form 3, 4 and 5 respectively. \nBased solely on our review of the copies of such reports received by us, and on written representations by our officers and directors regarding their compliance with the applicable reporting requirements under Section 16(a) of the Exchange Act, we believe that, with respect to the fiscal year ended December 31, 2020, our officers and directors, and all of the persons known to us to own more than 10% of our common stock, filed all required reports on a timely basis. \n### Item 11. Executive Compensation \nThe following compensation table summarizes the cash and non-cash compensation earned during the years ended December 31, 2020, and 2019 by each person who served as principal executive officer, principal financial officer, and secretary during 2020. \n(1) \nThe value of the Stock Award is determined by multiplying the number of restricted shares issued by the quoted closing price of the Companys common stock on the date of the award, which was $0.60 as of April 8, 2020. \n### Employment Agreements \nMr. Zhenyong Liu receives a monthly salary of RMB 20,000 (approximately $3,065). On January 11, 2012, the Company awarded Mr. Zhenyong Liu 44,326 shares of restricted common stock. Zhenyong Liu 8,000 shares of restricted common stock under the 2011 ISP and 2012 ISP, with a value of $2.66 per share, based on the closing price on the date of the stock issuance. On September 13, 2018, the Company issued 100,000 shares of common stock to Mr. Zhenyong Liu under the 2015 Omnibus Equity Incentive Plan with a value of $0.88 per share as of the date of issuance. On April 8, 2020, the Company issued 200,000 shares of common stock to Mr. Zhenyong Liu under the 2019 ISP with a value of $0.60 per share as of the date of issuance. On September 8,2020, the Compensation Committee of the Company unanimously approved that Mr. Zhenyong Liu shall receive the bonus of $40,000 for his service rendered in the year 2020. \nMs. Hao began receiving a monthly salary of RMB 20,000 (approximately $3,065) in January 2015. On September 13, 2018, the company issued 10,000 shares of common stock to Ms. Jing Hao under the 2015 Omnibus Equity Incentive Plan with a value of $0.88 per share as of the date of issuance. On September 8,2020, the Compensation Committee of the Company unanimously approved that Ms. Jing Hao shall receive the bonus of $40,000 for her service rendered in the year 2020. \n\nThe following table sets forth a summary of compensation paid or entitled to our directors during the fiscal years ended December 31, 2020 and December 31, 2019: \nEffective November 1, 2014, Mr. Marco Ku Hon Wai began serving as our director and has received annual compensation of $20,000, payable on a monthly basis. In addition, the Company agreed to issue Mr. Ku 7,500 shares of its common stock every year under the Companys stock incentive plan. Ku 7,500 shares restricted common stock under the 2015 ISP for his services in 2015, with a value of $1.33 per share, based on the closing price on the date of the issuance. Mr. Ku will be reimbursed for his out-of-pocket expenses incurred in connection with his service to the Company. \nEffective October 28, 2009, Mr. Wenbing Christopher Wang has served as our director and has received annual compensation of $20,000, payable on a monthly basis. Mr. Wang also received 4,000 shares of common stock, a number equal to $20,000 divided by the closing price of the common stock on October 28, 2009, with piggyback registration rights subordinate to that held by investors in any past or future private placement of securities. On January 11, 2012, the Company awarded its independent director Mr. Wenbing Christopher Wang 15,820 shares of restricted common stock. Wang 5,000 shares restricted common stock under the 2011 ISP and 2012 ISP for, with a value of $2.66 per share, based on the closing price on the date of the stock issuance. Wang 5,000 shares restricted common stock under the 2015 ISP, with a value of $1.33 per share, based on the closing price on the date of the issuance. \nOn October 12, 2016, Ms. Lusha Niu was elected as our director and receives annual compensation of RMB50,000, payable on a monthly basis. \nOn December 31, 2013, Mr. Fuzeng Liu received 5,000 shares of restricted common stock from our 2011 and 2012 ISPs. The value of the stock award is determined by the closing price of the Companys common stock on the date of the award, which was $2.66 as of December 31, 2013. \nOther than the appointments described above, there are no understandings or arrangements between Mr. Ku, Mr. Wang, or Ms. Niu and any other person pursuant to which Mr. Ku, Mr. Wang, or Ms. Niu was appointed as a director. Mr. Ku, Mr. Wang, and Ms. Niu do not have any family relationship with any director, executive officer or person nominated or chosen by us to become a director or executive officer. \n\nThere were no option exercises in fiscal year of 2020 or options outstanding as of December 31, 2020. \nPension and Retirement Plans \nCurrently, except for contributions to the PRC government-mandated social security retirement endowment fund for those employees who have not waived their coverage, we do not offer any annuity, pension or retirement benefits to be paid to any of our officers, directors or employees. There are also no compensatory plans or arrangements with respect to any individual named above which results or will result from the resignation, retirement or any other termination of employment with our company, or from a change in our control. \nItem 12. \nThe following table sets forth certain information with respect to the beneficial ownership of our common stock by (i)each director, (ii) our Chief Executive Officer and President and (iii) all executive officers and directors as a group as of March 19, 2021. \n\n* \nLess than 1% of the Companys issued and outstanding common shares. \n(1) \nThe address of each director and executive officer is c/o Science Park, Juli Road, Xushui District, Baoding City, Hebei Province, Peoples Republic of China. \nItem 13. \nLoans from our principal shareholder, Chairman and CEO Mr. Zhenyong Liu \n\nOn December 10, 2014, Mr. \nZhenyong Liu. Mr. As of December 31, 2020, and 2019, the outstanding loan balance were $nil and $2,185,569, respectively, and the accrued interest was $210,635and $197,009, respectively, which was recorded in other payables and accrued liabilities as part of the current liabilities in the consolidated balance sheet. \nZhenyong Liu were $nil. The interest expense incurred for such related party loans are $nil and $94,636for the years ended December 31, 2020, and 2019, respectively. \n\n\n\nIn connection with the sale of the Industrial Buildings, Hebei Fangsheng agreed to lease the Industrial Buildings back to the Company for its original use for a term of up to three years, with an annual rental payment of approximately $145,052(RMB1,000,000). \n\nOur Board of Directors is charged with reviewing and approving all potential related party transaction whether or not such transactions exceed $120,000. We have not adopted other procedures for review, or standards for approval, of such transactions, but instead review them on a case-by-case basis. \n### Director Independence \nThe Company currently has three independent directors, Marco Ku Hon Wai, Wenbing Christopher Wang, and Lusha Niu, as that term is defined under the NYSE AMERICAN Company Guide. \nItem 14. \n### Audit Fees \nWe incurred approximately $188,208 for professional services rendered by our registered independent public accounting firm, WWC, P.C., for the audit and reviews of the Companys financial statements for 2020. \nWe incurred approximately $171,600 for professional services rendered by our registered independent public accounting firm, WWC, P.C., for the audit and reviews of the Companys financial statements for 2019. \n### Audit-Related Fees \nIT Tech Packaging did not incur any audit-related fees to WWC in 2020. \nIT Tech<|endoftext|>And national and provincial laws worldwide. Online political advertising laws are rapidly evolving, and in certain jurisdictions have varying transparency and disclosure requirements. We have already seen publishers impose varying restrictions on the types of political advertising and breadth of targeted advertising allowed on their platforms with respect to advertisements for the 2020 U.S. presidential election in response to political advertising scandals like \n### Cambridge Analytica \nThe lack of uniformity and increasing requirements on transparency and disclosure could adversely impact the inventory made available for political advertising and the demand for such inventory on our platforms, and otherwise increase our operating and compliance costs. \nChanges in data residency and cross-border transfer restrictions may also impact our operations. As the advertising industry evolves, and new ways of collecting, combining and using data are created, governments may enact legislation in response to technological advancements and changes that could result in our having to re-design features or functions of our platforms, therefore incurring unexpected compliance costs. \nThese laws and other obligations may be interpreted and applied in a manner that is inconsistent with our existing data management practices or the features of our platforms. If so, in addition to the possibility of fines, lawsuits and other claims, we could be required to fundamentally change our business activities and practices or modify our products, which could have an adverse effect on our business. We may be unable to make such changes and modifications in a commercially reasonable manner or at all, and our ability to develop new products and features could be limited. All of this could impair our or our advertisers ability to collect, use, or disclose information relating to consumers, which could decrease demand for our platforms, increase our costs, and impair our ability to maintain and grow our client base and increase our revenue. \nRisks Related to our Capital Stock and Warrants and Other Business Risks \nWe are a holding company and our only material asset is our indirect interest in DMS, and we are accordingly dependent upon distributions made by DMS and its subsidiaries to pay taxes, make payments under the Tax Receivable Agreement and pay dividends. \nWe are a holding company with no material assets other than our ownership of equity interests of Blocker Corp (our wholly owned subsidiary). Blocker Corp is a holding company with no material assets other than its ownership of DMS Units. Our ability to pay taxes, make payments under the Tax Receivable Agreement and pay dividends will depend on the financial results and cash flows of DMS and its subsidiaries and the distributions we receive (via Blocker Corp) from DMS. Deterioration in the financial condition, earnings or cash flow of DMS and its subsidiaries for any reason could limit or impair DMS ability to pay such distributions. Additionally, to the extent that we need funds and DMS and/or any of its subsidiaries are restricted from making such distributions under applicable law or regulation or under the terms of any financing arrangements, or DMS is otherwise unable to provide such funds, it could materially adversely affect our liquidity and financial condition. \nDMS is treated as a partnership for U.S. federal income tax purposes and, as such, generally will not be subject to any entity-level U.S. federal income tax. Instead, taxable income will be allocated to holders of DMS Units (including Blocker Corp). We will include Blocker Corp as a corporate member on our consolidated corporate U.S. federal income tax returns. Accordingly, we will be required to pay income taxes on Blocker Corps allocable share of any net taxable income of DMS. In addition to tax expenses, we will also incur expenses related to our operations, including payment obligations under the Tax Receivable Agreement (and the cost of administering such payment obligations), which could be significant. The Amended Partnership Agreement requires, and we intend to cause, DMS to make tax distributions pro rata to holders of DMS Units (including Blocker Corp) in amounts sufficient for us and Blocker Corp to cover all applicable taxes (calculated at assumed tax rates), relevant operating expenses, payments under the Tax Receivable Agreement and dividends, if any, declared by us. However, as discussed below, DMS ability to make such distributions may be subject to various limitations and restrictions, including, but not limited to, restrictions on distributions that would either violate any contract or agreement to which DMS is then a party, including debt agreements, or any applicable law, or that would have the effect of rendering DMS insolvent. If our cash resources are insufficient to pay taxes, meet our obligations under the Tax Receivable Agreement and to fund our other obligations, we may be required to incur additional indebtedness from lenders to provide the liquidity needed to make such payments, which could materially adversely affect our liquidity and financial condition and subject us to various restrictions imposed by any such lenders. To the extent that we are unable to make payments under the Tax Receivable Agreement for any reason, such payments generally will be deferred and will accrue interest until paid; however, nonpayment for a specified period may constitute a material breach of a material obligation under the Tax Receivable Agreement and therefore accelerate payments due under the Tax Receivable Agreement. \nAdditionally, although DMS generally will not be subject to any entity-level U.S. federal income tax, it may be liable under U.S. federal tax law for adjustments to its tax return, absent an election to the contrary. In the event DMS calculations of taxable income are incorrect, its members, including Blocker Corp, may be subject in later years to material liabilities pursuant to this law and its related guidance. \nWe anticipate that the distributions Blocker Corp will receive from DMS may, in certain periods, exceed our and Blocker Corps actual tax liabilities and obligations to make payments under the Tax Receivable Agreement. The Board, in its sole discretion, will make determinations from time to time with respect to the use of any such excess cash so accumulated, which may include, among other uses, acquiring (or causing Blocker Corp to acquire) additional newly issued DMS Units from DMS at a per-unit price determined by reference to the market value of the shares of DMS Class A Common Stock at such time (which DMS Units, if acquired by us, are expected to be contributed to Blocker Corp); paying dividends, which may include special dividends, on DMS Class A Common Stock and DMS Class C Common Stock; funding repurchases of DMS Class A Common Stock or DMS Class C Common Stock; We have no obligation to distribute such cash (or other available cash other than any declared dividend) to our stockholders. To the extent that we do not distribute such excess cash as dividends on DMS Class A Common Stock or otherwise undertake ameliorative actions between DMS Units and shares of DMS Class A Common Stock and instead, for example, hold such cash balances, holders of DMS Units other than Blocker Corp may benefit from any value attributable to such cash balances as a result of their ownership of shares of DMS Class A Common Stock following an exchange of their DMS Units, notwithstanding that such holders may previously have participated as holders of DMS Units in distributions by DMS that resulted in such excess cash balances. We also expect, if necessary, to undertake ameliorative actions, which may include pro rata or non-pro rata reclassifications, combinations, subdivisions or adjustments of outstanding DMS Units, to maintain one-for-one parity between DMS Units and shares of DMS Class A Common Stock. \nDividends on DMS Class A Common Stock, if any, will be paid at the discretion of the Board, which will consider, among other things, our business, operating results, financial condition, current and expected cash needs, plans for expansion and any legal or contractual limitations on our ability to pay such dividends. Financing arrangements may include restrictive covenants that restrict our ability to pay dividends or make other distributions to our stockholders. In addition, DMS is generally prohibited under Delaware law from making a distribution to a member to the extent that, at the time of the distribution, after giving effect to the distribution, liabilities of DMS (with certain exceptions) exceed the fair value of its assets. DMS subsidiaries are generally subject to similar legal limitations on their ability to make distributions to DMS. If DMS does not have sufficient funds to make distributions, our ability to declare and pay cash dividends may also be restricted or impaired. \nUnder the Tax Receivable Agreement, we are required to make payments to the Majority Shareholders in respect of certain tax benefits and certain refunds of pre-Closing taxes of DMS and Blocker Corp, and such payments may be substantial. \nPursuant to the Amended Partnership Agreement, the Majority Shareholders may redeem their DMS Units from DMS for cash, or, at our option, we may acquire such DMS Units in exchange for cash or shares of DMS Class A Common Stock, subject to certain conditions and transfer restrictions as set forth therein and in the Investor Rights Agreement. DMS Units acquired by us are expected to be contributed to Blocker Corp. These redemptions and exchanges are expected to result in increases in Blocker Corps allocable share of the tax basis of the tangible and intangible assets of DMS. These increases in tax basis may increase (for income tax purposes) depreciation and amortization deductions of Blocker Corp and therefore reduce the amount of income (or, if applicable, franchise) tax that we and Blocker Corp would otherwise be required to pay in the future had such exchanges never occurred. \nIn connection with the Business Combination, we entered into the Tax Receivable Agreement, pursuant to which we are required to pay the Majority Shareholders (i) 85% of the amount of savings, if any, in U.S. federal, state and local income tax that we and Blocker Corp actually realize as a result of (A) certain existing tax attributes of Blocker Corp acquired in the Business Combination, and (B) increases in Blocker Corps allocable share of the tax basis of the tangible and intangible assets of DMS and certain other tax benefits related to the payment of cash consideration pursuant to the Business Combination Agreement and any redemptions of DMS Units or exchanges of DMS Units for cash or shares of DMS Class A Common Stock after the Business Combination and (ii) 100% of certain refunds of pre-Closing taxes of DMS and Blocker Corp received during a taxable year beginning within two (2) years after the Closing. All such payments to the Majority Shareholders are our obligation, and not that of DMS. The actual increase in Blocker Corps allocable share of DMS tax basis in its assets, as well as the amount and timing of any payments under the Tax Receivable Agreement, will vary depending upon a number of factors, including the timing of redemptions and exchanges, the market price of the shares of DMS Class A Common Stock at the time of the redemption or exchange, the extent to which such redemptions or exchanges are taxable and the amount and timing of the recognition of our or Blocker Corps taxable income. While many of the factors that will determine the amount of payments that we will make under the Tax Receivable Agreement are outside of our control, we expect that the payments we will make under the Tax Receivable Agreement will be substantial and could have a material adverse effect on our financial condition. \nAny payments made by us under the Tax Receivable Agreement will generally reduce the amount of overall cash flow that might have otherwise been available to us. To the extent that we are unable to make timely payments under the Tax Receivable Agreement for any reason, the unpaid amounts generally will be deferred and will accrue interest until paid; however, nonpayment for a specified period may constitute a material breach of a material obligation under the Tax Receivable Agreement and therefore accelerate payments due under the Tax Receivable Agreement, as further described<|endoftext|>The public warrants that vote on such amendment and, solely with respect to any amendment to the terms of the private placement CAPS \nTM or any provision of the warrant agreement with respect to the private placement CAPS \nTM \n, 50% of the number of the then outstanding private placement CAPS \nTM \nIn addition, our amended and restated certificate of incorporation requires us to provide our public stockholders with the opportunity to redeem their public shares for cash if we propose an amendment to our amended and restated certificate of incorporation to modify the substance or timing of our obligation to redeem 100% of our public shares if we do not complete a partnering transaction within 24 months (or 27 months, as applicable) of the closing of our initial public offering or with respect to any other material provisions relating to stockholders rights or pre-partnering transaction activity. To the extent any of such amendments would be deemed to fundamentally change the nature of the securities, we would register, or seek an exemption from registration for, the affected securities. We may seek to amend our charter or governing instruments or extend the time to consummate a partnering transaction in order to effectuate our partnering transaction. \n\nOur initial stockholders, with their founder shares and their performance shares, hold approximately 20% of the voting power of our common stock (not including the private placement shares) prior to the completion of a partnering transaction. Further, pursuant to a letter agreement with our sponsor, we have agreed not to enter into a definitive agreement regarding a partnering transaction without the prior written consent of our sponsor. As a result, we may not be permitted to enter into a partnering transaction that our Board believes to be in the stockholders best interests. Further, for so long as any performance shares remain outstanding, we may not, without the prior or written consent of the holders of a majority of the performance shares then outstanding take certain actions such as to (i)change our fiscal year, (ii)increase the number of directors on the Board, (iii)pay any dividends or effect any split on any of our capital stock, (iv)adopt any stockholder rights plan, (v)acquire any entity or business with assets at a purchase price greater than 10% or more of our total assets measured in accordance with in the United States or the accounting standards then used by us in the preparation of our financial statements or (vi)issue any ClassA shares in excess of 20% of our then outstanding ClassA shares or that would otherwise require a stockholder vote pursuant to the rules of the stock exchange on which the ClassA shares are then listed. As a result, the holders of the performance shares may be able to prevent us from taking such actions that the Board believes is in our interest. \nIf our initial stockholders purchase any CAPS \nTM any additional shares of ClassA common stock in the aftermarket or in privately negotiated transactions, this would increase their control. Factors that would be considered in making such additional purchases would include consideration of the current trading price of our shares of ClassA common stock. We may not hold an annual meeting of stockholders to elect new directors prior to the completion of our partnering transaction, in which case all of the current directors will continue in office until at least the completion of the partnering transaction. Accordingly, our initial stockholders will continue to exert control at least until the completion of our partnering transaction. \n\nSince the net proceeds of our initial public offering and the sale of the private placement CAPS \nTM are intended to be used to complete a partnering transaction with a partnering candidate, we may be deemed to be a blank check company under the United States securities laws. However, because we will have net tangible assets in excess of $5,000,000, we are exempt from rules promulgated by the SEC to protect investors in blank check companies, such as Rule 419. Among other things, this means that we have a longer period of time to complete our partnering transaction than do companies subject to Rule 419. Moreover, if our initial public offering were subject to Rule 419, that rule would prohibit the release of any interest earned on funds held in the trust account to us unless and until the funds in the trust account were released to us in connection with our completion of a partnering transaction. \nSubsequent to our completion of our partnering transaction, we may be required to take write-downs or write-offs, restructuring and impairment or other charges that could have a significant negative effect on our financial condition, results of operations, and the price of our securities, which could cause you to lose some or all of your investment. \nEven if we conduct extensive due diligence on a partnering candidate with which we combine, we cannot assure you that this diligence will identify all material issues that may be present with a particular partnering candidate, that it would be possible to uncover all material issues through a customary amount of due diligence, or that factors outside of the partnering candidate and outside of our control will not later arise. In addition, charges of this nature may cause us to violate net worth or other covenants to which we may be subject as a result of assuming pre-existing debt held by a partnering candidate or by virtue of our obtaining debt financing to partially finance the partnering transaction or thereafter. \n\nAlthough we will seek to have all vendors, service providers, prospective partnering candidates and other entities with which we do business (other than our independent registered public accounting firm) execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account for the benefit of our public stockholders, such parties may not execute such agreements, or even if they execute such agreements they may not be prevented from bringing claims against the trust account, including, but not limited to, fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain advantage with respect to a claim against our assets, including the funds held in the trust account. \nUpon redemption of our public shares, if we do not complete our partnering transaction within the prescribed timeframe, or upon the exercise of a redemption right in connection with our partnering transaction, we will be required to provide for payment of claims of creditors that were not waived that may be brought against us within the 10 years following redemption. \nPursuant to the letter agreement, our sponsor has agreed that it will be liable to us if and to the extent any claims by a third party for services rendered or products sold to us, or a prospective partnering candidate with which we have entered into a written letter of intent, confidentiality or other similar agreement or partnering transaction agreement, reduce the amount of funds in the trust account to below the lesser of (i) $10.00 per public share and (ii)the actual amount per public share held in the trust account as of the date of the liquidation of the trust account, if less than $10.00 per public share due to reductions in the value of the trust assets, less taxes payable, provided that such liability will not apply to any claims by a third party or prospective partnering candidate who executed a waiver of any and all rights to the monies held in the trust account (whether or not such waiver is enforceable) nor will it apply to any claims under our indemnity of the underwriter of our initial public offering against certain liabilities, including liabilities under the Securities Act. \n\n\n\n\n\n\n\nBecause we are neither limited to evaluating a partnering candidate in a particular industry sector nor have we selected any specific partnering candidate with which to pursue our partnering transaction, you will be unable to ascertain the merits or risks of any particular partnering candidates operations. \nOur efforts to identify a prospective partnering transaction candidate will not be limited to a particular industry, sector, or geographic region. While we may pursue a partnering transaction opportunity in any industry or sector, we intend to capitalize on the ability of our management team to identify, acquire, and operate a business or businesses that can benefit from our management teams established global relationships and operating experience. Our management team has extensive experience in identifying and executing strategic investments globally and has done so successfully in a number of sectors, including financial services. Our amended and restated certificate of incorporation prohibits us from effectuating a partnering transaction solely with another blank check company or similar company with nominal operations. Because we have entered into a definitive agreement with any specific partnering candidate with respect to a partnering transaction, there is no basis to evaluate the possible merits or risks of any particular partnering candidates operations, results of operations, cash flows, liquidity, financial condition or prospects. To the extent we complete our partnering transaction, we may be affected by numerous risks inherent in the business operations with which we combine. Although our officers and directors will endeavor to evaluate the risks inherent in a particular partnering candidate, we cannot assure you that we will properly ascertain or assess all of the significant risk factors or that we will have adequate time to complete due diligence. Furthermore, some of these risks may be outside of our control and leave us with no ability to control or reduce the chances that those risks will adversely impact a partnering candidate. \nTM will ultimately prove to be more favorable to investors than a direct investment, if such opportunity were available, in a partnering candidate. \nAlthough we have identified general criteria and guidelines that we believe are important in evaluating prospective partnering candidates, we may enter into our partnering transaction with a partnering candidate that does not meet such criteria and guidelines, and as a result, the partnering candidate with which we enter into our partnering transaction may not have attributes entirely consistent with our general criteria and guidelines. \nAlthough we have identified general criteria and guidelines for evaluating prospective partnering candidates, it is possible that a partnering candidate with which we enter into our partnering transaction will not have all of these positive attributes. If we complete our partnering transaction with a partnering candidate that does not meet some or all of these guidelines, such combination may not be as successful as a combination with a business that does meet all of our general criteria and guidelines. In addition, if we announce a prospective partnering transaction with a partnering candidate that does not meet our general criteria and guidelines, a greater number of stockholders may exercise their redemption rights, which may make it difficult for us to meet any closing condition with a partnering candidate that requires us to have a minimum net worth or a certain amount of cash. In addition, if stockholder approval of the transaction is required by law, or we decide to obtain stockholder approval for business or other legal reasons, it may be more difficult for us to attain stockholder approval of our partnering transaction if the partnering candidate does not meet our general criteria and guidelines. \n\nUnless we complete our partnering transaction with an affiliated entity, we are not required to obtain an opinion from an independent accounting firm or independent investment banking firm that the price we are paying is fair to our stockholders from a financial point of view. Such standards used will be disclosed in our proxy solicitation or tender offer materials, as applicable, related to our partnering transaction. \nWe may issue additional shares of ClassA common stock or shares of preferred stock to complete our partnering transaction or under an employee incentive plan after completion of our partnering transaction. We may also issue shares of ClassA<|endoftext|>Company, depending on valuations ascribed to the target and us in the Business Combination. \n\nWhile we would intend to implement such improvements, to the extent that our efforts are delayed or we are unable to achieve the desired improvements, the Business Combination might not be as successful as we anticipate. \nTo the extent we complete our Business Combination with a large complex business or entity with a complex operating structure, we may also be affected by numerous risks inherent in the operations of the business with which we combine, which could delay or prevent us from implementing our strategy. \nThe absence of such a redemption threshold may make it possible for us to complete our Business Combination with which a substantial majority of our shareholders do not agree. \nOur amended and restated memorandum and articles of association do not provide a specified maximum redemption threshold, except that we will not redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 (such that we are not subject to the SECs penny stock rules) or any greater net tangible asset or cash requirement which may be contained in the agreement relating to our Business Combination. As a result, we may be able to complete our Business Combination even though a substantial majority of our public shareholders do not agree with the transaction and have redeemed their shares or, if we seek shareholder approval of our Business Combination and do not conduct redemptions in connection with our Business Combination pursuant to the tender offer rules, have entered into privately negotiated agreements to sell their shares to our Sponsor, officers, directors, advisors or any of their affiliates. \nIn order to effectuate a business combination, blank check companies have, in the recent past, amended various provisions of their charters and other governing instruments, including their warrant agreements. We cannot assure you that we will not seek to amend our amended and restated memorandum and articles of association or governing instruments in a manner that will make it easier for us to complete our Business Combination that our shareholders may not support. \nAmending our amended and restated memorandum and articles of association requires at least a special resolution of our shareholders as a matter of Cayman Islands law, meaning the approval of holders of at leasttwo-thirdsof our ordinary shares who attend and vote at a general meeting of the Company, and amending our warrant agreement will require a vote of holders of at least 65% of the warrants. In addition, our amended and restated memorandum and articles of association require us to provide our public shareholders with the opportunity to redeem their public shares for cash if we propose an amendment to our amended and restated memorandum and articles of association that would affect the substance or timing of our obligation to allow redemption in connection with our Business Combination or to redeem 100% of our public shares if we do not complete a Business Combination within 24 months from the IPO Closing Date. To the extent any of such amendments would be deemed to fundamentally change the nature of any of the securities offered in the Initial Public Offering, we would register, or seek an exemption from registration for, the affected securities. \nThe provisions of our amended and restated memorandum and articles of association that relate to ourpre-BusinessCombination activity (and corresponding provisions of the agreement governing the release of funds from our Trust Account) may be amended with the approval of a special resolution which requires the approval of the holders of at leasttwo-thirdsour ordinary shares who attend and vote at a general meeting of the Company, which is a lower amendment threshold than that of some other blank check companies. It may be easier for us, therefore, to amend our amended and restated memorandum and articles of association and the trust agreement to facilitate the completion of a Business Combination that some of our shareholders may not support. \nSome other blank check companies have a provision in their charter which prohibits the amendment of certain of its provisions, including those which relate to a companyspre-businesscombination activity, without approval by a certain percentage of the companys shareholders. For those companies, amendment of these provisions typically requires approval by 90% of the companys shareholders attending and voting at a general meeting. Our amended and restated memorandum and articles of association provide that any of the provisions related topre-BusinessCombination activity (including the requirement to deposit proceeds of the Initial Public Offering and the private placement of warrants into the Trust Account and not release such amounts except in specified circumstances, and to provide redemption rights to public shareholders as described herein) may be amended if approved by special resolution, meaning holders of at leasttwo-thirdsof our ordinary shares who attend and vote at a general meeting of the Company, and corresponding provisions of the trust agreement governing the release of funds from our Trust Account may be amended if approved by holders of at least 65% of our ordinary shares. Our initial shareholders and their permitted transferees, if any, currently beneficially own, on an as converted basis, 20% of our issued and outstanding ClassA Ordinary Shares, will participate in any vote to amend our amended and restated memorandum and articles of association and/or trust agreement and will have the discretion to vote in any manner they choose. \nOur Sponsor, executive officers and directors have agreed, pursuant to a written agreement with us, that they will not propose any amendment to our amended and restated memorandum and articles of association that would affect the substance or timing of our obligation to allow redemption in connection with our Business Combination or to redeem 100% of our public shares if we do not complete a Business Combination within 24months from the IPO Closing Date, unless we provide our public shareholders with the opportunity to redeem their ClassA Ordinary Shares upon approval of any such amendment at aper-shareprice, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account and not previously released to us to pay our taxes if such funds are held in an interest-bearing account (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares. These agreements are contained in letter agreements that we have entered into with each of our Sponsor, directors and each member of our management team. \nWe may be unable to obtain additional financing to complete our Business Combination or to fund the operations and growth of a target business, which could compel us to restructure or abandon a particular Business Combination. \nAlthough we believe that the net proceeds of the Initial Public Offering and the sale of the Private Placement Warrants will be sufficient to allow us to complete our Business Combination, because we have not yet selected any prospective target business we cannot ascertain the capital requirements for any particular transaction. If the net proceeds of the Initial Public Offering and the sale of the Private Placement Warrants prove to be insufficient, either because of the size of our Business Combination, the depletion of the available net proceeds in search of a target business, the obligation to redeem for cash a significant number of shares from shareholders who elect redemption in connection with our Business Combination or the terms of negotiated transactions to purchase shares in connection with our Business Combination, we may be required to seek additional financing (including pursuant to a specified future issuance or otherwise from Marquee, The Raine Group and their respective affiliates) or to abandon the proposed Business Combination. None of Marquee, The Raine Group and their respective affiliates is obligated to provide, or seek, any such financing or, except as expressly set forth herein, to provide any other services to us. To the extent that additional financing proves to be unavailable when needed to complete our Business Combination, we would be compelled to either restructure the transaction or abandon that particular Business Combination and seek an alternative target business candidate. If we do not complete our Business Combination, our public shareholders may only receive their pro rata portion of the funds in the Trust Account that are available for distribution to public shareholders and not previously released to us to pay our taxes on the liquidation of our Trust Account, and our warrants will expire worthless. None of our officers, directors or shareholders is required to provide any financing to us in connection with or after our Business Combination. If we do not complete our Business Combination, our public shareholders may only receive approximately $10.00per share on the liquidation of our Trust Account, and our warrants will expire worthless. \nIf we have not completed a Business Combination within 24 months from the IPO Closing Date, our public shareholders may be forced to wait beyond such 24 months before redemption from our Trust Account. \nIf we have not completed a Business Combination within 24 months from the IPO Closing Date, the proceeds then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account and not previously released to us to pay our taxes if such funds are held in an interest-bearing account (less up to $100,000 of interest to pay dissolution expenses), will be used to fund the redemption of our public shares, as further described herein. If we are required towind-up,liquidate the Trust Account and distribute such amount therein, pro rata, to our public shareholders, as part of any liquidation process, such winding up, liquidation and distribution must comply with the applicable provisions of the Companies Law. In that case, investors may be forced to wait beyond 24 months from the IPO Closing Date before the redemption proceeds of our Trust Account become available to them and they receive the return of their pro rata portion of the proceeds from our Trust Account. We have no obligation to return funds to investors prior to the date of our redemption or liquidation unless we complete our Business Combination prior thereto and only then in cases where investors have sought to redeem their ClassA ordinary shares. Only upon our redemption or any liquidation will public shareholders be entitled to distributions if we do not complete our Business Combination. \n\nWe and our directors and officers who knowingly and willfully authorized or permitted any distribution to be paid out of our share premium account while we were unable to pay our debts as they fall due in the ordinary course of business would be guilty of an offence and may be liable for a fine of approximately $18,292 and to imprisonment for five years in the Cayman Islands. \nWe may not hold an annual general meeting until after the completion of our Business Combination. \nIn accordance with the Nasdaq corporate governance requirements, we are not required to hold an annual general meeting until no later than one year after our first fiscal year end following our listing on Nasdaq. There is no requirement under the Companies Law for us to hold annual or extraordinary meetings to appoint directors. \nHolders of ClassA Ordinary Shares will not be entitled to vote on any appointment of directors we hold prior to our Business Combination. \nPrior to our Business Combination, only holders of our Founder Shares will have the right to vote on the appointment of directors. In addition, prior to the completion of a Business Combination, holders of a majority of our Founder Shares may remove a member of the Board for any reason. Accordingly, you may not have any say in the management of the Company prior to the completion of a Business Combination. \n\nHowever, under the terms of the warrant agreement, we have agreed to use our commercially reasonable efforts to file a registration statement under the Securities Act covering such shares and maintain a current prospectus relating to the ClassA Ordinary<|endoftext|>Not occupy. Aggregate future minimum rentals to be received under non-cancelable leases as of December 31, 2020 were $967,000 through 2027. \n### Note 6. Goodwill and Core Deposit Intangible \nGoodwill and core deposit intangible assets were as follows: \nThe Company recorded goodwill of $2.4 million during the first quarter of 2019 in connection with the acquisition of the assets of Nolan. Please see Note 18, \n### Nolan Acquisition \n\nCore deposit intangible is amortized on a straight line basis over the estimated lives of the deposits, which range from five to twelve years. The core deposit intangible amortization totaled $201,000 for the years ended December 31, 2020 and 2019. \nThe carrying basis and accumulated amortization of the core deposit intangible as of December 31, 2020 and 2019 were as follows: \nThe estimated amortization expense of the core deposit intangible for each of the following five years is as follows: \n### Note 7. Deposits \nTime deposits of $250,000 and over totaled $59.6 million and $37.4 million as of December 31, 2020 and 2019, respectively. \nDeposits were as follows \n: \nAs of December 31, 2020 the scheduled maturities of time deposits were as follows: \nThe aggregate amount of demand deposit overdrafts that have been reclassified as loans as of December 31, 2020 and 2019 was insignificant. \nNote 8. \n### Borrowed Funds and Subordinated Notes \nThe Company has a blanket lien credit line with the FHLB with borrowing capacity of $36.0 million secured by commercial loans. The Company determines its borrowing needs and utilizes overnight advance accordingly at varying terms. The Company had no borrowings with FHLB as of December 31, 2020. As of December 31, 2019, the Company had $12.0 million in borrowings with FHLB, which consisted of an overnight advance of $2.0 million with an interest rate of 1.45%, and a $10.0 million six-month fixed term advance with an interest rate of 2.18% and maturity date of January 27, 2020. At maturity, the term advance was rolled into the overnight advance and subsequently paid off. \nThe Company also has a credit line with the FRB with borrowing capacity of $27.0 million, which is secured by commercial loans. The Company had no borrowings from the FRB at December 31, 2020 and December 31, 2019 under this credit line. As part of the CARES Act, the FRB offered secured discounted borrowings to banks who originated PPP loans through the Paycheck Protection Program Liquidity Facility (PPPLF). At December 31, 2020, the Bank pledged $83.7million of PPP loans to the FRB under the PPPLF, and had borrowings of $83.7million at a rate of0.35%, with maturities ranging from April 2022 through June 2022. PPP loans pledged as collateral for the PPPLF are excluded from the average assets used in the Companys leverage ratio calculation. \nAs of December 31, 2020 and 2019, the Company had subordinated notes totaling $12.0 million, consisting of $8.0 million issued in 2017 bearing an interest rate of 7.125% payable semi-annually and maturing on July 20, 2027, and $4.0 million issued in 2018 bearing interest rate of 7.125% payable semi-annually and maturing on March 31, 2028. The subordinated notes are unsecured and subordinated in right of payment to the payment of our existing and future senior indebtedness and structurally subordinated to all existing and future indebtedness of our subsidiaries. \n### Note 9. Benefit Plans \nThe Company funds certain costs for medical benefits in amounts determined at the discretion of management. The Company has a retirement savings 401(k) plan covering substantially all employees of the Bank, and a second plan covering substantially all employees of Sanders Morris and Tectonic Advisors. \nUnder the 401(k) plan covering the Banks employees, an employee may contribute up to the annual maximum contribution allowed for a given year under IRS regulations. The Company matches 100% of the employees contribution on the first 1% of the employees compensation and 50% of the employees contribution on the next 5% of the employees compensation. \nUnder the safe harbor provision of the 401(k) plan adopted by both Sanders Morris and Tectonic Advisors, the relevant employer is required to contribute 3% of eligible wages to the plan, up to the maximum amount under Internal Revenue Service (IRS) regulations, regardless of the level of the employees contributions. An eligible employee may contribute up to the annual maximum contribution allowed for a given year under IRS guidance. At its discretion, the Company may also make additional annual contributions to the plan. Any discretionary contributions are allocated to employees in the proportion of employee contributions to the total contributions of all participants in the plan. No discretionary contributions were made during the years ended December 31, 2020 and 2019. The Plan is a participant directed plan, and as such, contributions to the plan are invested as directed by the respective plan participant. \nThe amount of employer contributions charged to expense under the two plans was $409,000 and $371,000 for the years ended December 31, 2020 and 2019, respectively, and is included in salaries and employee benefits on the consolidated statements of income. There was no accrual payable to either plan as of December 31, 2020 and 2019. \n### Note 10. Income Taxes \nThe provision (benefit) for income taxes consists of the following: \nThe effective tax rate differs from the U. S. statutory tax rate due to the following for 2020 and 2019: \nThe effective income tax rate for 2019 was less than the U.S. statutory rate due to Tectonic Advisors and Sanders Morris tax status as partnerships for the periods prior to May 13, 2019, the date the Tectonic Merger was completed. \nA reconciliation between reported income tax expense and the amounts computed by applying the U.S. federal statutory income tax rate of 21% to income before income taxes is presented in the following table. \nThe tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities as of December 31, 2020 and 2019 are as follows: \nProjections for continued levels of profitability will be reviewed quarterly and any necessary adjustments to the deferred tax assets will be recognized in the provision or benefit for income taxes. In assessing the realization rate of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible.No valuation allowance for deferred tax assets was recorded at December 31, 2020 and 2019, as management believes it is more likely than not that all of the deferred tax assets will be realized against deferred tax liabilities and projected future taxable income. \nThe Company files U.S. federal, state, and local income tax returns. \n### Note 11. Stock Compensation Plans \nThe board of directors and shareholders adopted the Tectonic Financial, Inc. 2017 Equity Incentive Plan (Plan) in May 2017 in connection with the Companys acquisition of TBI. The Plan is administered by the Compensation Committee of the Board and authorizes the granting of options, stock appreciation rights, restricted stock and restricted stock units to employees, directors and consultants in order to promote the success of the Companys business. Incentive stock options may be granted only to employees of the Company, or a parent or subsidiary of the Company. The Company reserved 750,000 authorized shares of common stock for the Plan. The term of each option is no longer than 10 years from the date of the grant. At December31, 2020, the Company had 350,000 shares of common stock remaining available for future grants. \nThe Company accounts for stock-based employee compensation plans using the fair value-based method of accounting. The fair value of each option award is estimated on the date of grant by a third party using a closed form option valuation (Black-Scholes) model. \nNo stock options were granted during the years ended December 31, 2020 or 2019, except for the conversion of each option to purchase one Tectonic Holdings common unit to an option to purchase one share of the Company common stock in connection with the Tectonic Merger, resulting in 190,000 options outstanding. There were no stock options that were exercised or expired during 2020 and 2019. \nThe number of option shares outstanding as of December 31, 2020 and 2019 was 190,000, and the weighted average exercise price was $5.37 in each year. The weighted average contractual life of the stock awards as of December 31, 2020 and 2019 was 6.37 years and 7.37 years, respectively. Stock options outstanding at the end of the period had immaterial aggregate intrinsic values. The weighted-average grant date fair value of the options as of December 31, 2020 and 2019 was $1.94. Under Topic 805, the grant date fair value has been restated as though the Tectonic Merger had occurred upon the date at which the entities came under common control. \nAs of December 31, 2020, there were 50,000 stock options outstanding that vested on May 15, 2020, the third anniversary of the grant date, for which compensation has been fully recognized. As of December 31, 2020, these options were not exercised. In addition, there were 140,000 stock options outstanding as of December31, 2020 that vest on May 15, 2021, the fourth anniversary of the grant date. The Company is recording compensation expense on a straight-line basis over the vesting periods. The Company recorded salaries and employee benefits expense on our consolidated statements of income in connection with the Plan of $79,000 and $109,000 for the years ended December 31, 2020 and 2019, respectively, related to the stock options. As of December 31, 2020, there was $24,000 of unrecognized compensation cost related to the stock options. \nOn September 30, 2020, the Company granted restricted stock awards totaling 210,000 shares of common stock. The fair value of each grant award was estimated on the date of grant by a third party using the market approach based on the application of latest 12-month Company metrics to guideline public company multiples. \nThe vesting schedules vary by award, with all of the awards vesting over a three year period from 2023 through 2025. The restricted stock awards are subject to accelerated vesting due to death, total disability, or change in control of the Company. As of December 31, 2020, all 210,000 awarded shares were outstanding. The Company is recording compensation expense on a straight line basis over the respective vesting periods. The Company recorded salaries and employee benefits expense on our consolidated statements of income in connection with the Plan of $72,000 for the year ended December 31, 2020 related to the restricted stock awards. As of December 31, 2020, there was $911,000 of unrecognized compensation cost related to the stock awards. \nAs of December 31, 2020, 210,000 restricted shares awarded were outstanding and the weighted average contractual life was 3.46 years. There were no restricted shares awarded during 2019, and there were no restricted shares awarded outstanding as of December 31, 2019. The weighted average grant date fair value of the awards as of December 31, 2020 was $4.81. \n### Note 12. \nThe Company is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These instruments involve, to varying degrees, elements of credit risk in excess of the amount recognized in the accompanying balance sheets. The Companys exposure to credit loss in the event of non-performance by the other party to the financial instruments for commitments to extend credit and standby letters of credit is represented by the contractual amount of those instruments. The Company uses the same credit policies in making commitments and conditional obligations as it does for on-balance sheet instruments. \nSince many of the commitments may expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. \n### The following table summarizes loan commitments: \nThe Company is involved in various regulatory inspections, inquiries, investigations and proceedings, and litigation matters<|endoftext|>EXPLANATORY NOTE \nPART III \nITEM 10. \n\nITEM 11. \nEXECUTIVE COMPENSATION \nITEM 12. \n\nITEM 13. \n\nITEM 14. \n\nPART IV \nITEM 15. \n\n### EXPLANATORY NOTE \nCIM Income NAV, Inc. (the Company, we, us, or our) is filing this Amendment No.1 on Form 10-K/A (this Amendment No.1) to amend our Annual Report on Form 10-K for the year ended December31, 2020, originally filed with the Securities and Exchange Commission (the SEC) on March31, 2021 (the Original Form 10-K), to include the information required by Items 10 through 14 of Part III of Form 10-K. This information was previously omitted from the Original Form 10-K in reliance on General Instruction G(3) to Form 10-K, which permits the information in the above-referenced items to be incorporated in the Form 10-K by reference to our definitive proxy statement if such statement is filed no later than 120 days after our fiscal year-end. We are filing this Amendment No.1 to provide the information required in Part III of Form 10-K because a definitive proxy statement containing such information will not be filed by us within 120 days after the end of the fiscal year covered by the Form 10-K. The reference on the cover of the Original Form 10-K to the incorporation by reference to portions of our definitive proxy statement into Part III of the Original Form 10-K is hereby deleted. \nIn accordance with Rules 12b-15 and 13a-14 under the Securities Exchange Act of 1934, as amended (the Exchange Act), we have also amended PartIV, Item15 to include currently dated certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 from our principal executive officer and principal financial officer. Because no financial statements have been included in this Amendment No.1 and this Amendment No.1 does not contain or amend any disclosure with respect to Items 307 and 308 of Regulation S-K, paragraphs 3, 4 and 5 of the certifications have been omitted. Similarly, because no financial statements have been included in this Amendment No. 1, certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 have been omitted. \nExcept as described above, this Amendment No.1 does not amend any other information set forth in the Original Form 10-K, and we have not updated disclosures included therein to reflect any subsequent events. This Amendment No.1 should be read in conjunction with the Original Form 10-K and with our other filings made with the SEC subsequent to the filing of the Original Form 10-K. \nPART III \nITEM 10. \n\n### Board of Directors \nIn accordance with applicable law and our charter and bylaws, the business and affairs of the Company are managed under the direction of our board of directors. Our board of directors consists of seven directors, four of whom are independent directors. Our board of directors has formed three committees: the audit committee; the valuation, compensation and affiliate transactions committee; and the nominating and corporate governance committee. \nAs of the date of this report, our directors and executive officers, their ages and their positions and offices are as follows: \nRichard S. Ressler has served as our chief executive officer, president and a director since February 2018, and as the chairman of our board of directors and a member of the nominating and corporate governance committee since August 2018. Mr. Ressler has also served as vice president of CIM Income NAV Management, LLC (CIM Income NAV Management), our advisor, CREI Advisors, LLC (CREI Advisors), our property manager, CCO Capital, LLC, our dealer manager (CCO Capital), and of CCO Group, LLC (CCO Group) since February 2018. Mr. Ressler is the founder and President of Orchard Capital Corp. (Orchard Capital), a firm through which Mr. Ressler oversees companies in which Orchard Capital or its affiliates invest. Through his affiliation with Orchard Capital, Mr. Ressler serves in various senior capacities with, among others, CIM Group, LLC (CIM), a community-focused real estate and infrastructure owner, operator, lender and developer, and the indirect parent of our sponsor, advisor, dealer manager and property manager; Orchard First Source Asset Management (together with its controlled affiliates, OFSAM), a full-service provider of capital and leveraged finance solutions to U.S. corporations; and OCV Management, LLC (OCV), an investor, owner and operator of technology companies. Mr. Ressler also serves as a board member for various public and private companies in which Orchard Capital or its affiliates invest, including as chairman of j2 Global, Inc. (NASDAQ: JCOM) . Mr. Ressler served as Chairman and CEO of JCOM from 1997 to 2000 and, through an agreement with Orchard Capital, currently serves as its non-executive Chairman. . Mr. Ressler has served as chairman of CIM Commercial Trust Corporation (NASDAQ: CMCT), a REIT operated by an affiliate of CIM that acquires, owns and operates Class A and creative office assets, since March 2014. He has also served as a chief executive officer, president and director of CIM Real Estate Finance Trust, Inc. (formerly Cole Credit Property Trust IV, Inc.) (CMFT), a REIT operated by an affiliate of CIM and our advisor which invests primarily in net lease core real estate assets as well as real estate loans and other credit investments, since February 2018, and has served as its chairman of the board since August 2018. Mr. Ressler served as chief executive officer, president and director of Cole Office & Industrial REIT (CCIT III), Inc. (CCIT III) from February 2018 and chairman of the board as of August 2018 until CCIT IIIs merger with CMFT in December 2020. Mr. Ressler has also served as director of Cole Office & Industrial REIT (CCIT II), Inc. (CCIT II) from January 2019 until CCIT IIs merger with Griffin Capital Essential Asset REIT, Inc. (GCEAR), on March 1, 2021, and as a director of Cole Credit Property Trust V (CCPT V) from January 2019 until October 2019. Mr. Ressler co-founded CIM in 1994 and, through an agreement with Orchard Capital, serves as the chairman of CIMs Real Assets Management Committee and Investment Committees, and serves on the Investment Allocation Committee. CIM Capital, LLC, and its relying advisers (CIM Capital Controlled Company Management, LLC, CIM Capital RE Debt Management, LLC, CIM Capital Real Property Management, LLC, and CIM Capital Securities Management, LLC), CIM Capital IC Management, LLC, and CIM Capital SA Management, LLC, affiliates of CIM, are registered with the United States Securities and Exchange Commission as registered investment advisers. Mr. Ressler co-founded the predecessor of OFSAM in 2001 and, through an agreement with Orchard Capital, chairs its executive committee. Mr. Ressler co-founded OCV in 2016 and, through an agreement with Orchard Capital, chairs its executive committee. Prior to founding Orchard Capital, from 1988 until 1994, Mr. Ressler served as Vice Chairman of Brooke Group Limited, the predecessor of Vector Group, Ltd. (NYSE: VGR) and served in various executive capacities at VGR and its subsidiaries. Prior to VGR, Mr. Ressler was with Drexel Burnham Lambert, Inc., where he focused on merger and acquisition transactions and the financing needs of middle-market companies. Mr. Ressler began his career in 1983 with Cravath, Swaine and Moore LLP, working on public offerings, private placements, and merger and acquisition transactions. Mr. Ressler holds a B.A. from Brown University, and J.D. and M.B.A. degrees from Columbia University. Mr. Ressler was selected to serve as a director because of his extensive real estate, business management and finance experience and expertise, in addition to his leadership roles at several public companies, all of which are expected to bring valuable insight to the board of directors. \nGeorge N. Fugelsang has served as an independent director and a member of our audit committee since September 2011, and as our chairman of the valuation, compensation and affiliate transactions committee and a member of the nominating and corporate governance committee since August 2018. He previously served as non-executive chairman of the board of directors from June 2015 until August 2018. Mr. Fugelsang served as a member of the board of directors, audit committee and compensation committee of Cole Credit Property Trust II, Inc. (CCPT II) from May 2010, June 2010 and May 2011, respectively, until CCPT IIs merger with Spirit Realty Capital, Inc. in July 2013. From 1994 through 2001, Mr. Fugelsang was chief executive officer of Dresdner Kleinwort Benson North America, the U.S.-based investment banking business of Dresdner Bank AG, where he was responsible for all of Dresdner Bank AGs activities in North America. From 1996 until 2001, Mr. Fugelsang was also chairman of the board of Dresdner Bank Mexico, S.A., chairman of the board of Dresdner Bank Canada and a member of the board of directors of Dresdner RCM Global Investors LLC. Mr. Fugelsang served on the board of managers of Mrs. Fields Famous Brands, LLC from May 2004 until July 2008. Mr. Fugelsang also served on the boards of trustees of the Institute of International Bankers and the Thunderbird School of Global Management, and as a member of the board of directors of Advanced Research Technologies of Montreal, Canada. He was also a member of the board of the New York City Partnership, the German American Chamber of Commerce, Inc., and a director of the Foreign Policy Association in New York. Mr. Fugelsang formerly served on the advisory board of the Monterey Institute of International Studies, an affiliate of Middlebury College. Mr. Fugelsang was selected to serve as a director because of his experience as the chief executive officer of an investment bank, his extensive financing experience and his general business accomplishments, all of which are expected to bring valuable insight to the board of directors. \nW. Brian Kretzmer has served as an independent director of our company since February 2018, and a member of our audit committee and our valuation, compensation and affiliate transactions committee since August 2018. Mr. Kretzmer currently operates his own consultancy practice and is an investor in several private firms where he serves in multiple capacities. From 1999 to 2006, Mr. Kretzmer was Chief Executive Officer of MAI Systems Corporation (which operated principally through its subsidiary Hotel Information Systems), a provider of enterprise management solutions for lodging organizations. He also served as Chief Financial Officer of MAI Systems Corporation from 1993 to 1996 and 1999 to 2000. Mr. Kretzmer is a thirty-year veteran in technology industries. Mr. Kretzmer has served as a director of j2 Global, Inc. since July 2007. He has served as an independent director of CMFT since February 2018, and as a member of its audit committee and valuation, compensation and affiliate transactions committee since August 2018. He also served as an independent director for CCIT III from February 2018 until CCIT IIIs merger with CMFT in December 2020. Mr. Kretzmer holds a B.A. from Montclair State University and an M.B.A. from Farleigh Dickinson University. Mr. Kretzmer was selected to serve as a director because of his extensive operational and financial perspective and accounting expertise, in addition to his leadership roles at MAI Systems Corporation, all of which are expected to bring valuable insight to the board of directors. \nRichard J. Lehmann has served as one of our independent directors since January 2012 and as the chairman of the nominating and corporate governance committee and a member of the valuation, compensation and affiliate transactions committee since August 2018. He has served as the founding principal of The Biltmore Bank of Arizona from 2002 to 2018, and previously served as chairman of Bank Capital Corporation, its former holding company, from 2002 until 2012. In 2012, The Biltmore Bank of Arizona was sold to Grandpoint Capital, Inc., a bank holding company headquartered in California. Mr. Lehmann served on the board of directors of Grandpoint Capital from 2012 until it was sold to Pacific Premier Bancorp, Inc. (NASDAQ: PPBI) in 2018. Mr. Lehmann began his banking career with Citibank in 1969. When he left Citibank in 1988 he was senior corporate officer for Europe, Middle East and Africa. In 1988, he became chairman and chief executive officer of Valley National Bank of Arizona and served in that capacity until the bank was sold to Banc One Corporation in 1993. Mr.<|endoftext|>Financial assets and financial liabilities that are measured at fair value on a recurring basis as of December 31, 2020 by level within the fair value hierarchy: \nThe estimated fair value of the Public Warrants transferred from a Level 3 measurement as of December 31, 2020 on account of the separate listing and trading of the Public Warrants as of November 2, 2020. \nThe fair value of Public Warrants issued in connection with the Initial Public Offering have been measured based on the listed market price of such warrants, a Level 1 measurement, since December 31, 2020. For the period ended December 31, 2020, the Company recognized a charge to the statement of operations resulting from an increase in the fair value of liabilities of approximately $27.1 million presented as change in fair value of derivative warrant liabilities on the accompanying statement of operations. \n\n\nThe change in the fair value of the derivative warrant liabilities measured with Level 3 inputs for the period from July 24, 2020 (inception) through December 31, 2020 is summarized as follows: \n### NOTE 10. SUBSEQUENT EVENTS \nOn February 7, 2021, the Company entered into a with First Merger Sub, Second Merger Sub and Volta, pursuant to which First Merger Sub will merge with and into Volta, with Volta surviving the First Merger as a wholly owned subsidiary of the Company, and the Surviving Corporation will subsequently merge with and into Second Merger Sub with Second Merger Sub surviving the Second Merger as a wholly owned subsidiary of the Company. \nPrior to the effective time of the First Merger (the Effective Time), the Company will domesticate (the Domestication) as a Delaware corporation in accordance with Section 388 of the Delaware General Corporation Law (the DGCL) and the applicable provisions of the Companies Act (2020 Revision) of the Cayman Islands (the Companies Act). The Company expects to complete the late in the second quarter or in the first half of the third quarter of 2021. \n\nIn connection with the execution of the Business Combination Agreement, the Company entered into a Stockholder Support Agreement (the Stockholder Support Agreement) with Volta and certain shareholders of Volta pursuant to which such shareholders agreed to vote all of their shares of Voltas Class A common stock, par value $0.001 per share (Volta Class A Common Stock) and shares of Voltas Class B common stock, par value $0.001 per share (Volta Class B Common Stock and, together with the Volta Class A Common Stock, the Volta Common Stock) and shares of Voltas preferred stock (Volta Preferred Stock) in favor of the approval and adoption of the and related transactions (the Proposed Transactions), including agreeing to execute a written consent within forty-eight hours of a registration statement on Form S-4 filed by the Company becoming effective. \nLock-Up Agreement \nIn connection with the execution of the Business Combination Agreement, the founders of Volta entered into a Lock-Up Agreement with the Company and Volta pursuant to which they have agreed, subject to certain customary exceptions, not to effect any (a) direct or indirect sale, assignment, pledge, hypothecation, disposition, loan or other transfer, or entry into any agreement with respect to any sale, assignment, pledge, hypothecation, disposition, loan or other transfer, with respect to any shares of the Companys domesticated Class A common stock (the Class A Common Stock) or domesticated Class B common stock (the Class B Common Stock) held by them immediately after the Effective Time, including any shares of Class A Common Stock or Class B Common Stock issuable upon the exercise of options or warrants to purchase shares of Class A Common Stock or Class B Common Stock held by them immediately following the closing of the Proposed Transactions (the BCA Closing) or (b) publicly announce any intention to effect any transaction specified in clause (a), in each case, until the date that is the earlier of (i) one year after the BCA Closing and (ii) the earlier to occur of, subsequent to the BCA Closing, (x) the first date on which the last reported sale price of the Class A Common Stock equals or exceeds $12.00 per share (as equitably adjusted for share sub-divisions, share dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30 trading-day period commencing at least 150 days after the BCA Closing and (y) the date on which there is consummated a subsequent liquidation, merger, share exchange or other similar transaction which results in all of the Companys stockholders having the right to exchange their shares of Class A Common Stock for cash, securities or other property. \nThe Companys bylaws after the BCA Closing will include transfer restrictions on its securities issued to the investors of Volta in connection with the First Merger for a period of six (6) months after the BCA Closing. \n### Sponsor Letter \nIn connection with the execution of the Business Combination Agreement, the Company entered into a letter agreement with Volta, the Sponsor and the other holders of the Founder Shares pursuant to which, among other things, the Sponsor and each other holder agreed to (a) waive the anti-dilution rights set forth in Article 17.3 of the amended and restated memorandum and articles of association, (b) comply with the non-solicitation provisions in the and (c) vote all of the Companys ordinary shares held by them in favor of the adoption and approval of the and the Proposed Transactions. \nSubscription Agreements \nIn connection with the execution of the Business Combination Agreement, the Company entered into separate subscription agreements (collectively, the Subscription Agreements) with a number of investors (each, a Subscriber and collectively, the Subscribers), pursuant to which the Subscribers agreed to purchase, and the Company agreed to sell to the Subscribers, an aggregate of 30,000,000 shares of Class A Common Stock (the Private Placement Shares), for a purchase price of $10.00 per share and an aggregate purchase price of $300,000,000, in a private placement. \n\nPursuant to the Subscription Agreements, the Company agreed that, within 30 calendar days after the consummation of the Proposed Transactions, it will file with the SEC (at the Companys sole cost and expense) a registration statement registering the resale of the Private Placement Shares (the Private Placement Resale Registration Statement), and to use commercially reasonable efforts to have the Private Placement Resale Registration Statement declared effective as soon as practicable after the filing thereof, but no later than the earlier of (i)60 calendar days (or 90 calendar days if the SEC notifies the Company that it will review the Private Placement Resale Registration Statement) following the BCA Closing and (ii) the tenth business day after the SEC notifies the Company that the Private Placement Resale Registration Statement will not be reviewed or will not be subject to further review. \nAlso, in January 2021, in connection with the Proposed Transactions, the Company engaged Barclays Capital Inc. (Barclays) and Goldman Sachs & Co LLC (Goldman and, together with Barclays, the Placement Agents) pursuant to an engagement letter to act as co-placement agents in connection with the potential sale of its equity-linked securities to one or more financial investors. An aggregate fee of 3.0% of the gross proceeds received by the Company from a sale of the securities in such offering (or $9.0 million) will be payable to the Placement Agents, subject to the completion of the offering. The Company also engaged Barclays under such engagement letter to act as the Companys financial advisor and capital markets advisor in connection with the Proposed Transactions, and the Company agreed to pay a fee of $3.0 million to Barclays for such services, subject to the consummation of the Proposed Transactions. \nThe Company evaluated subsequent events and transactions that occurred after the balance sheet date through May 6, 2021, the date the financial statements were issued. Other than as described herein, the Company did not identify any other subsequent events that would have required adjustment or disclosure in the financial statements. \nNOTE 11. \nThe restatement and revision had no impact to net loss, net cash flows from operating, investing or financing activities. \n### Item 9. \n\nNone. \n### Item 9A \nControls and Procedures. \n\n\n\n\n\n\n\n\nItem 9B. \nOther Information. \nNone. \n### PART III \nItem 10. \n\n\n* \nDenotes an executive officer. \n### Vincent T. Cubbage \nChief Executive Officer, President and Chairman of the Board of Directors. Mr. Cubbage has served as our Chief Executive Officer, President and director since July 2020 and as Chairman of our Board of Directors since the completion of our Initial Public Offering in September 2020. Mr. Cubbage also serves as Chief Executive Officer and as a Director of TortoiseEcofin III since February 2021. Mr. Cubbage served as Chief Executive Officer, President and director of Tortoise Acquisition I from November 2018, and as Chairman of the Tortoise Acquisition I Board from the completion of its initial public offering in March 2019, to the completion of its initial business combination with Hyliion on October 1, 2020, and he continues to serve on the board of directors of Hyliion Holdings Corp. He has served as Managing Director Private Energy of Tortoise Capital Advisors, L.L.C. since January 2019. Mr. Cubbage served as the Chief Executive Officer and a member of the Board of Managers of Lightfoot Capital Partners GP LLC, the general partner of Lightfoot Capital Partners, LP, from its formation in 2006 through its wind up in December 2019. He served as Chief Executive Officer, Director and Chairman of the Board of Arc Logistics GP LLC, the general partner of Arc Logistics Partners LP (NYSE: ARCX), formerly a publicly-traded partnership engaged in the midstream business, from October 2013 to the date of its sale in December 2017. From 2007 to 2011, Mr. Cubbage also served on the board of managers of the general partner of International Resources Partners, LP, a private partnership founded by Lightfoot Capital that was engaged in the mining of natural resources. Prior to founding Lightfoot Capital, Mr. Cubbage was a Senior Managing Director and Head of the Midstream sector in the Investment Banking Division of Banc of America Securities from 1998 to 2006. Before joining Banc of America Securities, Mr. Cubbage was a Vice President at Salomon Smith Barney in the Global Energy and Power Group where he worked from 1994 to 1998. Mr. Cubbage received an M.B.A. from the American Graduate School of International Management and a B.A. from Eastern Washington University. \nWe believe Mr. Cubbages extensive knowledge of the energy industry, as well as his substantial business, leadership and management experience, including serving on the board of directors of a publicly traded partnership, brings important and valuable skills to our board of directors. \n### Stephen Pang \nMr. Pang has served as a director since the completion of our Initial Public Offering in September 2020 and has served as our Chief Financial Officer since July 2020. Mr. Pang also serves as President and Chief Financial Officer and as a Director of TortoiseEcofin III since February 2021. Mr. Pang served as a director of Tortoise Acquisition I from the completion of its initial public offering in March 2019, and as Chief Financial Officer of Tortoise Acquisition I since January 2020, to the completion of its initial business combination on October 1, 2020, and he continues to serve on the board of directors of Hyliion Holdings Corp. Mr. Pang is a Managing Director and Portfolio Manager at Tortoise, and is responsible for Tortoises public and private direct investments across its energy strategies. Prior to joining Tortoise in 2014, Mr. Pang was a director in Credit Suisse Securities (USA) LLCs Equity Capital Markets Group. Before joining Credit Suisse Securities (USA) LLC in 2012, he spent eight years in Citigroup Global Markets Inc.s Investment Banking Division, where he focused on equity underwriting and corporate finance in the energy sector. Since October 2019, Mr. Pang has served as a member of the board of managers of Mexico Pacific Limited LLC. Mr. Pang received a B.S. in Business Administration from the University of Richmond and is a CFA charterholder. \nWe believe Mr. Pangs extensive<|endoftext|>Resources could be consumed by the need to attend to and seek to resolve these disputes and our business could be harmed by the emergence of such a dispute. \nIf we lose our rights under these agreements, we may not be able to conduct any further activities with the product candidate or program that the license covered. If this were to happen, we might not be able to develop our product candidates further, or following regulatory approval, if any, we might be prohibited from marketing or commercializing them. In particular, patents previously licensed to us, such as the patents we previously licensed from Angiogene, might after termination be used to stop us from conducting activities in the patents respective fields. \nWe depend on patents and proprietary technology in the course of our business, and we must protect those assets in order to preserve our business. \nAlthough we expect to seek patent protection for any compounds we discover and/or for any specific use we discover for new or previously known compounds, any or all of them may not be subject to effective patent protection. Further, the development of regimens for the administration of pharmaceuticals, which generally involve specifications for the frequency, timing and amount of dosages, has been, and we believe, may continue to be, important to our effort, although those processes, as such, may not be patentable. In addition, the issued patents may be declared invalid or our competitors may find ways to avoid the claims in the patents. Further, our lack of access to adequate capital may cause us to curtail payment of fees necessary to maintain patents that we otherwise would seek to maintain, and we may make incorrect decisions regarding which patents to keep and which to abandon. \nOur success will depend, in part, on our ability to obtain and maintain patents, protect our trade secrets and operate without infringing on the proprietary rights of others. We are the exclusive licensee, sole assignee or co-assignee on a number of granted United States patents, pending United States patent applications, and granted patents and/or pending applications in several other major markets, including the European Union, Canada and Japan. The patent position of pharmaceutical and biotechnology firms like us is generally highly uncertain and involves complex legal and factual questions, resulting in both an apparent inconsistency regarding the breadth of claims allowed in United States patents and general uncertainty as to their legal interpretation and enforceability. Accordingly, patent applications assigned or exclusively licensed to us may not result in patents being issued, any issued patents assigned or exclusively licensed to us may not provide us with competitive protection or may be challenged by others, and the current or future granted patents of others may have an adverse effect on our ability to do business and achieve profitability. Moreover, because some of the basic research relating to one or more of our patent applications and/or patents were performed at various universities and/or funded by grants, one or more of these universities, employees of such universities and/or grantors could assert that they have certain rights in such research and any resulting products. Further, others may independently develop similar products, may duplicate our products, or may design around our patent rights. In addition, as a result of the assertion of rights by a third-party or otherwise, we may be required to obtain licenses to patents or other proprietary rights of others in or outside of the United States. Any licenses required under any such patents or proprietary rights may not be made available on terms acceptable to us, if at all. If we do not obtain such licenses, we could encounter delays in product market introductions while our attempts to design around such patents or could find that the development, manufacture or sale of products requiring such licenses is foreclosed. In addition, we could incur substantial costs in defending ourselves in suits brought against us or in connection with patents to which we hold licenses or in bringing suit to protect our own patents against infringement. \nWe require employees and the institutions that perform our preclinical and clinical trials to enter into confidentiality agreements with us. Those agreements provide that all confidential information developed or made known to a party to any such agreement during the course of the relationship with us be kept confidential and not be disclosed to third-parties, except in specific circumstances. Any such agreement may not provide meaningful protection for our trade secrets or other confidential information in the event of unauthorized use or disclosure of such information. \nRISKS RELATED TO OUR STOCK AND FINANCING ACTIVITIES \nThe price of our common stock is volatile, and is likely to continue to fluctuate due to reasons beyond our control; a limited public trading market may cause volatility in the price of our common stock. \nThe market price of our common stock has been, and likely will continue to be, highly volatile. Factors, including our financial results or our competitors financial results, clinical trial and research development announcements and government regulatory action affecting our potential products in both the United States and foreign countries, have had, and may continue to have, a significant effect on our results of operations and on the market price of our common stock. We cannot assure you that an investment in our common stock will not fluctuate significantly. One or more of these factors could significantly harm our business and cause a decline in the price of our common stock in the public market. Substantially all of the shares of our common stock issuable upon exercise of outstanding options and warrants have been registered or are likely to be registered for resale or are available for sale pursuant to Rule 144 under the Securities Act, and may be sold from time to time. As of December 31, 2020, we had approximately 22,644,000 shares of common stock underlying currently outstanding warrants and options. Sales of any of these shares on the market, as well as future sales of our common stock by existing stockholders, or the perception that sales may occur at any time, could adversely affect the market price of our common stock. \nOur common stock is currently quoted on the OTCQB Market. The quotation of our common stock on the OTCQB Market does not assure that a meaningful, consistent and liquid trading market currently exists, and in recent years such market has experienced extreme price and volume fluctuations that have particularly affected the market prices of many smaller companies like us. Our common stock is subject to this volatility. Sales of substantial amounts of common stock, or the perception that such sales might occur, could adversely affect prevailing market prices of our common stock and our stock price may decline substantially in a short time and our stockholders could suffer losses or be unable to liquidate their holdings. \nWe will require additional capital funding, the receipt of which may impair the value of our common stock. \nOur future capital requirements depend on many factors, including our research, development, sales and marketing activities. We will need to raise additional capital through public or private equity or debt offerings or through arrangements with strategic partners or other sources in order to continue to develop our product candidates. There can be no assurance that additional capital will be available when needed or on terms satisfactory to us, if at all. To the extent we raise additional capital by issuing equity securities, our shareholders may experience substantial dilution and the new equity securities may have greater rights, preferences or privileges than our existing common stock. \nOur common stock is currently subject to the Penny Stock Rules of the SEC and the trading market in our securities is limited, which makes transactions in our stock cumbersome and may reduce the value of an investment in our stock. \nAs of December 31, 2020, we had net tangible assets of less than $0.6 million and our common stock had a market price per share of less than $5.00. As a result, transactions in our common stock are subject to the SECs penny stock rules. The designation of our common stock as a penny stock likely limits the liquidity of our common stock. Prices for penny stocks are often not available to buyers and sellers and the market may be very limited. Penny stocks are among the riskiest equity investments. Broker-dealers who sell penny stocks must provide purchasers of these stocks with a standardized risk-disclosure document prepared by the SEC. The document provides information about penny stocks and the nature and level of risks involved in investing in the penny stock market. A broker must also provide purchasers with bid and offer quotations and information regarding broker and salesperson compensation and make a written determination that the penny stock is a suitable investment for the purchaser and obtain the purchasers written agreement to the purchase. Many brokers choose not to participate in penny stock transactions. Because of the penny stock rules, there may be less trading activity in penny stocks. Because shares of our common stock are currently subject to these penny stock rules, your ability to trade or dispose of shares of our common stock may be adversely affected. \nWe may not be able to achieve secondary trading of our stock in certain states because our common stock is no longer nationally traded, which could subject our stockholders to significant restrictions and costs. \nOur common stock is not currently eligible for trading on the Nasdaq Capital Market or on a national securities exchange. Therefore, our common stock is subject to the securities laws of the various states and jurisdictions of the United States in addition to federal securities law. While we may register our common stock or qualify for exemptions for our common stock in one of more states, if we fail to do so the investors in those states where we have not taken such steps may not be allowed to purchase our stock or those who presently hold our stock may not be able to resell their shares without substantial effort and expense. These restrictions and potential costs could be significant burdens on our stockholders. \nIf we fail to maintain an effective system of internal controls over financial reporting, we may not be able to accurately report our financial results. As a result, current and potential stockholders could lose confidence in our financial reporting, which could harm our business and the trading price of our stock. \nEffective internal controls over financial reporting are necessary for us to provide reliable financial reports. If we cannot maintain effective controls and reliable financial reports, our business and operating results could be harmed. For example, our small size and limited staffing levels do not allow for segregation of duties that exist at larger companies. We have conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2020 based on the criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 Framework). Based on that evaluation, our management concluded that our internal control over financial reporting were not effective as of December 31, 2020. We continue to work on remedying our weaknesses and maintaining effective internal controls over financial reporting; however, there can be no assurance that a material weakness will not occur in the future. Any failure to implement and maintain controls over our financial reporting or difficulties encountered in the implementation of improvements in our controls, could cause us to fail to meet our reporting obligations. Any failure to maintain our internal controls over financial reporting or to address identified weaknesses in the future, if they were to occur, could also cause investors to lose confidence in our reported financial information, which could have a negative impact on the trading price of our stock. \nIssuance of additional equity securities may adversely affect the market price of our common stock. \nWe were authorized to issue up to 150,000,000<|endoftext|>Of a provision of the Code of Business Conduct and Ethics that applies to the Companys Chief Executive Officer, Chief Financial Officer and any other principal financial officer, controller and any other principal accounting officer, and any other person performing similar functions and relates to certain elements of the Code of Business Conduct and Ethics, including the name of the officer to whom the waiver was granted, on the Investor Relations section of our website at www.aemetis.com. \n\nSection 16(a) of the Securities Exchange Act of 1934, as amended, requires our executive officers and directors and persons who own more than 10% of a registered class of our equity securities to file with the SEC initial statements of beneficial ownership, reports of changes in ownership and annual reports concerning their ownership of our common stock and other equity securities, on Forms 3, 4 and 5 respectively. Executive officers, directors and greater than 10% shareholders are required by SEC regulations to furnish the Company with copies of all Section 16(a) reports they file. Based upon a review of those forms and representations regarding the need for filing Form 5, we believe during the year ended December 31, 2020 that each of our directors, executive officers and 10% stockholders complied with all Section 16(a) filing requirements. \nIn making this statement, we have relied upon examination of the copies of Forms 3, 4 and 5, and amendments thereto, provided to the Company during and with respect to fiscal year 2020 and the written representations of its directors and executive officers. \n### Item 11. Executive Compensation \nNamed Executive Directors \nThe following table sets forth the name, age (as of April 30, 2021) and position of each of our named executive officers for 2020. \nThe information provided below is biographical information about each named executive officer. \nEric A. Mr. Mr. Since 1995, Mr. Since 2000, Mr. In 2003, Mr. \n(now Alto Ingredients, Inc.) (NASDAQ: ALTO) \n, a West Coast ethanol producer and marketer. Mr. McAfee received a B.S. Mr. Mr. \nAndrew B. Mr. Mr. In April 2005, Mr. Mr. Mr. \nTodd A. From 2007 to March 2010, Mr. From 1994 to 2007, Mr. in Cupertino, CA. Prior to this, Mr. Until November 2013, Mr. (OTC: VIGS). Mr. Mr. \nThe Chief Executive Officer is chosen by the Board and other executive officers are chosen by the Chief Executive Officer. Each executive officer holds office until a successor has been elected and qualified or until such officers earlier death, resignation or removal. \n\nThe following table sets forth information concerning compensation paid or accrued for services rendered to the Company in all capacities for the fiscal years 2019 and 2020 to the named executive officers, which includes the Companys Chief Executive Officer and the Companys other two most highly compensated executive officers who were serving as executive officers at the end of fiscal year 2020. \n(1) \nThese amounts reflect the value determined by the Company for accounting purposes for these awards with respect to the current fiscal year and do not reflect whether the recipient has actually realized a financial benefit from the awards (such as by exercising stock options or warrants). This column represents the aggregate grant date fair value of stock options granted during fiscal years 2019 and 2020 to each of the named executive officers, in accordance with ASC Topic 718 \n### Compensation \nPursuant to SEC rules, the amounts shown exclude the impact of estimated forfeitures related to service-based vesting conditions. The assumptions made when calculating the amounts in this column are found in Note 10 (Stock-Based Compensation) of the Notes to Consolidated Financial Statements in Part II, Item 8 of the 2020 Annual Report filed with the SEC on March 15, 2021. \n(2) \nMr. McAfees compensation is solely for his service as an executive officer and he does not receive any additional compensation for his service as Chairman of the Board. \nOutstanding Equity Awards at Fiscal Year End (2020) \nThe following table shows all outstanding equity awards held by the named executive officers at the end of fiscal year 2020. \nOPTIONS/WARRANTS AWARDS \n(1) \n\n(2) \nOne-twelfth (1/12) of the shares subject to the option vest every three months following the date of grant. \n(3) \nOne-twelfth (1/12) of the shares subject to the warrant vest every three months following the date of grant. \n### Stock Option Grants (2020) \nThe exercise price for stock option awards granted during 2020 was set at the closing price as reported by NASDAQ on the date of grant, and each such award has a term of 10 years from the date of grant. One twelfth (1/12 th \n) of the shares subject to the options granted to employees and executives during January 2020, March 2020, and April 2020 vest every three months from the date of grant. Grants to non-employee Board members vested immediately. No outstanding stock option awards were materially modified during 2020. \n### Option Exercises and Stock Vested (2020) \nEmployment Contracts and Termination of Employment and Change-In-Control Arrangements \nWe are party to the following agreements with our named executive officers: \n### Eric A. McAfee \nEffective September 1, 2011, the Company entered into an employment agreement with Mr. McAfee in connection with his continuing responsibilities as Chief Executive Officer. Under Mr. McAfees employment agreement, he originally received an annual salary of $180,000 per year, subject to annual review and adjustments. Effective January 1, 2017, the Governance, Compensation and Nominating Committee approved an increase in his annual salary from $250,000 per year to $310,000 per year. Effective January 1, 2020, Mr. McAfee entered into an employment agreement on substantially the same terms as the prior agreement except for the change of control increase to a period of twelve (12) months. In addition, Mr. McAfee is entitled to an annual cash bonus in an amount determined by the Board of Directors based upon attainment of certain performance milestones as determined by the Board from time to time. McAfee was determined by taking into consideration the profitability of future operations, likelihood of future success of the company, and executive leadership participation qualities, adjusted by the impact of external policy, political and economic events as positive or negative influences on the amount of difficulty required to execute on the business plan. This amount was then scaled to $50,000 to reflect the amount of cash available for executive bonuses for the 2020 fiscal year. The initial term of Mr. McAfees employment agreement was for three years with automatic one-year renewals thereafter, unless terminated by either party on sixty days notice prior to the end of the then-current period. \nMcAfee is terminated other than for Cause (as defined in the agreement) or as a result of his death or Total Disability (as defined in the agreement) or is Constructively Terminated (as defined in the agreement), then provided he signs a release of claims, Mr. McAfee is entitled to receive severance benefits of (i) cash payments equal to his then-current base salary for a period of twelve (12) months payable in accordance with the Companys normal payroll practices, and (ii) company-paid health, dental, and vision insurance coverage for him and his dependents until the earlier of six (6) months following the date of termination or until such time as Mr. McAfee is covered under another employers group policy for such benefits. If, on or following a Change in Control, Mr. McAfees employment is Constructively Terminated or involuntarily terminated other than for Cause, death or Total Disability, then provided he signs a release of claims, in addition to the severance benefits provided above, all of his then unvested restricted stock or stock options shall become immediately vested. \n### Todd A. Waltz \nOn March 15, 2010, the Company entered into an employment agreement with Mr. Waltz to serve as the Companys Chief Financial Officer. Under Mr. Waltzs employment agreement, Mr. Waltz originally received an annual salary of $180,000 per year, subject to annual review and adjustments. Effective January 1, 2017, the Governance, Compensation and Nominating Committee approved an increase in his annual salary from $230,000 per year to $250,000 per year. Effective January 1, 2020, Mr. Waltz entered into an employment agreement on substantially the same terms as the prior agreement except for the change of control increase to a period of twelve (12) months. Mr. Waltz is entitled to an annual bonus of up to $50,000. Waltz was based on an estimation of his contribution to the goals achieved by the Company, as defined by the same formula applied to the Chief Executive Officer. The initial term of Mr. Waltzs employment agreement was for three years with automatic one-year renewals unless terminated by either party on sixty days notice prior to the end of the then-current extension period. \nWaltz is terminated other than for Cause (as defined in the agreement) or as a result of his death or Total Disability (as defined in the agreement) or is Constructively Terminated (as defined in the agreement), then provided he signs a release of claims, Mr. Waltz is entitled to severance benefits of (i) cash payments equal to his monthly base salary for a period of one (1) year payable in accordance with the Companys normal payroll practices, and (ii) company-paid health, dental, and vision insurance coverage for him and his dependents until the earlier of three (3) months following the date of termination or until such time as Mr. Waltz is covered under another employers group policy for such benefits. Waltzs employment is Constructively Terminated or involuntarily terminated other than for Cause, death or Total Disability, then provided he signs a release of claims, in addition to the severance benefits provided above, all of his then unvested restricted stock or stock options shall become immediately vested. \n### Andrew B. Foster \nOn May 22, 2007, the Company entered into an employment agreement with Mr. Foster to serve as the Companys Executive Vice President and Chief Operating Officer. Under Mr. Fosters employment agreement, Mr. Foster originally received an annual salary of $180,000 per year, subject to annual review and adjustments. Effective January 1, 2017, the Governance, Compensation and Nominating Committee approved an increase in his annual salary from $210,000 per year to $230,000 per year. Effective January 1, 2020, Mr. Foster entered into an employment agreement on substantially the same terms as the prior agreement except for the change of control increase to a period of twelve (12) months. Mr. Foster is entitled to a discretionary annual bonus of up to $50,000. Foster was based on an estimation of his contribution to the goals achieved by the Company, as defined by the same formula applied to the Chief Executive Officer. The initial term of Mr. Fosters employment agreement was for three years with automatic one-year renewals unless terminated by either party on sixty days notice prior to the end of the then-current extension period. \nFoster is terminated other than for Cause (as defined in the agreement) or as a result of his death or Total Disability (as defined in the agreement) or is Constructively Terminated (as defined in the agreement), then provided he signs a release of claims, Mr. Foster is entitled to severance benefits of (i) cash payments equal to his monthly base salary for a period of one (1) year payable in accordance with the Companys normal payroll practices, and (ii) company-paid health, dental, and vision insurance coverage for him and his dependents until the earlier of three (3) months following the date of termination or until such time as Mr. Foster is covered under another employers group policy for such benefits. Fosters employment is Constructively Terminated or involuntarily terminated other than for Cause, death or Total Disability, then provided he signs a release of claims, in addition to the severance benefits provided above, all of his then unvested restricted stock or stock options shall become immediately vested. \nPotential Payments Upon Termination or Change-In-Control (2020) \nThe following table quantifies the estimated payments and benefits that would be provided to each named executive officer upon the occurrence of the indicated event, assuming<|endoftext|>And Pluchenik are the managing members of 1271 Associates. Siget is the General Partner of Silk. Messrs. Glick and Pluchenik are the managing members of Siget. By virtue of these relationships, each of Siget NY, 1271 Associates, Siget and Messrs. Levinson, Glick and Pluchenik may be deemed to beneficially own the shares owned directly by Silk. Mr.Pluchenik is the manager of PF Investors, and by virtue of this relationship, Mr.Pluchenik may be deemed to beneficially own the shares of Common Stock owned directly by PF Investors. Based solely on a Schedule 13D/A filed on July1, 2019, and accounting for the \n1-for-15 reverse stock split of the Companys common stock, (i)Seymour Pluchenik has the sole voting and dispositive power with respect to none of the shares and shared voting and dispositive power with respect to 307,728 shares, (ii)Sam Levinson, Simon Glick, Siget, Siget NY and 1271 Associates have the sole voting and dispositive power with respect to none of the shares and shared voting and dispositive power with respect to 290,809 shares, (iii)Silk has the sole voting and dispositive power with respect to 290,809 shares and shared voting and dispositive power with respect to none of the shares and (iv)PF Investors has the sole voting and dispositive power with respect to 16,918 shares and shared voting and dispositive power with respect to none of the shares. \n(4) \nThe address of Arbiter Partners Capital Management LLC (Arbiter Partners) is 530 Fifth Avenue, 20th Floor, New York, NY 10036. Arbiter Partners and Paul J. Isaac share voting power and share dispositive power with respect to all of the reported shares. Information relating to Arbiter Partners is based on a Schedule 13D filed with the SEC on March10, 2017 and Form 4 filed with the SEC on August29, 2017, as adjusted for the \n1-for-15 reverse stock split of the Companys common stock. Arbiter Partners is a registered investment adviser that manages and/or administers Arbiter Partners QP LP, an affiliated investment fund (APQ), and various accounts, including Isaac Brothers, LLC, Nana Associates LLC and 9 Interlaken Partners LLC (collectively, the Family Accounts). Mr.Isaac controls Arbiter Partners. By reason of its position as investment adviser to APQ and as manager and/or administrator of the Family Accounts, Arbiter Partners may be deemed to possess the power to vote and dispose of the shares held by APQ and the Family Accounts. By reason of his responsibility for the supervision and conduct of all investment activities of Arbiter Partners, Mr.Isaac may be deemed to possess the power to vote and dispose of the shares beneficially owned by Arbiter Partners. Mr.Isaac disclaims beneficial ownership of these securities for all purposes of Section16 of the Securities Exchange Act of 1934, as amended, except to the extent of his pecuniary interest therein. \n(5) \nThe address of the reporting persons reported on this line is 1333 Second Street, Suite 650, Santa Monica, CA 90401. Shares reported on this line represent shares that may be deemed to be beneficially owned by Steven D. Lebowitz, Deborah P. Lebowitz, David Lebowitz, Amanda Lebowitz, Lauren Lebowitz Salem, Robert Lebowitz, Kathryn Lebowitz Silverberg, The Lebowitz Family Stock, LLC (LFS LLC) and Leonard S. Pearlstein. Based solely on a Schedule 13G/A filed on January29, 2021, (i) Steven D. Lebowitz has sole voting and dispositive power with respect to 11,666 shares, shared voting power with respect to 160,176 shares and shared dispositive power with respect to 167,174 shares, (ii)Deborah P. Lebowitz has sole voting and dispositive power with respect to none of the shares and shared voting and dispositive power with respect to 160,176 shares, (iii)David Lebowitz and Amanda Lebowitz have sole voting and dispositive power with respect to none of the shares and shared voting and dispositive power with respect to 1,166 shares, (iv)Lauren Lebowitz Salem has sole voting power with respect to 3,000 shares, sole dispositive power with respect to none of the shares, shared voting power with respect to none of the shares, and shared dispositive power with respect to 3,000 shares, (v)Robert Lebowitz has sole voting power with respect to 200 shares, sole dispositive power with respect to none of the shares, shared voting power with respect to none of the shares, and shared dispositive power with respect to 200 shares, (vi)Kathryn Lebowitz Silverberg has sole voting power with respect to 2,166 shares, sole dispositive power with respect to none of the shares, shared voting power with respect to none of the shares, and shared dispositive power with respect to 2,166 shares, (vii)LFS LLC has sole voting and dispositive power with respect to 11,666 shares and shared voting and dispositive power with respect to none of the shares, and (viii)Leonard S. Pearlstein has sole voting power with respect to 466 shares, sole dispositive power with respect to none of the shares, shared voting power with respect to none of the shares, and shared dispositive power with respect to 466 shares. \n(6) \nThe address of the reporting persons reported on this line is 450 Park Avenue, Suite 2700, New York, NY 10022. Shares reported on this line represent shares that may be deemed to be beneficially owned by Pangea Ventures, L.P. (Pangea), Ortelius Advisors, L.P. (Ortelius) and Peter DeSorcy. Ortelius is the investment manager of Pangea. Peter DeSorcy is the Managing Member of the general partner of Ortelius, is a Managing Member of Ortelius and has a controlling interest in Ortelius, and, as a result, Peter DeSorcy may be deemed to beneficially own the shares beneficially owned by Pangea. Each of Pangea, Ortelius and Peter DeSorcy has sole voting and dispositive power with respect to none of the shares and shared voting and dispositive power with respect to 118,807 shares. The foregoing information regarding Pangea, Ortelius and Peter DeSorcy and their respective beneficial ownership of shares is based solely on a Schedule 13D filed on March25, 2021. \n(7) \nThe address of Clayton Partners LLC is 3160 College Avenue, Suite 203, Berkeley, CA 94705. Clayton Partners LLC has sole voting and dispositive power with respect to 118,500 shares and shared voting and dispositive power with respect to none of the shares. The foregoing information regarding Clayton Partners LLC and the shares that it beneficially owns is based solely on a Schedule 13G filed on January22, 2021. \n(8) \nConsists of 6,636 shares held by Ms.Lody directly, 56,789 unvested shares of restricted stock (36,999 of which are subject to the Companys achievement of certain performance targets), and 6,479 shares of common stock underlying the vested portion of an option to purchase shares of common stock at $111.90 per share. \n(9) \nConsists of 7,216 shares held by Mr.Ribar directly and 22,541 unvested shares of restricted stock (14,054 of which are subject to the Companys achievement of certain performance targets). \n(10) \nConsists of 13,009 shares held by Mr.Brickman directly and 13,543 unvested shares of restricted stock (8,424 of which are subject to the Companys achievement of certain performance targets). \n(11) \nConsists of 5,387 shares held by Mr.Brooks directly and 418 shares held by the Philip A. Brooks Revocable Trust. \n(12) \nIncludes 61,615 shares held directly or indirectly by the executive officers and directors of the Company, 124,449 unvested shares of restricted stock (78,455 of which are subject to the Companys achievement of certain performance targets) and 6,479 shares of common stock underlying the vested portion of an option to purchase shares of common stock at $111.90 per share. \n(13) \nMr.Hendrickson resigned as the Companys Executive Vice President and Chief Financial Officer effective November6, 2020 to pursue other career opportunities, and the Company has been unable to determine the number of shares of its common stock held by Mr.Hendrickson, if any. \nITEM13. \n\n### Director Independence Policy \nThe Board has determined that Dr.E. Rodney Hornbake, Ross B. Levin, Jill M. Krueger, Michael W. Reid, Philip A. Brooks, EdA. Grier and Steven T. Plochocki, each an existing director, are independent within the meaning of the corporate governance rules of the NYSE and no such individual has any relationship with us, except as a director stockholder and/or director nominee, as applicable. In addition, we have adopted a Director Independence Policy, as described in greater detail below, which establishes guidelines for the Board to follow in making the determination as to which of our directors is independent. Our Director Independence Policy is available on our website at [IDX] in the Investor Relations section and is available in print to any stockholder who requests it. The Board has determined that Messrs. Hornbake, Levin, Reid, Brooks, Grier and Plochocki and Ms.Krueger, each an existing director, are independent in accordance with our Director Independence Policy. \nThe Board undertakes an annual review of the independence of all non-management directors. In advance of the meeting at which this review occurs, each non-management director is asked to provide the Board with full information regarding the directors business and other relationships with us in order to enable the Board to evaluate the directors independence. Directors have an affirmative obligation to inform the Board of any material changes in their circumstances or relationships that may impact their designation by the Board as independent. This obligation includes all business relationships between, on the one hand, directors or members of their immediate family, and, on the other hand, us, whether or not such business relationships are described above. \nNo director qualifies as independent unless the Board affirmatively determines that the director has no material relationship with us. The following guidelines are considered in making this determination: a director who is, or has been within the last three years, employed by us, or whose immediate family member is, or has been within the last three years, one of our executive officers, is not independent; a director who received, or whose immediate family member received, during any twelve-month period within the last three years, more than $120,000 in direct compensation from us, other than director and committee fees and pension or other forms of deferred compensation for prior service (provided such compensation is not contingent in any way on continued service), is not independent; a director (a)who is or whose immediate family member is a current partner of a firm that is our internal or external auditor, (b)who is a current employee of such a firm, (c)whose immediately family member is a current employee of such a firm and participates in the firms audit, assurance or tax compliance (but not tax planning) practice, or (d)who is, or whose immediate family member was within the last three years (but is no longer), a partner or employee of such a firm and personally worked on our audit within that time, is not independent; a director who is, or whose immediate family member is, or has been within the last three years, employed as an executive officer of another company where any of our present executive officers at the same time serves or served on that other companys compensation committee, is not independent; a director who is a current employee, or whose immediate family member is a current executive officer, of a company that has made payments to, or received payments from, us for property or services in an amount which, in any of the last three fiscal years, exceeds the greater of $1million or 2% of such other companys consolidated gross revenues, is not independent; a director who serves as an executive officer, or whose immediate family member serves as an executive officer, of a tax exempt organization that, within the preceding three years, received contributions from us, in any single fiscal year, of an amount equal to the greater of $1million or 2% of such organizations consolidated gross revenue, is not independent; and a director who has a beneficial ownership interest of 10% or more in a company which has received remuneration from us in any single fiscal year in an amount equal to the greater of $1million or 2% of such companys consolidated gross revenue is not independent until three years after falling below such threshold. \nIn addition, members of the Compensation Committee must not have any relationship<|endoftext|>"},"task":{"kind":"string","value":"{\"file\": \"/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz\"}"}}},{"rowIdx":70,"cells":{"text":{"kind":"string","value":"<|endoftext|>The Compensation Committee, the Board of Directors approved an annual stock option grant of 25,000 shares to each of its non-employee members for ongoing service as members of the Board of Directors. \nExpense Reimbursement \nAll directors are reimbursed for expenses incurred in connection with attending meetings of the Board of Directors and committees. \nITEM 12. \n\nBased solely upon information made available to us, the following table sets forth information with respect to the beneficial ownership of our Common Stock as of April 28, 2021 by (i) each director; We do not know of any person who beneficially owns more than 5% of our Common Stock. Except as otherwise indicated in footnotes to this table or, where applicable, to the extent authority is shared by spouses under community property laws, to our knowledge, the holders listed below have sole voting and investment power with respect to all shares of Common Stock beneficially owned by them. \n* \nLess than 1% \n(1) \nThis table is based upon information supplied by officers and directors, and with respect to principal stockholders, any Schedules 13D and 13G filed with the SEC. Applicable percentage ownership is based on 6,316,702 shares of Common Stock outstanding as of April 28, 2021. In computing the number of shares beneficially owned by a person and the percentage ownership of that person, shares of Common Stock subject to options or warrants currently exercisable, or exercisable within 60days after April 28, 2021 (subject to specified limits), at any time at the option of the holder, are deemed outstanding. \n(2) \nExcept as otherwise indicated, the business address of each director and executive officer listed is c/o GeoVax Labs, Inc., 1900 Lake Park Drive, Suite 380, Smyrna, Georgia 30080. \n(3) \nIncludes 16,613 shares of Common Stock and warrants to purchase 16,613 shares of common stock. \n(4) \nIncludes 81,870 shares of Common Stock and warrants to purchase 81,870 shares of common stock. \n(5) \nIncludes 11,987 shares of Common Stock and warrants to purchase 11,987 shares of common stock. \n(6) \nIncludes 53,925 shares of Common Stock and warrants to purchase 53,925 shares of common stock. \n(7) \nIncludes 60,184 shares of Common Stock and warrants to purchase 60,184 shares of common stock. \n(8) \nIncludes 21,024 shares of Common Stock and warrants to purchase 21,024 shares of common stock. \n(9) \nIncludes 245,603 shares of Common Stock and warrants to purchase 245,603 shares of common stock. \nITEM 13. \n\nOther than compensation arrangements for our Named Executive Officers and directors, we describe below each transaction since January 1, 2019, to which we were a party or will be a party, in which the amount exceeds $120,000 (or, if less, 1% of the average of our total assets amount at December 31, 2020 and 2019) and in which any related person (as defined in paragraph (a) of Item 404 of Regulation S-K) had or will have a direct or indirect material interest. Compensation arrangements for our named executive officers and directors are described above under Executive Compensation. \nSeries E Convertible Preferred Stock and Series G Warrants \nOn March 5, 2018, we entered into a Securities Purchase Agreement (the 2018 Securities Purchase Agreement) with Sabby Healthcare Master Fund, Ltd. and Sabby Volatility Warrant Master Fund, Ltd. (collectively, the Purchasers), each of which beneficially owned more than 5% of our Common Stock, providing for the issuance and sale to the Purchasers of an aggregate of 600 shares of our Series E Convertible Preferred Stock (the Series E Preferred Shares) for gross proceeds to the Company of $600,000. On September 5, 2018, the Company and the Purchasers agreed that the Company would issue the Purchasers an additional 600 Series E Preferred Shares for gross proceeds of $600,000. On February 18, 2019 all outstanding Series E Preferred Shares (1,200 shares) were exchanged for our Series F Convertible Preferred Stock, as described below. \nPursuant to the 2018 Securities Purchase Agreement, on September 5, 2018 the Purchasers were also issued Series G Common Stock Purchase Warrants (the Series G Warrants), to purchase shares of our Common Stock. The Series G Warrants were terminated by agreement between the Company and the Purchasers on August 4, 2020. \n### Term Promissory Notes and Series H Warrants \nOn December 27, 2018, we entered into an agreement with the Purchasers, each of which beneficially owned more than 5% of our Common Stock pursuant to which we issued two Term Promissory Notes (Notes) and Series H Common Stock Purchase Warrants (Series H Warrants) to the Purchasers in exchange for aggregate gross proceeds of $250,000. The non-interest-bearing Notes were initially due on January 22, 2019 but were subsequently extended and then cancelled pursuant to our issuance of Series F and Series G Convertible Preferred Stock as described below. \nThe Series H Warrants were originally issued for the purchase of up to 10,000,000 shares of our Common Stock in the aggregate with an exercise price of $0.025 per share. During July 2020, all of the Series H Warrants were converted into 7,147 shares of our Common Stock pursuant to the cashless exercise provisions of the warrants. \n### Series F Convertible Preferred Stock \nOn February 18, 2019, we entered into Exchange Agreements (the February Exchange Agreements) with the Purchasers pursuant to which the Purchasers exchanged an aggregate of 1,563.146 shares of our Series C Convertible Preferred Stock (Series C Preferred Shares), for which the Purchasers paid $1,000 per share, and 1,200 shares of our Series E Convertible Preferred Stock (Series E Preferred Shares), for which the Purchasers paid $1,000 per share, held by them for an aggregate of 2,763.146 shares of our Series F Convertible Preferred Stock (Series F Preferred Shares and such transaction, the February Exchange). Upon consummation of the February Exchange, the shares of Series C Preferred Shares and Series E Preferred Shares subject to the February Exchange were cancelled and no Series C Preferred Shares or Series E Preferred Shares remain outstanding. The February Exchange Agreements also extended the maturity date of the Notes, dated December 27, 2018, made by the Company in favor of the Purchasers to June 22, 2019. \nBetween March 19 and July 10, 2019, the Purchasers converted 506.6122 Series F Preferred Shares into an aggregate of 10 shares of our Common Stock, and on July 17, 2019, all remaining outstanding Series F Preferred Shares (2,256.5338 shares) were exchanged for our Series H Convertible Preferred Stock, as described below. \nSeries G Convertible Preferred Stock and Series I Warrants \nOn February 25, 2019, we entered into a Securities Purchase Agreement (the February Securities Purchase Agreement) with the Purchasers providing for the issuance and sale to the Purchasers of an aggregate of up to 1,000 shares of our Series G Convertible Preferred Stock (the Series G Preferred Shares) and related warrants for gross proceeds of up to $1.0 million, to be funded at up to three different closings. At the first closing on February 25, 2019, we issued 500 Series G Preferred Shares and related warrants in exchange for the payment by the Purchasers of $250,000 in the aggregate, plus the cancellation by them of Term Notes due to them from the Company in the aggregate amount of $250,000. At the second and third closings, which occurred on April 26 and June 19, 2019, we issued an aggregate of 500 additional shares of Series G Preferred Stock and related warrants in exchange for the payment by the Purchasers of a total of $500,000. \nOn July 17, 2019, all outstanding Series G Preferred Shares (1,000 shares) were exchanged for our Series H Convertible Preferred Stock, as described below. \nPursuant to the February Securities Purchase Agreement, at each closing each Purchaser was issued a Series I Common Stock Purchase Warrant (Series I Warrants), to purchase up to a number of shares of the Companys Common Stock equal to 100% of the Series G Conversion Shares underlying the Series G Preferred Shares issued to such Purchaser for cash. During July 2020, 43,687 of the Series I Warrants were converted into 29,756 shares of our Common Stock pursuant to the cashless exercise provisions of the warrants, leaving 31,313 Series I Warrants remaining. Upon consummation of our 2020 underwritten public offering the number of shares subject to the Series I Warrants increased to 62,626 and the exercise price was reduced to $5.00. In January 2021, all of the remaining Series I Warrants were converted into 20,196 shares of our Common Stock pursuant to the cashless exercise provisions of the warrants. \n### Series H Convertible Preferred Stock \nOn July 17, 2019, we entered into Exchange Agreements (the July Exchange Agreements) with the Purchasers pursuant to which the Purchasers exchanged an aggregate of 2,256.5338 Series F Preferred Shares, for which the Purchasers paid $1,000 per share, and 1,000 Series G Preferred Shares, for which the Purchasers paid $1,000 per share, held by them for an aggregate of 3,256.5338 shares of our Series H Convertible Preferred Stock (Series H Preferred Shares and such transaction, the July Exchange). Upon consummation of the July Exchange, the Series F Preferred Shares and Series G Preferred Shares subject to the July Exchange were cancelled and no Series F Preferred Shares or Series G Preferred Shares remain outstanding. \nBetween July 18, 2019 and March 6, 2020, the Purchasers converted 3,256.5338 Series H Preferred Shares into an aggregate of 484,505 shares of our Common Stock, and there are no Series H Preferred Shares remaining outstanding. \n### Series I Convertible Preferred Stock \nOn July 24, 2019, we entered into a Securities Purchase Agreement (the July Securities Purchase Agreement) with the Purchasers providing for the issuance and sale to the Purchasers of an aggregate of 700 shares of our Series I Convertible Preferred Stock (the Series I Preferred Shares) for gross proceeds of $700,000. \nBetween March 6, 2020 and March 18, 2020, the Purchasers converted 700 Series I Preferred Shares into an aggregate of 204,371 shares of our Common Stock, and there are no Series I Preferred Shares remaining outstanding. \n### Series J Convertible Preferred Stock \nOn January 24, 2020, we entered into a Securities Purchase Agreement (the January Securities Purchase Agreement) with the Purchasers providing for the issuance and sale to the Purchasers of an aggregate of 300 shares of our Series J Convertible Preferred Stock (the Series J Preferred Stock) for gross proceeds of $300,000. On July 23, 2020, the Purchasers converted 300 Series J Preferred Shares into an aggregate of 42,723 shares of our Common Stock, and there are no Series J Preferred Shares remaining outstanding. \nJune 2020 Bridge Financing \nOn June 26, 2020, we entered into a Securities Purchase Agreement with Cavalry Fund I LP and Cavalry Special Ops Fund, LLC, pursuant to which the Company received aggregate gross proceeds of $1,050,000 in exchange for the issuance of 5% Original Issue Senior Secured Convertible Debentures in the aggregate principal amount of $1,200,000 and five-year warrants to purchase an aggregate of 2,400,000 shares of our common stock at an exercise price of $0.50 per share, subject to adjustment. On September 29, 2020, the June 26, 2020 5% Original Issue Senior Secured Convertible Debentures mandatorily converted into 303,667 conversion units, of which 177,625 include shares of common stock and 126,042 include pre-funded warrants (the Conversion Units). The Conversion Units provide substantially the same terms as the Units issued in September 2020. The pre-funded warrants provide the holder the right to purchase one share of common stock at an exercise price of $0.01 per share, are immediately exercisable and will not expire until exercised in full. These pre-funded warrants were exercised on January 13, 2021. The Company also issued these investors five-year warrants to acquire an additional 303,668 shares of common stock, in the aggregate, at $5.00 per share. \n### Director Independence \nChase, Kollintzas, and Spencer are the members of our Board of Directors who are independent, as that term is defined by Section 301(3)(B) of the Sarbanes-Oxley Act of 2002. The Board of Directors has also determined that these individuals meet the definition of independent director set forth in Rule5605(a)(2) of the Nasdaq Listing Rules and that<|endoftext|>Applied to cannabis and/or hemp flower products to remove or significantly reduce the odor and flavor of such products which are consumed by smoking and/or ingestion. However, High Sierra believes that eventually there may be competitors. High Sierra believes that it will have an early competitive advantage being the first to enter this line of business and file for patent protection as has been discussed in other places herein. It believes that its Provisional Patent Applications and its Utility Patent Applications, if granted, will give High Sierra some significant protection from competing companies. \nThere are numerous other companies and individuals that compete in the hemp cigarette market place. Some of those companies are substantially larger than we are and some may have much greater financial resources than we do. We can offer no assurance that we will be able to compete successfully against our competitors in this line of business. \n### Employees \nAs of the date of this Report, we have only four part-time employees who are our officers Vincent C. Lombardi, Gregg W. Koechlein, Jeffrey M. Pogol and Glenn C. Miller, and no full time employees. Mr. Lombardi, Mr. Koechlein and Mr. Pogol each devote approximately sixteen (16) hours per week to the business of the Company, and Mr. Miller devotes approximately eight (8) hours per week to the business of the Company. They may be compensated for their part time services on an as needed basis. For example, on February 26, 2021, we issued 10,000 shares of our restricted common stock to Jeffrey M. Pogol and 10,000 shares of our restricted common stock to another service provider for services rendered valued in the amount of $2,000 each, and on January 1, 2021 Gregg W. Koechlein was paid $7,500 for services. We have no written employment agreements. We have never experienced a work stoppage and believe our relationship with our employees is good. \nEffect of Existing or Probable Governmental Regulations on our Business \nWe are subject to the following regulations of the SEC and applicable securities laws, rules and regulations: \n\nWe are subject to the reporting requirements of Section 13 of the Exchange Act, and subject to the disclosure requirements of Regulation S-K of the SEC, as a smaller reporting company. That designation will relieve us of some of the informational requirements of Regulation S-K applicable to larger companies. \nSarbanes/Oxley Act \nWe are also subject to the Sarbanes/Oxley Act of 2002. The Sarbanes/Oxley Act created a strong and independent accounting oversight board to oversee the conduct of auditors of public companies and strengthen auditor independence. It also requires steps to enhance the direct responsibility of senior members of management for financial reporting and for the quality of financial disclosures made by public companies; establishes clear statutory rules to limit, and to expose to public view, possible conflicts of interest affecting securities analysts; creates guidelines for audit committee members appointment, compensation and oversight of the work of public companies auditors; management assessment of our internal controls; auditor attestation to managements conclusions about internal controls; prohibits certain insider trading during pension fund blackout periods; requires companies and auditors to evaluate internal controls and procedures; and establishes a federal crime of securities fraud, among other provisions. Compliance with the requirements of the Sarbanes/Oxley Act will substantially increase our legal and accounting costs. \n### Exchange Act Reporting Requirements \nSection 14(a) of the Exchange Act requires all companies with securities registered pursuant to Section 12(g) of the Exchange Act to comply with the rules and regulations of the SEC regarding proxy solicitations, as outlined in Regulation 14A. Matters submitted to stockholders at special or annual meetings thereof or pursuant to a written consent will require us to provide our stockholders with the information outlined in Schedules 14A or 14C of Regulation 14; preliminary copies of this information must be submitted to the SEC at least 10 days prior to the date that definitive copies of this information are forwarded to our stockholders. \nWe are also required to file Annual Reports on SEC Form 10-K and Quarterly Reports on SEC Form 10-Q with the SEC on a regular basis, and will be required to timely disclose certain material events (e.g., changes in corporate control; acquisitions or dispositions of a significant amount of assets other than in the ordinary course of business; and bankruptcy) in a Current Report on SEC Form 8-K. \n### Emerging Growth Company \nWe are and we will remain an emerging growth company as defined in the Jumpstart Our Business Startups Act of 2012(the JOBS Act), until the earliest to occur of (i) the last day of the fiscal year during which our total annual revenues equal or exceed $1 billion (subject to adjustment for inflation), (ii) the last day of the fiscal year following the fifth anniversary of the completion of this primary offering, (iii) the date on which we have, during the previous three-year period, issued more than $1 billion in non-convertible debt securities, or (iv) the date on which we are deemed a \"large accelerated filer\" (with at least $700 million in public float) under the Exchange Act. \nAs an \"emerging growth company\", we may take advantage of specified reduced disclosure and other requirements that are otherwise applicable generally to public companies. \nWe have taken advantage of some of these reduced burdens, and thus the information we provide stockholders may be different from what you might receive from other public companies in which you hold shares. However, we are choosing to opt out of such extended transition period, and as a result, we will comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. Section 107 of the JOBS Act provides that our decision to opt out of the extended transition period for complying with new or revised accounting standards is irrevocable. \nNotwithstanding the above, we are also currently a smaller reporting company, meaning that we are not an investment company, an asset-backed issuer, or a majority-owned subsidiary of a parent company that is not a smaller reporting company and have a public float of less than $75 million and annual revenues of less than $50 million during the most recently completed fiscal year. In the event that we are still considered a smaller reporting company, at such time as we cease being an emerging growth company, the disclosure we will be required to provide in our SEC filings will increase, but will still be less than it would be if we were not considered either an emerging growth company or a smaller reporting company.Specifically, similar to emerging growth companies, smaller reporting companies are able to provide simplified executive compensation disclosures in their filings; are exempt from the provisions of Section 404(b) of the Sarbanes-Oxley Act (SOX) requiring that independent registered public accounting firms provide an attestation report on the effectiveness of internal control over financial reporting; \n### Start-up Stage \nThe Company is in the start-up stage and has generated no revenue as of the date hereof. In the past three (3) years, we have been funded primarily through loans from non-related third parties, our officers, directors and our shareholders. \nCost and Effects of Compliance with Environmental Laws \nOur current business operations are not subject to any material environmental laws, rules or regulations that would have an adverse material effect on our business operations or financial condition or result in a material compliance cost. \n### ITEM 1A. RISK FACTORS \nAs a smaller reporting company, we are not required to provide risk factors; however, for information on risk factors, see the Risk Factors section of our Form 8-K Current Report dated December 31, 2018 and previously filed with the SEC on January 2, 2019. \nITEM 1B. UNRESOLVED STAFF COMMENTS \nNone \n### ITEM 2: PROPERTIES \nThe Companys only place of business is located at 1495 Ridgeview Drive, Suite 230A, Reno, Nevada 89519.The space rented by the Company consists of office space with a fixed monthly payment for utilities. \nITEM 3: LEGAL PROCEEDINGS \nWe are not a party to any pending legal proceeding and, to the knowledge of our management; no federal, state or local governmental agency is presently contemplating any proceeding against us. No director, executive officer or affiliate of ours or owner of record or beneficially of more than 5% of our common stock is a party adverse to us or has a material interest adverse to us in any proceeding. \n### ITEM 4: MINE SAFETY DISCLOSURES \nNone; not applicable. \nPART II \n\n### Market Information \nThere is no established trading market for our shares of common stock. Our shares of common stock are listed on the OTC Bulletin Board of the Financial Industry Regulatory Authority, Inc. (FINRA) under the symbol GLFO; however, management does not expect any established trading market to develop in our shares of common stock unless and until we have material operations. In any event, no assurance can be given that any market for our common stock will develop or be maintained. If a public market ever develops in the future, the sale of shares of our common stock that are deemed to be restricted securities pursuant to Rule 144 of the SEC by members of management or others may have a substantial adverse impact on any such market. See the heading Rule 144 below for requirements of resales of shares of our common stock under Rule 144. \nThere has been no established trading market in our common stock for many years. Additionally, many of the approximately 8,289,642 shares issued to non-affiliates in the acquisition of our wholly-owned subsidiary became saleable under Rule 144 in January 2020, and may now be sold into any trading market that may develop for our shares. These factors may result in uncertainty and volatility in the trading price of our common stock that may not have any relation to our current or future prospects. \nSet forth below are the high and low closing bid prices for our common stock for each quarter of 2020 and 2019. These bid prices were obtained from OTC Markets, Inc. All prices listed herein reflect inter-dealer prices, without retail mark-up, mark-down or commissions and may not represent actual transactions. \n### Rule 144 \nThe following is a summary of the current requirements of Rule 144: \nAffiliate or Person Selling on Behalf of an Affiliate \nNon-Affiliate (and has not been an Affiliate During the Prior Three Months) \n### Restricted Securities of Reporting Issuers \nDuring six-month holding period no resales under Rule 144 Permitted. \nAfter Six-month holding period may resell in accordance with all Rule 144 requirements including: \n\nVolume limitations, \n\nFiling of Form 144. \nDuring six- month holding period no resales under Rule 144 permitted. \nAfter six-month holding period but before one year unlimited public resales under Rule 144 except that the current public information requirement still applies. \n\n### Restricted Securities of Non-Reporting Issuers \n\nAfter one-year holding period may resell in accordance with all Rule 144 requirements including: \n\nVolume limitations, \n\nFiling of Form 144. \n\n\n### Shell Companies \nRule 144 is generally unavailable for the resale of shares of stock of publicly reporting shell companies. After such a company ceases to be a shell company, then Rule 144 may become available for the resale of its outstanding shares beginning 12 months after it files Form 10 information with the SEC. We believe that we are no longer a shell company following the closing of our acquisition of our High Sierra subsidiary, and that Rule 144 became available one (1) year following the filing of our Current Report on Form 8-K which was filed on January 2, 2019. We believe that many of the approximately 8,289,642 shares issued to non-affiliates in the acquisition of our wholly-owned subsidiary became saleable under Rule 144 in January 2020, and may now be sold into any trading market that may develop for our shares. \n### Section 4(a)(1) of the Securities Act \nSince we were a shell company as defined in subparagraph (i) of Rule 144 up until December 31, 2018 when we acquired<|endoftext|>To be impaired as of October 31, 2020 and 2019. \nQUEST MANAGEMENT, INC. \n\nOctober 31, 2020 and 2019 \n\n### Long-lived Assets (continued) \nThe Company applies the provisions of ASC 360-10, \n\n### Intangible Assets \n\nIntangibles - Goodwill and Other \nThe Company had no such intangibles at October 31, 2020 and 2019, and recorded no impairment losses during the years ended October 31, 2020 or 2019. \n### Revenue Recognition \nThe Company applies ASC 606, \n\nUnder ASC 606, the Company will recognize revenue from the sale of our exercise equipment by applying the following steps: (1) identify the contract with a customer; \n### Advertising \nAdvertising expenses for the years ended October 31, 2020 and 2019 were $0. \n\n\n\n\n\nand \n\n### Use of Estimates \n\nQUEST MANAGEMENT, INC. \n\nOctober 31, 2020 and 2019 \n\n\n\n### Income Taxes \n\nIncome Taxes \n\n\n### Loss Per Share \nThere were no potentially dilutive shares outstanding as of October 31, 2020 and 2019. \n\n\n### NOTE 2 Financial Condition and Going Concern \nThe Company had limited operations during the period from October 12, 2014 (date of inception) to October 31, 2020 resulted in accumulated deficit of $808,623. As of October 31, 2020, Company had working capital deficit of $36,623. \n\nQUEST MANAGEMENT, INC. \n\nOctober 31, 2020 and 2019 \nNOTE 2 Financial Condition and Going Concern (continued) \n\n### NOTE 3 Property and Equipment \nWe purchased our principal executive offices at 1 Kalnu iela, Malta, LV-4630 Latvia, on October 30, 2014 for $7,915. \nThe Company depreciates its property using straight-line depreciation over the estimated useful life of 40 years. \nThis property now has a $0 value after impairment on October 31, 2018. \nThe current executive offices are provided without cost, located at: 797 South First Street Fulton, NY 13069. \n### NOTE 4 Notes Payable \nOn May 31, 2016, the Company issued a Promissory Note in the principal amount of $16,605 to Peak Marine Holdings LLC, a Florida limited liability company (Peak). \nThe holder also has the right to assign any portion of the Note or assign the shares to be issued to other parties. \nThe remaining balance on the Note is $1,605. \nAt October 31, 2020, the Company has recorded $518 in accrued interest payable on the Note. The interest expense for the years ended October 31, 2020 and 2019 was $64. \nOn October 2020, the Company issued a Promissory Note in the principal amount of $6,150 to an LLC. This Promissory Note (the Note) was issued in consideration of advances and loans made by the LLC to the Company. \nThese loans were for operating expenses of the Company, due upon demand and have no interest rate.. \n### NOTE 5 Note Payable-Related Party \nDirectors and President of the Company had loaned the company for operations from time to time on need basis. Company former director and president loaned the company of $ 4,066 which was non-interest bearing, unsecured and payable upon demand. As of the year ended, October 31, 2018, the Company had taken a gain on impairment of this loan, with $4,066 recognized in other income and adjusted loan payable balance to $0. The balance to this loan as of April 30, 2020 is $0. \nAs of October 31, 2020, loan amount of $11,105 is due to Custodian of the company. The note is non-interest bearing, unsecured and is payable on demand. \nThese loans were for operating expenses of the Company, due upon demand and have no interest rate. \nQUEST MANAGEMENT, INC. \n\nOctober 31, 2020 and 2019 \nNOTE 6 Income Taxes \nThe Company adopted the provisions of ASC 740-10 (formerly known as FIN No. 48, Accounting for Uncertainty in Income Taxes). \nThere has been no significant change in the unrecognized tax benefit during the period ended October 31, 2020. \nAs of October 31, 2020, we had no accrued interest or penalties related to uncertain tax positions. \n\nThe components of deferred income tax assets (liabilities) at October 31, 2020, were as follows: \n\nHowever, NOL carry forward arising after January 1, 2018, will now be limited to 80 percent of taxable income. \n### NOTE 7 Capital Changes \n\nQUEST MANAGEMENT, INC. \n\nOctober 31, 2020 and 2019 \nNOTE 8 Contingencies and Commitments \nThe Company follows ASC 440 & ASC 450, subtopic 450-20 of the FASB Accounting Standards Codification to report accounting for contingencies and commitments respectively. Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur. \n\nIf the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Companys financial statements. \nManagement does not believe, based upon information available at this time, that these matters will have a material adverse effect on the Companys consolidated financial position, results of operations or cash flows. \nManagement of the Company has conducted a diligent search and concluded that there were no commitments, contingencies, or legal matters pending at the balance sheet dates. \nThe effects of Covid -19 could impact our ability to operate under the going concern and maintain sufficient liquidity to continue operations. The impact of Covid-19 on companies is evolving rapidly and its future effects are uncertain. There are material uncertainties from Covid-19 that cast significant doubt on the companys ability to operate under the going concern. It is highly likely that our company will have issues relating to the current situation that need to be considered by management. There will be a wide range of factors to take into account in going concern judgments and financial projections including travel bans, restrictions, government assistance and potential sources of replacement financing, financial health of suppliers and customers and their effect on expected profitability and other key financial performance ratios including information that shows whether there will be sufficient liquidity to continue to meetobligations when they are due. \n\nOn February 3, 2020, the Custodian as an interim officer acting on behalf of the Company, appointed Yamilka Veras as President, Director and Sole officer of the Company. \nThe Company incurred a loss of $615,855 from the debt conversion. \nAs of October 31, 2020 loan amount of $11,722 is due to Custodian of the company on a note payable. The note payable is non-interest bearing, unsecured and is payable on demand. \nQUEST MANAGEMENT, INC. \n\nOctober 31, 2020 and 2019 \nNOTE 10 Legal Matters \nOn December 2, 2019, one of the Companys shareholders made a motion and application to be appointed as custodian of the Company based on prior management abandoning its responsibilities to continue making filings at the Nevada Secretary of States office and for failing to hold a shareholders meeting in over 2 years and otherwise failing to keep current in its obligations to the Company. \nand the Custodian. The Custodian is now in the process of meeting all of the requirements set forth in the Court Order and filing a motion to terminate its services. Upon granting the motion, the Court will issue an Order acknowledging that the Custodian has performed all of the duties that had been required of it and the management of the Company will revert exclusively to the officers and directors appointed by the Custodian. \n\nIn accordance with ASC 855-10, the Company has analyzed its operations subsequent to October 31, 2020 through the date these financial statements were issued i.e. as of March 25, 2021 and has determined that it does not have any material subsequent events to disclose in these financial statements. \nOn June 3, 2020, Andrew Birnbaum, Friction & Heat, LLC, a Utah limited liability company (F&H), the Company entered into a certain Stock Purchase Agreement (the SPA) whereby Andrew Birnbaum acquired 200,000,000 restricted shares of the Companys common stock from F&H in exchange for payment of a $400,000 promissory note to F&H. Following the execution of the SPA, a change of control of the Company occurred. Andrew Birnbaum is now the majority shareholder of the Company, owning 76.6% of the issued and outstanding shares of common stock. \n### NOTE 12 Restatement of Financial Statements \nDuring the year, the Company identified that in the year of 2016 the Company issued 500,000 shares of its common stock as on February 01, 2016 to director against services and originally no value was assigned to this issuance. The restatement for the year ended October 31, 2016 assigned a value of $1,000 to this transaction, or $.002 per share. Similarly, on December 8, 2016 the Company issued 46,000,000 shares of its common stock to director against services and originally, no value was assigned to this issuance. The restatement for the year ended October 31, 2017 assigned a value of $92,000 to this transaction, or $.002 per share. \nQUEST MANAGEMENT, INC. \n\nOctober 31, 2020 and 2019 \nNOTE 12 Restatement of Financial Statements (continued) \nIdentified errors have been rectified by restating relevant years equity and expenses. Cumulative Effect of restatement as on October 31, 2019 on each line item in the financial statements is given below; \n### As originally reported on October 31, 2019 \nEffects of Error in \nRestated Amounts October 31, 2019 \nPrior to 2019 \n- - - - - - - - - - - - --- - - USD- - - - - - - - - - - - - - - - \n### Restatement in Balance Sheet \nAssets \n- \n- \n- \n- \nLiabilities \n- \n- \n- \n- \n### Restatement in Statement of Operations \nRevenue \n- \n- \n- \n- \nExpenses \n- \n- \n- \n- \nOverall Effect on Financial Statements and Shareholders deficit \nITEM 9. \nNone. \n### ITEM 9A. CONTROLS AND PROCEDURES. \n\nUnder the supervision and with the participation of our principal executive officer and principal financial officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rules 13a-15(e) and 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the Exchange Act). Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuers management, including its principal executive and principal financial officers, or persons performing similar functions as appropriate to allow timely decisions regarding required disclosure. We concluded that our disclosure controls and procedures as defined in Rule 13a-15(e) under the Exchange Act were not effective as of October 31, 2020 to ensure that information required to be disclosed in reports we file or submit under the Exchange Act is recorded, processed, and summarized and reported within the time periods specified in SEC rules and forms and our disclosure controls and procedures were also ineffective to ensure that the information required to be disclosed in reports that we file under the Exchange Act is accumulated and communicated to our principal executive and financial officers to allow timely decisions regarding required disclosures. \n\nManagement of the Company is responsible for establishing and maintaining adequate internal control over financial reporting as defined in rule 13a-15(f) and 15d-15(f) under the Exchange Act. Internal control over financial reporting is a process designed by, or under the supervision of the CEO to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with generally accepted accounting principles. Internal controls over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records which in reasonable detail accurately and fairly reflect the transactions and disposition of the Companys assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of consolidated financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made in accordance with authorizations of management and directors of the issuer; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Companys assets that could have a material effect<|endoftext|>Be prevented or detected on a timely basis. \n\nIf we discover additional weaknesses in our internal controls in the future, any such newly identified material weakness could limit our ability to prevent or detect a misstatement of our accounts or disclosures that could result in a material misstatement of our financial statements. \n\nFollowing the issuance of the SEC Statement, our management and our audit committee concluded that it was appropriate to restate our previously issued audited financial statements as of December 31, 2020 and 2019 and for the year ended December 31, 2020 and the period from June 13, 2019 (inception) through December 31, 2019. \nAs a result of such material weakness, the restatement related to the accounting for the Warrants, and other matters raised or that may in the future be raised by the SEC, we face potential litigation or other disputes which may include, among others, claims invoking the federal and state securities laws, contractual claims or other claims arising from the restatement and material weakness in our internal control over financial reporting. As of the date of this Annual Report on Form 10-K/A, we have no knowledge of any such litigation or dispute. \n### Item 1B. Unresolved Staff Comments \nNone. \nItem 2. Properties \nWe do not own any real estate or other physical properties materially important to our operation. Our registered office is located at PO Box 500, 71 Fort Street, Grand Cayman KY1-1106, Cayman Islands. We consider our current office space, combined with the other office space otherwise available to our executive officers adequate for our current operations. \n### Item 3. Legal Proceedings \nTo the knowledge of our management, there is not litigation currently pending or contemplated against us, any of our officers or directors in their capacity as such or against any of our property. \nItem 4. Mine Safety Disclosures \n### Not Applicable \nPart II \nItem 5. Market for Registrants Common Equity, Related Shareholder Matters, and Issuer Purchases of Equity Securities \n(a) Market Information \nOur units, Class A ordinary shares and warrants are each traded on the New York Stock Exchange under the symbols ALUS.U, ALUS and ALUS.WS, respectively. Our units commenced public trading on November 26, 2019 and our Class A ordinary shares and warrants commenced public trading on January 10, 2020. \n(b) Holders \nOn March 1, 2021, there was two holders of record of our units, two holders of record of our Class A Ordinary Shares and two holders of record of our warrants. \n(c) Dividends \nWe have not paid any cash dividends on our ordinary shares to date and do not intend to pay cash dividends prior to completion of our initial business combination. The payment of cash dividends in the future will be dependent upon our revenues and earnings, if any, capital requirements and general financial condition subsequent to completion of our initial combination. The payment of any cash dividends subsequent to our initial business combination will be at the discretion of our Board of Directors and subject to the company having funds lawfully available for distribution at such time. \n\nNone. \n\n### None. \n(f) Purchase of Equity Securities by Issuer and Affiliated Purchasers \nNone. \n### Item 6. Selected Financial Data \nNot applicable. \nITEM 7. \nof this Annual Report on Form 10-K/A. Risk Factors and elsewhere in this Annual Report on Form 10-K/A. \nThe following information has been adjusted to reflect the restatement of our financial statements as described in the Explanatory Note at the beginning of this Amendment and in Note 1A, Restatement of Previously Issued Financial Statements, in Notes to the Financial Statements of this Amendment. \n### Overview \nWe are a blank check company incorporated in the Cayman Islands on June 13, 2019 formed for the purpose of effecting a merger, share exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses (a Business Combination). We intend to effectuate our Business Combination using cash derived from the proceeds of the initial public offering, our shares, debt or a combination of cash, shares and debt. \n\n### Recent Developments \nOn January 29, 2021, we entered into a (the \n\n) with FREYR A/S, a company organized under the laws of Norway ( \n### FREYR \n), the Sponsor, in the capacity as the representative for the Alussa shareholders in accordance with the terms and conditions of the Business Combination Agreement, FREYR Battery, a corporation in the form of a public limited liability company organized under the laws of Luxembourg ( \nPubco \n\n### Norway Merger Sub 1 \n\n\n### Norway Merger Subs \n\nCayman Merger Sub \n\n### Major Shareholders \n\nShareholder Representative \n). \nPrior to the completion of the transactions contemplated by the Business Combination Agreement, the Norway Merger Subs shall be wholly-owned subsidiaries of the Company. \nPursuant to the terms of the Business Combination Agreement, (a) the Company will merge with and into Cayman Merger Sub, with the Company continuing as the surviving entity (the \n### Cayman Merger \n), (b) the Company will distribute all of its interests in Norway Merger Sub 1 to Pubco, (c) FREYR will merge with and into Norway Merger Sub 2, with Norway Merger Sub 2 continuing as the surviving entity (the \nNorway Merger \n\n### Cross-Border Merger \n), as a result of which, (i) each issued and outstanding security of the Company immediately prior to the effective time of the Cayman Merger shall be exchanged for the right of the holder thereof to receive securities of Pubco in accordance with the (or, in the case of Dissenting Purchaser Shareholders, if any, the right to receive the fair value of such holders Dissenting Purchaser Ordinary Shares and such other rights as are granted by the Cayman Companies Law), (ii) each issued and outstanding security of FREYR immediately prior to the effective time of the Norway Merger shall be exchanged for the right of the holder thereof to receive securities of Norway Merger Sub 1 in accordance with the and (iii) each issued and outstanding security of Norway Merger Sub 1 immediately prior to the Cross-Border Effective Time shall be exchanged for the right of the holder to receive securities of Pubco, all upon the terms and subject to the conditions set forth in the and in accordance with the provisions of applicable law. \nThe Business Combination will be consummated in accordance with the terms and subject to the conditions as further described in the Business Combination Agreement. \n### Results of Operations (As Restated) \nAs discussed in the Explanatory Note to this Amendment and the Restatement of Previously Issued Financial Statements in Note 1A, in the Companys financial statements included in Item 8 to this Amendment, we are restating the financial statements of the Company as of December 31, 2020 and 2019,for the year ended December 31, 2020 and the period from June 13, 2019 (inception) through December 31, 2019, and as of and for the periods ended September 30,2020, June 30, 2020, and March 31, 2020. The amended discussion and analysis as it pertains to the restated periods presented below provides information to assist in understanding our financial condition and results of operations, and should be read in conjunction with the Companys financial statements included in Item 8. \nOur only activities from inception to December 31, 2020 were organizational activities and those necessary to prepare for our initial public offering (the Initial Public Offering), described below, and, after our Initial Public Offering, identifying a target company for a Business Combination. We do not expect to generate any operating revenues until after completion of our Business Combination. We generate non-operating income in the form of interest income on marketable securities held in our trust account (the Trust Account). We are incurring expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as due diligence expenses. \nFor the Year Ended December 31, 2020 and the Period from June 13, 2019 (Inception) through December 31, 2019 \nFor the year ended December 31, 2020, we had net loss of $7,580,615, which consists of changes in fair value of warrant liabilities of $4,393,750 and operating costs of $5,190,525, offset by interest income on marketable securities held in the Trust Account of $2,003,660. \nFor the period from June 13, 2019 (inception) through December 31, 2019, we had net loss of $4,779,782, which consists of changes in fair value of warrant liabilities of $3,937,500 and operating costs of $1,173,063, offset by interest income on marketable securities held in the Trust Account of $290,672 and an unrealized gain on marketable securities held in the Trust Account of $40,109. \nFor the Three and Nine Months Ended September 30, 2020 \nFor the three months ended September 30, 2020, we had a net loss of $2,487,788, which consists of changes in fair value of warrant liabilities of $2,312,500 and operating costs of $324,347, offset by interest income on marketable securities held in the Trust Account of $93,440 and an unrealized gain on marketable securities held in Trust Account of $55,619. \nFor the nine months ended September 30, 2020, we had net income of $8,039,334, which consists of changes in fair value of warrant liabilities of $7,356,250, interest income on marketable securities held in the Trust account of $1,944,601 and an unrealized gain on securities held in the Trust Account of $16,548, offset by operating costs of $1,278,065. \n### For the Three and Six Months Ended June 30, 2020 \nFor the three months ended June 30, 2020, we had net income of $1,583,736, which consists of changes in fair value of warrant liabilities of $2,000,000 and interest income on marketable securities held in the Trust Account of $958,571, offset by operating costs of $453,873 and an unrealized loss on marketable securities held in Trust Account of $920,962. \nFor the six months ended June 30, 2020, we had net income of $10,527,122, which consists of changes in fair value warrant liabilities of $9,668,750 and interest income on marketable securities held in the Trust Account of $1,851,161, offset by operating costs of $953,718 and an unrealized loss on marketable securities held in Trust Account of $39,071. \n### For the Three Months Ended March 31, 2020 \nFor the three months ended March 31, 2020, we had net income of $8,943,386, which consists of changes in fair value of warrant liabilities of $7,668,750, interest income on marketable securities held in the Trust Account of $892,590 and an unrealized gain on marketable securities held in the Trust Account of $881,891, offset by operating costs of $499,845. \nLiquidity and Capital Resources (As Restated) \nOn November 29, 2019, we consummated the Initial Public Offering of 25,000,000 Units, at a price of $10.00 per Unit, generating gross proceeds of $250,000,000. Simultaneously with the closing of the Initial Public Offering, we consummated the sale of 8,000,000 Private Placement Warrants to the Sponsor at a price of $1.00 per warrant, generating gross proceeds of $8,000,000. \nOn December 5, 2019, as a result of the underwriters election to fully exercise their over-allotment option, the Company consummated the sale of an additional 3,750,000 Units, at a price of $10.00 per Unit, and the sale of an additional 750,000 Private Placement Warrants, at a price of $1.00 per Private Placement Warrant, generating total gross proceeds of $38,250,000. \nFollowing the Initial Public Offering, the exercise of the over-allotment option and the sale of the Private Placement Warrants, a total of $287,500,000 was placed in the Trust Account. We incurred $16,326,240 in transaction costs, including $5,750,000 of underwriting fees, $10,062,500 of deferred underwriting fees and $513,740 of other costs. \nFor the year ended December 31, 2020, net cash used in operating activities was $1,911,404. Net loss of $7,580,615 was impacted by the change in fair value of warrant liabilities of $4,393,750 and interest earned on marketable securities held in the Trust Account of $2,003,660. Changes in operating assets and liabilities provided $3,279,121 of cash from operating activities. \nFor the period from June 13, 2019 (inception) through December 31, 2019, net cash used in operating activities was $228,898. Net loss of $4,779,782 was impacted by the change<|endoftext|>Price of $1.00 per Private Placement Warrant, generating gross proceeds to the Company of $6.0 million(Note 5). \nUpon the closing of the Initial Public Offeringand the Private Placement,$200.0million ($10.00 per Unit) of the net proceeds of the sale of the Units in the Initial Public Offering and the Private Placement were placedin atrust account (Trust Account) located in the United States at JP Morgan Chase Bank, N.A. with Continental Stock Transfer & Trust Company acting as trustee, and are invested only in U.S. government securities, within the meaning of Section 2(a)(16) of the Investment Company Act having a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7promulgated under the Investment Company Act of 1940, as amended (the Investment Company Act) which invest only in direct U.S. , as determined by the Company, until the earlier of: (i) the completion of a Business Combination and (ii) the distribution of the funds held in the Trust Account as described below. \nThe Company must complete one or more initial Business Combinations having an aggregate fair market value of at least 80% of the net assets held in the Trust Account (excluding the amount of any deferred underwriting discount held in trust) at the time of the agreement to enter into the initial Business Combination. However, the Company will only complete a Business Combination if the post-transactioncompany owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target business sufficient for it not to be required to register as an investment company under the Investment Company Act. \nFAST ACQUISITION CORP. \n\nThe Company will provide the holders of the Companys outstanding Public Shares (the Public Stockholders) with the opportunity to redeem all or a portion of their Public Shares upon the completion of a Business Combination either (i) in connection with a stockholder meeting called to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek stockholder approval of a Business Combination or conduct a tender offer will be made by the Company, solely in its discretion, subject to applicable law and stock exchange listing requirements. The per-shareamount to be distributed to Public Stockholders who redeem their Public Shares will not be reduced by the deferred underwriting commissions the Company will pay to the underwriters (as discussed in Note 6). As a result, such common stock has been recorded at redemption amount and classified as temporary equity in accordance with the Financial Accounting Standards Boards (FASB) Accounting Standards Codification (ASC) Topic 480 Distinguishing Liabilities from Equity. \nThe Company will proceed with a Business Combination only if a majority of the shares voted are voted in favor of the Business Combination. If a stockholder vote is not required by applicable law or stock exchange listing requirements and the Company does not decide to hold a stockholder vote for business or other reasons, the Company will, pursuant to its Amended and Restated Certificate of Incorporation (the Certificate of Incorporation), conduct the redemptions pursuant to the tender offer rules of the Securities and Exchange Commission (SEC) and file tender offer documents with the SEC prior to completing a Business Combination. If the Company seeks stockholder approval in connection with a Business Combination, the initial stockholders (as defined below) have agreed to vote their Founder Shares (as defined below in Note 5) and any Public Shares purchased during or after the Initial Public Offering in favor of a Business Combination or do not vote at all. \nThe Certificate of Incorporation provides that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a group (as defined under Section 13 of the Securities Exchange Act of 1934, as amended (the Exchange Act)), will be restricted from redeeming its shares with respect to more than an aggregate of 15% or more of the Public Shares, without the prior consent of the Company. \nThe Sponsor and the Companys officers and directors (the initial stockholders) have agreed not to propose an amendment to the Certificate of Incorporation to modify the substance or timing of the Companys obligation to redeem 100% of the Public Shares if the Company does not complete a Business Combination within the initial Combination Period (as defined below) or with respect to any other material provisions relating to stockholders rights or pre-initialBusiness Combination activity, unless the Company provides the Public Stockholders with the opportunity to redeem their Public Shares in conjunction with any such amendment. \nIf the Company is unable to complete a Business Combination within 24months from the closing of the Initial Public Offering, or August 25, 2022 (as such period may be extended by the Companys stockholders in accordance with the Certificate of Incorporation, the Combination Period), the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the Public Shares, at a per-shareprice, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account (net of permitted withdrawals and up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding Public Shares, which redemption will completely extinguish Public Stockholders rights as stockholders (including the right to receive further liquidating distributions, if any), and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the remaining stockholders and the board of directors, liquidate and dissolve, subject in each case to the Companys obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. \nFAST ACQUISITION CORP. \n\nThe initial stockholders agreed to waive their rights to liquidating distributions from the Trust Account with respect to the Founder Shares if the Company fails to complete a Business Combination within the Combination Period. In the event of such distribution, it is possible that the per share value of the residual assets remaining available for distribution (including Trust Account assets) will be only $10.00 or potentially less. In order to protect the amounts held in the Trust Account, the Sponsor has agreed to be liable to the Company if and to the extent any claims by a third party (except for the Companys independent registered public accounting firm) for services rendered or products sold to the Company, or a prospective target business with which the Company has entered into a letter of intent, confidentiality or other similar agreement or business combination agreement (a Target), reduce the amount of funds in the Trust Account to below the lesser of (i) $10.00 per Public Share and (ii) the actual amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account, if less than $10.00 per Public Share due to reductions in the value of the trust assets, less taxes payable, provided that such liability will not apply to any claims by a third party or Target that executed a waiver of any and all rights to the monies held in the Trust Account (whether or not such waiver is enforceable) nor will it apply to any claims under the Companys indemnity of the underwriters of the Initial Public Offering against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the Securities Act). The Company will seek to reduce the possibility that the Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers, prospective target businesses and other entities with which the Company does business, execute agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account. \nBasis of Presentation \n\nAs described in the Companys Form 8-K filed on May 13, 2021 and in Note 2Restatement of Previously Issued Financial Statements, the Companys financial statements as of and for the period from June 4, 2020 (inception) through December 31, 2020, and the unaudited interim financial statements as of September 30, 2020, and for the three months ended September 30, 2020, and the period from June 4, 2020 (inception) through September 30, 2020 (collectively, the Affected Periods), are restated in this Annual Report on Form 10-K/A (Amendment No. 1) (this Annual Report) to correct the misapplication of accounting guidance related to the Companys warrants in the Companys previously issued audited and unaudited condensed financial statements for such periods.The restated financial statements are indicated as Restated in the audited and accompanying notes, as applicable. \n### Emerging Growth Company \nThe Company is an emerging growth company, as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the JOBS Act), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-OxleyAct, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. \n\nFAST ACQUISITION CORP. \n\n\nOn February 1, 2021, the Company entered into an agreement and plan of merger (the Merger Agreement) with Fertitta Entertainment, Inc., a Texas corporation (FEI), FAST Merger Corp., a Texas corporation and direct subsidiary of the Company (FAST Merger Corp.) and FAST Merger Sub Inc., a Texas corporation and direct subsidiary of FAST Merger Corp. \nUpon the closing of the Business Combination (the Closing), each share of common stock of the Company will be converted into one share of Class A common stock of New FEI and all of the outstanding equity interests of FEI will be acquired for aggregate consideration that is currently valued at approximately $1.97 billion. Such consideration will be paid to Tilman J. Fertitta, the sole stockholder of FEI, by the issuance of a number of shares of Class B common stock of New FEI, calculated based on the aggregate closing date transaction value, as determined pursuant to the Merger Agreement, and a $10 per share price of the Class B common stock. The value of the aggregate consideration will change between now and the Closing based on (i) the difference between the net debt of FEI at the Closing and the current target net debt of $4.6 billion and (ii) (x) the difference between the 60-day average closing stock price of a share of Golden Nugget Online Gaming, Inc. (GNOG) as of the day prior to the Closing and $18.46, the closing stock price of GNOG on January 28, 2021, multiplied by \n(y) 31,350,625 (subject to adjustment by reason of any stock dividend, subdivision, reclassification, reorganization, recapitalization, split, combination or exchange of shares, or any other similar event between the date of the Merger Agreement and the Closing). In addition, in connection with the Business Combination, FEI will complete an internal reorganization and spin out certain assets which are not intended to be part of the Business Combination (the Restructuring). \nThe shares of Class B common stock of New FEI will have the same economic terms as the shares of Class A common stock of New FEI, but the shares of Class B common stock of New FEI will have 10 votes per share. The outstanding shares of Class B common stock of New FEI will be subject to a sunset provision if Mr. Fertitta and other permitted holders of Class B common stock collectively cease to beneficially own at least 20% of the number of shares of Class B common stock of New FEI collectively held by Mr. Fertitta and other permitted transferees as<|endoftext|>Outstanding ordinary shares immediately following the completion of our initial public offering. As a result, in addition to our initial shareholders founder shares, we would need 11,250,001, or 37.5% (assuming all issued and outstanding shares are voted), of the 30,000,000 public shares sold in our initial public offering to be voted in favor of an initial business combination in order to have our initial business combination approved. \n\n\n\nThe amount of the deferred underwriting commission payable to the underwriters will not be adjusted for any shares that are redeemed in connection with an initial business combination. \n\n\n\n\n\n\n\nOn January31, 2020, U.S. \nThe \n\nThe extent to which \n\n\nIf the disruptions posed by \nMoreover, the existence and persistence of \nCOVID-19 could serve to exacerbate the likelihood, and magnitude, of negative effects arising out of any or all of the other risks identified in this Report. \n\n\n\nFor example, the outbreak of \n\nand (iii)as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders and our board of directors, liquidate and dissolve, subject in the case of clauses(ii) and (iii), to our obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law. \n\n\nSee Item 1. \n\n\n\nOur public shareholders will be entitled to receive funds from the trust account only upon the earliest to occur of: (i)our completion of an initial business combination, and then only in connection with those ClassA ordinary shares that such shareholder properly elected to redeem, subject to the limitations described herein, (ii)the redemption of any public shares properly tendered in connection with a shareholder vote to amend our amended and restated memorandum and articles of association (A)to modify the substance or timing of our obligation to provide holders of our ClassA ordinary shares the right to have their shares redeemed in connection with our initial business combination or to redeem \n100% of our public shares if we do not complete our initial business combination within 24 months from the closing of our initial public offering or (B)with respect to any other provision relating to the rights of holders of our ClassA ordinary shares, and (iii)the redemption of our public shares if we have not consummated an initial business within 24 months from the closing of our initial public offering, subject to applicable law and as further described herein. \n\nWe have been approved to list our units on the NYSE and our ClassA ordinary shares and warrants on or promptly after their date of separation. \n\n\n\nBecause we expect that our units and eventually our ClassA ordinary shares and warrants will be listed on the NYSE, our units, ClassA ordinary shares and warrants will qualify as covered securities under the statute. \n\nHowever, because we will have net tangible assets in excess of $5,000,000 upon the completion of our initial public offering and the sale of the private placement warrants and will file a Current Report on Form \nMoreover, if our initial public offering were subject to Rule419, that rule would prohibit the release of any interest earned on funds held in the trust account to us unless and until the funds in the trust account were released to us in connection with our completion of an initial business combination. \n\n\n\n\n\nOf the net proceeds of our initial public offering and the sale of the private placement warrants, only approximately $1,000,000 is available to us outside the trust account to fund our working capital requirements. We believe that, upon the closing of our initial public offering, the funds available to us outside of the trust account, together with funds available from loans from our sponsor, its affiliates or members of our management team will be sufficient to allow us to operate for at least the 24 months following the closing of our initial public offering; Of the funds available to us, we may use a portion of the funds available to us to pay fees to consultants to assist us with our search for a target business. \n\n\n\n\n\nAccordingly, due to claims of such creditors, the per-share redemption amount received by public shareholders could be less than the $10.00 per public share initially held in the trust account. Pursuant to a letter agreement, our sponsor has agreed that it will be liable to us if and to the extent any claims by a third-party (other than our independent registered public accounting firm) for services rendered or products sold to us, or a prospective target business with which we have discussed entering into a transaction agreement, reduce the amounts in the trust account to below the lesser of (i)$10.00 per public share and (ii)the actual amount per public share held in the trust account as of the date of the liquidation of the trust account if less than $10.00 per public share due to reductions in the value of the trust assets, in each case net of the interest that may be withdrawn to pay our income tax obligations, provided that such liability will not apply to any claims by a third-party or prospective target business that executed a waiver of any and all rights to seek access to the trust account nor will it apply to any claims under our indemnity of the underwriters of our initial public offering against certain liabilities, including liabilities under the Securities Act. \n\n\nIn the event that the proceeds in the trust account are reduced below the lesser of (i)$10.00 per public share and (ii)the actual amount per public share held in the trust account as of the date of the liquidation of the trust account if less than $10.00 per public share due to reductions in the value of the trust assets, in each case net of the interest that may be withdrawn to pay our income tax obligations, and our sponsor asserts that it is unable to satisfy its obligations or that it has no indemnification obligations related to a particular claim, our independent directors would determine whether to take legal action against our sponsor to enforce its indemnification obligations. \n\nThe funds in the trust account are invested in U.S. government treasury bills with a maturity of 185 days or less or in money market funds that meet certain conditions under \nRule2a-7 under the Investment Company Act and that invest only in direct U.S. government obligations. While short-term U.S. In the event that we are unable to complete our initial business combination or make certain amendments to our Memorandum and Articles of Association, our public stockholders are entitled to receive their pro-rata share of the proceeds held in the trust account, plus any interest income not released to us, net of taxes payable. \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nThere is no requirement under the Companies Act for us to hold annual or shareholder meetings to elect directors. \n\n\n\n\n\n\n\nPursuant to a registration rights agreement with us, our sponsor and its permitted transferees can demand that we register the resale of the ClassA ordinary shares into which founder shares are convertible, the private placement warrants and the ClassA ordinary shares issuable upon exercise of the private placement warrants, and warrants that may be issued upon conversion of working capital loans and the ClassA ordinary shares issuable upon conversion of such warrants. \n\n\n\n\n\n\n\n\n\nOur amended and restated memorandum and articles of association authorize the issuance of up to 300,000,000 ClassA ordinary shares, par value $0.0001 per share, 30,000,000 ClassB ordinary shares, par value $0.0001 per share, and 1,000,000 preference shares, par value $0.0001 per share. We have 270,000,000 and 22,500,000 authorized but unissued ClassA ordinary shares and ClassB ordinary shares, respectively, available for issuance which amount does not take into account shares reserved for issuance upon exercise of outstanding warrants or shares issuable upon conversion of the ClassB ordinary shares, if any. We have no preference shares issued and outstanding. \n\n\n\n\n\n\ninvestors. \nOur PFIC status for our current and subsequent taxable years may depend on whether we qualify for the PFIC start- up exception. Our actual PFIC status for any taxable year, however, will not be determinable until after the end of such taxable year (and, in the case of the start-up exception, potentially not until after the two taxable years following our current taxable year). Moreover, if we determine we are a PFIC for any taxable year, upon written request by a U.S. Holder, we will endeavor to provide to a U.S. We urge U.S. \n\nShareholders or warrant holders may be subject to withholding taxes or other taxes, or other adverse tax consequences, with respect to their ownership of us after the reincorporation. \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nMessrs. \nIn addition, our sponsor, officers and directors may in the future become affiliated with other blank check companies that may have acquisition objectives that are similar to ours (including Peridot II). \n\n\n\n\nOur sponsor, officers and directors may sponsor, form or participate in other blank check companies similar to ours during the period in which we are seeking an initial business combination (including Peridot II). Although we dare not specifically focusing on, or targeting, any transaction with any affiliated entities, we would pursue such a transaction if we determined that such affiliated entity met our criteria and guidelines for a business combination and such transaction was approved by a majority of our independent and disinterested directors. \n\nIn August 2020, our sponsor paid $25,000, or approximately $0.003 per share, to cover certain expenses on our behalf in consideration of 8,625,000 ClassB ordinary shares, par value $0.0001. In addition, our sponsor purchased an aggregate of 8,000,000 private placement warrants, each exercisable to purchase one ClassA ordinary share at $11.50 per share, subject to adjustment, at a price of $1.00 per warrant, in a private placement that closed simultaneously with the closing of our initial public offering. \n\n\n\n\nThe net proceeds from our initial public offering and the sale of the private placement warrants provided us with up to $290,500,000 that we may use to complete our initial business combination (after taking into account the $10,500,000 of deferred underwriting commissions being held in the trust account and the estimated non-reimbursed expenses of our initial public offering). \n\n\n\n\n\n\n\n\n\n\n\n\n\n\nAmending our amended and restated memorandum and articles of association will require at least a special resolution of our shareholders as a matter of Cayman Islands law, meaning the approval of holders of at least two-thirds of our ordinary shares who attend and vote at a shareholder meeting of the company, and amending our warrant agreement will require a vote of holders of at least 65% of the public warrants and, solely with respect to any amendment to the terms of the private placement warrants or any provision of the warrant agreement with respect to the private placement warrants, 65% of the number of the then outstanding private placement warrants. \n\nOur sponsor and its permitted transferees, if any, who will collectively beneficially own, on an as-converted basis, 20% of our ClassA ordinary shares upon the closing of our initial public offering (assuming they do not purchase any units in our initial public offering), will participate in any vote to amend our amended and restated memorandum and articles of association and/or trust agreement and will have the discretion to vote in any manner they choose. \n\n\n\n\n\n\nThe warrant agreement provides that the terms of the warrants may be amended without the consent of any holder for the purpose of (i)curing any ambiguity or correct any mistake, including to conform the provisions of the warrant agreement to the description of the terms of the warrants and the warrant agreement set forth in this Report, or defective provision (ii)amending the provisions relating to cash dividends on ordinary shares as contemplated by and in accordance with the warrant agreement or (iii)adding or changing any provisions with respect to matters or questions arising under the warrant agreement as the parties to the warrant agreement may deem necessary or desirable and that the parties deem to not adversely affect the rights of the registered holders of the warrants, provided that the approval by the holders of at least 65% of the then-outstanding public warrants is required to make<|endoftext|>Returned his automobile to the leasing company and we ceased incurring any related costs.. \n(2) \nThe Company and Ms. This amount reflects the Company's accrual for her severance benefits as of that date. See \nTermination Arrangements NEOs (Excluding CEO) for additional information \n\nThe following table sets forth the possible non-equity (cash-based), equity incentive plan (performance-based RSUs) and stock awards (time-based RSUs) that were granted to the NEOs in 2020. \n(1) \nAmounts represent full year cash awards under the 2020 STIP. The actual payments were equal to 79.3% of the 2020 STIP target award and are discussed in the \"Short-Term Incentive Compensation\" section and reflected in the Non-Equity Incentive Plan Compensation column of the Summary Compensation Table above. \n(2) \nAmounts represent the RSUs awarded under the performance-based 2020 LTIP in 2020. The RSUs are convertible into shares of the Company's common stock if the pre-established performance goals of the 2020 LTIP are achieved. The performance period of the 2020 LTIP is the three year period ending December 31, 2022. \n(3) \nAll equity awards were granted on January 2, 2020. \n(4) \nThe amount shown in the \"Threshold\" column represents the amount that would have been paid for 2020 if we had achieved the minimum level of each financial performance objective and did not meet the operational performance objectives. Additional details are reflected in the \"Short-Term Incentive Compensation\" section. \n(5) \nAmounts represent the grant date fair value of the awards, as of the grant date, calculated in accordance with FASB ASC Topic 718, which, for the performance-based 2019 LTIP awards, is based upon the probable outcome of the underlying performance conditions. For additional information, refer to footnotes of the audited financial statements that were included in the Company's 2020 Annual Report on Form 10-K. \n(6) \nMs. Culp-Fingerhut concluded her employment with the Company effective December 31, 2020, and forfeited all non-equity, equity incentive plan and stock awards granted that were unvested at that time. \n\nAt December31, 2020, the following RSUs are outstanding for the NEOs: \n(1) \nMarket or payout values of the unvested RSUs' were based on our closing stock price at December31, 2020, of $11.13. \n(2) \nRepresents the threshold number of performance-based RSUs awarded under the LTIP on January 2, 2019. The RSUs are convertible into shares of the Company's common stock if the pre-established performance goals are achieved over the three-year period ending on December 31, 2021. \n(3) \nRepresents the threshold number of performance-based RSUs awarded under the LTIP on January 2, 2020. The RSUs are convertible into shares of the Company's common stock if the pre-established performance goals are achieved over the three-year period ending on December 31, 2022. \n(4) \nRepresents the RSUs awarded on January 2, 2020. RSUs vest in equal annual installments on December 31, 2020, 2021 and 2022. \n(5) \nRepresents the RSUs awarded on January 2, 2019. RSUs vest in equal annual installments on December 31, 2019, 2020 and 2021. \n(6) \nMs. Culp-Fingerhut concluded her employment with the Company effective December 31, 2020, and forfeited all equity incentive plan and stock awards granted that were unvested at that time. \n### STOCK AWARDS VESTED \nThe following table shows information regarding stock awards that vested during 2020 with respect to our NEOs. Amounts earned based on performance through the end of 2020 were not paid until after filing the Form 10-K and upon the Board's determination that the applicable performance goals were met. \n(1) \nAmounts are based on the closing price of our common stock of $11.13 on December 31, 2020, the date shares were vested. Payments in shares of the Company's common stock for our annual LTIP awards were made in March 2021 for performance-based awards, after filing the Form 10-K, with the SEC, and in January 2021, for time-based awards. \nThe following table details the achievement of the pre-established performance criteria that allowed for payment of the vested RSUs in common stock of the Company in March 2021, after filing the Form 10-K with the SEC. \n(1) \nSoftware operations bookings represent contractual arrangements to provide software licenses, professional services and equipment sales for our Care Connect Suite of products or subscriptions, professional services and signature support for our Spok Go Software-as-a-Service offering. These contractual arrangements (bookings) represent future revenue. \n(2) \nGAAP). \nPAYMENTS UPON TERMINATION OR TERMINATION DUE TO CHANGE IN CONTROL \nOur policies on severance are intended to provide fair and equitable compensation in the event of involuntary termination of employment without cause. The Company and Ms. Ms. Other than the accrual for Ms. \nEmployment Agreement and Termination Arrangements CEO \nMr. Kelly entered into a new employment agreement with the Company dated as of January 3, 2019, the term of which has been extended to December 31, 2022. \nUnder the employment agreement, Mr.Kelly receives a stated annual base salary of $600,000 and is eligible to participate in all of our benefit plans, including fringe benefits available to our senior executives, as such plans or programs are in effect from time to time, and the use of an automobile. The Board reviews Mr.Kellys base salary annually and may increase, but not decrease, the amount of his base salary. In addition to base salary, under the terms of the new employment agreement Mr. Kelly is eligible to receive a target annual cash bonus opportunity of 83.33% of his base salary (a reduction from 100% in Mr. Kelly's previous agreement) based on achievement of certain performance targets set by the Board or a committee thereof; provided that Mr.Kelly is employed by the Company on December31 of the applicable calendar year and he has not voluntarily terminated his employment with the Company prior to the date such annual bonus is payable. The annual bonus shall be payable in cash. \nUnder the employment agreement, we are not obligated to pay Mr.Kelly a gross-up payment for any payment received or to be received by Mr.Kelly in connection with his termination of employment or contingent upon a change in control of the Company that is subject to any excise tax. \nThe employment agreement contains a covenant restricting Mr.Kelly from soliciting and hiring employees of the Company and its subsidiaries (both wireless and software businesses) and from competing against the Company and its subsidiaries (both wireless and software businesses) during Mr.Kellys employment and for a period of two years after the date of termination (as defined in the employment agreement) for any reason. \nUnder the employment agreement, the agreement may be terminated with 30days written notice at any time if Mr.Kelly is disabled (as defined in the employment agreement) for a period of sixmonths or more; with cause (as defined in the employment agreement); and without cause upon notice from the Company. Mr.Kelly may terminate such agreement with our Company at any time upon 60days written notice to the Company. Furthermore, the employment agreement may be terminated by mutual agreement of the parties and shall automatically terminate upon Mr.Kellys death. \n### Disability. \nThe employment agreement provides that for termination as a result of disability, following the use of all accrued sick and personal days, we shall pay Mr.Kelly: \n(1) \nA disability benefit equal to 50% of the base salary during the disability period in lieu of payment of his base salary; \n(2) \n\n(3) \nAn amount equal to two times the full base salary then in effect, payable in a lump sum within 45 days after such date of termination; and \n(4) \nAn amount equal to the product of (i)a fraction based on the prorated number of days earned in the calendar year as of the date of disability, times (ii)the annual STIP target amount payable within 45 days after the date of termination. \nAny payments made to Mr.Kelly during the disability period shall be reduced by any amounts paid or payable to him under our disability benefit plans. \n### Death \nThe employment agreement provides that upon death, Mr.Kellys estate will be entitled to: \n(1) \nBase salary through the date of death; \n(2) \n\n(3) \nAn amount equal to two times the full base salary, payable in a lump sum within 45 days after the date of death; and \n(4) \nAn amount equal to the product of (i)a fraction based on the prorated number of days earned in the calendar year as of the date of death, times (ii)the annual STIP target amount payable within 45 days after the date of termination. \n\nThe employment agreement provides that upon a termination of employment, either by the Company without cause or by Mr.Kelly for good reason (as defined in the employment agreement), he will be entitled to: \n(1) \nBase salary through the date of termination payable within 10 business days; \n(2) \nAll other unpaid amounts under any Company fringe benefit and incentive compensation programs, at the time such payments are due; \n(3) \nAn amount equal to two times the full base salary then in effect, payable in a lump sum within 45 days after the date of termination; \n(4) \nAn amount equal to the annual STIP target for the calendar year in which the termination occurs, payable within 45 days after the date of termination; provided that he shall be entitled to two times his annual STIP target if such termination occurs within one year following a change of control; \n(5) \nAn amount equal to the product of (i)a fraction based on the prorated number of days earned in the calendar year as of the date of termination, times (ii)the annual STIP target amount payable within 45 days after the date of termination; \n(6) \nReimbursement of the cost of continued group health plan benefits in accordance with the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) for 24 months, to the extent elected by the CEO and to the extent the CEO is eligible and subject to the terms of the plan and the law; \n(7) \nReimbursement for expenses reasonably incurred by Mr.Kelly in securing outplacement services through a professional person or entity of his choice, subject to the approval of the Company, at a level commensurate with Mr.Kellys position, for up to one year commencing on or before the one-year anniversary of the date of termination at his election, not to exceed $35,000; and \n(8) \nFull vesting of any unvested time-based equity awards and waiver of any continuous employment conditions on any unvested performance-based equity awards, which awards shall be payable if and when such performance objectives are achieved. \nAssuming that the termination occurred on December31, 2020, and our closing stock price at December31, 2020, was $11.13, the targeted payments to the CEO are set forth in the following table: \n(1) \nFor purposes of the Disability benefits, Mr.Kelly was assumed to be disabled on June1, 2020, through a termination date of December31, 2020 (which includes 30 days written notice provided on December 1, 2020). For purposes of the \"Death\" and \"Termination without Cause or For Good Reason\" scenarios it was assumed death or termination was December31, 2020. \n(2) \nThis amount assumes Mr.Kelly has been paid his pro rata base salary from January1, 2020, through December31, 2020, under the Death and Termination without Cause or For Good Reason scenarios. The payment to Mr.Kelly under the Disability scenario includes a disability benefit equal to 50% of the base salary during the disability period, assumes the use of Mr. Kelly's accrued sick and personal days as of May 31, 2020, through termination on December 31, 2020, and reduces compensation by anticipated payments made under the Company's short- and long-term disability plans during the period of disability. \n(3) \nThese amounts represent the relevant lump sum payments pursuant to Mr.Kellys employment agreement and include the additional STIP target bonus amounts. \n(4) \nThis represents a standard benefit available to all employees. \n(5) \nThis payment was based on accrued vacation hours at December31, 2020, under the Death and Termination without Cause or For Good Reason scenarios. This payment is pursuant to Mr.Kellys employment agreement and the vacation policy for NEOs. \n(6) \nThis was the cost of continuation of health benefits that may be provided to Mr.Kelly. At his expense, Mr.Kelly or his beneficiary is entitled<|endoftext|>Rates would also cause a corresponding increase in the Companys Tax Receivable Agreement (TRA \n) liability as the Company is obligated to share 85% of the cash tax savings that are attributable to its increased tax basis in the UBH partnership assets per the Business Combination, future exchanges of UBH units for UBI stock by the Continuing Members, and annual TRA Payments, as well as the tax basis step-up that occurred in connection with the Kennedy Acquisition. Existing tax laws in the United States have been and could in the future be subject to significant change. For example, in December 2017, the Tax Cuts and Jobs Act (the TCJ Act), was signed into law in the United States. While our accounting for the recorded impact of the TCJ Act is deemed to be complete, these amounts are based on prevailing regulations and currently available information, and additional guidance issued by the Internal Revenue Service (IRS), may continue to impact our recorded amounts in future periods. Additional changes in the United States tax regime, including changes in how existing tax laws are interpreted or enforced, can adversely affect our business, financial condition or results of operations. \nWe are also subject to regular reviews, examinations and audits by the IRS and other taxing authorities with respect to income and non-income-based taxes. \nComplications with the design or implementation of our new enterprise resource planning system could adversely impact our business and operations. \nWe rely extensively on information systems and technology to manage our business and summarize operating results. We are in the process of a multi-year implementation of a new global enterprise resource planning (ERP) system and expect to fully transition to the new ERP during 2021. This ERP system will replace our existing operating and financial systems. The ERP system is designed to accurately maintain the Companys financial records, enhance operational functionality and provide timely information to the Companys management team related to the operation of the business. The ERP system implementation process has required, and will continue to require, the investment of significant personnel and financial resources. We may not be able to successfully implement the ERP system without experiencing further delays, increased costs and other difficulties. If we are unable to successfully design and implement the new ERP system as planned, our financial position, results of operations and cash flows could be negatively impacted. Additionally, if we do not effectively implement the ERP system as planned or the ERP system does not operate as intended, the effectiveness of our internal control over financial reporting could be adversely affected or our ability to assess those controls adequately could be further delayed. \nThe imposition or proposed imposition of new or increased taxes aimed at our products can adversely affect our business, financial condition or results of operations. \nCertain jurisdictions in which our products are made, manufactured, distributed or sold have either imposed, or are considering imposing, new or increased taxes on the manufacture, distribution or sale of our products, ingredients or substances contained in, or attributes of, our products or commodities used in the production of our products. These tax measures, whatever their scope or form, could increase the cost of certain of our products, reduce consumer demand and overall consumption of our products, lead to negative publicity (whether based on scientific fact or not) or leave consumers with the perception (whether or not valid) that our products do not meet their health and wellness needs, resulting in adverse effects on our business, financial condition or results of operations. \n\n\nThere may be a large number of shares of Class A Common Stock sold in the market in the near future. These sales, or the perception in the market that the holders of a large number of shares intend to sell shares, could reduce the market price of our Class A Common Stock, even if our business is doing well. A substantial number of our Class A Common Stock previously held by the pre-Business Combination public shareholders of CCH at the closing of the Business Combination are available for sale in the public market. In addition, 15,802,379 shares of Class A Common Stock were issued upon exercise of our warrants, including warrants that were initially sold by CCH in its initial public offering of securities (the Public Warrants) and warrants issued pursuant to those certain Forward Purchase Agreements entered into by CCH, Collier Creek partners LLC, the sponsor of CCH (the Sponsor) and the independent directors of CCH (the Forward Purchase Agreements and such warrants, the Forward Purchase Warrants), and up to 7,200,000 shares of Class A Common Stock issuable upon the exercise of our warrants initially sold to the Sponsor simultaneously with the closing of its initial public offering (the Private Placement Warrants), have been registered for resale on the registration statement on Form S-1 declared effective as of October 5, 2020. \nWe have also registered up to 9,500,000 shares of Class A Common Stock that we may issue under the Utz Brands, Inc. 2020 Omnibus Equity Incentive Plan (the 2020 Plan), 1,500,000 shares of Class A Common Stock that we may issue under the Utz Brands, Inc. 2021 Employee Stock Purchase Plan, and 1,557,941 shares of Class A Common Stock that we may issue under the Utz Quality Foods, LLC 2020 Long-Term Incentive Plan. \nIn addition, we have granted certain registration rights in respect of all shares of Class A Common Stock, including shares that are obtainable in exchange for common units of UBH held by the Continuing Members. \nPotential sales of shares of Class A Common Stock described above or the perception of such sales may depress the market price of our Class A Common Stock. A market for our Class A Common Stock may not continue, which would adversely affect the liquidity and price of our securities. \nThe price of our Class A Common Stock may fluctuate significantly due to the markets reaction to the Business Combination and general market and economic conditions. An active trading market for our Class A Common Stock may not be sustained. In addition, the price of our Class A Common Stock can vary due to general economic conditions and forecasts, our general business condition and the release of our financial reports. Additionally, if our Class A Common Stock is not listed on, or becomes delisted from, the New York Stock Exchange (NYSE) for any reason, and is quoted on an over-the-counter market, the liquidity and price of such securities may be more limited than if we were quoted or listed on NYSE or another national securities exchange. You may be unable to sell your Class A Common Stock unless a market is sustained. Furthermore, our Private Placement Warrants, when exercised, will increase the number of issued and outstanding shares and may reduce the market price of our Class A Common Stock. \n\nWe are a holding company with no material assets other than our ownership of the Common Company Units and our managing member interest in UBH. Our ability to pay taxes, make payments under the TRA and pay dividends will depend on the financial results and cash flows of UBH and its subsidiaries and the distributions we receive from UBH. Deterioration in the financial condition, earnings or cash flow of UBH and its subsidiaries for any reason could limit or impair UBHs ability to pay such distributions. Additionally, to the extent that we need funds and UBH and/or any of its subsidiaries are restricted from making such distributions under applicable law or regulation or under the terms of any financing arrangements, or UBH is otherwise unable to provide such funds, it could materially adversely affect our liquidity and financial condition. \nUBH is intended to be treated as a partnership for U.S. federal income tax. Instead, taxable income will be allocated to holders of Common Company Units. Accordingly, we will be required to pay income taxes on our allocable share of any net taxable income of UBH. Under the terms of the Third Amended and Restated Limited Liability Company Agreement of UBH (the Third Amended and Restated Limited Liability Company Agreement), UBH is obligated to make tax distributions to holders of Common Company Units (including us) calculated at certain assumed tax rates. In addition to income taxes, we will also incur expenses related to our operations, including payment obligations under the TRA, which could be significant, and some of which will be reimbursed by UBH (excluding payment obligations under the TRA). We intend to cause UBH to make ordinary distributions and tax distributions to holders of Common Company Units on a pro rata basis in amounts sufficient to cover all applicable taxes, relevant operating expenses, payments under the TRA and dividends, if any, declared by us. However, as discussed below, UBHs ability to make such distributions may be subject to various limitations and restrictions including, but not limited to, retention of amounts necessary to satisfy the obligations of UBH and its subsidiaries and restrictions on distributions that would violate any applicable restrictions contained in UBHs debt agreements, or any applicable law, or that would have the effect of rendering UBH insolvent. To the extent that we are unable to make payments under the TRA for any reason, such payments will be deferred and will accrue interest until paid; provided, however, that nonpayment for a specified period may constitute a material breach of a material obligation under the TRA and therefore accelerate payments under the TRA, which could be substantial. \nAdditionally, although UBH generally will not be subject to any entity-level U.S. In the event UBHs calculations of taxable income are incorrect, UBH and/or its members, including us, in later years may be subject to material liabilities pursuant to this federal legislation and its related guidance. \nWe anticipate that the distributions it will receive from UBH may, in certain periods, exceed our actual tax liabilities and obligations to make payments under the TRA. The Company Board, in its sole discretion, will make any determination from time to time with respect to the use of any such excess cash so accumulated, which may include, among other uses, to pay dividends on our Class A Common Stock. \nDividends on our Class A Common Stock, if any, will be paid at the discretion of the Company Board, which will consider, among other things, our available cash, available borrowings and other funds legally available therefor, taking into account the retention of any amounts necessary to satisfy our obligations that will not be reimbursed by UBH, including taxes and amounts payable under the TRA and any restrictions in then applicable bank financing agreements. Financing arrangements may include restrictive covenants that restrict our ability to pay dividends or make other distributions to its stockholders. In addition, UBH is generally prohibited under Delaware law from making a distribution to a member to the extent that, at the time of the distribution, after giving effect to the distribution, liabilities of UBH (with certain exceptions) exceed the fair value of its assets. UBHs subsidiaries are generally subject to similar legal limitations on their ability to make distributions to UBH. If UBH does not have sufficient funds to make distributions, our ability to declare and pay cash dividends may also be restricted or impaired. \n\nAt the closing of the Business Combination, the Continuing Members sold Common Company Units for the cash consideration in the Business Combination and may in the future exchange their Common Company Units, together with the surrender and cancellation of an equal number of shares of Class V Common Stock, for shares of our Class A Common Stock (or cash) pursuant to the Third Amended and Restated Limited Liability Company Agreement, subject to certain conditions and transfer restrictions as set forth therein and in the Investor Rights Agreement dated August 28, 2020 (the Investor Rights Agreement), entered into between the Company, the Continuing Members, the Sponsor, the Founder Holders, Collier Creek's independent directors (together with the Sponsor and the Founder Holders, the Sponsor Parties \n) and the representative of the Sponsor (the<|endoftext|>23, 2017. As of December 31, 2019, these options are fully vested. \n7. \nThese options vested in equal installments beginning on February 8, 2018. As of February 22, 2020, these options are fully vested. \n### Director Compensation \nThe following table sets forth information concerning the 2020 compensation of each of our directors other than Keith L. Schilling, who was a named executive officer and received no compensation for serving as a director: \n1. \nThis column includes the total long term incentive cash awards granted to each of the applicable directors and the vesting of cash-settled phantom stock awards. \n2. \nMessrs. First, Jeong and Solomon assign all compensation to Ascribe Capital. \n3. \nMessrs. Day and Langford resigned from the Board effective March 9, 2020. \nFor additional information regarding fees earned for services as a director in 2020, including annual retainer fees, committee and chairmanship fees, and meeting fees, see Board of Directors and Committees of the Board Board of Directors Compensation. \n### Employment Agreements \nPursuant to our employment agreement, effective December 19, 2019, with Keith L. Schilling, our President and Chief Executive Officer, Mr. Schillings initial annual base salary was set at $650,000 and is subject to adjustment at least annually. Mr. Schilling is entitled to an annual performance bonus if certain performance criteria are met. In addition, Mr. Schilling is eligible from time to time to receive grants of stock options and other long-term equity incentive compensation under our LTIP. If Mr. Schillings employment were to be terminated for certain reasons, he would be entitled to a lump sum severance payment equal to 1.5 times the sum of his annual base salary plus the higher of (i) his current annual incentive target bonus for the full year in which the termination of employment occurred or (ii) the highest annual incentive bonus received by him for any of the last three completed fiscal years. Additionally, in the event that within the six months preceding or the twelve months following a change of control of the Company, Mr. Schillings Employment Agreement is not renewed by the Company and a new employment agreement has not been entered into, Mr. Schilling will be entitled to the same severance benefits described above, subject to certain conditions. Mr. Schillings employment agreement renews automatically each January 1 st for a one-year period unless notice of termination is properly given by us or Mr. Schilling. In the event that Mr. Schillings employment agreement is not renewed by us for any reason other than cause and a new employment agreement has not been entered into prior to the expiration of the then-current term, Mr. Schilling will be entitled to the same severance benefits described above. \nWe entered into a Separation Agreement on September 13, 2019 with Mr. Patterson (the Separation Agreement), pursuant to which he received (i) a severance payment of $1,442,000, minus applicable taxes and withholdings, and a $200,000 one-time cash payment within ten days following the six-month anniversary of his separation from the Company effective on January 2, 2020 (the Separation Date), (ii) after-tax reimbursement of 100% of the COBRA premiums for up to 18 months after the Separation Date or the date Mr. Patterson becomes eligible for group health insurance coverage under another employers group health insurance, whichever is sooner, and (iii) reimbursement of attorneys fees in an amount up to $20,000 incurred by him in consultations related to the Separation Agreement. In addition, Mr. Patterson received (i) all base salary through the Separation Date, pay for any accrued unused paid time off as of the Separation Date, and his performance bonus for the year 2019, in each case to the extent payable in accordance with Mr. Pattersons Amended and Restated Employment \nAgreement, dated as of October 24, 2016, as amended and (ii) all vested benefits under the Basic Energy Services, Inc. \nPursuant to the Separation Agreement, all equity incentive awards previously granted to Mr. Patterson continued to be governed by the terms and conditions of their respective award agreements. All incentive awards that were unvested immediately prior to the Separation Date were forfeited as of the Separation Date. All stock options which vested prior to the Separation Date remained exercisable for 90 days following the Separation Date, after which they expired. \nWe entered into a Separation Agreement on September 28, 2020 with Mr. Schorlemer (the Separation and Release Agreement), pursuant to which he received (i) all base salary through the Separation Date, pay for any accrued unused paid time off as of the Separation Date, and his performance bonus prorated for the year 2020, in each case to the extent payable in accordance with Mr. Schorlemers Employment Agreement, dated as of August 27, 2018, and (ii) all vested benefits under the Basic Energy Services, Inc. \nMr. Hurleys employment agreement, following Mr. Hurley's change in role from Executive Vice President, Operations to on September 29, 2020, provides for a base salary of $450,000. Mr. Hurley is also entitled to an annual performance bonus if certain performance criteria are met. Hurley is eligible from time to time to receive awards of long-term equity incentive compensation under Basics equity compensation plans. \nIf Mr. Hurleys employment is terminated for certain reasons, he would be entitled to a lump sum severance payment equal to 1.5 times the sum of his base salary plus his current annual incentive target bonus for the full year in which the termination of employment occurred. Additionally, if Mr. Hurleys employment is terminated for certain reasons within the six months preceding or the twelve months following a change of control of Basic, he would be entitled to a lump sum severance payment equal to two times the sum of his base salary plus the higher of (i) his current annual incentive target bonus for the full year in which the termination of employment occurred or (ii) the highest annual incentive bonus received by him for any of the last three completed fiscal years. In the event that within the six months preceding or the twelve months following a change of control of the Company, Mr. Hurleys employment agreement is not renewed by the Company and a new employment agreement has not been entered into, Mr. Hurley will be entitled to the same severance benefits described above, subject to certain conditions. \nPursuant to Mr. Newman's employment agreement, and following Mr. Newman's change in role from Senior Vice President Region Operations to Executive Vice President, Operations effective September 29, 2020, Mr. Newman was given an annual base salary of $408,048. Mr. Newman is also entitled to an annual performance bonus if certain performance criteria are met. In addition, Mr. Newman is eligible from time to time to receive grants of stock options and other long-term equity incentive compensation under our LTIP. If Mr. Newman's employment were to be terminated for certain reasons, he would be entitled to a lump sum severance payment equal to 1.5 times the sum of his annual base salary plus his current annual incentive target bonus for the full year in which the termination of employment occurred. Additionally, if the employment were to be terminated for certain reasons within the six months preceding or the twelve months following a change in control of our Company, he would be entitled to a lump sum severance payment equal to two times the sum of his annual base salary plus the higher of (i) his current annual incentive target bonus for the full year in which the termination of employment occurred or (ii) the highest annual incentive bonus received by him for any of the last three fiscal years. The employment agreement renews automatically each January 1 st for a one-year period unless notice of termination is properly given by us or the officer. In the event that his employment agreement is not renewed by us for any reason other than cause and a new employment agreement has not been entered into prior to the expiration of the then-current term, Mr. Newman will be entitled to the same severance benefits described above. \nNewman also provides for gross up payments to the extent Section 280G of the Code would apply to such payments as excess parachute payments. \nAs consideration for our entering into the above employment agreements, each of Messrs. Schilling, Hurley and Newman have agreed in their employment agreements that, for a period of six months following the termination of his employment by us without cause or by him for good reason, and for a period of two years following the termination of his employment for retirement or any other reason, they will not, among other things, engage in any business competitive with ours, render services to any entity that is competitive with us or solicit business from certain of our customers or potential customers. These non-competition restrictions will not apply in the event that such termination is within twelve months of a change in control of our company. Additionally, each officer has agreed not to solicit any of our employees to terminate, reduce or otherwise adversely affect his employment with us for a period of two years following the termination of his employment by us for whatever reason. \nOur Compensation Committee reviews and discusses periodically with a compensation consultant the salary and wage levels of our officers and employees, including our NEOs. In February 2021, our Compensation Committee, based on its discussion with its compensation consultant, reviewed and approved 2021 base salaries to remain the same as follows: Mr. Schilling - $650,000; Mr. Hurley - $450,000; and Mr. Newman - $408,048. \nITEM 12. \n\nThe following table provides information regarding options, warrants and rights authorized for issuance under our equity compensation plans as of December31, 2020: \n### Plan Category \nNumber of Securities to be Issued upon Exercise of Outstanding Options, Warrants and Rights (a) \n(1) \nWeighted Average Exercise Price of Outstanding Options, Warrants and Rights \n(2) \nNumber of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (excluding Securities Reflected in Column (a)) \n(3) \nEquity compensation plans approved by security holders (1) \n$ \n39.23 \nEquity compensation plans not approved by security holders \n### Total \n$ \n39.23 \n1. \nRepresents shares of common stock issuable under the Basic Energy Services, Inc. Long Term Incentive Plan, effective as of May 14, 2019 (the LTIP), and the Basic Energy Services, Inc. Non-Employee Director Incentive Plan, effective as of May 25, 2017 (as amended, the Director Incentive Plan). Includes 194,264 shares of common stock that may be issued upon the vesting of stock options and 158,664 shares of common stock that may be issued upon vesting of restricted stock awards (\"RSAs\"). \n2. \nRSAs do not have an exercise price; accordingly, RSAs are excluded from the weighted average exercise price of outstanding awards. \n3. \nRepresents the number of shares of common stock remaining available for grant under the LTIP as of December31, 2020. If any common stock underlying an unvested award is canceled, forfeited or is otherwise terminated without delivery of shares, then such shares will again be available for issuance under the LTIP. \n\nThe following table sets forth the number of shares of common stock beneficially owned as of April 30, 2021, by (1) all persons who beneficially own more than 5% of the outstanding voting securities of the Company, to the knowledge of the Companys management, (2) each current director, (3) each named executive officer listed in the Summary Compensation Table and (4) all current directors and executive officers as a group. \n\nUnless otherwise noted, the business address of each of the stockholders listed is 801 Cherry Street, Suite 2100, Fort Worth, Texas 76102. \nBeneficial ownership is determined according to the rules of the SEC, which generally provide that a person has beneficial ownership of a security if he, she or it possesses sole or shared voting or investment power over that security, including options that are currently exercisable or exercisable within 60 days. \nThe beneficial ownership of our common stock is based on 24,899,932 shares of common stock and 118,805 shares of Series A Preferred Stock convertible into 118,805,000<|endoftext|>Be of such a nature that the sales price adequately represents the market value of all potential products or by-products. \ne. \nMinerals shall be deemed sold at the time they leave the Property or at the time the Minerals are transferred by Sublessee to an Affiliate. As used herein, \"Affiliate\" means any business entity which, directly or indirectly, is owned or controlled by Sublessee or owns or controls Sublessee, or any entity or firm acquiring Minerals from Sublessee otherwise than at arm's-length. \n7. \nPrior to commencing any Operations, Sublessee shall have obtained final approval of all necessary mining and reclamation plans from the Utah Division of Oil, Gas and Mining, or its successor agency (the \"Division\") authorizing Sublessees Operations and shall have posted with and obtained approval from the Division of a surety bond or other financial guarantee (Reclamation Surety) in the amount and form acceptable to the Division and sufficient to guarantee Sublessees performance of reclamation in accordance with Utah laws and regulations. The amount of the surety bond or financial guarantee shall be periodically reviewed in accordance with Divisions regulations and, if the Division directs, increased or otherwise modified as directed by the Division. Sublessee shall keep Sublessor fully informed as to reclamation costs and bonding requirements and Sublessors approval of the bond amount shall be required. Sublessor will not unreasonably withhold such approval. \n8. \nUnder the terms of the Lease, Asphalt Ridge , Inc. has reserved the right at any time during the term of the Lease to convey all or part of the Property or the Water Rights, or rights therein, subject to the Lease and shall give Sublessor Notice of any such conveyance. This Sublease shall be subject to the right reserved by the Lessor as described herein. Upon Sublessors receipt of any sale or conveyance of the Property by Lessor, Sublessor shall promptly notify Sublessee in writing of any such conveyance. \nPETROTEQ ENERGY INC. \n\n\nExpressed in US dollars \n8. \n\n(b) \n\nOn June 1, 2018, the Company acquired mineral rights under two mineral leases entered into between the State of Utahs School and Institutional Trust Land Administration (SITLA), as lessor, and POSR, as lessee, covering lands in Asphalt Ridge that largely adjoin the lands held under the TMC Mineral Lease (collectively, the SITLA Mineral Leases). \n\n\n(c) \n### BLM Mineral Lease \nThe total consideration of $10,800,000 was settled by a cash payment of $1,800,000 and by the issuance of 15,000,000 shares at an issue price of $0.60 per share, amounting to $9,000,000. \nfederal oil and gas leases, administered by the BLM covering approximately 5,960 gross acres (2,980 net acres) within the State of Utah, for a total consideration of $13,000,000 settled by the issuance of 30,000,000 shares at an issue price of $0.40 per share, amounting to $12,000,000 and cash of $1,000,000, of which $100,000 has not been paid to date. \n9. \n\nPETROTEQ ENERGY INC. \n\n\nExpressed in US dollars \n9. \n### PROPERTY, PLANT AND EQUIPMENT(continued) \n(a) \nOil Extraction Plant \nDuring the year ended August 31, 2017 the Company began the dismantling and relocating the oil extraction facility to its TMC Mineral Lease facility to improve production and logistical efficiencies while continuing its project to increase production capacity to a minimum capacity of 400-500 barrels per day. The plant has been substantially relocated to the TMC mining site and expansion of the plant to production of 400-500 barrels per day has been substantially completed. \nThe cost of construction includes capitalized borrowing costs for the year ended August 31, 2020 of $0 (2019 - $2,190,309) and total capitalized borrowing costs as at August 31, 2020 of $4,421,055 (2019 - $4,421,055). \nAs a result of the relocation of the plant and the expansion that has taken place to date, the Company reassessed the reclamation and restoration provision and raised an additional liability of $2,375,159 during the fiscal year ended August 31, 2019 which is capitalized to the cost of the plant and will be depreciated according to our depreciation policy. \nAs a result of the relocation of the plant and the planned expansion of the plants production capacity to 400-500 barrels per day, and subsequently to an additional 3,000 barrels per day, the Company re-evaluated the depreciation policy of the oil extraction plant and the oil extraction technologies (Note 11) and determined that depreciation should be recorded on the basis of the expected production of the completed plant at various capacities. No amortization has been recorded during the 2020 and 2019 fiscal years as there has only been test production during these years. \nPETROTEQ ENERGY INC. \n\n\nExpressed in US dollars \n### Adoption of ASC Topic 842, Leases \nOnSeptember1, 2019, the Company adopted Topic 842 using the prospective transition method applied to leases that were in place as of September1, 2019. Results for reporting periods beginning afterSeptember1, 2019are presented under Topic 842, while prior period amounts are not adjusted and continue to be reported in accordance with the Companys historic accounting under Topic 840. \nThe Company entered into a real property lease for office space located at 15315 Magnolia Blvd., Sherman Oaks, California. The lease commenced on September 1, 2019 and expires on August 31, 2024, monthly rental expense is $4,941 per month with annual 3% escalations during the term of the lease. \nThe initial value of the right-of-use asset was $245,482 and the operating lease liability was $245,482. The Company monitors for events or changes in circumstances that require a reassessment of our lease. When a reassessment results in the remeasurement of a lease liability, a corresponding adjustment is made to the carrying amount of the corresponding right-of-use asset unless doing so would reduce the carrying amount of the right-of-use asset to an amount less than zero. In that case, the amount of the adjustment that would result in a negative right-of-use asset balance is recorded as a loss in the statement of operations and comprehensive loss. \n\nThe terms of the note were renegotiated during June 2020, and the instalments were amended to $16,140 per month due to payments not being made during the pandemic. The promissory note is secured by the crusher. \n### Discount Rate \nTo determine the present value of minimum future lease payments for operating leases at September 1, 2019, the Company was required to estimate a rate of interest that it would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment (the incremental borrowing rate or IBR). \nThe Company determined the appropriate IBR by identifying a reference rate and making adjustments that take into consideration financing options and certain lease-specific circumstances. For the reference rate, the Company used the 5 year ARM interest rate at the time of entering into the agreement and compared that rate to the Companys weighted average cost of funding at the time of entering into the operating lease. The Company determined that10.00%was an appropriate incremental borrowing rate to apply to its real-estate operating lease. \n### Right of use assets \nRight of use assets included in the consolidated Balance Sheet are as follows: \nLease costs consist of the following: \nPETROTEQ ENERGY INC. \n\n\nExpressed in US dollars \n10. \n### LEASES (continued) \nOther lease information: \nMaturity of Leases \n\n\nPETROTEQ ENERGY INC. \n\n\nExpressed in US dollars \n11. \n### INTANGIBLE ASSETS \nOil Extraction Technologies \nSince the company has increased the capacity of the plant to 400 to 500 barrels daily during 2018, and expects to further expand the capacity to an additional 3,000 barrels daily, it determined that a more appropriate basis for the amortization of the technology is the units of production at the plant after commercial production begins again. \nNo amortization of the technology was recorded during the 2020 and 2019 fiscal years. \n12. \n\nAccounts payable as at August 31, 2020 and 2019 consist primarily of amounts outstanding for construction and expansion of the oil extraction plant and other operating expenses that are due on demand. \nAccrued expenses as at August 31, 2020 and 2019 consist primarily of other operating expenses and interest accruals on debt (Note 13) and convertible debentures (Note 14). \nInformation about the Companys exposure to liquidity risk is included in Note 31(c). \nPETROTEQ ENERGY INC. \n\n\nExpressed in US dollars \n### The maturity date of debt is as follows: \n(a) \nPrivate lenders \n(ii) \nThe debentures initially bore interest at a rate of 12% per annum, were originally scheduled to mature on October 15, 2017 and are secured by all of the assets of the Company. The remaining non-convertible portion of the debenture was to be paid off in 12 equal monthly instalments beginning May 1, 2018, bearing interest at 5% per annum. On December 13, 2019, the maturity date of the non-convertible portion of the debenture was extended to January 31, 2020 and the interest rate was increased to 10% per annum. Effective January 31, 2020, the terms of the debenture were renegotiated and the maturity date was extended to August 31, 2020. The maturity date of the debentures are currently being renegotiated. \n(iii) \nThe debenture matured on September 17, 2019 and bears interest at 10% per annum. Subsequent to year end, on September 23, 2020, the principal amount of the debenture of $100,000 plus accrued interest of $18,904 was converted into 2,161,892 shares at a conversion price of $0.055 per share. \nPETROTEQ ENERGY INC. \n\n\nExpressed in US dollars \n14. \n### CONVERTIBLE DEBENTURES \n\nPETROTEQ ENERGY INC. \n\n\nExpressed in US dollars \n14. \n\n(a) \nGS Capital Partners \nOn December 28, 2018, the Company issued a convertible debenture to GS Capital Partners (GS)of $143,750 including an Original Issue Discount (OID) of $18,750, together with warrants exercisable for 260,416 shares of common stock at an exercise price of $0.48 per share with a maturity date of April 29, 2019. \nOn August 26, 2020, the convertible debenture in the aggregate principal sum of $143,750 together with accrued interest and penalty interest thereon of $49,112 was purchased and assigned to Morison Management S.A. (Morison) The Company cancelled the convertible debenture issued to GS and issued a replacement convertible debenture to Morison in the aggregate principal sum of $192,862 with a maturity date of August 26, 2021 and bearing interest at 10% per annum. \n(b) \n### Cavalry Fund I LP \n(i) \nOn September 4, 2018, the Company issued units to Cavalry Fund I LP (Cavalry) for $250,000, which was originally advanced on August 9, 2018. The units consist of 250 units of $1,000 convertible debentures and a common share purchase warrant exercisable for 1,149,424 shares. The convertible debenture bore interest at 10% per annum and matured on September 4, 2019 and was convertible into common shares of the Company at a price of $0.87 per common share. \nOn September 9, 2019, the Company repaid $75,000 of principal and $1,096 in interest in partial settlement of the convertible debenture. On September 19, 2019, the Company entered into an agreement with Calvary Fund, whereby the remaining principal and interest of $200,000 was settled by the issue of 1,111,111 common shares and a warrant exercisable for 1,111,111 common shares at an exercise price of $0.23 per share. \nOn August 7, 2020 the Company entered into an Amended and Restated Amending Agreement (ARA) with Cavalry whereby the maturity date of the warrant exercisable for 1,111,111 common shares was extended to July 31, 2021 and the exercise price was amended to $0.0412 per share. \n(ii) \nOn October 12, 2018, the Company issued 250 one year units to Cavalry for gross proceeds of $250,000, each unit consisting of a $1,000 principal convertible unsecured debenture, bearing interest at 10% per annum and convertible into common shares at $0.86 per share, and a common share purchase warrant exercisable for 290,500 shares at an exercise price of $0.86 per share, which warrant expired on October 12, 2019. \nDuring December 2019, the maturity date of the convertible debenture was amended to October 12, 2020 and the conversion price was amended to $0.18 per share. In terms of the ARA entered into on August 7, 2020, the maturity date of the convertible<|endoftext|>Proxy statement in connection with the last annual meeting, and, with respect to an election to be held at a special meeting of stockholders, no earlier than 150 days before such special meeting and no later than 120 days before such special meeting, or if the first public notice of such special meeting is less than 130 days prior to the date of such special meeting, the tenth day following the date on which public notice of the meeting is first given to stockholders. The notice shall provide such information as required under the Companys Bylaws, including, without limitation, the name and address of the stockholder and his or her nominees, a representation that the stockholder is entitled to vote at the meeting and intends to nominate the person, a description of all arrangements or understandings between the stockholder and each nominee, other information as would be required to be included in a proxy statement soliciting proxies for the election of the stockholders nominees, the consent of each nominee to serve as a director of the Company if so elected, information concerning the stockholders direct and indirect ownership of securities of the Company, including with respect to any beneficial owner of securities of the Company held by the stockholder, and compensation received by or relationships between such stockholder with respect to the securities of the Company from any beneficial owner of such securities. We may require any proposed nominee to furnish other information as we may reasonably require to determine the eligibility of the proposed nominee to serve as a director of the Company. \n### Audit Committee \nThe Board of Directors has adopted a charter for the Audit Committee, which is available on our website, www.crimsonwinegroup.com. The Audit Committee consists of Mr. Carlson, who serves as the Chairman, Mr. Neikrug and Mr. Rollins. Carlson is qualified as an audit committee financial expert within the meaning of regulations of the SEC and that each of Mr. Carlson, Neikrug and Rollins is independent applying the NASDAQ Stock Markets listing standards for independence and the SECs independence requirements for audit committee members. During 2019, the Audit Committee met four times. \nCompensation Committee \nThe Compensation Committee, formed in 2018, (i) reviews and approves the compensation of the Companys executive officers, (ii) establishes, oversees and administers compensation policies and programs for the Companys employees and (iii) administers the Companys incentive compensation plan. The Board of Directors has adopted a charter for the Compensation Committee, which is available on our website, www.crimsonwinegroup.com. The Compensation Committee currently consists of Mr. Rollins, who serves as the Chairman, and Mr. Neikrug, each of whom is independent applying the NASDAQ Stock Markets listing standards for independence and the SECs independence requirements for compensation committee members. Each member of our Compensation Committee is also a non-employee director, as defined pursuant to Rule 16b-3 promulgated under the Exchange Act, and an outside director, as defined pursuant to Section 162(m) of the Internal Revenue Code of 1986, as amended. During 2019, the Compensation Committee met two times. \n\nSection 16(a) of the Securities Exchange Act of 1934 requires our executive officers and directors, and persons who beneficially own more than 10% of a registered class of our equity securities, to file reports of ownership and changes in ownership with the SEC. Based solely upon a review of the copies of such forms furnished to us and written representations from our executive officers, directors and greater than 10% beneficial stockholders, we believe that all persons subject to the reporting requirements of Section 16(a) filed the required reports on a timely basis except for one Form 4 filing by Nicolas M.E. Quill which was filed late. \nCode of Business Practice \nWe have a Code of Business Practice, which is applicable to all of our directors, officers and employees, and includes a Code of Practice applicable to our principal executive officers and senior financial officers. Both the Code of Business Practice and the Code of Practice are available on our website, www.crimsonwinegroup.com. We intend to post amendments to, or waivers from, our Code of Practice on our website as required by applicable law. \n\n### Introduction \nThe Compensation Committee makes all decisions regarding executive officer compensation. The Compensation Committee periodically reviews the elements of compensation for executive officers and, subject to any existing employment agreements, sets each element of compensation for the Chief Executive Officer and the other executive officers, including annual base salary and annual incentive bonus. \nStock Ownership Requirements \nWe do not have a formal stock ownership requirement, although two of our directors, Messrs. John D. Cumming and Joseph S. Steinberg, respectively, beneficially own approximately 11.7% and 11.5% of our outstanding common stock as of March 6, 2020. \n### Accounting and Tax Matters \nDuring the year ended December31, 2019, option grants for 89,000 shares were issued and are outstanding at year-end. The options vest annually over 5 years, expire in 7 years and have an exercise price of $6.87, the market value at the date of grant. \nThe share-based compensation expense for these grants was $141,000, the grant date fair value, which will be recorded over the vesting period. Estimates of share-based compensation expense require a number of complex and subjective assumptions, including the selection of an option pricing model. The Company determined the grant date fair value of the awards using the Black-Scholes-Merton option-pricing valuation model, with the following assumptions and values: stock price volatility, 22%; employee exercise patterns and expected life, 5 years; dividend yield, 0%; and risk-free interest rate, 1.6%. \n### Executive Compensation \nThe following table shows, for fiscal years 2019 and 2018, all of the compensation earned by, awarded to or paid to our named executive officers (as defined by Item 402(m)(2) of Regulation S-K). \n(1) \nBase salary under employment agreements with subsequent increases at the Board of Directors' sole discretion. For Mr. Williams includes $15,833 of directors fees paid in 2018 following his resignation as described in footnote 3 below. \n(2) \nIncludes 401k contributions, health club reimbursements and car allowance paid by the Company. For Mr. Williams includes $42,000 of consulting fees paid in 2018 and for Mr. DeLong includes $306,000 in severance paid in 2019. \n(3) \nEffective May 21, 2018, Craig D. Williams resigned from his role as an officer of the Company. \n(4) \nEffective May 21, 2018, Nicolas M.E. Quill became an employee of the Company. \n(5) \nEffective June 7, 2019, Patrick M. DeLong resigned from his role as an officer of the Company. \n(6) \nFrom June 3, 2019 through December 1, 2019, Nicolas M.E. Quill acted as interim President and Chief Executive Officer of the Company. \n(7) \nMike Cekay's employment with the Company was terminated on February 5, 2020. \n(8) \nEffective June 29, 2018 Karen L. Diepholz became an employee of the Company. \n(9) \nEffective December 2, 2019 Jennifer Locke became an employee of the Company. Ms. Locke received a sign-on equity award of stock options to purchase 89,000 shares of the Company's common stock, with a per-share exercise price equal to the fair market value of the stock on the grant date. \n2019 Outstanding Equity Awards at Fiscal Year-End \nThe following table sets forth information concerning outstanding option awards held by our named executive officers at December 31, 2019. \n(1) \nThese options vest in equal annual installments over five years on each one-year anniversary of the date of grant and expire after seven years. \n### Executive Agreements \nMike S. Cekay \nOn March 26, 2012, we entered into an agreement with Mr. Cekay. Mr. Cekay's employment was terminated on February 5, 2020. Mr. Cekay was eligible for an annual bonus in an amount to be determined by us in our discretion up to 40% bonus target of base salary plus an accelerator, based on sales contribution as compared to target, to be determined annually. The amount of any annual bonus was to be based upon our performance and Mr. Cekays performance, as determined by us, against goals mutually agreed upon between Mr. Cekay and us. Pursuant to the agreement, Mr. Cekay was also eligible to participate in a long term incentive plan, receive a car allowance benefit of $1,400 per month and participate in standard company benefits. Mr. Cekay was not entitled to any benefits if his employment was terminated or upon other events. In connection with his termination from employment, the Company and Mr. Cekay entered into a severance agreement. The severance agreement included a general release of claims by Mr. Cekay in favor of the Company, and provided for Mr. Cekay to be paid an amount equal to 26 weeks of his regular base salary in effect on his departure date (a gross amount of $145,000). Mr. Cekay also received a lump sum payment equal to $5,468, less certain required deductions, which represents approximately three months of what is charged to COBRA qualified beneficiaries for the same medical coverage options elected by Mr. Cekay. \n### Nicolas M.E. Quill. \nOn March 14, 2018, we entered into an agreement with Mr. Quill. The agreement continues until terminated by us or Mr. Quill at any time and for any reason or for no reason with or without notice. Mr. Quill is eligible for an annual bonus in an amount to be determined by us in our discretion up to 40% bonus target of base salary. The amount of any annual bonus will be based upon our performance and Mr. Quills performance, as determined by us, against goals mutually agreed upon between Mr. Quill and us. Pursuant to the agreement, Mr. Quill is also eligible to receive a car allowance benefit of $400 per month and participate in standard company benefits. Mr. Quill is entitled to certain benefits if his employment is terminated or upon other events. See Potential Payments on Termination or Change of Control below. \nCraig D. Williams. \nEffective May 21, 2018, Mr. Williams resigned from the Company as Chief Operating Officer and Chief Winegrower. Following Mr. Williams resignation, on June 1, 2018 the Company entered into a consulting agreement (the Initial Consulting Agreement) with Mr. Williams pursuant to which Mr. Williams provided winemaking consulting services. Under the Initial Consulting Agreement, Mr. Williams was paid a $6,000 monthly retainer for his consulting services, and was entitled to be reimbursed for his out-of-pocket expenses. On January 30, 2019, the Company and Mr. Williams entered into a new consulting agreement (the New Consulting Agreement) to replace the Initial Consulting Agreement. Under the New Consulting Agreement, the Company will pay Mr. Williams for his services at the rate of $250 per hour, and Mr. Williams will be reimbursed for his out-of-pocket expenses. The parties estimate that Mr. Williams will provide 40 hours of consulting services each year under the New Consulting Agreement. \n### Karen L. Diepholz. \nOn June 29, 2018, we entered into an agreement with Ms. Diepholz. Diepholz at any time and for any reason or for no reason with or without notice. Ms. Diepholz is eligible for an annual bonus in an amount to be determined by us in our discretion up to 37.5% bonus target of base salary. Diepholz's performance, as determined by us, against goals mutually agreed upon between Ms. Diepholz and us. Pursuant to the agreement, Ms. Diepholz is also eligible to participate in a long term incentive plan, and participate in standard company benefits. Ms. Diepholz is entitled to certain benefits if her employment is terminated or upon other events. \nJennifer L. Locke. \nOn December 2, 2019, we entered into an agreement with Ms. Locke. Locke at any time and for any reason or for no reason with or without notice. Ms. Locke is eligible for an annual bonus in an amount to be determined by us in our discretion up to 35% bonus target of base salary. Locke's performance, as determined by us, against goals mutually agreed upon between Ms. Locke and us. Ms. Locke received a sign-on equity award of stock options to purchase 89,000 shares of the Companys common stock, with a per-share exercise price equal to the fair market value of<|endoftext|>Seek to amend our Certificate of Organization or Operating Agreement if it would adversely alter the rights, preferences, privileges or powers of or restrictions on the Class A Units or Class B Units without the majority vote of the outstanding units affected thereby. \nCertain Provisions In Our Governing Documents Could Limit Attempts By Our Members To Replace Or Remove Members Of Our Board Of Directors Or Current Management And May Adversely Affect The Market Price Of Our Units. \nProvisions in our Operating Agreement may have the effect of delaying or preventing a change of control or changes in our board of directors or management. \nOur board of directors is composed of three elected directors (elected by the Common and Class B Units) (the \" \n### Elected Directors \n\") and four \" \nClass A Directors \n\" (appointed by the Class A Units, currently held solely by HALE). Therefore, the members holding Common Units and Class B Units cannot appoint a majority of the board of directors. \nThe Class A Members have the right to appoint all Class A Directors and fill all vacancies upon the resignation, death or removal of any Class A Director, which prevents members holding Common Units and Class B Units from being able to fill Class A Director vacancies. \nThe Class A Directors may only be removed by the Class A Members, which prohibits the replacement of a majority of our board of directors by our members holding Common Units and Class B Units. \nOur Class A Members must approve certain transactions of the Company including any merger, sale of assets, or other reorganization or acquisition or any material change to the Companys business. \nOur Class A Members also have preemptive rights to acquire a pro-rata portion of future issuances of units, which may discourage, deter, or prevent future changes in control of our company \nThese provisions, alone or together, could deter, delay or prevent hostile takeovers and changes in control of our company or changes in our management, could limit the opportunity for our members to receive a premium for their Units, and could also affect the price that some investors are willing to pay for our units. \nMembers Will Owe Taxes On Lincolnway Energy's Profits But May Never Receive Any Distributions From Lincolnway Energy. \nLincolnway Energy is not required to make any distributions, and it is possible that no distributions will be made by Lincolnway Energy, even if Lincolnway Energy has profits. Any Lincolnway Energy profits will be taxable to its members in accordance with the members' respective percentage ownership of the units, whether or not the profits have been distributed.Even if distributions are made, the distributions may not equal the taxes payable by a member on the member's share of Lincolnway Energy's profits. Lincolnway Energy could also sustain losses offsetting the profits of a prior tax period, so a member might never receive a distribution or be able to sell the member's units for an amount equal to the taxes which have already been paid by the member. \n### Item 2.Properties. \nLincolnway Energy's office and its ethanol plant are located on approximately 64 acres in Nevada, Iowa.Lincolnway Energy owns the real estate and its office and ethanol plant, but all of those properties are subject to mortgages and security interests held by Lincolnway Energy's lenders. \nLincolnway Energy's office building has approximately 1,400 square feet.Lincolnway Energy utilizes the office building for office space for Lincolnway Energy's management and other staff.Lincolnway Energy was utilizing approximately 95% of the available office space as of the date of this annual report, with the remaining 5% available to accommodate any expansion of Lincolnway Energy's staff.The office building also includes grain receiving facilities. \nLincolnway Energy also owns approximately 147 acres of real estate which is adjacent to the 64 acre parcel noted above.Approximately 54 acres of this real estate was used to construct additional railroad spur tracks. The remaining 93 acres are available for future development, but Lincolnway Energy does not, currently, have any definite plans for the use of that real estate in Lincolnway Energy's ethanol operations, and most of the real estate will likely be rented for farming during Fiscal 2021. \nItem 3.Legal Proceedings. \n### On May 3, 2010, GS CleanTech Corporation (\" \nCleanTech \n\"), a wholly owned subsidiary of GS (Green Shift) CleanTech Corporation filed a complaint against the Company alleging that the Companys operation of a corn oil extraction process infringes proprietary rights owned by CleanTech related to methods for the separation of corn oil from the by-product stream of the dry mill ethanol manufacturing process, and post-oil removal processing methods. \nThe lawsuit was initially filed in the United States District Court for the Northern District of Iowa but was moved with numerous similar cases to the United States District Court for the Southern District of Indiana. The Company, together with multiple other defendants in a consolidated multi-district litigation proceeding collectively filed Motions for Summary Judgment asserting that each did not infringe the patents-at-issue and, further, that said patents are invalid. On November 13, 2014, the U.S. District Court released its Ruling & Order on Summary Judgment. The Court held that Lincolnway Energy did not infringe the patents-at-issue and further ruled that said patents are invalid and, thus, unenforceable against Lincolnway Energy. The Court also denied CleanTech's Motion for Summary Judgment of Infringement and Enforceability against Lincolnway Energy. \nIn September 2016, the Court issued an opinion rendering the CleanTech patents unenforceable due to inequitable conduct. This ruling is in addition to the prior favorable court decisions on non-infringement. CleanTech and its attorneys filed a Notice of Appeal appealing the rulings of the September 2016 summary judgment decision. On March 2, 2020, the rulings were affirmed on appeal by the Court of Appeals for the Federal Circuit and a petition for a rehearing of the appeal en banc was subsequently denied. The official deadline to seek further appeal of the rulings has expired; however, on November 27, 2020, in alleged reliance on an extension of the filing window for writs of certiorari to the Supreme Court of the United States (\" \n### SCOTUS \n\") granted in light of the COVID-19 pandemic, CleanTech filed a writ of certiorari seeking review of the rulings by SCOTUS which has yet to be ruled upon by the Court. A motion for an award of attorney fees against the plaintiffs is currently pending and defendants in the case may receive some reimbursement from the plaintiffs for their legal fees in defending this matter. Lincolnway Energy does not expect any potential award of attorneys fees in the matter to be material, if received at all. \nFrom time to time, the Company may be subject to legal proceedings, claims, and litigation arising in the ordinary course of business. While the outcome of these matters, if any, are currently not determinable, we do not expect that the ultimate costs to resolve these matters, if any, would have a material adverse effect on the Company financial position, results of operations, or cash flows. \nItem 4. Mine Safety Disclosures. \nNot applicable. \n### PART II \nItem 5. \n\n### Market for Lincolnway Energy Units \nLincolnway Energy is authorized to issue an unlimited number of units. As of December 1, 2020, Lincolnway Energy had 105,122 outstanding units with (i) 42,049 Common Units issued and outstanding held by 940 persons, (ii) 56,086 Class A Units held by HALE, LLC and (iii) 6,987 Class B Units held by 61 persons. \nLincolnway Energy's units are not listed on any exchange, and there is no public trading market for Lincolnway Energy's units. However, the Company does provide access to a qualified matching service for its members, which provides a system for limited transfers of the Companys units. \nThere have been some sales of units pursuant to Lincolnway Energy's qualified matching service. The purchase price and other terms of any transactions pursuant to Lincolnway Energy's qualified matching service are negotiated and established solely by the seller and the buyer. Lincolnway Energy does not endorse or recommend any sale of units and is not responsible for the fairness of the purchase price paid in any transactions made pursuant to the qualified matching service, or for the payment or other terms of any transaction. Lincolnway Energy therefore does not represent or guarantee in any way that any of the prices paid pursuant to the qualified matching service are fair or accurately reflect the value of Lincolnway Energy's units, and Lincolnway Energy does not endorse or recommend any sales of units at any of the prices listed by a member in the qualified matching service or on the same or similar terms. \n### Distributions \nThe payment of distributions to members by Lincolnway Energy is within the discretion of the Board of Lincolnway Energy, and there is no assurance of any distributions from Lincolnway Energy. The Company cannot be certain if or when it will be able to make additional distributions. \nThe payment of distributions is also subject to Lincolnway Energy's compliance with various covenants and requirements of Lincolnway Energy's credit and loan agreements, and it is possible that those covenants and requirements will at times prevent Lincolnway Energy from paying a distribution to its members if Lincolnway Energy fails to meet certain financial metrics or is in default under the provisions of the credit and loan agreements \n### Performance Graph \nThe following graph shows a comparison of cumulative total member return since September 30, 2014, calculated on a dividend reinvested basis, for the Company, the NASDAQ Composite Index (the \nNASDAQ \n) and an index of other companies that have the same SIC code as the Company (the \n### Industry Index \n). The graph assumes $100 was invested in each of our units, the NASDAQ and the Industry Index on September 30, 2015. Data points on the graph are annual \n, and the Companys return is based on change in book value \nNote that historic unit price performance is not necessarily indicative of future unit price performance. \nPursuant to the rulesand regulations of the Securities and Exchange Commission, the performance graph and the information set forth therein shall not be deemed to be filed for purposes of Section18 of the Securities Exchange Act of 1934, and shall not be deemed to be incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing. \n\nThe following information is summary selected financial data for Lincolnway Energy for the fiscal years ended September 30, 2020, 2019, 2018, 2017, and 2016, with respect to statements of operations data and balance sheet data. The data is qualified by, and must be read in conjunction with, Item 1A of this annual report, \"Risk Factors\", Item 7 of this annual report, \"Management's Discussion and Analysis of Financial Condition and Results of Operations\", and with the financial statements and supplementary data included in Item 8 of this annual report. \nDuring the 2019 fiscal year, Lincolnway Energy was in violation of its financial covenants and was not expected to meet covenants of the loan agreement for the next 12 month period. Therefore, Lincolnway Energy was required to classify debt with their primary lender as a current liability during 2019. In May 2020, the Company was no longer in violation of its covenants with their primary lender, was expected to meet the financial covenants set out in the loan agreement for the next 12 month period and therefore the debt was classified as a long-term obligation for the 2020 fiscal year end. These classifications are reflected in the Working Capital (Deficit) calculation above. \nItem 7.Management's Discussion and Analysis of Financial Condition and Results of Operations \nExcept for the historical information, the following discussion contains forward-looking statements that are subject to risks and uncertainties, and which speak only as of the date of this annual report.No one should place strong or undue reliance on any forward looking statements.Lincolnway Energy's actual results or actions may differ materially from these forward-looking<|endoftext|>"},"task":{"kind":"string","value":"{\"file\": \"/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz\"}"}}},{"rowIdx":71,"cells":{"text":{"kind":"string","value":"<|endoftext|>Alussa Energy Acquisition Corp. 1 on Form 10-K/A (the Amendment) to amend and restate certain items in its Annual Report on Form 10-K as of December 31, 2020 and 2019 and for the year ended December 31, 2020 and the period from June 13, 2019 (inception) through December 31, 2019, originally filed with the U.S. Securities and Exchange Commission (the SEC) on March 1, 2021 (the Original Form 10-K) \n\nOn May 5, 2021, the Companys management and the audit committee of the Companys Board of Directors (the Audit Committee) concluded that it is appropriate to restate (i) certain items on the Companys previously issued audited balance sheet dated as of November 29, 2019, which was related to the Companys initial public offering (the IPO), (ii) the Companys previously issued unaudited interim financial statements as of and for the periods ended September 30, 2020, June 30, 2020, and March 31, 2020 and (iii) the Companys previously issued audited financial statements as of December 31, 2020 and 2019, for the year ended December 31, 2020 and for the period from June 13, 2019 (inception) through December 31, 2019 (the Relevant Periods). Considering such restatement, the Company concluded that such financial statements for the Relevant Periods should no longer be relied upon. \nAs a result of the SEC Statement, the Company reevaluated the accounting treatment of (i) the 14,375,000 redeemable warrants (the Public Warrants) that were included in the units issued by the Company in its IPO and for the underwriters exercise of their over-allotment option and (ii) the 8,750,000 warrants that were issued to the Companys sponsor in private placements that closed concurrently with the IPO and the underwriters exercise of their over-allotment option (the Private Placement Warrants, collectively with the Public Warrants, the Warrants). \n\n\nAs the Warrants meet the definition of a derivative as contemplated in ASC 815, \n### Derivatives and Hedging \n, the Warrants should be recorded as derivative liabilities on the balance sheets and measured at fair value at issuance and at each reporting date in accordance with ASC 820, \nFair Value Measurement \n, with changes in fair value recognized in the statements of operations in the period of change. \n### Effects of Restatement \nAs a result of the factors described above, the Company has included in this Amendment: (i) certain restated items on the previously issued balance sheet dated as of November 29, 2019, the date that the IPO closed, that were previously reported on a Current Report on Form 8-K filed with the SEC on December 5, 2019, and (ii) restated financial statements as of December 31, 2020 and 2019 and for the year ended December 31, 2020 and the period from June 13, 2019 (inception) through December 31, 2019. The adjustments that impact the Companys financial statements for these periods are summarized as follows: i \nThe impact of these amounts is included in the following items on the Companys balance sheet as of November 29, 2019 and on the Companys financial statements as of December 31, 2020 and 2019 and for the year ended December 31, 2020 and the period from June 13, 2019 (inception) through December 31, 2019, respectively: \n### Balance sheets: \nStatements of operations: \nWarrant liabilities \n### Operating costs \nTotal liabilities \nChange in fair value of warrant liabilities \n\n### Class A ordinary shares \nAdditional paid-in capital \nAccumulated deficit \n### Total shareholders equity \nOther income (expense) \nNet loss \n### Basic and diluted net loss per ordinary share \nA summary of the restatement and its effects to the Companys balance sheet as of November 29, 2019 and to the Companys financial statements as of December 31, 2020 and 2019 and for the year ended December 31, 2020 and the period from June 13, 2019 (inception) through December 31, 2019, respectively, included with this Amendment, is presented in Note 1A in the accompanying Notes to the financial statements. \nInternal Control Considerations \n\n### Items Amended by this Filing \nThe following items included in the Original Form 10-K are amended by this Amendment: \nPart II Item 7. \nPart II Item 8. \n### Part II Item 9A. Controls and Procedures \nPart IV Item 15. \nAs required by applicable rules of the SEC, new certifications by the Companys principal executive officer and principal financial officer are filed as exhibits 31.1, 31.2, and 32. \nExcept as described above, this Amendment does not amend, update or change any other disclosures in the Original Form 10-K. In addition, the information contained in this Amendment does not reflect events occurring after the filing of the Original Form 10-K and does not modify or update the disclosures therein, except as specifically identified above. Among other things, forward-looking statements made in the Original Form 10-K have not been revised to reflect events, results or developments that occurred or facts that became known to us after the date of the Original Form 10-K, other than the restatement, and such forward-looking statements should be read in conjunction with our filings with the SEC, including those subsequent to the filing of the Original Form 10-K. \nThe financial information that has been previously filed or otherwise reported for these periods is superseded by the information in this Annual Report on Form 10-K, and the financial statements and related financial information contained in such previously filed reports should no longer be relied upon. \n### ii iii \nUnless otherwise stated in this annual report on Form 10-K/A (Annual Report on Form 10-K/A), or the context otherwise requires, references to: we, us, company or our company are to Alussa Energy Acquisition Corp.; public shares are to the Class A ordinary shares sold as part of the units in our initial public offering; public shareholders are to the holders of our public shares; sponsor are to Alussa Energy Sponsor LLC, a Delaware limited liability company; our Chief Executive Officer is to the managing member of our sponsor; initial shareholders are to the holders of our founder shares prior to our initial public offering; founder shares are to our Class B ordinary shares initially purchased by our sponsor in a private placement prior to our initial public offering and, unless the context otherwise requires, our Class A ordinary shares issued upon the conversion thereof as provided herein; ordinary shares are to our Class A ordinary shares and our Class B ordinary shares; public warrants are to the redeemable warrants sold as part of the units in our initial public offering (whether they were purchased in our initial public offering or in the open market); warrants are to our redeemable warrants, which include the public warrants as well as the private placement warrants to the extent they are no longer held by the initial purchasers of the private placement warrants or their permitted transferees; \nCompanies Law are to the Companies Law (2020 Revision) of the Cayman Islands as the same may be amended from time to time; equity-linkedsecurities are to any securities of our company which are convertible into or exchangeable or exercisable for, ordinary shares of our company; and specified future issuance are to an issuance of a class of equity or equity-linkedsecurities to specified purchasers, which may include funds advised by Encompass Capital Advisors LLC that are members of our sponsor, that we may determine to make in connection with financing our initial business combination. \niv \n\nCertain statements in this report may constitute forward-looking statements for purposes of the federal securities laws. Forward-looking statements in this report may include, for example, statements about: our ability to complete our initial business combination with FREYR AS; our pool of prospective target businesses in the oil and gas E&P industry; risks associated with acquiring an operating company or business in the oil and gas E&P industry; or our financial performance. \nThese risks and uncertainties include, but are not limited to, those factors described in the section of this report entitled Risk Factors. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws v \n### Part I \nItem 1. Business \nGeneral \nWe are a blank check company incorporated as a Cayman Islands exempted company for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses, which we refer to throughout this report as our initial business combination. We have no revenues to date and we will not generate operating revenues until we consummate our initial business combination. While we may pursue an acquisition opportunity in any industry or sector, we have concentrated our efforts on businesses that complement our management teams expertise in the production, operation and development of crude oil and natural gas wells and related infrastructure, and to capitalize on the ability of our management team to source, screen, evaluate, negotiate, structure, close and manage acquisitions of energy assets or businesses globally. We have concentrated on acquiring one or more businesses with an aggregate enterprise value of approximately $500 million to $1 billion. \n\nOn January 29, 2021, Alussa entered into a (the \n\n) with FREYR AS, a company organized under the laws of Norway ( \n### FREYR \n), Alussa Energy Sponsor LLC, a limited liability company formed under the laws of Delaware, in the capacity as the representative for the Alussa shareholders in accordance with the terms and conditions of the ( \n### Sponsor or \nPurchaser Representative \n), FREYR Battery, a corporation in the form of a public limited liability company organized under the laws of Luxembourg ( \n### Pubco \n\nNorway Merger Sub 1 \n\n\n### Norway Merger Subs \n\nCayman Merger Sub \n\n### Major Shareholders \n\nShareholder Representative \n). FREYR is a Norway-based developer of clean, next-generation battery cell production capacity. FREYR is targeting development of up to 43 GWh of battery cell production capacity in Norway by 2025 to position the Company as one of Europes largest battery cell suppliers. FREYR expects to deliver safer, higher energy density and lower cost clean battery cells made with renewable energy from an ethically and sustainably sourced supply chain. The Companys ambition is to become the battery cell producer with the lowest lifecycle carbon footprint in the world. FREYR plans to utilize Norways inherent advantages, including access to renewable energy, some of Europes lowest electricity prices and shorter delivery distances to main markets in Europe and the US as compared to competitors in Asia. Pursuant to the terms of the Business Combination Agreement, (a) Alussa will merge with and into Cayman Merger Sub, with Alussa continuing as the surviving entity (the \n### Cayman Merger \n), (b) Alussa will distribute all of its interests in Norway Merger Sub 1 to Pubco, (c) FREYR will merge with and into Norway Merger Sub 2, with Norway Merger Sub 2 continuing as the surviving entity (the \nNorway Merger \n\n### Cross-Border Merger \n), as a result of which, (i) each issued and outstanding security of Alussa immediately prior to the effective time of the Cayman Merger shall be exchanged for the right of the holder thereof to receive securities of Pubco in accordance with the (or, in the case of Dissenting Purchaser Shareholders, if any, the right to receive the fair value of such holders Dissenting Purchaser Ordinary Shares and such other rights as are granted by the Cayman Companies Law), (ii) each issued and outstanding security of FREYR immediately prior to the effective time of the Norway Merger shall be exchanged for the right of the holder thereof to receive securities of Norway Merger Sub 1 in accordance with the and (iii) each issued and outstanding security of Norway Merger Sub 1 immediately prior to the Cross-Border Effective Time shall be exchanged for the right of the holder to receive securities of Pubco, all upon the terms and subject to the conditions set forth in the and in accordance with the provisions of applicable law (the \nBusiness Combination \n). \nConsummation of the transactions contemplated by the are subject to customary conditions or the respective parties, including the approval of the Business<|endoftext|>Be able to exercise their warrants and sell the ordinary shares underlying their warrants while holders of our public warrants would not be able to exercise their warrants and sell the underlying ordinary shares. \nOur ability to require holders of our warrants to exercise such warrants on a cashless basis after we call the warrants for redemption or if there is no effective registration statement covering the ClassA ordinary shares issuable upon exercise of these warrants will cause holders to receive fewer ClassA ordinary shares upon their exercise of the warrants than they would have received had they been able to pay the exercise price of their warrants in cash. \nIf we call the warrants for redemption for cash, we will have the option, in our sole discretion, to require all holders that wish to exercise warrants to do so on a cashless basis. If we choose to require holders to exercise their warrants on a cashless basis or if holders elect to do so when there is no effective registration statement, the number of ClassA ordinary shares received by a holder upon exercise will be fewer than it would have been had such holder exercised his or her warrant for cash. For example, if the holder is exercising 875 public warrants at $11.50 per share through a cashless exercise when the ClassA ordinary shares have a fair market value of $17.50 per share, then upon the cashless exercise, the holder will receive 300 ClassA ordinary shares. The holder would have received 875 ClassA ordinary shares if the exercise price was paid in cash. This will have the effect of reducing the potential upside of the holders investment in our company because the warrant holder will hold a smaller number of ClassA ordinary shares upon a cashless exercise of the warrants they hold. \n\n\n\nSee Item1. BusinessEffecting Our Initial Business CombinationTendering Share Certificates in Connection with a Tender Offer or Redemption Rights. \n\n\n\nOur amended and restated memorandum and articles of association authorize the issuance of up to 479,000,000 ClassA ordinary shares, par value $0.0001 per share, 20,000,000 ClassB ordinary shares, par value $0.0001 per share, and 1,000,000 preference shares, par value $0.0001 per share. \nThere are 464,699,000 and 16,550,000 authorized but unissued ClassA ordinary shares and ClassB ordinary shares, respectively, available for issuance which amount includes shares reserved for issuance upon exercise of outstanding warrants or shares issuable upon conversion of the ClassB ordinary shares, if any. \nWe may also issue ClassA ordinary shares to redeem the warrants or uponconversion of the ClassB ordinary shares at a ratio greater than one-to-one at the time of our initial business combination as a result of the anti-dilution provisions as set forth herein. However, our amended and restated memorandum and articles of association provide, among other things, that prior to the completion of our initial business combination, we may not issue additional shares that would entitle the holders thereof to (i)receive funds from the trust account or (ii)vote on any initial business combination or on any other proposal presented to shareholders prior to or in connection with the completion of an initial business combination. \nUnlike most other similarly structured blank check companies, our initial shareholders will receive additional ClassA ordinary shares if we issue shares to consummate an initial business combination. \nThe founder shares will automatically convert into ClassA ordinary shares on the first business day following the consummation of our initial business combination at a ratio such that the number of ClassA ordinary shares issuable upon conversion of all founder shares will equal, in the aggregate, on an as-converted basis, 20% of the sum of (i)the total number of ClassA ordinary shares issued and outstanding upon completion of our Initial Public Offering, plus (ii)the sum of (a)the total number of ClassA ordinary shares issued or deemed issued or issuable upon conversion or exercise of any equity-linked securities or rights issued or deemed issued, by the company in connection with or in relation to the consummation of the initial business combination, excluding any ClassA ordinary shares or equity-linked securities exercisable for or convertible into ClassA ordinary shares issued, or to be issued, to any seller in the initial business combination and any private placement warrants issued to our sponsor upon conversion of working capital loans, minus (b)the number of public shares redeemed by public shareholders in connection with our initial business combination. This is different than most other similarly structured blank check companies in which the initial shareholders will only be issued an aggregate of 20% of the total number of shares to be outstanding prior to the initial business combination. \n\nRedemption of the outstanding warrants as described above could force you to (i)exercise your warrants and pay the exercise price therefor at a time when it may be disadvantageous for you to do so, (ii) sell your warrants at the then-current market price when you might otherwise wish to hold your warrants or (iii)accept the nominal redemption price which, at the time the outstanding warrants are called for redemption, we expect would be substantially less than the Market Value of your warrants. \n\n\nWe issued public warrants to purchase 4,600,000 of our ClassA ordinary shares as part of theunits offered by the prospectus relating to our Initial Public Offering and, simultaneously with the closing of the Initial Public Offering, we issued in a private placement 501,000 private placementunits, each exercisable to purchase one ClassA ordinary share at $11.50 per share. In addition, if the sponsor makes any working capital loans, it may convert up to $1,500,000 of such loans into up to an additional 150,000 private placementunits, at the price of $10.00 per unit. \n\n\n\n\n\n\nThe transaction may require a shareholder or warrant holder to recognize taxable income, or otherwise subject it to adverse tax consequences, in the jurisdiction in which the shareholder or warrant holder is a tax resident or in which its members are resident if it is a tax transparent entity. Shareholders or warrant holders may be subject to withholding taxes, other taxes or other adverse tax consequences with respect to their ownership of us after the reincorporation. \n\n\ntariffs and trade barriers; longer payment cycles; tax issues, such as tax law changes and variations in tax laws as compared to United States tax laws; rates of inflation; employment regulations; corruption; \n\nIf our founding team following our initial business combination is unfamiliar with United States securities laws, they may have to expend time and resources becoming familiar with such laws, which could lead to various regulatory issues. \nManagement of the partner business may not be familiar with United States securities laws. \n\n\n\n\n\n\n### General Risk Factors \n\n\n\n\n\n\n### RegulationS-K. \n\n\n\n\ninvestors. \nHolder (as defined by the United States he Internal Revenue Service IRS) of our ClassA ordinary shares or warrants, the U.S. Our PFIC status for our current and subsequent taxableyears may depend on whether we qualify for the PFIC start-up. \nWe urge U.S. \nIf you are a U.S. Holder who held our shares at any point during your taxable year that includes December31, 2020, you should consult your tax advisor regarding the advisability of making a QEF election with respect to our ClassA ordinary shares for such taxable year, and the procedures necessary to validly make and maintain such election. Information contained in the website is not a part of, and is not incorporated by reference into, this Annual Report on \n### Form10-K. \n\n\n\n\n\n(ii)the redemption of any public shares properly tendered in connection with a shareholder vote to amend our amended and restated memorandum and articles of association (A)to modify the substance or timing of our obligation to provide holders of our ClassA ordinary shares the right to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24months from the closing of the Initial Public Offering or (C)with respect to any other provision relating to the rights of holders of our ClassA ordinary shares or pre-initial business combination activity, and (iii)the redemption of our public shares if we have not consummated an initial business within 24months from the closing of the Initial Public Offering, subject to applicable law and as further described herein. \n\n\n\n\n\nAlthough we will seek to have all vendors, service providers (excluding our independent registered public accounting firm), prospective partner businesses and other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account for the benefit of our public shareholders, such parties may not execute such agreements, or even if they execute such agreements, they may not be prevented from bringing claims against the trust account, including, but not limited to, fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain advantage with respect to a claim against our assets, including the funds held in the trust account. If any third party refuses to execute an agreement waiving such claims to the monies held in the trust account, our founders will perform an analysis of the alternatives available to it and will only enter into an agreement with a third party that has not executed a waiver if our founding team believes that such third partys engagement would be significantly more beneficial to us than any alternative. \nUpon redemption of our public shares, if we have not consummated an initial business combination within 24months from the closing of the Initial Public Offering, we will be required to provide for payment of claims of creditors that were not waived that may be brought against us within the 10years following redemption. Pursuant to the letter agreement, our sponsor has agreed that it will be liable to us if and to the extent any claims by a third party (excluding our independent registered public accounting firm) for services rendered or products sold to us, or a prospective partner business with which we have discussed entering into a transaction agreement, reduce the amounts in the trust account to below the lesser of (i)$10.00 per public share and (ii)the actual amount per share held in the trust account as of the date of the liquidation of the trust account if less than $10.00 per public share due to reductions in the value of the trust assets, in each case net of the interest that may be withdrawn to pay our tax obligations, provided that such liability will not apply to any claims by a third party or prospective partner business who executed a waiver of any and all rights to seek access to the trust account nor will it apply to any claims under our indemnity of the underwriters of the Initial Public Offering against certain liabilities, including liabilities under the Securities Act. \n\nwith a maturity of 185days or less or in money market funds meeting certain conditions under \nRule2a-7 under the Investment Company Act, which invest only in direct U.S. While short-term U.S. currently yield a positive rate of interest, they have briefly yielded negative interest rates in recentyears. Central banks in Europe and Japan pursued interest rates below zero in recentyears, and the Open Market Committee of the Federal Reserve has not ruled out the possibility that it may in the future adopt similar policies in the United States. In the event that we do not to complete our initial business combination or make certain amendments to our amended and restated memorandum and articles of association, our public shareholders are entitled to receive their pro-rata share of the proceeds held in the trust account, plus any interest income, net of taxes paid or payable (less, in the case we are unable to complete our initial business combination, $100,000 of interest). \n\nIf, after we distribute the proceeds in the trust account to our public shareholders, we file a bankruptcy or insolvency petition or an involuntary bankruptcy or insolvency petition is<|endoftext|>By customary requirements and borrowing base formulas. As of December 31, 2020, Landsea Homes had approximately $272 million outstanding under its various credit facilities and loan agreements, with approximately $278million of additional borrowing capacity, subject to customary borrowing base requirements. Our indebtedness could have detrimental consequences, including the following: our ability to obtain additional financing as needed for working capital, land acquisition costs, building costs, other capital expenditures, or general corporate purposes, or to refinance existing indebtedness before its scheduled maturity, may be limited; we will need to use a portion of cash flow from operations to pay interest and principal on our indebtedness, which will reduce the funds available for other purposes; if we are unable to comply with the terms of the agreements governing our indebtedness, the holders of that indebtedness could accelerate that indebtedness and exercise other rights and remedies against us; the terms of any refinancing may not be as favorable as the debt being refinanced, if at all. \nWe cannot be certain that cash flow from operations will be sufficient to allow us to pay principal and interest on our debt, support operations and meet other obligations. If we do not have the resources to meet our obligations, we may be required to refinance all or part of our outstanding debt, sell assets or borrow more money. We may not be able to do so on acceptable terms, in a timely manner, or at all. If we are unable to refinance our debt on acceptable terms, we may be forced to dispose of our assets on disadvantageous terms, potentially resulting in losses. Defaults under our debt agreements could have a material adverse effect on our business, prospects, liquidity, financial condition or results of operations. \nA breach of the covenants under any of the agreements governing our indebtedness could result in an event of default. \nA default under any of the agreements governing our indebtedness may allow our creditors to accelerate the related debt and may result in the acceleration of any other debt to which a cross-acceleration or cross-default provision applies. In addition, an event of default under the credit agreement governing our credit facility would permit the lenders thereunder to terminate all commitments to extend further credit under the applicable facility. Furthermore, if we were unable to repay the amounts due and payable under any secured indebtedness, those lenders could proceed against the collateral granted to them to secure that indebtedness. In the event our lenders or the holders of our notes accelerate the repayment of our borrowings, we cannot assure that we would have sufficient assets to repay such indebtedness. As a result of these restrictions, we may be: limited in how we conduct our business; unable to raise additional debt or equity financing to operate during general economic or business downturns; or unable to compete effectively or to take advantage of new business opportunities. \nThese restrictions may affect our ability to grow or continue our existing operations. \nThe agreements governing our debt impose operating and financial restrictions, which may prevent us from capitalizing on business opportunities and taking some corporate actions. \nThe agreements governing our debt impose operating and financial restrictions. These restrictions limit our ability, among other things, to: incur or guarantee additional indebtedness or issue certain equity interests; pay dividends or distributions, repurchase equity or prepay subordinated debt; make certain investments; sell assets; incur liens; create certain restrictions on the ability of restricted subsidiaries to transfer assets; enter into transactions with affiliates; create unrestricted subsidiaries; and consolidate, merge or sell all or substantially all of our assets. \nAs a result of these restrictions, our ability to obtain additional financing as needed for working capital, land acquisition costs, building costs, other capital expenditures, or general corporate purposes, or to refinance existing indebtedness before its scheduled maturity, may be limited. In addition, our credit facility currently contains certain financial covenants with which we must test compliance periodically. Failure to have sufficient borrowing base availability in the future or to be in compliance with our financial covenants under our credit facility could have a material adverse effect on our operations and financial condition. \nIn addition, we may in the future enter into other agreements refinancing or otherwise governing indebtedness which impose yet additional restrictions and covenants, including covenants limiting our ability to incur additional debt, make certain investments, reduce liquidity below certain levels, make distributions to stockholders and otherwise affect our operating policies. These restrictions may adversely affect our ability to finance future operations or capital needs or to pursue available business opportunities. If a default occurs, the relevant lenders could elect to declare the indebtedness, together with accrued interest and other fees, to be immediately due and payable and proceed against any collateral securing that indebtedness. \nPotential future downgrades of our credit ratings could adversely affect our access to capital and could otherwise have a material adverse effect on us. \nOur corporate credit ratings and our current credit condition affect, among other things, our ability to access new capital, especially debt, and negative changes in these ratings may result in more stringent covenants and higher interest rates under the terms of any new debt. Our credit ratings could be downgraded or rating agencies could issue adverse commentaries in the future, which could have a material adverse effect on our business, results of operations, financial condition and liquidity. In particular, a weakening of our financial condition, including a significant increase in our leverage or decrease in our profitability or cash flows, could adversely affect our ability to obtain necessary funds, result in a credit rating downgrade or change in outlook or otherwise increase our cost of borrowing. \n### Interest rate changes may adversely affect us. \nAdverse economic conditions could also cause the terms on which we borrow to be unfavorable. \nWe may be unable to obtain suitable performance, payment and completion surety bonds and letters of credit, which could limit our future growth or impair our results of operations. \nWe provide bonds in the ordinary course of business to governmental authorities and others to ensure the completion of our projects or in support of obligations to build community improvements such as roads, sewers, water systems and other utilities, and to support similar development activities by certain of our joint ventures. As a result of the deterioration in market conditions during the recent downturn, surety providers became increasingly reluctant to issue new bonds and some providers were requesting credit enhancements (such as cash deposits or letters of credit) in order to maintain existing bonds or to issue new bonds, which trends may continue. If we are unable to obtain performance bonds or letters of credit when required or the cost or operational restrictions or conditions imposed by issuers to obtain them increases significantly, we may not be able to develop or may be significantly delayed in developing a community or communities or may incur significant additional expenses, and, as a result, our business, prospects, liquidity, financial condition or results of operation could be materially and adversely affected. \nWe may be unable to obtain suitable bonding for the development of our communities \nWe provide performance bonds and letters of credit in the ordinary course of business to governmental authorities and others to ensure the completion of our projects or in support of obligations to build community improvements such as roads, sewers, water systems and other utilities. If we are unable to obtain performance bonds or letters of credit when required or the cost or operational restrictions or conditions imposed by issuers to obtain them increases significantly, we may be significantly delayed in developing our communities or may incur significant additional expenses and, as a result, our financial condition and results of operations could be materially and adversely affected. \n### Risks Related to the Ownership of Our Securities \nResales of the shares of Common Stock included in the Merger Consideration could depress the market price of our Common Stock. \nThere may be a large number of our shares of Common Stock sold in the market The shares held by our public stockholders are freely tradeable. \nThe LF Capital Restricted Stockholders, including the Sponsor, hold more than 5% of the Common Stock with respect to their converted Founder Shares. Pursuant to the registration rights agreement, dated June 19, 2018, by and between the Company and the LF Capital Restricted Stockholders, the LF Capital Restricted Stockholders are entitled to registration of the converted Founder Shares. In addition, holders of our Private Placement Warrants and their permitted transferees can demand that we register the Private Placement Warrants and the shares of Common Stock issuable upon exercise of the Private Placement Warrants. These holders also have certain piggy-back registration rights with respect to registration statements filed subsequent to the closing of the Business Combination. \nCommon Stock issued to the Seller pursuant to the Business Combination will be freely tradeable following the expiration of the lock-up on the earlier of (A) one year following the closing of the Business Combination and (B) subsequent to the closing of the Business Combination, (x) if the last sale price of the Common Stock equals or exceeds $12.00 per share as quoted on Nasdaq (adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days following the closing of the Business Combination or (y) the date following the closing of the Business Combination on which the Company completes a liquidation, merger, capital stock exchange, reorganization or other similar transaction that results in all of the Companys stockholders having the right to exchange their shares of the Company for cash, securities or other property, as set forth in the Seller Lock-up Agreement. \nCommon Stock held by the Sponsor and certain other holders of converted Founder Shares as a result of the conversion of its Class B common stock will be freely tradeable following the expiration of a lock-up for the same duration as the Seller Lock-up Agreement, as set forth in the Sponsor Lock-up Agreement (with 500,000 of such shares being subject to the terms of forfeiture pursuant to that certain Founders Surrender Agreement). Our Common Stock held by the LF Capital Restricted Stockholders (other than the Sponsor and certain other holders of converted Founder Shares) as a result of the conversion of their Class B common stock is freely tradeable as a result of the registration of the resale thereof pursuant to the related registration statement. \nSuch sales of shares of our Common Stock or the perception of such sales may depress the market price of our Common Stock or public warrants. \n\nThe price of our securities may fluctuate significantly due to the markets reaction to the Business Combination and general market and economic conditions. An active trading market for our securities may never develop or, if developed, it may not be sustained. In addition, the price of our securities may vary due to general economic conditions and forecasts, our general business condition and the release of our financial reports. Additionally, if our securities are not listed on, or become delisted from, Nasdaq for any reason, and are quoted on the OTC Bulletin Board or OTC Pink, an inter-dealer automated quotation system for equity securities that is not a national securities exchange, the liquidity and price of our securities may be more limited than if we were quoted or listed on Nasdaq or another national securities exchange. Nasdaq listing requirements<|endoftext|>Subsequent to closing, the Company defaulted under the BLOI2 and the Subsequent Land Purchase Agreement as it did not reacquire the property in the required ninety days after closing. As a consequence, the Company forfeited the $165,768 deposited into the Chicago Title Escrow account referenced above. \nInvestment Accounting Treatments for Investors One and Two \nThe escrow agreement closed and Investor Two took title to property. There is no provision in BLOI2, or in the Subsequent Land Purchase Agreement, that would impose any continuing liability on the Company other than the loss of the Companys escrow deposit. \nAs no terms and conditions were established to characterize the $125,000 investment as a Note Payable, the Company has recorded a continuing liability to Investor One in connection with BLOI1 having been recorded as a deferred liability. Contrary to the case with Investor Two, the Company acknowledged the additional $62,500 liability provided for under BLOI1 and $187,500 was recorded as advances on agreements as a short-term deferred liability on the Companys books and records. Additionally, BLOI1 provided for a rent payment of $3,750 for a period of twelve months after execution of BLOI1. \nIn February 2019, the Company entered into a settlement agreement with Investor One which required the issuance of 20,000 shares of the Companys common stock and established an additional principal sum for repayment of $200,000. The settlement includes installment payments of $10,000 per month beginning on February 15, 2019 until the balance is repaid and ends the accrual of interest. Prior to entering into the settlement agreement, the Company had recorded interest expense of $4,125, bringing the balance from $187,500 at December 31, 2018 to $191,625. The settlement agreement resulted in additional expense of $8,375. The Company made three $10,000 payments during the year ended December 31, 2019 and also reduced the value by another $1,000 in connection with the 20,000 shares being valued at $11,000 instead of the $10,000 value initially discussed. \n### Investor Three \nIn December 2015, the Company entered into a Revenue Share Agreement for $750,000 that was recorded as advances on agreements liability. As per the Revenue Share Agreement, in the event that, for the period from February 5, 2016 through the three year anniversary of the Effective Date, if Lessee fails to pay the Company any Fixed Minimum Rent, the Company shall be required to pay to Investor Three, in full, Investor Threes share each month until the Company has paid Investor Three an aggregate of $825,000 under this Revenue Share Agreement. Thereafter, the Company shall have no further obligations or responsibilities to Investor Three in connection with this Revenue Share Agreement. Due to the above clause, by reason of defaults on the DHS Project (as defined elsewhere herein), an additional penalty of $75,000 was incurred which was recorded as deferred finance cost. During the fiscal year 2018, the Company reduced $200,000 of principal by transferring land to Investor Three. During the fiscal year 2018, the Company also recorded a loss on settlement of debt in the consolidated statements of operations increasing the balance by $97,800 to $615,000 at December 31, 2018, in accordance with a settlement discussed in further detail in Note 12. This balance remains outstanding at December 31, 2019. \nNote 10 Put Obligation Liability \nIn connection with the THC Merger, the Company granted the THC shareholders an option to require the Company to purchase from them up to 1,478,836 shares of the Companys common stock at a price of $0.68 per share for the period commencing on the 24-month anniversary of the closing of the THC Merger and ending on the 30-month anniversary of the closing of the THC Merger; provided, however, that they may only exercise this option if the Companys stock price is below $0.88 and trading volume is below 50,000 a day for a 90-day period. The accounting treatment requires that the Company records the fair value of the put obligation liability as of the inception date and to fair value the put obligation liability as of each subsequent reporting date. \nThe fair value of the Companys put option payable from the THC Merger was estimated using the Binomial Pricing Model, which uses certain assumptions related to risk-free interest rates, expected volatility, expected life of the stock options, and future dividends. Accordingly, the Company used three (3) comparables in the cannabis industry to determine a volatility range and elected to use our private placement stock price of $0.50 at issuance at December 31, 2017. \nThe fair value as of the date of issuance of the described put obligation liability was determined using the Binomial Pricing Model, with the following assumptions: \nThe put obligation liability on the date of issuance of February 12, 2016 was determined to be $706,616 and was included in the purchase price of the THC Merger. As of December 31, 2017, the put obligation liability is recorded on the balance sheet at $323,459. While the 30-month period expired prior to December 31, 2018, the Company is currently in arbitration related to an attempted exercise of the put option, in which the exercise of the put option was upheld by the arbitrator. Based on the Companys asserted defenses, the Company is appealing the award. However, the Company has recorded a stock subscription receivable and a liability for the $1,000,000 exercise amount at December 31, 2018 based on the pending award as discussed in Note 12. During the year ended December 31, 2018, a net gain of $323,459 was recorded as a change in fair value of derivative liabilities. The matter remains unresolved as of December 31, 2019 and both the stock subscription receivable and the liability for the $1,000,000 exercise remain outstanding. \n### Note 11 Stockholders Equity \nThe Company is authorized to issue 525,000,000 shares of capital stock, $0.0000001 par value per share, of which 5,000,000 shares are designated as Series A Convertible Preferred stock, 20,000,000 shares are designated as preferred stock and 500,000,000 shares are designated as common stock. As of December 31, 2019, there were no shares of preferred stock issued and outstanding, and 76,890,925 shares of common stock issued and outstanding. \nDuring the years ended December 31, 2019 and 2018, the Company issued 535,000 and 922,500 shares, respectively, for services valued at $295,500 and $459,375, respectively. \nDuring the year ended December 31, 2018, the Company issued 10,000 shares of its common stock for charitable donations valued at $5,000 and issued 200,000 shares of its common stock in exchange for delayed lease obligations valued at $100,000. \nDuring the year ended December 31, 2019, the Company issued 488,000 shares of its common stock in exchange for debt settlements valued at $220,400. The Company also paid a refund of additional paid-in-capital of $2,500. \nDuring the year ended December 31, 2019, the Company issued 10,000,000 shares of common stock in exchange for its 50% equity investment in PVI, with another 10,000,000 shares of common stock issued subsequent to year-end. \nThe Company has a stock subscriptions payable balance of $5,940,720 and $37,500 as of December 31, 2019 and 2018, respectively, with $5,500,000 of the balance at December 31, 2019 representing 10,000,000 shares of common stock to be issued in exchange for the Companys investment in PVI that were not issued until 2020. An additional $444,220 of the balance at December 31, 2019 represents the settlement of 555,275 shares payable to The Hit Channel discussed in Note 12, which were issued in 2020. During the years ended December 31, 2019 and 2018, the Company issued $57,500 and $206,250, respectively, of common stock related to prior year subscriptions. \nThe value of the issued stock was determined based on the value at which the Companys stock was sold close to when the services were provided or when the donation occurred. \n\nFrom time to time, the Company is party to certain legal proceedings that arise in the ordinary course and are incidental to our business. Future events or circumstances, currently unknown to management, will determine whether the resolution of pending or threatened litigation or claims will ultimately have a material effect on our consolidated financial position, liquidity or results of operations in any future reporting periods. \nSalem, et al. v. \nwas filed July 13, 2018. Trademark Reg. No. The arbitrator issued an award on December 23, 2019 upholding the Claimants exercise of the put option as discussed in Note 10 and the transfer of the IP rights. Pineapple Express, Inc. \n### Pineapple Express v. Ramsey Salem \nJAMS Arbitration Reference Number: 1220063897 was filed December 4, 2019. v. JAMS Arbitration Reference Number: 1210035565, filed July 13, 2018, by Respondent. \nHawkeye v. \nLos Angeles Superior Court Case Number: BC708868 was filed June 6, 2018. Plaintiff claimed damages against Defendant in the excess of $900,000 arising from a series of successive amended and revised revenue sharing agreements pertaining to rental income from certain leasehold for premises more commonly known as 65421 San Jacinto Lane, Desert Hot Springs, CA 92240 which was not realized through no fault of Defendants, nor are Defendants contracting parties to the lease agreement or original revenue sharing agreement for which consideration was paid. However, the matter was reduced to an entry of judgment by the court in or about February 21, 2020 for the amount of $615,000, which monies remain due and outstanding and are accrued for in the Companys advances on agreements liability as of December 31, 2019 and 2018. \n### Sharper, Inc. v. \nLos Angeles Superior Court Case Number: 18SMCV00149 was filed November 1, 2018. Finnegan & Diba was substituted out of the matter on June 14, 2019. The matter was arbitrated through other counsel and the arbitrator issued a final award in favor of Petitioner in or about September 4, 2019 for the principal amount of $15,375, which has been accrued for in the Companys contingent liabilities as of December 31, 2018. The award was transitioned to an entry of judgment in the total amount of $18,692 on or about February 27, 2020, against Pineapple Express, Inc. The accrual in the Companys contingent liabilities as of December 31, 2019 was increased to $18,692. \nCunningham v. Pineapple Express, Inc. \nLos Angeles Superior Court Case Number: BS171779: Judgment, ordered by the Department of Industrial Relations, Labor Commissioners Office was entered by the Court on December 11, 2017. Finnegan & Diba was retained to defend enforcement proceedings and substituted out of the matter in March 2019. This claim was accrued for in the Companys contingent liabilities as of December 31, 2019 and 2018. \n### Pineapple Express, Inc. v. Cunningham \nLos Angeles Superior Court Case Number: SC 127731 was filed June 21, 2017. This amount has been accrued for in the Companys contingent liabilities as of December 31, 2019. Finnegan & Diba was not the counsel of record when judgment was entered and only addressed enforcement proceedings until such time it was substituted out as counsel of record in or about June 14, 2019. \nThe Hit Channel, Inc. v. Pineapple Express, Inc. \nLos Angeles Superior Court Case Number: 19STCV09006 was filed in or about March 14, 2019. The matter has since resolved pursuant to the confidential settlement agreement entered into by and between the parties. The licensing agreement has been deemed terminated, and the matter has been dismissed with prejudice by order of the court on February 14, 2020. The Hit Channel was awarded $40,000 and 555,275 shares of the Companys restricted stock as settlement, for which the Company has accrued $40,000 in contingent liabilities and $444,220 in stock subscriptions payable as of December 31, 2019. The Company also received the website, www.THCExpress.com \n, from The Hit Channel as part of the Settlement Agreement. This amount was determined as the amount that The Hit Channel, Inc. was able to pay back its investors and incurred costs. \nPineapple Express, Inc. \nJAMS Arbitration Reference Number: 1210037058 was filed December 18, 2019. In 2020, the parties agreed on a settlement amount of $15,000. A final award from arbitration also awarded arbitration fees to the claimant, increasing the award from $15,000 to $23,805, which the Company has accrued<|endoftext|>Revenue, Adjusted EBITDA and Return on Capital. Wakefield, Doman, Garner, Fentress and Woodley were Adjusted EBITDA and Adjusted \n### Pre-Tax \nIncome for the Companys Progressive Leasing and Vive operating segments. Performance metrics for Mr.Lindsay were Adjusted EBITDA and Adjusted \nPre-Tax \nIncome for the Aarons Business operating segment. The threshold number of shares represents 25% of target, and the maximum number of shares represents 200% of target. Any awards earned vest in three approximately equal increments over a three-year period on March7, 2021, 2022 and 2023. Based on the Companys performance for the year, performance shares were earned at 135.6% of target for Mr.Michaels, 104.2% of target for Mr.Wakefield, 104.2% of target for Mr.Doman, 104.2% of target for Mr.Garner, 104.2% of target for Mr.Fentress, 135.6% of target for Mr.Robinson, 200% of target for Mr.Lindsay, 135.6% of target for Mr.Wall and 104.2% of target for Mr.Woodley. \n(3) \nIncludes time-based restricted stock granted to each of our NEOs under the Companys Long-Term Incentive Award Program, that are expected to vest in three approximately equal increments over a three-year period on each of March7, 2021, 2022 and 2023. \n(4) \nIncludes stock options granted under the Companys Long-Term Incentive Award Program that are expected to vest in three approximately equal increments over a three-year period on each of March7, 2021, 2022 and 2023. \n(5) \nRepresents the aggregate grant date fair value of awards recognized by the Company as required by Financial Accounting Standards Board Codification Topic 718. \n10-K for the year ended December 31, 2020 for a discussion of the assumptions used in calculating these amounts. \n2015 Equity and Incentive Plan, as Amended and Restated \n### General. \nThe purpose of the Companys 2015 Equity and Incentive Plan, as amended and restated (the Equity Plan) is to promote the long-term growth and profitability of the Company and our subsidiaries by providing employees, directors, consultants, advisors and other persons who work for us and our subsidiaries with incentives to maximize shareholder value and otherwise contribute to our continued success. In addition, we believe the Equity Plan is a critical component to help us attract, retain and reward the best talent and align their interests with our shareholders. \nAdministration of the Equity Plan. \nOur Board of Directors may appoint the Compensation Committee or such other committee consisting of two or more members (in each case, the Committee) to administer the Equity Plan, and our Board of Directors has currently designated the Compensation Committee to serve this function. The Committee has the right to select the persons who receive awards under the Equity Plan, to set the terms and conditions of such awards (including the term, exercise price, vesting conditions, and the consequences of termination of employment), and to interpret and administer the Equity Plan. Subject to the express provisions of the Equity Plan, the Committee is authorized and empowered to do all things that the Committee in its discretion determines to be necessary or appropriate in connection with the administration and operation of the Equity Plan. \nTypes of Awards. \nThe Equity Plan provides for the grant of non-qualified stock options (NQSOs), incentive stock options (ISOs), stock appreciation rights (SARs), restricted stock, restricted stock units, performance shares, performance units, annual incentive awards and other stock-based awards to eligible participants. ISOs may only be granted to employees of the Company or its subsidiaries. \n### Shares Available for Issuance. \nThe aggregate number of shares that will be available for issuance pursuant to awards granted under the Equity Plan is 8,566,816 shares (the Share Pool), subject to adjustment as described in the Equity Plan, of which 3,126,340 shares remain available for issuance as of April15, 2021. The shares issued by the Company under the Equity Plan will be authorized but unissued shares or shares currently held (or subsequently acquired) as treasury shares, including shares purchased on the open market or in private transactions. \nIf shares awarded under the Equity Plan are not issued, or are reacquired by the Company, as a result of a forfeiture of restricted stock or a restricted stock unit, or the termination, expiration or cancellation of an NQSO, ISO, SAR, performance share or performance unit, or the settlement of an award in cash in lieu of shares, that number of shares will be added back to the Share Pool. If the exercise price of an option, or the purchase price and/or tax withholding obligation under any award is satisfied by the Company retaining shares or by the participant tendering shares (either by actual delivery or attestation), the number of shares so retained or tendered shall be deemed delivered for purposes of determining the Share Pool and shall not be available for further awards under the Equity Plan. To the extent a SAR is settled in shares of common stock, the gross number of shares subject to such SAR shall be deemed delivered for purposes of determining the Share Pool and shall not be available for further awards under the Equity Plan. Shares reacquired by the Company on the open market or otherwise using cash proceeds from the exercise of options shall not be added back to the Share Pool. \n### Amendment and Termination. \nOur Board of Directors or the Committee may amend or terminate the Equity Plan in whole or in part at any time, but the amendment or termination cannot adversely affect any rights or obligations with respect to an award previously granted without the affected participants written consent. The Company must obtain the approval of the shareholders before amending the Equity Plan to the extent required by Section422 of the Internal Revenue Code or the rules of the NYSE or other applicable law. \nThe Committee may amend an outstanding award agreement in a manner not inconsistent with the terms of the Equity Plan, but the amendment will not be effective without the participants written consent if the amendment is materially adverse to the participant. The Committee cannot amend outstanding awards, without shareholder approval, to reduce the exercise price of outstanding awards, or cancel outstanding options or SARs in exchange for cash, another award or stock option or SAR with an option exercise price or SAR price that is less than the option exercise price or SAR price of the original stock option or SAR. \nEmployee Stock Purchase Plan, as amended and restated \n### General. \nThe purpose of the Companys Employee Stock Purchase Plan, as amended and restated (the ESPP) is to encourage ownership of our common stock by eligible employees of the Company and certain of our subsidiaries which have been designated as eligible to participate in the ESPP. Specifically, the ESPP provides eligible employees of the Company and certain of our subsidiaries an opportunity to use payroll deductions to purchase shares of our common stock on periodic purchase dates at a discount. The Compensation Committee believes that the ESPP is a valued benefit for our eligible employee base. We believe that allowing employees to purchase shares of our common stock through the ESPP motivates high levels of performance and provides an effective means of encouraging employee commitment to our success and recruiting new employees. We expect that employee participation in the ownership of the business through the ESPP will be to the mutual benefit of both our employees and us. Our Board of Directors or the Compensation Committee may amend, suspend or terminate the ESPP at any time. However, no amendment may increase the number of shares of common stock available under the ESPP, change the employees eligible to participate, or cause the ESPP to cease to be an employee stock purchase plan within the meaning of Section423 of the Code, without obtaining shareholder approval within 12 months before or after such amendment. \nIn connection with the consummation of the \nSpin-Off, our Board of Directors amended and restated the ESPP to effectuate the Companys assumption of the plan and provide, among other things, that references to Aarons common stock be changed to refer to PROG Holdings, Inc.s common stock and references to Aarons be changed to PROG Holdings, Inc., the name of our Company as of the \n### Spin-Off. \nFurther, our Compensation Committee has approved an amendment to the ESPP to expand eligibility under the ESPP to include, employees of the Company and various subsidiaries who are subject to the disclosure requirements of Section16(a) of the Exchange Act, which will be subject to approval by our shareholders at the 2021 Annual Meeting. \nAdministration. \nThe ESPP is administered by the Compensation Committee, although the Compensation Committee may, where permitted by the terms of the ESPP and applicable law, delegate administrative tasks under the ESPP to the services of an agent and/or Company employees to assist with the administration of the ESPP. Subject to the provisions of the ESPP and applicable law, the Compensation Committee or its delegate will have full and exclusive authority to interpret the terms of the ESPP and determine eligibility to participate in the ESPP. In all cases, the ESPP is required to be administered in such a manner so as to comply with applicable requirements of Section423 of the Internal Revenue Code. All determinations of the Compensation Committee are final and binding on all persons having an interest in the ESPP. \n### Offering Period, Purchase of Shares. \nUnder the ESPP, participants have the ability to purchase shares of our common stock at a discount during a series of successive offering periods, which will commence and end on such dates as determined by the Compensation Committee or its delegate. Unless otherwise determined by the Compensation Committee or its delegate, each offering period will be six months in length. However, in no event may an offering period be longer than 27 months in length. \nShares Available for Issuance. \nThe maximum number of shares of our common stock authorized for sale under the ESPP is 200,000. The shares made available for sale under the ESPP may be authorized but unissued shares, treasury shares, reacquired shares reserved for issuance under the ESPP, or shares acquired on the open market. As of December31, 2020, the aggregate number of shares of common stock that may be issued under the ESPP was 75,314. \n\nYear-End \nThe following table provides additional information on equity awards held by our NEOs, including both unexercised and unvested awards, as of December31, 2020, after giving effect to the adjustments made in connection with the \n### Spin-Off as discussed in the CD&A above. See \n\nSpin-Off. \n(1) \nReflects award value based on a share price of $53.87, the closing price of our common stock on December 31, 2020. \n(2) \nThese options vest in three equal increments on each of March7, 2019, 2020 and 2021. \n(3) \nThese options vest in three equal increments on each of March7, 2020, 2021 and 2022. \n(4) \nThese options vest in three equal increments on each of March7, 2021, 2022 and 2023. \n(5) \nThese restricted shares vested on March7, 2021. \n(6) \nOne-half of these restricted shares vested on March7, 2021 and the remaining one-half are scheduled to vest on March7, 2022. \n(7) \nThese restricted shares vest in three equal increments on each of March7, 2021, 2022 and 2023. \n(8) \nPerformance shares earned vest in three equal increments on each of March7, 2021, 2022 and 2023. \n(9) \n\n(10) \nThese restricted shares vest in three equal increments on each of July31, 2021, 2022 and 2023. \n(11) \n\n(12) \n\n(13) \n\n(14) \nThese performance shares vested on March7, 2021. \nOptions Exercised and Stock Vested in Fiscal Year 2020 \nThe following tables provide additional information for our NEOs regarding (i)stock option exercises during 2020, including the number of shares acquired upon exercise and the value realized and (ii)the number of shares acquired upon the vesting of stock awards, each before payment of any applicable withholding tax and broker commissions. \n(1) \nReflects the value of options exercised based on the difference between the closing price of the Companys common stock on the day of exercise and the applicable exercise price. \n(2) \nReflects the value of shares that vested based on the closing price of the Companys common stock on the<|endoftext|>July 19, 2023). The Convertible Notes mature July 19, 2023 or upon a Reorganization Event (as defined in the CoD) and are secured by substantially all of the assets of the Company and certain of its domestic subsidiaries. After a redemption of the Series A Preferred Stock which causes there to be outstanding obligations under the Convertible Notes, the \n-30- \nRIMINI STREET, INC. \n### \nConvertible Notes are convertible at the option of the holder (but not the Company) on the same terms as the Series A Preferred Stock. \nThe Company may prepay for cash up to $80.0 million of the Convertible Notes on a pro rata basis prior to July 19, 2021 with full yield maintenance as if the Convertible Notes were held until July 19, 2021, provided that such redemptions are subject to certain conditions and limitations. The Company may prepay the Convertible Notes without penalty at any time on a pro rata basis after July 19, 2021. All prepayments are subject to the right of the holder of each Convertible Note to convert the prepayment amount into shares of Common Stock. The Convertible Notes also contain customary restrictions on the ability of the Company to, among other things, make certain restricted payments with respect to its capital stock, subordinated indebtedness and unsecured indebtedness, consummate certain mergers, consolidations or dissolutions and make certain dispositions, subject to specific exclusions. \nUpon the occurrence of an Event of Default (as defined in the Convertible Notes), the holders of such Convertible Notes will have the right to accelerate all obligations of the Company thereunder (or in some instances, such obligations shall be accelerated with no action required on the part of the holders), and such obligations will become immediately due and payable. In addition, if such acceleration occurs prior to July 19, 2021, the holders will also have the right to receive a make-whole premium thereunder. \n\nThe original Registration Rights Agreement required the Company to register the resale of the shares of Common Stock and Series A Preferred Stock issued pursuant to the 2018 SPA. The Company satisfied such registration requirements in November 2018. The Registration Rights Agreements, entered into in connection with both the March 2019 and June 2019 Private Placements, require the Company to register the resale of the shares of Common Stock and Series A Preferred Stock pursuant to the March 2019 SPA and the June 2019 SPA within 120 days of the respective March 7, 2019 and June 20, 2019 closing dates. The Company satisfied such registration requirements in July 2019. Each such Registration Rights Agreement also includes customary piggyback registration rights, suspension rights, indemnification, contribution, and assignment provisions. \nNOTE 7 CAPITAL STRUCTURE \n### Preferred Stock \nUpon completion of the Delaware Domestication discussed in Note 1, the Company is authorized to issue 100,000,000 preferred shares with a par value of $0.0001 per share in one or more series. The Companys board of directors is authorized to establish the voting rights, if any, designations, powers, preferences, special rights, and any qualifications, limitations and restrictions thereof, applicable to the shares of each series. The Board of Directors has authorized the issuance of up to 180,000 shares of Series A Preferred Stock, and 154,911 shares were issued and outstanding as of December31, 2020. The specific terms of the Series A Preferred Stock are discussed in detail in Note 6. \nCommon Stock \nAs of December31, 2020 and 2019, Company is authorized to issue up to 1,000,000,000 shares of Common Stock, with a par value of $0.0001 per share. Holders of the Companys shares of Common Stock are entitled to one vote for each share. \nOn August 18, 2020, the Company completed a firm commitment underwritten public offering (the \"August 2020 Offering\") of 6.1million shares of its Common Stock at a price of $4.50 per share for total gross proceeds of $27.5million. \n-31- \nRIMINI STREET, INC. \n\n### NOTE 8 STOCK-BASED COMPENSATION AND WARRANTS \nOverview of Equity Incentive Plans \nThe Companys 2007 Stock Plan (the 2007 Plan) reserved up to approximately 14.3 million shares of Common Stock for the grant of stock options and stock purchase rights to employees and directors. The 2007 Plan was terminated in November 2013; however, the terms of the 2007 Plan continue to govern any outstanding awards thereunder. As of December31, 2020, stock options for approximately 1.6million shares are outstanding under the 2007 Plan, all of which are vested. \nIn October 2013, the Company established the 2013 Equity Incentive Plan, as amended and restated in July 2017 (the 2013 Plan) that provides for grants of stock options, stock appreciation rights, restricted stock, restricted stock units (\"RSU's\"), performance units and performance shares. As of December31, 2020, options for approximately 7.0 million shares are outstanding and RSU's for approximately 3.3million shares outstanding under the 2013 Plan. There are approximately 4.0 million shares available for future grants. Through December31, 2020, grants under the 2013 Plan consist of stock options and RSU's. The 2013 Plan will expire in July 31, 2027. \nThe 2007 Plan and the 2013 Plan (collectively referred to as the Stock Plans) provide for stock options to be granted to employees and directors at an exercise price not less than 100% of the fair value at the grant date. The options granted generally have a maximum term of 10 years from grant date and are exercisable upon vesting. Option granted to employees generally vest as to one-third of the shares subject to the award on each anniversary of the designated vesting commencement date, which may precede the grant date of such award. Options granted to directors generally vest for all of the shares one year after the grant date. \nOn the first day of each fiscal year beginning in 2018, the 2013 Plan provides that the number of authorized shares available for issuance will increase in an amount equal to the lesser of (i) 4.8 million shares, (ii) 4% of the outstanding shares of all classes of the Company's Common Stock as of the last day of the immediately preceding fiscal year; or (iii) such other amount as the Company's Board of Directors may determine. The Board of Directors approved an increase in the authorized shares for 3.1 million shares on February 23, 2021. \n### Stock Options \nThe following table sets forth the summary of stock option activity under the Companys Stock Plans for the years ended December31, 2020, 2019 and 2018, (shares in thousands): \n____________________ \n(1) \n\n(2) \n\n(3) \nAs of December31, 2020, 2019 and 2018, the aggregate intrinsic value of stock options outstanding was $3.8 million, $7.7 million, and $23.0 million, respectively. As of December31, 2020, 2019 and 2018, the aggregate intrinsic value of vested stock options was $3.6 million, $7.7 million and $23.0 million, respectively. \n(4) \nThe number of outstanding stock options that are not expected to ultimately vest due to forfeiture amounted to 0.1 million shares as of December31, 2020. \n-32- \nRIMINI STREET, INC. \n### \nThe following table presents the total number of shares available for grant under the 2013 Plan for the years ended December31, 2020, 2019 and 2018 (in thousands): \nFair Value of Stock Options \nThe fair value of each stock option grant under the Stock Plans was estimated on the date of grant using the BSM option-pricing model, with the following weighted-average assumptions for the years ended December31, 2020, 2019 and 2018: \nThe BSM model requires various highly subjective assumptions that represent managements best estimates of the fair value of the Companys Common Stock, volatility, risk-free interest rates, expected term, and dividend yield. The Common Stock option value is based on the Companys closing market price on the date of grant. \n\nThe intrinsic value of the vested employee options exercised during the years ended December31, 2020, 2019, and 2018 was $6.1million, $10.5 million and $9.5 million, respectively. The weighted-average grant date fair value per share of employee options granted for the years ended December31, 2020, 2019 and 2018 was $1.65, $1.98 and $2.73, respectively. \n### Restricted Stock Units \nFor the year ended December31, 2020, the Board of Directors granted RSUs under the 2013 Plan for an aggregate of approximately 3.0 million shares of Common Stock to non-employee members of the Board of Directors, officers and employees of the Company. These RSUs vest over periods ranging from 12 to 36 months from the respective grant dates and the awards are subject to forfeiture upon termination of employment or service on the Board of Directors. Based on the weighted average fair market value of the Common Stock of $4.69 per share on the date of grant, the aggregate fair value for the shares underlying the RSUs amounted to $8.7 million as of the grant date that is being recognized as compensation cost over the vesting period. Accordingly, compensation expense of $6.2 million was recognized for the year ended December31, 2020. The unrecognized portion of $10.5 million is expected to be charged to expense on a straight-line basis as the RSUs vest over a weighted-average period of approximately 1.88 years. \n-33- \nRIMINI STREET, INC. \n### \n\nThe aggregate stock-based compensation expense for stock options and RSU's for the years ended December31, 2020, 2019 and 2018 is classified as follows (in thousands): \nAs of December31, 2020, 2019 and 2018, total unrecognized compensation cost related to unvested stock options was $1.2 million, $2.2 million and $4.0 million, respectively. The remaining unrecognized costs are expected to be recognized on a straight-line basis over a weighted-average period of approximately 1.74 years. \n\nAt the Annual Meeting of Stockholders held on June 7, 2018, the Companys stockholders approved the Rimini Street, Inc. 2018 Employee Stock Purchase Plan (the ESPP). The ESPP provides for the purchase by employees of up to an aggregate of 5.0 million shares of Common Stock. The purchase price per share at which shares are sold in an offering period under the ESPP will be equal to the lesser of 85% of the fair market value of the shares (i) on the first trading day of the offering period, or (ii) on the purchase date (i.e., the last trading day of the offering period). Offering periods will consist of two six-month periods generally commencing twice each calendar year. The purpose of the ESPP is to provide an opportunity for eligible employees of the Company to purchase shares of the Company at a discount through voluntary contributions from such employees eligible pay, thereby attracting, retaining and rewarding such persons and strengthening the mutuality of interest between such employees and the Companys stockholders. Through December31, 2020, no offering period under the ESPP had commenced and no shares of Common Stock have been issued under the ESPP. \nOutstanding Warrants \nAll of the Companys outstanding warrants are currently exercisable. The exercise price and number of shares issuable upon exercise of the warrants may be adjusted in certain circumstances including in the event of a stock dividend, recapitalization, reorganization, merger or consolidation. A summary of the terms of outstanding warrants and the number of shares of RMNI Common Stock issuable upon exercise, is presented below as of December31, 2020 and 2019 (in thousands, except per share amounts): \n_____________________ \n(1) \nThe expiration date for the Origination Agent Warrant is the earlier to occur of the stated expiration date or the date when the Company experiences a change of control. \n(2) \nThe Origination Agent Warrant was issued upon consummation of the Mergers discussed in Note 4 and resulted in the elimination of the redemption features associated with two warrants issued in 2016 as discussed below under /RSI Redeemable Warrants. \n(3) \nOn May 26, 2015, GPIA completed an initial public offering that included warrants for 8.6 million shares of Common Stock (the Public Warrants). The Company may elect to redeem the Public Warrants, in whole or in part, at a price of $0.01 per Public Warrant if (i) 30 days prior written notice is provided to the holders, and (ii) the last sale price of the \n-34- \nRIMINI STREET, INC. \n### \nCompanys Common Stock equals or exceeds $18.00 per share for any 20 trading days within a 30-trading day period<|endoftext|>50% of the then outstanding redeemable warrants is unlimited, examples of such amendments could be amendments to, among other things, increase the exercise price of the warrants, convert the warrants into cash or stock (at a ratio different than initially provided), shorten the exercise period or decrease the number of shares of our common stock purchasable upon exercise of a warrant. Our initial stockholders may purchase redeemable warrants with the intention of reducing the number of redeemable warrants outstanding or to vote such warrants on any matters submitted to warrantholders for approval, including amending the terms of the redeemable warrants in a manner adverse to the interests of the registered holders of redeemable warrants. While our initial stockholders have no current commitments, plans or intentions to engage in such transactions and have not formulated any terms or conditions for such transactions, there is no limit on the number of our redeemable warrants that our initial stockholders may purchase and it is not currently known how many redeemable warrants, if any, our initial stockholders may hold at the time of our initial business combination or at any other time during which the terms of the redeemable warrants may be proposed to be amended. Please see Item 1. \n\n\nIf any action, the subject matter of which is within the scope of the forum provisions of the warrant agreement, is filed in a court other than a court of the State of New York or the United States District Court for the Southern District of NewYork (a foreign action) in the name of any holder of our warrants, such holder shall be deemed to have consented to: (x)the personal jurisdiction of the state and federal courts located in the State of NewYork in connection with any action brought in any such court to enforce the forum provisions (an enforcement action), and (y)having service of process made upon such warrant holder in any such enforcement action by service upon such warrant holders counsel in the foreign action as agent for such warrant holder. \n\n\nWe have the ability to redeem outstanding redeemable warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01 per warrant, provided that the last sale price of our ClassA common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock 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 we send the notice of redemption to the warrant holders. Redemption of the outstanding warrants could force you to: (1)exercise your redeemable warrants and pay the exercise price therefor at a time when it may be disadvantageous for you to do so (2)sell your redeemable warrants at the then-current market price when you might otherwise wish to hold your redeemable warrants; or (3)accept the nominal redemption price which, at the time the outstanding redeemable warrants are called for redemption, is likely to be substantially less than the market value of your redeemable warrants. \nIn addition, we may redeem your redeemable warrants after they become exercisable for $0.10 per warrant upon a minimum of 30days prior written notice of redemption provided that holders will be able to exercise their redeemable warrants prior to redemption for a number of ClassA common stock determined based on the redemption date and the fair market value of our ClassA common stock. In addition, such redemption may occur at a time when the redeemable warrants are out-of-the-money, in which case you would lose any potential embedded value from a subsequent increase in the value of the ClassA common stock had your warrants remained outstanding. \nOur redeemable warrants and founder shares may have an adverse effect on the market price of our ClassA common stock and make it more difficult to effectuate our initial business combination. \nWe issued detachable redeemable warrants to purchase 6,737,242 shares of our ClassA common stock in the IPO, and will also be distributing warrants (which will be in the form of distributable redeemable warrants and, to the extent any public stockholders redeem ClassA common stock in connection with the initial business combination, distributable redeemable warrants and private placement warrants) to purchase 6,737,242 shares of our ClassA common stock in connection with the closing of our initial business combination, each at a price of $11.50 per whole share (subject to adjustment as provided herein). Simultaneously with the closing of the IPO and the exercise of the underwriters over-allotment option, we also issued an aggregate of 6,723,127 private placement warrants, each exercisable to purchase one share of ClassA common stock at a price of $11.50 per share, subject to adjustment as provided herein. Our initial stockholders currently hold 10,105,863 founder shares. In addition, if our sponsor, Starboard or certain of our officers and directors make any working capital loans, up to $1.5 million of such loans may be converted into warrants, at the price of$1.50 per warrant, at the option of the lender. \n\nThe private placement warrants issued to the sponsor and the private placement warrants issued to the forward purchasers are identical to the redeemable warrants sold as part of theunits in the IPO except that, so long as they are held by our sponsor or its permitted transferees or, in the case of any private placement warrants issued to the forward purchasers, held by our forward purchasers or their permitted transferrees: (1)they will not be redeemable by us, except as otherwise set forth herein; (2)they (including the ClassA common stock issuable upon exercise of these warrants) may not, subject to certain limited exceptions, be transferred, assigned or sold by our sponsor or the forward purchasers, as applicable, until 30days after the completion of our initial business combination; \nBecause each unit contains one-sixth of one warrant and only a whole warrant may be exercised, theunits may be worth less thanunits of other blank check companies. \nEach unit contains one-sixth of one detachable redeemable warrant. Because, pursuant to the warrant agreement, the redeemable warrants may only be exercised for a whole number of shares, only a whole warrant may be exercised at any given time. While holders ofunits (or the underlying shares of ClassA common stock) who elect not to redeem such shares in connection with our initial business combination will also receive a distribution of redeemable warrants in the form of distributable redeemable warrants, it is likely that the number of distributable redeemable warrants issued to any such holder will not be a whole number. This is different from other offerings similar to ours whoseunits include one share of common stock and one warrant to purchase one whole share. We have established the components of theunits in this way in order to reduce the dilutive effect of the warrants upon completion of a business combination since the detachable redeemable warrants and distributable warrants will be exercisable in the aggregate for one-third of the number of shares compared tounits that each contain a warrant to purchase one whole share, thus making us, we believe, a more attractive merger partner for target businesses. Nevertheless, this unit structure may cause ourunits to be worth less than if they included a warrant to purchase one whole share. \n\nUnlike most blank check companies, if (i)we issue additional shares of ClassA common stock or equity-linked securities for capital raising purposes in connection with the closing of our initial business combination at an issue price or effective issue price of less than $9.20 per share (with such issue price or effective issue price to be determined in good faith by us and, (i)in the case of any such issuance to our sponsor or its affiliates, without taking into account any founder shares held by our sponsor or such affiliates, as applicable, prior to such issuance, and (ii)without taking into account (A)the transfer of founder shares or private placement warrants (including if such transfer is effectuated as a surrender to us and subsequent reissuance by us) by our sponsor in connection with such issuance) or (B)any private placement warrants issued pursuant to the forward purchase agreement (the Newly Issued Price), (ii)the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of our initial business combination on the date of the consummation of our initial business combination (net of redemptions), and (iii)the Market Value is below $9.20 per share, then the exercise price of the warrants will be adjusted to be equal to 115% of the higher of the Market Value and the Newly Issued Price, and the $18.00 per share redemption trigger price will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price. \n\nThese provisions include the ability of the board of directors to designate the terms of and issue new series of preferred shares, which may make more difficult the removal of management and may discourage transactions that otherwise could involve payment of a premium over prevailing market prices for our securities. \nSection203 of the DGCL affects the ability of an interested stockholder to engage in certain business combinations, for a period of threeyears following the time that the stockholder becomes an interested stockholder. We have elected in our amended and restated certificate of incorporation not to be subject to Section203 of the DGCL. Nevertheless, our amended and restated certificate of incorporation contains provisions that have the same effect as Section203 of the DGCL, except that it provides that affiliates of our sponsor and their transferees will not be deemed to be interested stockholders, regardless of thepercentage of our voting stock owned by them, and will therefore not be subject to such restrictions. \n\nOur amended and restated certificate of incorporation requires (unless we consent in writing to the selection if an alternative forum), to the fullest extent permitted by law, that derivative actions brought in our name, actions against directors, officers and employees for breach of fiduciary duty and other similar actions may be brought only in the Court of Chancery in the State of Delaware and, if brought outside of Delaware, the stockholder bringing the suit will be deemed to have consented to service of process on such stockholders counsel. \n\n\nEach of our officers and directors is engaged in several other business endeavors for which they may be entitled to substantial compensation and our officers and directors are not obligated to contribute any specific number of hours per week to our affairs. \nPlease see Item 10. for a discussion of our officers and directors other business affairs. \n\n\n\n\n\n\n\n\nCertain of our officers, directors and Industry Advisors are now, and all of them may in the future become, affiliated with entities engaged in business activities similar to those intended to be conducted by us and, accordingly, may have conflicts of interest in determining to which entity a particular business opportunity or other transaction should be presented. \nUntil we consummate our initial business combination, we will be engaged in the business of identifying and combining with one or more businesses. Our sponsor and officers and directors are, or may in the future become, affiliated with entities (such as operating companies, investment vehicles or other blank check companies) that are engaged in a similar business. As a result, our officers or directors could have conflicts of interest in determining whether to present business combination opportunities to us or to any other entity with which they may become involved. \nAs described in Item 1. BusinessAcquisition Process). \nAccordingly, if any Industry Advisor becomes aware of a business combination opportunity which is suitable for one or more entities to which he has fiduciary, contractual or other obligations or duties, he will honor those obligations and duties to present such business combination opportunity to such entities first and only present it to us if such entities reject the opportunity and he determines to present the opportunity to us. These conflicts may not be resolved<|endoftext|>No. 1, and in the Companys Annual Report on Form10-K for the fiscal year ended December31, 2020 for filing with the SEC. \nThis Compensation Committee Report does not constitute soliciting material and should not be deemed filed or incorporated by reference into any other Company filing with the SEC, except to the extent that the Company specifically incorporates this Report by reference into another Company filing. \n\nJohn M. McMillin, \nChair \n### Steven M. Cohen \nIra J. Lamel \nExecutive Compensation \n\nThe following table sets forth information regarding compensation earned by our NEOs during years 2019 and 2020. In accordance with the rules promulgated by the SEC, certain columns relating to information that is not applicable have been omitted from this table. \n(1) \nThe amounts in this column represent the sign-on cash bonus paid to Mr. Rusie in connection with the commencement of his employment with Whole Earth Brands. The terms of Mr. Rusies sign-on cash bonus are described under Sign-on Cash Bonus above. The amounts shown for Mr. Bailey and Mr. Rusie represent annual bonuses earned in 2019 or 2020 and paid in cash in the first quarter of the following year, based on the attainment of individual and company performance metrics as determined by the Merisant and MAFCO board of directors in its discretion. \n(2) \nThe grant date fair market value of each equity award was computed in accordance with FASB ASC Topic 718. \n(3) \nThe amounts in this column reflect payments to the NEOs in accordance with the legacy Cash LTIP, as described above. \n(4) \nAmounts in this column include: \n(5) \nMr. Manzone is paid in Swiss Francs (CHF). Mr. Manzones compensation has been converted to U.S. dollars based on the Financial Times December 31, 2020 exchange rate of 1 CHF = $1.13. \n(6) \nDue to Mr. Baileys resignation, this equity award was forfeited. \n(7) \nMr. Rusie was hired as CFO of Merisant and Mafco Worldwide on December 9, 2019. \n(8) \nThis amount represents the transaction bonus described in Mr. Manzones employment agreement above. Mr. Manzone received 3,260,600 CHF reflecting an exchange rate of 1 CHF = $1.05. \n(9) \nMr. Manzone was paid a retention payment in 2019 of $500,000 USD. \n(10) \nCompensation for Mr. Manzone in Swiss Francs (CHF) has been converted to U.S. Dollars (USD) based on the Financial Times exchange ratio of 1.025 as of February 11, 2020. \n\nThe following table sets forth information with respect to outstanding equity awards for each of our NEOs as of December 31, 2020: \n(1) \nEach NEO was granted restricted stock units (RSUs) under the 2020 LTIP. The RSUs will settle in shares of the Companys common stock on a one-for-one basis and become fully vested, subject to the grantees continued employment with the Company, on or about November 19, 2021 (with full vesting upon an involuntary termination of employment without cause). In the event of a voluntary termination by the grantee prior to the vesting date, all RSUs subject to the award will be forfeited. \n(2) \nMarket value of stock computed by multiplying the closing market price of FREE stock on December 31, 2020 ($10.90) by the number of RSUs granted. \n(3) \nMr. Bailey forfeited his RSUs upon his resignation. \n\nThe severance benefits for our NEOs are provided under individual employment agreements and, in certain cases, equity award agreements. Upon any termination of employment, each NEO will be entitled to receive, within thirty days following termination, any accrued and vested payments and benefits that have not yet been paid, including unpaid base salary earned, accrued but unused vacation and reimbursement for any unreimbursed business expenses (collectively, the \n### Accrued Benefits \n). Additionally, depending on the type of termination, each NEO may be entitled to receive severance payments in addition to the Accrued Benefits. Terminations under which we may pay severance benefits include in the event we terminate an NEOs employment without cause, an NEO resigns for good reason or an NEOs employment is terminated following designated Change in Control situations (in each case, only as outlined in the applicable employment arrangement). The severance payments are subject to the NEOs execution and non-revocation of a general release of claims in favor of the Company and continued compliance with customary confidentiality and non-solicitation requirements. \nIn the event of termination of employment due to death or disability, the NEOs are entitled to only receive payment of any Accrued Benefits. In addition, all unvested equity awards are forfeited upon the NEOs termination due to death or disability, unless the Compensation Committee determines otherwise in its discretion pursuant to the terms of the 2020 LTIP. \nNone of the NEOs are automatically entitled to benefits upon a change in control of the Company. Mr. Manzone is entitled to termination benefits and enhanced termination payments or benefits in the event he is terminated within twelve (12) months following a change in control of the Company, as described in his employment agreement above. Mr. Rusies termination benefits are also described above. Mr. Bailey did not receive severance upon his resignation from the Company. \n### Director Compensation Plans \nIn connection with the Business Combination, the Company adopted a new Board compensation program which is designed to provide competitive compensation necessary to attract and retain high quality non-employee directors and to encourage ownership of our common stock to further align their interests with those of our stockholders. The new program provides the following compensation for non-employee directors following the Business Combination: an annual cash retainer of $65,000 (earned and payable in equal installments on the first day of each fiscal quarter); a restricted stock award with a value of $65,000 (based on the fair market value of a share of common stock on the grant date or, in some cases, on the closing of the Business Combination) payable in the form of restricted stock, granted upon initial election to the Board and then each year at the annual shareholders meeting; an annual cash retainer of $250,000 for the Executive Chairman of the Board (earned and payable in equal installments on the first day of each fiscal quarter); and a restricted stock award with a value of $250,000 for the executive chairman of the Board (based on the fair market value of a share of common stock on the grant date or, in some cases, on the closing of the Business Combination), granted upon initial election to the Board and then each year at the annual shareholders meeting. \nFor the purposes of the restricted stock awards granted in 2020 only, each non-employee director received their respective restricted stock awards on or about September 30, 2020, with 100% of the shares scheduled to vest on the close of business on the date of the Companys 2022 annual shareholder meeting, except in the case of an involuntary termination, change in control, death or disability and subject to such other terms and conditions as may otherwise be set forth in the applicable award agreement \n\nThe following table provides information concerning the compensation of each non-employee director who served on the Board in 2020. Company employees did not receive compensation for serving as a director. \n(1) \nThe amounts in this column represent the aggregate grant date fair market value of restricted stock awards granted to each non-employee director, computed in accordance with FASB ASC Topic 718. The value represents the number of shares issued multiplied by the closing price on the date of grant ($8.34). The additional value is the result of rounding. \n(2) \nSince Mr. Manzone is an employee, he did not receive any compensation for his service as a director. \nItem 12. \n### Security Ownership of Principal Stockholders \nSet forth below are stockholders known by us to be the beneficial owner of more than 5% of our common stock as of April 6, 2021. As of April 6, 2021, there were 38,426,669 shares of our common stock outstanding. \n(1) \nBased solely on Schedule 13G filed by River Road Asset Management, LLC on February 11, 2021.The principal business address for River Road Asset Management, LLC is 462 S. 4th Street, Suite 200, Louisville, Kentucky 40202. \n(2) \nBased solely on a Schedule 13G filed on February 12, 2021, (i) Rubric Capital Management LP (Rubric Capital LP) is the investment adviser to certain investment funds and/or accounts (collectively, the Rubric Funds); and (ii) David Rosen is the managing member of Rubric Capital Management GP LLC (Rubric Capital GP), which is the general partner of Rubric Capital LP. In such capacities Rubric Capital LP, Mr. Rosen and Rubric Capital GP may each be deemed to beneficially own an aggregate of 2,600,000 shares of Common Stock. The principal business address for each reporting person is 155 East 44th St, Suite 1630, New York, NY 10017 \nOn July 24, 2020, Dicalite Management Group, Inc. (Dicalite) filed Amendment No. 1 to its Schedule 13G indicating that it had ceased to be the beneficial owner of more than five percent of Companys equity securities. Subsequently, Dicalite informed the Company that it had liquidated its entire position in the Companys equity securities. \nSecurity Ownership of \nThe following table shows, as of April 6, 2021, the amount of our common stock beneficially owned by: our directors; our executive officers named in the Summary Compensation Table; \nBeneficial ownership includes those shares of our common stock the reporting person has the power to vote or transfer, stock options that are currently exercisable or exercisable within 60days, and deferred stock units that may vest within 60days. The principal business address for each reporting person is 125 S. Wacker Drive, Suite 3150, Chicago, Illinois. Unless otherwise indicated, the persons named below have sole voting and investment power over the shares listed. \n* \nReflects beneficial ownership of less than one percent (1%) of our outstanding common stock. \n(1) \nIncludes 29,976 shares of restricted stock subject to vesting. \n(2) \n\n(3) \n\n(4) \n\n(5) \n\n\nThe following table summarizes information as of December 31, 2020 relating to stock authorized for issuance under our equity compensation plans, which consists of only our 2020 LTIP. \n1) \nIncludes 68,946 shares of restricted stock (RSAs) and 632,996 restricted stock units (RSUs) outstanding under our 2020 LTIP. \n(2) \nThere is no amount provided under this column because only RSAs and RSUs have been granted and these types of awards do not require the payment of any consideration by the award recipients. \n(3) \nAwards issuable under our 2020 LTIP include stock options, stock appreciation rights, stock awards, stock units, performance shares, performance units, and other stock-based awards. \nItem 13. \n\nOur Board has adopted a written related person transaction policy that sets the following policies and procedures for the review and approval or ratification of related person transactions. A related person transaction is a transaction, arrangement or relationship in which our company or any of our subsidiaries was, is or will be a participant, the amount of which involved exceeds $120,000, and in which any related person had, has or will have a direct or indirect material interest. A related person means: any person who is, or at any time during the applicable period was, one of the post-combination companys executive officers or one of our directors; 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 or sister-in-law of a director, executive officer or a beneficial owner of more than 5% of our voting stock, and any person (other than a tenant or employee) sharing the household of such director, executive officer or beneficial owner of more than 5% of our voting stock; and 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. \nSpecifically, pursuant to our audit committee charter, the audit committee has the responsibility to review related party transactions. \n### Item 14. \nThe following table presents the aggregate fees billed for professional services rendered by Ernst & Young LLP for the fiscal years ended<|endoftext|>Shares of common stock except to the extent of his or its pecuniary interest. The address of Mr. Hale, Fund Management, Capital Management, Hale Capital and HCP-FVA is 17 State Street, Suite 3230, New York, NY 10004. \n(4) \nBased on information contained in a report on Schedule 13G/A filed by Nantahala Capital Management, LLC (Nantahala), Wilmot B. Harkey and Daniel Mack on February 16, 2021. Consists of (i) 569,310 shares of common stock and (ii) 99,807 shares of Series A Preferred Stock that may be converted for 9,736 shares of common stock within 60 days of March 31, 2021. Messrs. Harkey and Mack are the managing members of Nantahala and disclaim beneficial ownership of such shares of common stock except to the extent of their pecuniary interest. The address of Messrs. Harkey and Mack and Nantahala is 19 Old Kings Highway S, Suite 200, Darien, CT 06820. \n(5) \nBased on information contained in a report on Schedule 13D/A filed by ESW Capital, LLC and Joseph A. Liemandt on December 31, 2018. Consists of (i) 1,286,135 shares of common stock and (ii) 224,786 shares of Series A Preferred Stock that may be converted for 21,933 shares of common stock within 60 days of March 31, 2021. ESW Capital, LLC and Mr. Liemandt disclaim Section13(d) beneficial ownership with respect to 21,933 shares of common stock issuable upon conversion of Series A Preferred Stock as a result of the application of the 9.99% blocker contained in the Certificate of Designations. Mr. Liemandt is the sole voting member of ESW Capital, LLC and disclaims beneficial ownership of such shares of common stock except to the extent of his pecuniary interest. The address of Mr. Liemandt and ESW Capital, LLC is 401 Congress Ave., Suite 2650, Austin, TX 78701. \n(6) \nBased on information contained in Forms 3 and 4 filed by Mr. Kelly and certain other information. Consists of (i) 10,986 shares of common stock, and (ii) 1,104 shares of restricted stock units expected to vest within 60 days of March 31, 2021 (does not include 114,446 shares of restricted stock units that are not expected to vest within 60 days of March 31, 2021) and (iii) 1,405 shares of Series A Preferred Stock held by Mr. Kelly, which equates to 137 shares of common stock on an as-converted basis (without giving effect to the 9.99% blocker contained in the Certificate of Designations), held by Mr. Kelly. \n(7) \nRudolph and certain other information. Consists of 2,568 shares of common stock and 1,104 shares of restricted stock units that are expected to vest within 60 days of March 31, 2021 held by Mr. Rudolph (does not include 114,446 shares of restricted stock units that are not expected to vest within 60 days of March 31, 2021). \n(8) \nMiller and certain other information. Consists of (i) 2,535 shares of common stock held by Mr. Miller, (ii) 1,104 shares of restricted stock units expected to vest within 60 days of March 31, 2021 (does not include 114,446 shares of restricted stock units that are not expected to vest within 60 days of March 31, 2021), and (iii) 26 shares of common stock held by PV Strategies LLC, a hedge fund managed by Miller Investment Management LLC, a registered investment adviser of which Mr. Miller is a principal. Mr. Miller, as a principal of Miller Investment Management LLC, may be deemed the beneficial owner of shares owned by PV Strategies LLC. Mr. Miller disclaims beneficial ownership of such shares except to the extent of his pecuniary interest therein. \n(9) \nBrooks and certain other information. Consists of 38,298 shares of common stock and 18,399 shares of restricted stock units expected to vest within 60 days of March 31, 2021 held by Brooks (does not include 680,775 shares of restricted stock units that are not expected to vest within 60 days of March 31, 2021). \n(10) \nWolfe and certain other information. Consists of 3,680 shares of common stock and 1,840 shares of restricted stock units expected to vest within 60 days of March 31, 2021 held by Wolfe (does not include 82,797 shares of restricted stock units that are not expected to vest within 60 days of March 31, 2021). \n(11) \nConsists of shares of common stock held by all directors and executive officers as a group and 3,597,890 shares held by HCP-FVA. \n### Item 13. \n\nThe Companys Board has recognized that related party transactions present a heightened risk of conflicts of interest and/or improper valuation (or the perception thereof). The Board therefore adopted a policy to be followed in connection with all related party transactions involving the Company. \n### A.Identification of Related Transactions \nUnder the policy, any Related Party Transaction shall be consummated or shall continue only if: \n1. the Audit Committee approves or ratifies such transaction in accordance with the guidelines set forth in the policy and if the transaction is on terms comparable to those that could be obtained in arms length dealings with an unrelated third party; or \n2. the transaction is approved by the disinterested members of the Board; or \n3. the transaction involves compensation approved by the Companys Compensation Committee. \nFor purposes of the policy, a Related Party is: \n1. a senior officer (which includes at a minimum each executive officer) or director of the Company; or \n2. a shareholder owning in excess of five percent of the Company (or its controlled affiliates); or \n3. a person who is an immediate family member of a senior officer or director; or \n4. an entity which is owned or controlled by someone listed in 1, 2 or 3 above, or an entity in which someone listed in 1, 2 or 3 above has a substantial ownership interest or control of such entity. \nFor purposes of the policy, a Related Party Transaction is a transaction between the Company and any Related Party (including any transactions requiring disclosure under Item 404 of Regulation S-K under the Exchange Act), other than: \n1. transactions available to all employees generally; and \n2. transactions involving less than $5,000 when aggregated with all similar transactions. \n### B.Audit Committee Approval \nThe Board determined that the Audit Committee of the Board is best suited to review and approve Related Party Transactions. Accordingly, at each calendar years first regularly scheduled Audit Committee meeting, management recommends Related Party Transactions to be entered into by the Company for that calendar year, including the proposed aggregate value of such transactions if applicable. After review, the Audit Committee approves or disapproves such transactions and at each subsequently scheduled meeting, management updates the Audit Committee as to any material change to those proposed transactions. \nIn the event management recommends any further Related Party Transactions subsequent to the first calendar year meeting, such transactions may be presented to the Audit Committee for approval or preliminarily entered into by management subject to ratification by the Audit Committee; provided that if ratification is not forthcoming, management shall make all reasonable efforts to cancel or annul such transaction. \n### C.Corporate Opportunity \nThe Board recognizes that situations may exist where a significant opportunity may be presented to management or a member of the Board that may equally be available to the Company, either directly or via referral. Before such opportunity may be consummated by a Related Party (other than an otherwise unaffiliated 5% stockholder), such opportunity shall be presented to the Board of the Company for consideration. \nD.Disclosure \nAll Related Party Transactions are to be disclosed in the Companys applicable filings as required by the Securities Act of 1933 and the Exchange Act and related rules. Furthermore, all Related Party Transactions shall be disclosed to the Audit Committee of the Board and any material Related Party Transaction shall be disclosed to the full Board. \n### E.Other Agreements \nManagement assures that all Related Party Transactions are approved in accordance with any requirements of the Companys financing agreements. \nPlease see Item 10. for a discussion of Director independence. \nRelated Party Transactions Reviewed During 2019 and 2020 \nMartin M. Hale, Jr., a member of the Companys Board of Directors, is a general partner of HCP-FVA, the holder in excess of 50% of the Companys Series A Preferred Stock. The Series A Preferred Stock was purchased by Hale Capital, of which Mr. Hale is a general partner, pursuant to a September 16, 2013 stock purchase agreement with the Company at a time when Mr. Hale was not a director of the Company. Hale Capital subsequently assigned all of its rights in the Series A Preferred Stock to HCP-FVA. Under the terms of the Certificate of Designations, the holders of the Series A Preferred Stock are entitled, as a group, to nominate and to elect up to two directors so long as at least 85% of the Companys Series A Preferred Stock is outstanding. HCP-FVA, the sole holder of the Series A Preferred Stock at the time, nominated and elected Mr. Hale in September 2013 and Michael P. Kelly on October 29, 2014, to the Companys Board of Directors. \nOn November 17, 2017, HCP-FVA provided a commitment letter to the Company agreeing to finance up to$3 millionto the Company (the Commitment) on the terms, and subject to the conditions, set forth in the Commitment. As part of that Commitment, on November 17, 2017, the Company entered into a Loan and Security Agreement with HCP-FVA and certain other loan parties named therein, pursuant to which the Lender made a short term loan to the Company in the principal amount of$500,000payable on May 17, 2018. In connection with the short term loan, the Company issued HCP-FVA Backstop Warrants to purchase138,591shares of common stock. See Note (7) \nNotes Payable and Stock Warrants for more information. \nOn February 23, 2018, we closed on the Commitment whereby HCP-FVA purchased$3 millionof Units (as defined in Note ( \n) \n### Notes Payable and Stock Warrants \n) to backstop a proposed private placement of Units to certain eligible stockholders of the Company. HCP-FVA subscribed for the full$3 millionof Units (at the Companys election) in the Commitment by payment of$2.5 millionin cash and the conversion of the$500,000short term loan In connection therewith, the Company issued HCP-FVA additional Backstop Warrants to purchase415,774shares of common stock and Financing Warrants to purchase3,669,900shares of common stock. \nOn October 9, 2018, the Company closed on the final tranche of its previously-announced Financing of Units to certain eligible stockholders of the Company. As a result, the Company received an additional$1,000,000of gross proceeds from new investors (the New Investors) which is in addition to the$3,000,000of gross proceeds previously received from HCP-FVA through the subscription of30,000,000Units pursuant to the Commitment on February 23, 2018. \nIn addition to providing the Company with$1,000,000of gross proceeds, the New Investors purchased$520,000of the Term Loan held by HCP-FVA and342,000of the900,000shares of Series A Preferred Stock held by HCP-FVA. Financing Warrants to purchase636,109shares of common stock held by HCP-FVA were also cancelled. Accordingly, the New Investors held Financing Warrants to purchase1,859,420shares of common stock and HCP-FVA held Financing Warrants to purchase3,033,791shares of common stock. The transfer of securities by HCP-FVA to New Investors was subject to certain transfer limitations to ensure the preservation of the Companys net operating loss carry forward. \nIn December 2018, outstanding Financing Warrants to purchase 489,321,074 of the Companys common stock were exercised resulting in the issuance of 489,321,074 shares of common stock (the Warrant Exercise). In connection with the Warrant Exercise, the Company received proceeds of approximately $489,321 which was used to reduce the outstanding principal due on the Amended and Restated Loan Agreement. Such amounts repaid included $303,379.07 to HCP-FVA, $122,214.13 to ESW Capital LLC, $54,264.08 to Nantahala and $763.92 to Mr. Kelly. \nOn May 21, 2019, HCP-FVA exercised its warrant to purchase 1,543,630 shares of common stock on a cashless exercise basis and was issued 1,518,107 shares of common stock. \nOn December 27, 2019, the Company entered into Amendment No. 1 to Amended and Restated Term Loan Credit Agreement, by and among the Company, certain of the Companys affiliates in their capacities as guarantors, HCP-FVA as administrative agent<|endoftext|>Date of the merger (excluding reductions to the extent due to (1) the sale of shares in which the Roney Representative has no pecuniary interest or (2) issuances unrelated to a Material Stock Acquisition) and (B) represents at least the Minimum Number, the Roney Representative will, without further action, only be entitled to designate up to three Roney Nominees; \n(A) is reduced by at least 75% from that owned on such closing date (excluding reductions to the extent due to due to (1) the sale of shares in which the Roney Representative has no pecuniary interest or (2) issuances unrelated to a Material Stock Acquisition) and (B) represents at least the Minimum Number, the Roney Representative will, without further action, only be entitled to designate up to two Roney Nominees; and represents less than the Minimum Number, the Roney Representative will, without further action, no longer have any nomination rights hereunder. \nLikewise, until the 2028 Annual Meeting and subject to the terms of the investor rights agreement, the Sponsor may designate all but two of the remaining directors, at least one of whom so designated will qualify as an independent director under applicable Nasdaq listing requirements (collectively, the Sponsor Nominees), for inclusion by the Company and its board of directors, acting through the nominating and governance committee of the board of directors, in the slate of nominees recommended to shareholders for election as directors at any annual or special meeting of the shareholders at which directors are to be elected. Notwithstanding this agreement, if the beneficial ownership of the Sponsor: \n(A) is reduced by at least 50%, but less than 75%, from that owned on the closing date of the merger (excluding reductions to the extent due to issuances unrelated to a Material Stock Acquisition) and (B) represents at least the Minimum Number, the Sponsor will, without further action, only be entitled to designate up to two Sponsor Nominees; \n(A) is reduced by at least 75% from that owned on such closing date (excluding reductions to the extent due to issuances unrelated to a Material Stock Acquisition) and (B) represents at least the Minimum Number, the Sponsor will, without further action, only be entitled to designate up to one Sponsor Nominee; and represents less than the Minimum Number, the Sponsor will, without further action, no longer have any nomination rights under the investor rights agreement. \nThe two members of the board who are neither Roney Nominees nor Sponsor Nominees will be individuals who qualify as independent directors under Nasdaq and TSX listing requirements and are nominated by the Nominating and Governance Committee and the entire board of directors. If and when the Companys securities are no longer listed on the TSX and the terms of these Nominating Committee Nominees expire, then the two positions on the board that would be filled by Nominating Committee Nominees will instead be filled by two additional Sponsor Nominees. \nThe Roney Representative as defined in the investor rights agreement is Patrick A. Roney or, if he is not then living or is incapacitated, the trustee of the Rudd Trust, the SLR Trust and the Rudd Foundation that owns a plurality of the total shares of common stock then held by them. \nA Material Stock Acquisition as defined in the investor rights agreement means a transaction in connection with which Parent issues shares of common stock representing more than 35% of such stock then outstanding. \nMinimum Number as defined in such agreement means 4% of the shares of the Companys common stock outstanding as of the relevant date or such lower percentage to which the Roney Representative or Sponsor, as applicable, may agree (such agreement not to be unreasonable withheld) upon the request of the other. \nIn furtherance of the nomination rights provided for in the investor rights agreement, such agreement also provides that: (i) in connection with each meeting or consent solicitation of at or by which directors are to be elected, the Companys board of directors (including any committee thereof) will nominate and recommend for election and include such recommendation in a timely manner in any proxy statement, consent solicitation or other applicable announcement to shareholders, and the Specified Investors will vote for each Roney Nominee and Sponsor Nominee; and (ii) the Company, acting through its board of directors (including any committee thereof), will fill any vacancy of a Roney Nominee or a Sponsor Nominee on the board with a Roney Nominee or a Sponsor Nominee, respectively. \nWith respect to voting on matters other than the election of directors, the investor rights agreement provides as follows for the period beginning on the closing date of the merger and ending the earlier of seven years from that date and the date on which the Roney Investors cease to own, in the aggregate, 10% or more of the Companys outstanding common stock. During that period, each Major Investor will irrevocably appoint the Roney Representative as such Major Investors proxy, to the fullest extent of such Major Investors rights with respect to the shares of the Companys common stock owned by such Major Investor as of the closing date or thereafter acquired, to vote each such shares at each annual or special meeting of shareholders on all matters other than, in the case of Sponsor, certain reserved matters. Such reserved matters are (a) the issuance of equity or the adoption of any equity plan, (b) any merger, consolidation or other business combination transaction to which the Company is a party (other than such a transaction resulting in a change of domicile, without more), (c) any transaction pursuant to which any executive officer, director or affiliate of the Company has an interest that is different from, or in addition to, the interests of the Companys shareholders generally, (d) any amendment of the Companys articles of incorporation or bylaws (other than an amendment that does not discriminate by its terms against any class, series or group of shareholders or any particular shareholder or adversely affect shareholder rights in a significant respect), and (e) any matter as to which Sponsor is advised in writing by a nationally recognized law firm that the failure to exercise independent judgment would be a breach of any law, exchange listing requirement, fiduciary duty or contract. \nUpon consummation of the transactions, the Specified Investors beneficially owned approximately 48.7% of the Companys common stock. \n### Resale Restrictions. \nPursuant to the investor rights agreement, the Major Investors (other than the Sebastiani Investors) agreed that they will not, for 18 months following the closing of the merger, sell, offer to sell, contract or agree to sell, pledge, grant any option to purchase or otherwise dispose of, directly or indirectly, establish or increase a put equivalent position or liquidate or decrease a call equivalent position, enter into any swap or other arrangement that transfers to another any of the economic consequences of ownership of the Companys common stock or otherwise hedges such consequences, including any short sale or any purchase, sale or grant of any right with respect to such stock or any security that includes, relates to or derives value from such stock (in each case, subject to certain exceptions set forth in the investor rights agreement). After that, approximately 94% of such investors shares will be released from the lock-up in equal amounts monthly over a 17-month period. Any remaining shares held by such investors will be released from the lock-up on the date that is 35 months following the closing of the merger. All other Legacy VWE investors party to the investor rights agreement (including the Sebastiani Investors but excluding Wasatch) agreed that they will not, for six months after the closing of the merger, sell, offer to sell, contract or agree to sell, pledge, grant any option to purchase or otherwise dispose of, directly or indirectly, establish or increase a put equivalent position or liquidate or decrease a call equivalent position, enter into any swap or other arrangement that transfers to another any of the economic consequences of ownership of the Companys common stock or otherwise hedges such consequences, including any short sale or any purchase, sale or grant of any right with respect to such stock or any security that includes, relates to or derives value from such stock (in each case, subject to certain exceptions). After that, approximately 83% of their shares will be released from the lock-up in equal amounts monthly over a five-month period. Any remaining shares held by such other Legacy VWE investors will be released from the lock-up on the date that is 11 months after the closing of the merger. \nModification or Amendment. \nThe investor rights agreement may be amended and the Company may take action therein prohibited, or omit to perform any act therein required to be performed by it, if and only if the Company has obtained the consent of each Major Investor holding at least 5% of the outstanding shares of the Companys common stock and, during the Roney Director Designation Period, the Roney Representative, but the resale restrictions described above cannot be amended without the prior written consent of any Major Investor that would be adversely affected by the amendment. \n### Registration Rights. \nUnder the investor rights agreement, (i) Wasatch and (ii) after the initial 18-month lock-up period provided for in the investor rights agreement, the Sponsor or any Major Investor holding not less than 10% of the shares of the Companys common stock held by all Legacy VWE Investors in the aggregate, may demand to sell all or a portion of their registrable securities in an SEC-registered offering up to six times, in the case of Wasatch and such Major Investors, and up to three times, in the case of the Sponsor, in each case subject to certain minimum requirements and customary conditions. The investor rights agreement also provides the Sponsor and all holders of Legacy VWE capital stock party thereto with piggy-back and Form S-3 registration rights, subject to certain minimum requirements and customary conditions. The investor rights agreement also provides that the Company will pay certain expenses relating to such registrations and indemnify the registration rights holders against (or make contributions in respect of) certain liabilities which may arise under the Securities Act. Approximately 27 million shares of the Companys common stock issued to Legacy VWE shareholders in connection with the merger are expected to be covered by the registration rights provisions of the investor rights agreement. \n### Item 14. Principal Ac counting Fees and Services \nAudit Fees \nMoss Adams billed the Company $3,695,488 in the aggregate for services rendered for the audit of the Companys 2021 fiscal year and services in connection with the SEC Form S-4 and Super 8-K filings. \nRSM billed BCAC $101,000 in the aggregate for services rendered for the audit of the Companys 2020 fiscal year and the review of the Companys interim consolidated financial statements. \n### Audit-Related Fees \nMoss Adams billed the Company $16,275 for the audit of the Companys 401(k) plan. \nRSM billed BCAC $137,000 for audit-related services rendered during the Companys fiscal year 2020. The services related to due diligence related to contemplated acquisition of Vintage Wine Estates, Inc. and review of interim reporting period.. \n### Tax Fees and All Other Fees \nNeither Moss Adams nor RSM provided any tax services or other services to us during the Companys fiscal year 2021 or 2020. \nPolicy on Pre-Approval of Independent Registered Public Accounting Firm Services \nThe charter of the Audit Committee provides for the pre-approval of all audit services and all permitted non-audit services to be performed for the Company by the independent registered public accounting firm, subject to the requirements of applicable law. The procedures for pre-approving all audit and non-audit services provided by the independent registered public accounting firm include the Audit Committee reviewing audit-related services, tax services and other services. The Audit Committee periodically monitors the services rendered by and actual fees paid to the independent registered public accounting firm to ensure that such services are within the parameters approved by<|endoftext|>Upon request. \n\nInformation on executive compensation is set forth in our 2021 definitive Proxy Statement and is incorporated herein by this reference. \n\n\nInformation concerning the ownership of certain beneficial owners is set forth in our 2021 definitive Proxy Statement and is incorporated herein by this reference. \n\nInformation on security ownership of directors and officers is set forth in our2021definitive Proxy Statement and is incorporated herein by this reference. \n\nThe following table sets forth certain information concerning our equity compensation plans as of December 31,2020: \n(1) Includes shares granted under our ESPP and restricted stock incentive units and performance-unit awards granted under our ECP and our Deferred Compensation Plan for Non-employee Directors. For a brief description of the material features of this plan, see Note 13 of the in this Annual Report. Column (c) includes 143,990 and 2,798,956 shares available for future issuance under our ESPP and our ECP and Deferred Compensation Plan for Non-employee Directors, respectively. \n(2) Includes the Employee Stock Award Program. No shares under the Employee Stock Award Program have been issued since May 2017, and the Company does not intend to issue any further shares thereunder. \n(3) Compensation deferred into our common stock under our ECP and Deferred Compensation Plan for Non-employee Directors is distributed to participants at fair market value on the date of distribution. The price used to calculate the weighted-average exercise price in the table is $76.77, which represents the year-end closing price of our common stock on the NYSE. \n\nInformation on certain relationships and related transactions and director independence is set forth in our 2021 definitive Proxy Statement and is incorporated herein by this reference. \n\nInformation on the principal accountants fees and services is set forth in our 2021 definitive Proxy Statement and is incorporated herein by this reference. \nPART IV. \nITEM 15. \n\n\nPage No. \n(a) \n\n52-53 \n(b) \nConsolidated Statements of Income for the years ended December 31, 20 \n9 and 201 \n(c) \nConsolidated Statements of Comprehensive Income for the years ended December 31, 20 \n19 and 201 \n(d) \n\n(e) \nConsolidated Statements of Cash Flows for the years ended December 31, 20 \n9 and 201 \n(f) \nConsolidated Statements of Equity for the years ended December 31, 20 \n9 and 201 \n60-61 \n(g) \n\n62-91 \n(2) Consolidated Financial Statements Schedules \nAll schedules have been omitted because of the absence of conditions under which they are required. \n(3) Exhibits \n3.1 \nAmended and Restated Certificate of Incorporation of ONE Gas, Inc., dated May 24, 2018 (incorporated by reference to Exhibit 3.1 to ONE Gas, Inc.s Current Report on Form 8-K filed on May 30, 2018 (File No. 1-36108)). \n3.2 \nAmended and Restated By-Laws of ONE Gas, Inc. dated \n### April 27 \n(incorporated by reference to Exhibit 3.1 to ONE Gas, Inc.s Current Report on Form 8-K filed on \nApril \n27, 20 \n(File No. 1-36108)). \n4.1 \nForm of Common Stock Certificate (incorporated by reference to Exhibit 4.2 to ONE Gas, Inc.s Registration Statement on Form 10, Amendment No. 1-36108)). \n4.2 \nIndenture, dated January 27, 2014, between ONE Gas, Inc. and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 10.1 to ONE Gas, Inc.s Current Report on Form 8-K filed on January 30, 2014 (File No. 1-36108)). \n4.3 \nSupplemental Indenture No. 1, dated January 27, 2014, between ONE Gas, Inc. and U.S. Bank National Association, as trustee, with respect to the 2.070% Senior Notes due 2019, the 3.610% Senior Notes due 2024 and the 4.685% Senior Notes due 2044-(incorporated by reference to Exhibit 10.2 to ONE Gas, Inc.s Current Report on Form 8-K filed on January 30, 2014 (File No. 1-36108)). \n4.4 \n### Supplemental Indenture \nNo. 2 \n, dated \nNovember 5, 2018, among ONE Gas, Inc. and U.S. Bank National Bank Association, as trustee, with respect to the 4.50% Notes due 2048 (incorporated by reference to Exhibit 4.2 to ONE Gas, Inc.s Current Report on Form 8-K filed on November 6, 2018 (File No. 1-36108)). \n4.5 \nSupplemental Indenture No. 3, dated May 4, 2020, among ONE Gas, Inc. and U.S. Bank National Bank Association, as trustee, with respect to the 2.00% Notes due 2030 (incorporated by reference to Exhibit 4.2 to ONE Gas, Inc.s Current Report on Form 8-K filed on May 4, 2020 (File No. 1-36108)) \n4.6 \nDescription of the Registrants securities registered pursuant to Section 12 of the Securities Act of 1934 \n10.1 \nForm of ONE Gas, Inc. Indemnification Agreement between ONE Gas, Inc. and ONE Gas, Inc. officers and directors (incorporated by reference to Exhibit 10.5 to ONE Gas, Inc.s Registration Statement on Form \n10 filed on October 1, 2013 (File No. 1-36108)). \n10.2 \nONE Gas, Inc. Pre-2005 Nonqualified Deferred Compensation Plan (incorporated by reference to Exhibit 10.7 to ONE Gas, Inc.s Registration Statement on Form 10, Amendment No. 1-36108)). \n10.3 \nONE Gas, Inc. Nonqualified Deferred Compensation Plan (incorporated by reference to Exhibit 10.8 to ONE Gas, Inc.s Registration Statement on Form 10, Amendment No. 1-36108)). \n10.4 \nONE Gas, Inc. Pre-2005 Supplemental Executive Retirement Plan (incorporated by reference to \nExhibit 10.9 to ONE Gas, Inc.s Registration Statement on Form 10, Amendment No. 1-36108)). \n10.5 \nONE Gas, Inc. Supplemental Executive Retirement Plan, as amended and restated effective December 1, 2017 (incorporated by reference to Exhibit 10.8 to ONE Gas, Inc.s Annual Report on Form 10-K filed on February 22, 2018 (File No. 1-36108)). \n10.6 \nONE Gas, Inc. Officer Change in Control Severance Plan (incorporated by reference to Exhibit 10.12 to ONE Gas, Inc.s Registration Statement filed on Form 10, Amendment No. 1-36108)). \n10.7 \nONE Gas, Inc. Equity Compensation Plan, as amended and restated effective December 1, 2017 (incorporated by reference to Exhibit 10.11 to ONE Gas, Inc.s Annual Report on Form 10-K filed on February 22, 2018 (File No. 1-36108)). \n10.8 \nForm of 2019 Restricted Unit Award Agreement (incorporated by reference to Exhibit 10.12 to ONE Gas, Inc.s Annual Report on Form 10-K filed on February 20, 2019 (File No. 1-36108)). \n10.9 \nForm of 2019 Performance Unit Award Agreement (incorporated by reference to Exhibit 10.1 \n3 to ONE Gas, Inc.s Annual Report on Form 10-K filed on February 20, 2019 (File No. 1-36108)). \n10.10 \nForm of 2018 Restricted Unit Award Agreement (incorporated by reference to Exhibit 10.14 to ONE Gas, Inc.s Annual Report on Form 10-K filed on February 22, 2018 (File No. 1-36108)). \n10.11 \nForm of 2018 Performance Unit Award Agreement (incorporated by reference to Exhibit 10.15 to ONE Gas, Inc.s Annual Report on Form 10-K filed on February 22, 2018 (File No. 1-36108)). \n10.12 \nExtension Agreement dated as of October 5, 2018, among ONE Gas, Inc., Bank of America, N.A., as administrative agent, swing line lender, a letter of credit issuer and a lender, and the other lenders and letter of credit issuers parties thereto (incorporated by reference to Exhibit 10.1 to ONE Gas Incs Current Report on Form 8-K filed on October 5, 2018 (File No. 1-36108)). \n10.13 \nONE Gas, Inc. \n(in corporated by reference to Exhibit 10.16 to ONE Gas, Inc.s Annual Report on Form 10-K filed on February 20, 2020 (File No. 1-36108)). \n10.14 \nONE Gas, Inc. Deferred Compensation Plan for Non-Employee Directors (incorporated by reference to Exhibit 10.19 to ONE Gas, Inc.s Annual Report on Form 10-K filed on February 23, 2017 (File No. 1-36108)). \n10.15 \nCredit Agreement, dated as of April 7, 2020, among ONE Gas, Inc., Bank of America, N.A., as administrative agent, and the other lenders party thereto (incorporated by reference to Exhibit 10.1 to ONE Gas, Inc.s Current Report on Form 8-K filed on April 7, 2020 (File No. 1-36108)) \n10.16 \nForm of Commercial Paper Dealer Agreement (incorporated by reference to Exhibit 10.1 to ONE Gas, Inc.s Current \nRep ort o n \n### F orm \n- \nK filed on September 10, 2014 (File No. 1-36108)). \n10.17 \n### Form of 2020 Performance Unit Award Agreement \n(incorporated by reference to Exhibit 10.20 to ONE Gas, Inc.s Annual Report on Form 10-K filed on February 20, 2020 (File No. 1-36108)) \n10.18 \n### Form of 2020 Restricted Unit Award Agreement \n(incorporated by reference to Exhibit 10.21 to ONE Gas, Inc.s Annual Report on Form 10-K filed on February 20, 2020 (File No. 1-36108)) \n10.19 \nEquity Distribution Agreement, dated as of February 26, 2020, among ONE Gas, Inc. and Morgan Stanley & Co. LLC, BofA Securities, Inc., and Mizuho Securities USA LLC, acting as managers; Morgan Stanley & Co. LLC, Bank of America, N.A. and Mizuho Securities Americas LLC, acting as forward purchasers; and Morgan Stanley & Co. LLC, BofA Securities, Inc. and Mizuho Securities USA LLC, acting as forward sellers (incorporated by reference to Exhibit 1.1 to ONE Gas, Inc.s Current Report on Form 8-K filed on February 26, 2020 (File No. 1-36108)). \n10.20 \nForm of Master Forward Sale Confirmation (incorporated by reference to Exhibit 1.2 to ONE Gas, Inc.s Current Report on Form 8-K filed on February 26, 2020 (File No. 1-36108)). \n10.21 \nForm of 2017 Restricted Unit Award Agreement (incorporated by reference to Exhibit 10.15 to ONE Gas, Inc.s Annual Report on Form 10-K filed on February 23, 2017 (File No. 1-36108)). \n10.22 \nForm of 2017 Performance Unit Award Agreement (incorporated by reference to Exhibit 10.16 to ONE Gas, Inc.s Annual Report on Form 10-K filed on February 23, 2017 (File No. 1-36108)). \n10.23 \nAmended and Restated Credit Agreement, dated as of October 5, 2017, among ONE Gas, Inc., Bank of America, N.A., as administrative agent, swingline lender and a letter of credit issuer, and the other lenders and letter of credit issuers parties thereto (incorporated by reference to Exhibit 10.1 to ONE Gas, Inc.s Current Report on Form 8-K filed on October 6, 2017 (File No. 1-36108)). \n10.24 \nONE Gas, Inc. Nonqualified Deferred Compensation Plan, as amended and restated effective January 1, 2018 (incorporated by reference to Exhibit 10.28 to ONE Gas, Inc.s Annual Report on Form 10-K filed February 22, 2018 (File No. 1-36108)). \n10.25 \nFirst Amendment and Extension Agreement, dated as of October 4, 2019, among ONE Gas, Inc., Bank of America, N.A., as administrative agent, swing line lender, a letter of credit issuer and a lender, and the other lenders and letter of credit issuers parties thereto (incorporated by reference to Exhibit 10.1 to ONE Gas, Inc.s Current Report on Form 8-K filed on October 4, 2019 (File No. 1-36108)). \n10.26 \nONE Gas, Inc. Amended and Restated Equity Compensation Plan (2018) (incorporated by reference to Appendix A to ONE Gas, Inc.s Definitive Proxy Statement on Schedule 14A filed on April 4, 2018 (File No. 1-36108) \n) \n10.27 \nONE Gas, Inc. Amended and Restated Annual Officer Incentive Plan, effective January 1, 2020 \n(incorporated by reference to Exhibit 10.31 to ONE Gas, Inc.s Annual Report on Form 10-K filed on February 20, 2020 (File No. 1-36108)) \n10.28 \nForm of 2021 Restricted Unit Award Agreement. \n10.29 \nForm of 2021 Performance Unit Award Agreement. \n10.30 \nForm of 2020 Restricted Unit Award Agreement dated July 2020 \n10.31 \nONE Gas Inc. Annual Officer Incentive Plan, effective January 1, 2019 (incorporated by reference to Exhibit 10.30 to ONE Gas, Inc.s Annual Report on Form 10-K filed February 20, 2019 (File No. 1-36108)). \n10.32 \nCredit Agreement, dated as of February 22, 2021, among ONE Gas, Inc., the lenders from time to time party thereto and Bank of America, N.A., as administrative agent (incorporated by reference to Exhibit 10.1 to ONE Gas Inc.s Current Report on Form 8-K filed on February 22, 2021 (File No. 1-36108) \n) \n21.1 \nSubsidiaries of ONE Gas, Inc. \n23.1 \nConsent of Independent Registered Public Accounting Firm - PricewaterhouseCoopers LLP. \n31.1 \nCertification of Pierce H. Norton II pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. \n31.2 \nCertification of Caron A. Lawhorn pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. \n32.1 \nCertification of Pierce H. Norton II pursuant to 18 U.S.C. \n32.2 \nCertification of Caron A. Lawhorn pursuant to 18 U.S.C. \n101.INS \n\n101.SCH \nXBRL Schema Document. \n101.CAL \n\n101.LAB \nXBRL Label Linkbase Document. \n101. PRE \n\n101.DEF \nXBRL Extension Definition Linkbase Document. \n\nAttached as Exhibit 101 to this Annual Report are the following XBRL-related documents: (i) Document and Entity Information; (iv) Consolidated Balance Sheets as of<|endoftext|>Net consists of the following at December 31: \nUnbilled receivables include amounts associated with percentage of completion and milestone billing accounting, which includes cost and gross profit earned in excess of billing, not currently billable due to contractual provisions.The provision for bad debt expense related to accounts receivable was $20,000 and $7,263 for the years ended December 31, 2020 and 2019, respectively \n### NOTE 5 INVENTORIES \nInventories, net consist of the following at December 31: \n\nProperty and equipment, net consists of the following at December 31: \nDuring the years ended December 31, 2020 and 2019, the Company incurred $922,597 and $671,223 of depreciation and amortization expense related to property and equipment, respectively. \n### NOTE 7 ACCRUED EXPENSES AND OTHER LIABILITIES \nAccrued expenses and other liabilities consist of the following at December 31: \nNOTE 8 DEBT \n### Bank Lines of Credit \nBressner Technology GmbH has two revolving lines of credit with German institutions totaling 2,200,000 (US$2,690,184).Borrowing under the lines of credit bear interest at a variable rate of Euribor plus a stated rate.The current rates for the lines of credit are 3.89% and 4.0%. One million euros of the credit line expires in January 2024, with the remaining balance being open indefinitely or until occurrence of a defined change of control event.There were no outstanding line of credit balances as of December 31, 2020 and 2019. \nForeign Debt Obligations \nBressner Technology GmbH has three term loans outstanding as of December 31, 2020 with a total balance outstanding of 1,066,446 (US$1,304,063) as follows: \nOn April 9, 2020, Bressner converted 500,000 of its line of credit from UniCredit Bank to a one year term loan at 1.9% interest with a balloon payment of principal and interest due upon maturity.The balance outstanding as of December 31, 2020 is 500,000 (US$611,406); \nBressner entered into a note payable in June 2019 in the amount of 500,000 (US$586,189) which bears interest at 1.70% and matured on June 25, 2020 with a balloon payment of principal and interest.This loan was subsequently extended to June 18, 2021, with an interest rate of 1.87% The amount outstanding as of December 31, 2020 and 2019 is 500,000 (US$611,406) and 508,679 (US$571,095), respectively; \nBressner entered into a note payable in April 2019 in the amount of 500,000 (US$586,189) which bears interest at 2.25% and matures on March 30, 2021 with monthly payments of principal and interest of 22,232 (US$24,960). The balance outstanding as of December 31, 2020 and 2019 is 66,446 (US$81,251) and 328,525 (US$368,835), respectively; \nBressner entered into a note payable in September 2019 in the amount of 300,000 (US$336,810) which bore interest at 1.65% and matured on March 24, 2020, with a balloon payment of principal and interest.The outstanding balance was paid in full as of March 31, 2020.At December 31, 2019, the outstanding balance was 301,650 (US$338,663); and \nBressner entered into a note payable in September 2017, in the amount of 400,000 (US$436,272) which bore interest at 2.125% and matured on January 31, 2020 and has been paid in full.Quarterly principal payments of 25,000 (US$28,068) were due in January, April, July and November of 2019.The balance outstanding as of December 31, 2019 was 25,000 (US$28,068). \n### Notes Payable \nIn April 2019, the Company borrowed $350,000 from three individuals for a two-year period at an interest rate of 9.5% which requires the Company to make monthly principal and interest payments of $16,100 per month.These loans are secured by the assets of the Company.In connection with these loans, the Company issued to the noteholders warrants to purchase shares of the Companys common stock equal to 10% of the original principal at a price per share equal to $2.15 per share.Accordingly, the Company issued to the noteholders warrants to purchase 16,276 shares of the Companys common stock at an exercise price of $2.15 per share. five year contractual term; 44.60% volatility; 0.0% dividend rate; and a risk-free interest rate of 2.307%.The total relative fair value of the warrants issued is $14,037.The balance outstanding as of December 31, 2020 and 2019 is $63,188 and $241,054, respectively. \n\nIn April 2019, the Company borrowed $1,150,000 from three individuals who serve on the Companys board of directors for a two year period at an interest rate of 9.5% which requires the Company to make monthly principal and interest payments of $52,900 per month.These loans are secured by the assets of the Company.In connection with these loans, the Company issued to the noteholders warrants to purchase shares of the Companys common stock equal to 10% of the original principal at a price per share equal to $2.15 per share.Accordingly, the Company issued to the noteholders warrants to purchase 53,490 shares of the Companys common stock at an exercise price of $2.15 per share. five year contractual term; 42.60% volatility; 0.0% dividend rate; and a risk-free interest rate of 2.3067%.The relative fair value of warrants issued is $46,121. The balance outstanding as of December 31, 2020 and 2019 is $206,669 and $791,170, respectively. \n\nOn April28, 2020, One Stop Systems, Inc. received authorization pursuant to the Paycheck Protection Program (PPP) of the Coronavirus Aid, Relief, and Economic Security Act (the CARES Act) as administered by the U.S. Small Business Administration (the SBA) for a PPP loan. On May11, 2020, the Loan was funded and the Company received proceeds in the amount of $1,499,360 (the PPP Loan). \nThe PPP Loan, which took the form of a two-year promissory note (the PPP \nNote), matures on April28, 2022 and bears interest at a rate of 1.0% per annum. Monthly principal and interest payments, less the amount of any potential forgiveness (discussed below), was initially to commence on October28, 2020. The Company did not pr ovide any collateral or guarantees for the PPP Loan, nor did the Company pay any facility charge to obtain the PPP Loan. The PPP Note provides for customary events of default, including, among others, those relating to failure to make payment, breaches of any term, obligation, covenant or condition contained in the PPP Note and payment of unauthorized expenses or use of proceeds contrary to CARES Act rules. The Company may prepay the principal of the PPP Loan at any time without incurring any prepayment cha rges. \nUnder the original rules, all or a portion of the PPP Loan may be forgiven by the SBA and lender upon application by the Company beginning 60 days but not later than 120 days after loan approval and upon documentation of expenditures in accordance with the SBA requirements. Under the CARES Act, loan forgiveness is available for the sum of documented payroll costs, covered rent payments, and covered utilities during the eight-week period beginning on the date of loan approval. For purposes of the CARES Act, payroll costs exclude compensation of an individual employee in excess of $100,000, prorated annually. Not more than 25% of the forgiven amount may be fornon-payrollcosts. Forgiveness is reduced if full-time headcount declines, or if salaries and wages for employees with salaries of $100,000 or less annually are reduced by more than 25%. In the event the PPP Loan, or any portion thereof, is forgiven pursuant to the PPP, the amount forgiven is applied to outstanding principal. \nHowever, the original rules governing loans granted under the PPP have been subsequently updated.The time period to spend the received funds has been extended from the original eight weeks to twenty-four weeks.Payroll is only required to be 60%, and the commencement date for the repayment has also been extended accordingly.The Company has submitted an application with the lender to forgive the PPP Loan, in accordance with SBA Procedural Notice, Control No. 5000-20057, effective as of October 2, 2020 and is awaiting notice of receipt of forgiveness.Because the Company expects the PPP loan to be forgiven in full, all related amounts have been presented as noncurrent liabilities. \n### Senior Secured Convertible Note: \nOn April 20, 2020, the Company entered into a Securities Purchase Agreement with an institutional investor, providing for the issuance of the Companys Senior Secured Convertible Promissory Notes with a principal face amount of up to $6,000,000. The notes are, subject to certain conditions, convertible into shares of the Companys common stock, par value $0.0001 per share, at an initial conversion price per share of $2.50. The notes will be issued with a 10% original issue discount. \nAt the initial closing of this offering, the Company issued notes of $3,000,000, and can consummate additional closings of up to $3,000,000, subject to the prior satisfaction of certain closing conditions which have been satisfied. The initial investor purchased the notes for an aggregate purchase price of $2,700,000 at the initial closing.The notes bear no interest rate (except upon event of default) and, unless earlier converted or redeemed, will mature on April 1, 2022. \nThe Notes are convertible at any time, in whole or in part, at the option of the investors, into shares of common stock at the initial conversion price of $2.50 per share. The conversion price is subject to adjustment for issuances of securities below the conversion price then in effect and for stock splits, combinations or similar events. If immediately following the close of business on the six month anniversary of the issuance date of each note, the conversion price then in effect exceeds 135% of the volume weighted average price VWAP (the Market Price), the initial conversion price under any such note will be automatically lowered to the Market Price. \nCommencing July 1, 2020, the Company has made monthly amortization payments equal to 1/22nd of the initial principal, any accrued and unpaid interest and late charges and any deferred or accelerated amount, of such note, which may be satisfied in cash at a redemption price equal to 105% of such installment amount(110% of such installment amount on notes issued at additional closings).As of December 31, 2020, the holder has elected to defer receipt of three installment payments as allowed per the agreement. \nSubject to the satisfaction of certain equity conditions set forth in the notes, installment amounts may be satisfied in shares of our common stock, with such installment conversion at a conversion price equal to the lower of (i) the conversion price then in effect and (ii) the greater of (x) the floor price of $1.00 (80% of the Nasdaq market price at date of purchase agreement) and (y) the lower of (I) 82.5% the volume weighted average price of our common stock on the trading day immediately before the applicable installment date and (II) 82.5% of the quotient of (A) the sum of the volume weighted average price of our common stock for each of the three (3) trading days with the lowest volume weighted average price of our common stock during the twenty (20) consecutive trading day period ending and including the trading day immediately prior to the applicable installment date, divided by (B) three (3). Shares of our common stock to be issued with respect to any such installment will be pre-delivered on the second trading day after the applicable installment notice date (as defined in the notes) with a true-up on the applicable installment date. The market value of any installment amount below the floor price will be cash settled on the applicable installment date \nManagement evaluated the embedded conversion feature to determine whether bifurcation was required as a separate derivative liability. Management first determined that the conversion feature was not within the scope of ASC 480. It then determined that the embedded derivative should be separated from the host instrument and accounted for as a derivative instrument because it met the criteria of ASC 815-15-25-1, primarily because the contract provides for delivery of an asset that puts the recipient in substantially the same position as net settlement. However, in part due to the Companys adoption of ASC 2017-11 on April 1, 2020, which allowed management to disregard the down round provisions of the conversion feature, management determined that a scope exception to derivative accounting existed by satisfying the additional conditions necessary for equity classification specified by ASC 815-10-15-74 and ASC<|endoftext|>"},"task":{"kind":"string","value":"{\"file\": \"/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz\"}"}}},{"rowIdx":72,"cells":{"text":{"kind":"string","value":"<|endoftext|>Plan was 30,486 shares valued at $1,128,592. \n\nBelow is a summary of employment and other arrangements with our NEOs. Change in Control, Cause, and Good Reason for each individual are defined below. Other capitalized terms not defined below have the meaning assigned to them in such individuals agreement. For more information on termination and other severance payment rights of each NEO, see herein. \n### David T. Provost Executive Employment Agreement \nProvost for an initial two (2)year period (extending for an additional two (2)year period from the date of a Change in Control). Under Mr. Provosts employment agreement, he is entitled to receive: an annual salary of at least $1.00, subject to annual review and adjustment; participation in annual bonus opportunity and equity programs starting in calendar year 2021, with a target bonus opportunity of $950,000; participation in long-term equity or equity-based incentive programs, with an annual aggregate grant date target value equal to at least $1.9 million; \nIf Mr. Provosts employment is terminated by TCF without Cause or by him for Good Reason (each a qualifying termination), not within six (6) months before or two (2) years after a Change in Control, subject to the execution of a release, Mr. Provost will be eligible to receive: the sum of (i) the greater of (a) $1.9 million and (b) two (2.0) times his then base salary, plus (ii) two (2.0) times the average of his bonuses under TCFs annual incentive plan for each of the three (3) most recently completed calendar years of his employment with TCF (with each such bonus calculated at the higher of $1.5 million and actual bonus paid); \nProvost (i) is terminated by TCF without Cause, (ii) terminates his employment for Good Reason, (iii) dies, (iv) is terminated due to a Disability or (v) retires on one (1) years advance notice, all equity-based awards will be treated as follows: all unvested stock options will immediately vest, the restrictions on all time-vesting restricted stock will lapse, all TRSUs will immediately vest, and all PRSUs will be settled at one hundred percent (100%) of target. \nProvost experiences a qualifying termination within two (2) years following a Change in Control, or within six (6) months before the date of a Change in Control, subject to the execution of a release, he will be entitled to change in control severance as follows: the sum of (i) the greater of (a) $2.85 million and (b) three (3.0) times his then base salary, plus (ii) three (3.0) times the average of his bonuses under TCFs annual executive incentive plan for each of the three (3) most recently completed calendar years of his employment with TCF, payable in one lump sum cash payment (with each such bonus calculated at the higher of $1.5 million and actual bonus paid); \n\nProvost agreed to covenants of confidentiality, non-competition, non-solicitation and non-disparagement. \nCraig R. Dahl Amended and Restated Employment and Separation and Release Agreements \n### Amended and Restated Employment Agreement \nOn November 6, 2019, we entered into an amended and restated employment agreement with Mr.Dahl, pursuant to which he was entitled to receive: an annual salary of at least $1,050,000, subject to annual review and increase; and perquisites including but not limited to an auto allowance and payment of certain membership fees. \nIn addition, if Mr.Dahls employment was terminated by TCF without Cause or by Mr.Dahl for Good Reason, subject to Mr.Dahls execution and non-revocation of a release of claims, Mr.Dahl was eligible to receive: a lump sum equal to 2.5 times the sum of (i) his annual base salary and (ii) the average of his annual bonus for the three most recently completed fiscal years; any earned but unpaid annual bonus; and payment of monthly COBRA insurance premiums for up to twenty-four months. \n\nIn connection with Mr. Dahls departure, TCF and Mr. Dahl entered into a separation and release agreement (the Dahl separation agreement) effective as of October 27, 2020, pursuant to which Mr. Dahl received (a) one lump sum payment of $11,213,931, less applicable withholding taxes, and (b) payments totaling $1,500,000, less applicable withholding taxes, payable in equal monthly installments on the first day of each month for a period of eighteen months, commencing on May 1, 2021. Mr. Dahls separation was a Termination without Cause, and any outstanding unvested equity awards vested automatically at one hundred percent (100%) in accordance with his employment agreement. \nMr. Dahls right to receive the benefits described in the Dahl separation agreement are in lieu of any other compensation and is conditioned upon his compliance with the non-competition and non-solicitation restrictions set forth in the Dahl separation agreement and employment agreement. \n### Brian W. Maass Employment Agreement \nOn December 13, 2020, we entered into an amended and restated employment agreement with Brian Maass, our Chief Financial Officer, that amended and restated his prior executive employment agreement with TCF, dated December 13, 2019, which will continue through December 13, 2022, and automatically renews for successive one-year periods unless either party provides the other party with notice of intention to terminate at least 30 days before an anniversary of the effective date. Under Mr.Maass employment agreement, he is entitled to receive: an annual salary of at least $575,000, subject to annual review and adjustment; annual cash incentive opportunity with a target value equal to 100% of base salary; an annual equity-based award with a target value equal to 150% of base salary; participation in the same benefit plans as apply to TCF salaried employees generally, and on the same terms and conditions; \nIf Mr.Maass employment is terminated by TCF without Cause or by him for Good Reason, each a qualifying termination, not within six months before or two years after a Change in Control, subject to his execution and non-revocation of a release of claims, Mr.Maass will be eligible to receive: \nprovided, that, Mr.Maass will not be entitled to such severance payment if he experiences a qualifying termination within two years of the TCF/Chemical merger date; \nand \n\nUpon a qualifying termination within six (6) months before or two (2) years following a Change in Control (not to include the TCF/Chemical merger), Mr. Maass will be eligible to receive: \n\nand \n\nMaass experiences a qualifying termination within two years following a Change in Control, or within six months before the date of a Change in Control, we will pay him the above-described severance payment in a lump sum cash payment; \nUnder Mr.Maass employment agreement, he is not entitled to any additional severance payments in the event of his termination due to death, Disability or Retirement with one years advance notice. \nIn addition, under his employment agreement, in the event he (a) is terminated by us without Cause, (b) terminates his employment for Good Reason, (c) dies, (d) is terminated due to a Disability, or (e) retires on one years advance notice, all equity-based awards will be treated as follows: all unvested stock options will immediately vest, the restrictions on all time-vesting restricted stock will lapse, all TRSUs will immediately vest and be convertible into shares of our common stock, and all PRSUs will be settled at 100% of target. \nDennis L. Klaeser Employment Agreement and Consulting Agreement \n### Employment and Letter Agreement \nOn July 1, 2018, we entered into an employment agreement with Mr.Klaeser, effective July 1, 2018, which was supplemented by his letter agreement dated December 13, 2019. The employment agreement, as supplemented by the letter agreement, continued through October 1, 2020, when he incurred a Termination without Cause and received Change in Control Severance Pay as defined in his employment agreement. Under Mr.Klaesers employment agreement, as supplemented, he was entitled to receive: an annual salary of $750,000, subject to annual review and adjustment; annual target bonus opportunity that is no less than 80% of base salary; annual equity-based award with a target value equal to 80% of base salary perquisites including but not limited to an auto allowance and payment of certain membership fees; and participation in the same benefits plans as apply to TCF senior executives generally, and on the same terms and conditions. \nWhen Mr.Klaesers employment ended on October 1, 2020, he received the following Change in Control Severance Pay: a lump sum payment equal to two times the sum of (a) his then current Base Salary and (b) the average of his annual bonus for the three most recently completed calendar years; his pro rata bonus for 2020; \n\n### Consulting Agreement \nOn August 5, 2020, we entered into a consulting agreement with Mr.Klaeser (the Klaeser consulting agreement). The Klaeser consulting agreement has a two (2)-year term that commenced on October2, 2020, and provides that Mr.Klaeser will receive an annual fee equal to $215,000 as compensation for providing consulting services in connection with strategic matters for TCF. In addition, Mr.Klaeser is eligible to receive a success fee for each successful transaction for which Mr.Klaeser provides material support during the term of the Klaeser consulting agreement. Any success fee is calculated in accordance with the terms of the Klaeser consulting agreement. In connection with the Huntington merger, Mr.Klaeser will receive a success fee in satisfaction of the obligations under the Klaeser consulting agreement upon consummation of the Huntington merger, subject to certain conditions. \nGary Torgow Executive Employment Agreement \nTorgow that supersedes his prior amended and restated retention agreement with TCF, dated March 10, 2020 (the retention agreement). Mr. Torgows employment agreement provides for an initial two (2)year period (extending for an additional two (2)year period from the date of a Change in Control (as defined in his employment agreement)). Under Mr. Torgows employment agreement, he is entitled to receive: an annual salary of $950,000, subject to annual review and increase; annual target bonus opportunity that is equal to 100% of base salary; \nIf Mr. Torgows employment is terminated by TCF without Cause or by him for Good Reason (each as defined in his employment agreement, and each a qualifying termination), not within six (6) months before or two (2) years after a Change in Control, subject to the execution of a release, Mr. Torgow will be eligible to receive: the sum of (i) two (2.0) times his then base salary, plus (ii) two (2.0) times the average of his bonuses under TCFs annual executive inventive plan for each of the three (3) most recently completed calendar years of his employment with TCF (with each such bonus calculated at the higher of $1.5 million and actual bonus paid), payable in one lump sum cash payment; \nTorgow (i) is terminated by TCF without Cause, (ii) terminates his employment for Good Reason, (iii) dies, (iv) is terminated due to a Disability or (v) retires on one (1) years advance notice, all equity-based awards will be treated as follows: all unvested stock options will immediately vest, the restrictions on all time-vesting restricted stock will lapse, all TRSUs will immediately vest, and all PRSUs will be settled at one hundred percent (100%) of target. \nTorgow experiences a qualifying termination within two (2) years following a Change in Control, or within six (6) months before the date of a Change in Control, subject to the execution of a release, he will be entitled to change in control severance as follows: the sum of (i) three (3.0) times his then base salary, plus (ii) three (3.0) times the average of his bonuses under TCFs annual executive inventive plan for each of the three (3) most recently completed calendar years of his employment with TCF (with each such bonus calculated at the higher of $1.5 million and actual bonus paid), payable in one lump sum cash payment; \n\nThomas C. Shafer Amended and Restated Employment Agreement \nOn December 13, 2020, we entered into an amended and restated employment agreement with Mr.Shafer that amended and restated his prior employment agreement with TCF, dated July 31, 2019. Mr. Shafers amended and restated employment agreement provides for an initial two (2)year period, and automatically renews for successive one (1)- year periods unless either party provides the other party with notice of intention to<|endoftext|>Disclosures (\"ASC 820-10\") and Accounting Standards Codification subtopic 825-10, Financial Instruments (\"ASC 825-10\"), which permits entities to choose to measure many financial instruments and certain other items at fair value. \n\nThe Company incurred research and development expenses of $373,112 and $6,376 for the years ended June 30, 2021 and 2020, respectively. \n\n\n### Offering Costs \n\n\n### Income Taxes \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n### NOTE 3 JOINT VENTURE \nOn May 31, 2021, the Company entered into a Joint Venture Agreement (the Agreement) with XTI Aircraft Company (XTI), a Delaware corporation, to form a new company, called Eco-Aero, LLC (the JV), a Delaware limited liability company, with the purpose of completing the preliminary design of XTIs TriFan 600, a 5-passenger plus pilot, hybrid electric, vertical takeoff, and landing (eVTOL) fixed wing aircraft. Under the Agreement, Xeriant is contributing capital, technology, and strategic business relationships, and XTI is contributing intellectual property licensing rights and know-how. XTI and the Company each own 50 percent of the JV. The JV is managed by a management committee consisting of five members, three appointed by the Company and two by XTI. The Agreement was effective on June 4, 2021, with an initial deposit of $1 million into the JV. Xeriants financial commitment is $10 million, contributed over a period of less than one year, as required by the aircraft development timeline and budget. \nThe Company analyzed the transaction under ASC 810 \n### Consolidation \n, to determine if the joint venture classifies as a Variable Interest Entity (VIE). The Joint Venture qualifies as a VIE based on the fact the JV does not have sufficient equity to operate without financial support from Xeriant. According to ASC 810-25-38, a reporting entity shall consolidate a VIE when that reporting entity has a variable interest (or combination of variable interests) that provides the reporting entity with a controlling financial interest on the basis of the provisions in paragraphs 810-10-25-38A through 25-38J. The reporting entity that consolidates a VIE is called the primary beneficiary of that VIE. According to the JV operating agreement, the ownership interests are 50/50. However, the agreement provides for a Management Committee of five members. Three of the five members are from Xeriant. Additionally, Xeriant has an obligation to invest $10,000,000 into the JV. As such, Xeriant has substantial capital at risk. Based on these two factors, the conclusion is that Xeriant is the primary beneficiary of the VIE. Accordingly, Xeriant has consolidated the VIE. \nNOTE 4 CONCENTRATION OF CREDIT RISKS \nThe Company maintains accounts with financial institutions. All cash in checking accounts is non-interest bearing and is fully insured by the Federal Deposit Insurance Corporation (FDIC). At times, cash balances may exceed the maximum coverage provided by the FDIC on insured depositor accounts. The Company believes it mitigates its risk by depositing its cash and cash equivalents with major financial institutions. On June 30, 2021, the Company had $712,540 in excess of FDIC insurance. \nNOTE 5 OPERATING LEASE RIGHT-OF-USE ASSET AND OPERATING LEASE LIABILITY \nThe Company leases 2,911 square feet of office space located in the Research Park at Florida Atlantic University, Innovation Centre 1, 3998 FAU Boulevard, Suite 309, Boca Raton, Florida. The Company entered into a lease agreement commencing on November 1, 2019 through January 1, 2025 in which the first three months of rent were abated. Due to the COVID-19 pandemic, the company decided to have all employees work from home and intends to build out the office space by the end of 2021 to allow employees to work from the office in January of 2022. The following table illustrates the base rent amounts over the term of the lease: \nOperating lease right-of-use asset and liability are recognized at the present value of the future lease payments at the lease commencement date. The interest rate used to determine the present value is our incremental borrowing rate, estimated to be 10%, as the interest rate implicit in most of our leases is not readily determinable. Since the common area maintenance expenses are expenses that do not depend on an index or rate, they are excluded from the measurement of the lease liability and recognized in other general and administrative expenses on the statements of operations. At inception the Company paid prepaid rent in the amount of $4,659, which was netted against the operating lease right-of-use asset balance until it was applied in February 2020. \n### Right-of-use asset is summarized below: \nOperating lease liability is summarized below: \nNOTE 6 EXCHANGE AGREEMENT \nOn April 16, 2019, the Company and the members of American Aviation Technologies, LLC (AAT) entered into a Share Exchange Agreement (Agreement). The agreement, which became effective on September 30, 2019, was pursuant to which the Company acquired 100% of the issued and outstanding membership units in exchange for the issuance of shares of the Companys Series A Preferred Stock constituting 86.39% of the total voting power of the Companys capital stock to be outstanding upon closing, after giving effect to the consummation of concurrent debt settlement and other capital stock issuances but before the issuance of shares of capital stock for investor relations purposes. As a result of the Exchange Agreement, AAT became a wholly owned subsidiary of the Company. \nOn September 30, 2019 just prior to the exchange, the Company issued 170,000 shares of preferred stock as compensation and 193,637 shares of preferred stock in satisfaction of $2,608,224 in liabilities. \n\nThe carrying value of convertible notes payable, net of discount, as of June 30, 2021 and 2020 was $158,196 and $32,734, respectively, as summarized below: \nThe following table illustrates the carrying values for the convertible notes payable as of June 30, 2021 and 2020: \nBetween September 27, 2019 and April 23, 2020, AAT issued convertible notes payable with an aggregate face value of $342,950 with a coupon rate of 6%. The notes have a maturity date of six months. The agreements provided that in the event AAT is merged into Xeriant (Company), at any time prior to the Maturity Date, the holder has the option to convert the principal balance and any accrued interest to common stock of the Company at a conversion price of $.0033 per share. In the event the holder does not elect to convert the note prior to maturity, the note will automatically convert to common stock at a price of $.0033 per share. \n(CONTINUED) \nHowever, the Company was required to determine if the debt contained a beneficial conversion feature (BCF), which is based on the intrinsic value on the date of issuance. The Company recorded a beneficial conversion feature in the amount of $342,950 related to these notes. Additionally, for the years ended June 30, 2021 and 2020 the Company recorded $19,368 and $323,582 in amortization of debt discount related to the BCF, respectively. For the years ended June 30, 2021 and 2020, the Company recorded $584 and $9,708 in interest expense. \nBetween March 27, 2020 and October 23, 2020, holders of the convertible notes converted $342,950 in principal and $10,290 in accrued interest into 107,042,708 shares of common stock. \nNotes issued between August 10, 2020 and January 19, 2021 \nBetween May 11, 2020 and January 19, 2021, the Company issued convertible notes payable with an aggregate face value of $299,350 with a coupon rate of 6%. The notes have a maturity date of three and six months. The agreements provided the holder has the option to convert the principal balance and any accrued interest to common stock of the Company. In the event the holder does not elect to convert the note prior to maturity, the note will automatically convert to common stock. Of the $299,350, $87,000 is convertible at $0.025 per share, $180,550 is convertible at $.03 per share, and the remaining $31,800 is convertible at $0.003 per share. \n\nIn connection with the notes, the Company issued warrants indexed to an aggregate 8,848,333 shares of common stock. The warrants were recorded in additional paid-in capital under their aggregate relative fair value of $156,225. \nAfter the allocation of $156,225 to the warrants, the remaining $169,956 in proceeds resulted in a beneficial conversion feature recorded in additional paid-in capital. \nAmortization of debt discount and interest expense related to all notes excluding related party notes \nFor the years ended June 30, 2021 and 2020, the Company recorded $304,121 and $453 in amortization of debt discount related to the notes. For the years ended June 30, 2021 and 2020, the Company recorded $ 7,409 and $14 in interest expense related to the notes, respectively. \n\nConvertible notes \n\n\nIn connection with the note, the Company issued warrants indexed to an aggregate 200,000 shares of common stock. The warrants were recorded in additional paid-in capital under their relative fair value of $2,461. \nAfter the allocation of $2,461 to the warrants, the remaining $2,539 in proceeds resulted in a beneficial conversion feature recorded in additional paid-in capital. \nFor the years ended June 30, 2021, the Company recorded $5,000 in amortization of debt discount related to the note. For the years ended June 30, 2021, the Company recorded $76 in interest expense related to the note. \nOn November 25, 2020, Keystone Business Development Partners converted $5,000 in principal and $76 in accrued interest into 203,024 shares of common stock. \n### Consulting fees \nDuring the years ended June 30, 2021 and 2020, the Company recorded $98,000 and $73,300 respectively, in consulting fees to Ancient Investments, LLC, a Company owned by the Companys CEO, Keith Duffy and the Companys Executive Director of Corporate Operations, Scott Duffy. \nFor the years ended June 30, 2021 and 2020, the Company recorded $38,000 and $7,000 respectively, in consulting fees to Edward DeFeudis, a Director of the Company. \nDuring the years ended June 30, 2021 and 2020, the Company recorded $54,000 and $44,700 respectively, in consulting fees to AMP Web Services, a Company owned by the Companys CTO, Pablo Lavigna. \nDuring the years ended June 30, 2021 and 2020, the Company recorded $30,000 and $7,000 respectively, in consulting fees to Keystone Business Development Partners, a Company owned by the Companys CFO, Brian Carey. As of June 30, 2021, $25,000 was recorded in accrued liabilities. \n\nWhen the Company becomes aware of potential litigation, it evaluates the merits of the case in accordance with FASB ASC 450-20-50, \nContingencies \nAs of June 30, 2021, the Company is not aware of any contingent liabilities that should be reflected in the financial statements. \n### NOTE 10 EQUITY \nCommon Stock \nFiscal Year 2021 Issuances \nOn July 30, 2020, the Company issued 16,011,818 shares of common stock related to conversions of debt from the previous fiscal year, which were previously recorded in common stock to be issued. \nThe shares were valued at $200,454 or $0.049 per share. As of result the Company recorded a loss on settlement in debt in the amount of $186,954. \nOn September 8, 2020, the Company issued 96,835,648 shares of common stock related to conversions of debt from the previous fiscal year, which were previously recorded in common stock to be issued. \nOn October 30, 2020, the Company issued 300,000 shares of common stock to an advisory board member for services. The shares were valued at $13,200 or $0.044 per share. \nOn November 17, 2020, the Company sold 1,700,000 shares of common for $25,500, or $0.015 per share. \nOn November 24, 2020, the Company sold 1,700,000 shares of common for $25,500, or $0.015 per share. \nOn December 1, 2020, the Company issued 2,000,000 shares of common stock for investment relation services valued at $100,000, or $0.05 per share. \nOn December 1, 2020, the Company issued 18,000,000 shares of common stock for investment relation services valued at $900,000, or $0.05 per share. \nOn January 29, 2021, the Company issued 50,000 shares of common stock to an advisory board member for services. The shares were valued at $25,500 or $0.51 per share. \nOn February 9, 2021, the Company issued 19,595,442 shares of common stock for the conversion of $127,150 in principal and $2,709 in accrued interest. \nIn March of 2021, the Company sold 12,075,001 shares of common for $1,497,000, or $0.12 per<|endoftext|>Either (i)in connection with a stockholder meeting called to approve the initial business combination or (ii)without a stockholder vote by means of a tender offer. So long as we obtain and maintain a listing for our securities on NYSE, we will be required to comply with NYSEs stockholder approval rules. \nThe requirement that we provide our public stockholders with the opportunity to redeem their public shares by one of the two methods listed above will be contained in provisions of our amended and restated certificate of incorporation and will apply whether or not we maintain our registration under the Exchange Act or our listing on NYSE. \nIf we provide our public stockholders with the opportunity to redeem their public shares in connection with a stockholder meeting, we will conduct the redemptions in conjunction with a proxy solicitation pursuant to Regulation 14A of the Exchange Act, which regulates the solicitation of proxies, and not pursuant to the tender offer rules, and file proxy materials with the SEC. \nWe will complete the Merger, or, if the Merger is not consummated and we seek stockholder approval in connection with a proposed alternative initial business combination, we will complete our initial business combination only if a majority of the outstanding shares of common stock voted are voted in favor of the initial business combination. Our initial stockholders will count towards this quorum and, pursuant to the letter agreement, our sponsor, officers and directors have agreed to vote any founder shares they hold and any public shares purchased during or after our initial public offering (including in open market and privately-negotiated transactions) in favor of our initial business combination. As a result, in addition to our initial stockholders founder shares, we would need only 11,250,001, or 37.5%, of the 30,000,000 public shares sold in our initial public offering to be voted in favor of an initial business combination in order to have our initial business combination approved (assuming all outstanding shares are voted). \nIf the Merger is not consummated and if a stockholder vote is not required in connection with a proposed alternative initial business combination and we do not decide to hold a stockholder vote for business or other legal reasons, we will conduct the redemptions pursuant to Rule13e-4 and Regulation 14E of the Exchange Act, which regulate issuer tender offers, and file tender offer documents with the SEC prior to completing our initial business combination, which contain substantially the same financial and other information about the initial business combination and the redemption rights as is required under Regulation 14A of the Exchange Act, which regulates the solicitation of proxies. \n\nIn the Merger is not consummated and upon the public announcement of a proposed alternative initial business combination, if we elect to conduct redemptions pursuant to the tender offer rules, we or our sponsor will terminate any plan established in accordance with Rule10b5-1 to purchase shares of our ClassA common stock in the open market, in order to comply with Rule14e-5 under the Exchange Act. \nIf the proposed initial business combination is not approved and we continue to search for a target company, we will promptly return any certificates or shares delivered by public stockholders who elected to redeem their shares. \n\nIn connection with the stockholder approval of the Merger or, if the Merger is not consummated and we seek stockholder approval of a proposed alternative initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our amended and restated certificate of incorporation provides that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a group (as defined under Section13 of the Exchange Act), will be restricted from seeking redemption rights with respect to more than an aggregate of 15% of the shares of common stock sold in our initial public offering, which we refer to as the Excess Shares, without our prior consent. \n\nAccordingly, a public stockholder would have up to two business days prior to the vote on the initial business combination if we distribute proxy materials, or from the time we send out our tender offer materials until the close of the tender offer period, as applicable, to submit or tender its shares if it wishes to seek to exercise its redemption rights. \n\n\nIf the Merger or an alternative proposed initial business combination is not approved or completed for any reason, then our public stockholders who elected to exercise their redemption rights would not be entitled to redeem their shares for the applicable pro rata share of the trust account. \nIf the Merger is not completed, we may continue to try to complete an alternative proposed initial business combination with a different target until November 30, 2022. \n\nOur amended and restated certificate of incorporation provides that we will have until November 30, 2022 to complete our initial business combination. If we are unable to complete our initial business combination by November 30, 2022, we will (i)cease all operations except for the purpose of winding up, (ii)as promptly as reasonably possible but not more than 10 business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account (which interest shall be net of taxes payable and up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders rights as stockholders (including the right to receive further liquidating distributions, if any), and (iii)as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, liquidate and dissolve, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect to our warrants, which will expire worthless if we fail to complete our initial business combination by November 30, 2022. \nOur initial stockholders, sponsor, officers and directors have entered into a letter agreement with us, pursuant to which they have waived their rights to liquidating distributions from the trust account with respect to any founder shares they hold if we fail to complete our initial business combination by November 30, 2022 or any extended period of time that we may have to consummate an initial business combination as a result of an amendment to our amended and restated certificate of incorporation. However, if our initial stockholders, sponsor or management team acquire public shares in or after our initial public offering, they will be entitled to liquidating distributions from the trust account with respect to such public shares if we fail to complete our initial business combination by November 30, 2022. \nOur initial stockholders, sponsor, officers and directors have agreed, pursuant to a letter agreement with us, that they will not propose any amendment to our amended and restated certificate of incorporation to modify the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial business combination by November 30, 2022 or with respect to any other material provisions relating to stockholders rights (including redemption rights) or pre-initial business combination activity, unless we provide our public stockholders with the opportunity to redeem their public shares upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account (which interest shall be net of taxes payable), divided by the number of then outstanding public shares. \nWe expect that all costs and expenses associated with implementing our plan of dissolution, as well as payments to any creditors, will be funded from amounts remaining out of the approximately $1,183,830 of proceeds held outside the trust account as of December 31, 2020, although we cannot assure you that there will be sufficient funds for such purpose. \nIf we were to expend all of the net proceeds of our initial public offering and the sale of the private placement warrants, other than the proceeds deposited in the trust account, and without taking into account interest, if any, earned on the trust account and any tax payments or expenses for the dissolution of the trust, the per-share redemption amount received by stockholders upon our dissolution would be approximately $10.00. \nThe underwriters of our initial public offering and our independent registered public accounting firm will not execute agreements with us waiving such claims to the monies held in the trust account. In order to protect the amounts held in the trust account, our sponsor has agreed that it will be liable to us if and to the extent any claims by a third party for services rendered or products sold to us, or a prospective target business with which we have entered into a written letter of intent, confidentiality or other similar agreement or business combination agreement, reduce the amount of funds in the trust account to below the lesser of (i) $10.00 per public share and (ii)the actual amount per public share held in the trust account as of the date of the liquidation of the trust account, if less than $10.00 per public share due to reductions in the value of the trust assets, less taxes payable, provided that such liability will not apply to any claims by a third party or prospective target business who executed a waiver of any and all rights to the monies held in the trust account (whether or not such waiver is enforceable) nor will it apply to any claims under our indemnity of the underwriters of our initial public offering against certain liabilities, including liabilities under the Securities Act. We have not, however, asked our sponsor to reserve for such indemnification obligations, nor have we independently verified whether our sponsor has sufficient funds to satisfy its indemnity obligations and we believe that our sponsors only assets are securities of our company. \n\n\nThe pro rata portion of our trust account distributed to our public stockholders upon the redemption of our public shares in the event we do not complete our initial business combination by November 30, 2022 may be considered a liquidating distribution under Delaware law. \nFurthermore, if the pro rata portion of our trust account distributed to our public stockholders upon the redemption of our public shares in the event we do not complete our initial business combination by November 30, 2022, is not considered a liquidating distribution under Delaware law and such redemption distribution is deemed to be unlawful (potentially due to the imposition of legal proceedings that a party may bring or due to other circumstances that are currently unknown), then pursuant to Section174 of the DGCL, the statute of limitations for claims of creditors could then be six years after the unlawful redemption distribution, instead of three years, as in the case of a liquidating distribution. If we are unable to complete our initial business combination by November 30, 2022, we will (i)cease all operations except for the purpose of winding up, (ii)as promptly as reasonably possible but not more than 10 business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account including interest earned on the funds held in the trust account (which interest shall be net of taxes payable and up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders rights as stockholders (including the right to receive further liquidating distributions, if any), and (iii)as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors,<|endoftext|>The minimum initial listing standards set forth in the Nasdaq listing standards, we cannot assure you that our securities will continue to be listed on the Nasdaq in the future or prior to our initial business combination. In order to continue listing our securities on the Nasdaq prior to our initial business combination, we must maintain certain financial, distribution and stock price levels. Additionally, in connection with our initial business combination, we will be required to demonstrate compliance with the Nasdaqs initial listing requirements, which are more rigorous than the Nasdaqs continued listing requirements, in order to continue to maintain the listing of our securities on the Nasdaq. For instance, our stock price would generally be required to be at least $4 per share. \nIf the Nasdaq delists any of our securities from trading on its exchange and we are not able to list such securities on another national securities exchange, we expect such securities could be quoted on an over-the-counter market. \nBecause our units, Class A common stock and warrants are listed on the Nasdaq, our units, Class A common stock and warrants will qualify as covered securities under such statute. Further, if we were no longer listed on the Nasdaq, our securities would not qualify as covered securities under such statute and we would be subject to regulation in each state in which we offer our securities. \n\nsecurities laws. However, because we have net tangible assets in excess of $5,000,000 and file Current Reports on Form 8-K, including an audited balance sheet of our company demonstrating this fact, we are exempt from rules promulgated by the SEC to protect investors in blank check companies, such as Rule 419. \n\nIf we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our amended and restated certificate of incorporation provides that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a group (as defined under Section 13 of the Exchange Act), will be restricted from seeking redemption rights with respect to more than an aggregate of 15% of the shares sold in the Initial Public Offering, without our prior consent, which we refer to as the Excess Shares. \n\n\nWe may not properly assess all claims that may be potentially brought against us. Furthermore, if the pro rata portion of our trust account distributed to our public stockholders upon the redemption of our public shares in the event we do not complete our initial business combination within the completion window is not considered a liquidating distribution under Delaware law and such redemption distribution is deemed to be unlawful, then pursuant to Section 174 of the DGCL, the statute of limitations for claims of creditors could then be six years after the unlawful redemption distribution, instead of three years, as in the case of a liquidating distribution. \n\n(unless required by the Nasdaq) and thus may not be in compliance with Section 211(b) of the DGCL, which requires an annual meeting of stockholders be held for the purposes of electing directors in accordance with a companys bylaws unless such election is made by written consent in lieu of such a meeting. \n\nWe may not be able to do so if, for example, any facts or events arise which represent a fundamental change in the information set forth in the registration statement or prospectus, the financial statements contained or incorporated by reference therein are not current, complete or correct or the SEC issues a stop order. \n\nPursuant to an agreement entered into concurrently with the issuance and sale of the securities in the Initial Public Offering, our initial stockholders and their permitted transferees can demand that we register the resale of their founder shares after those shares convert to shares of our Class A common stock at the time of our initial business combination. \n\n\nOur sponsor contributed $25,000, or approximately $0.008 per founder share, and, accordingly, holders of our Class A common stock will experience substantial dilution. \nOur sponsor acquired the founder shares at a nominal price, significantly contributing to the dilution of holders of our Class A common stock. This dilution would increase to the extent that the anti-dilution provisions of the Class B common stock result in the issuance of Class A shares on a greater than one-to-one basis upon conversion of the Class B common stock at the time of our initial business combination and would become exacerbated to the extent that public stockholders seek redemptions from the trust. In addition, because of the anti-dilution rights of the founder shares, any equity or equity-linked securities issued or deemed issued in connection with our initial business combination would be disproportionately dilutive to our Class A common stock. \n\nWe have the ability to redeem outstanding warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01 per warrant, provided that the closing price of our Class A common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock 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 we send the notice of redemption to the warrant holders. \n\n\nWe issued warrants to purchase 6,612,500 shares of our Class A common stock at a price of $11.50 per whole share (subject to adjustment as provided herein), as part of the units offered in the Initial Public Offering. Simultaneously with the closing of the Initial Public Offering, we also issued in a private placement an aggregate of 4,145,000 Private Placement Warrants, each exercisable to purchase one share of Class A common stock at a price of $11.50 per share, subject to adjustment as provided herein. Our initial stockholders currently hold 3,306,250 founder shares. \n\nThe private placement warrants are identical to the warrants sold as part of the units in the Initial Public Offering except that, so long as they are held by our sponsor or its permitted transferees: (1) they will not be redeemable by us; and (4) the holders thereof (including with respect to the shares of common stock issuable upon exercise of these warrants) are entitled to registration rights. \n\n\nOur Derivative Instruments are accounted for as liabilities and the changes in value of our Derivative Instruments could have a material effect on our financial results. \nIn light of the April 2021 SEC Staff statement and guidance in Accounting Standards Codification (ASC) 815-40, Derivatives and Hedging Contracts in Entitys Own Equity, our management evaluated the terms of our warrant agreement entered into in connection with our initial public offering and concluded that the public warrants and the private placement (together, the Warrants) include provisions that, based on the Staff statement, preclude the warrants from being classified as components of equity. As a result, we have classified our warrants as liabilities. Under this accounting treatment, we are required to measure the fair value of our warrants at the end of each reporting period and recognize changes in the fair value from the prior period in our operating results for the current period. \nIn connection with the restatement of our financial statements, our management has concluded that our disclosure controls and procedures were not effective as of March 31, 2021 due to a material weakness in internal controls over financial reporting solely related to our accounting for warrants. \nFollowing the issuance of the April 2021 Staff statement, and after consultation with our independent registered public accounting firm and our management team, our audit committee concluded that, in light of the SEC Staff statement, it was appropriate to restate our previously issued financial statements. As part of such process, we identified a material weakness in our internal controls over financial reporting, solely related to our accounting for warrants. \nWe expect to take steps to remediate the material weakness, but there is no assurance that any remediation efforts will ultimately have the intended effects. \nIn such case, we may be unable to maintain compliance with securities law requirements regarding timing filing of periodic reports in addition to applicable stock exchange listing requirements, investors may lose confidence in our financial reporting and our stock price may decline as a result. \n\nSection 404 of the Sarbanes-Oxley Act requires that we evaluate and report on our system of internal controls beginning with our annual report for the year ending December 31, 2021. \nThese provisions may make the removal of management more difficult and may discourage transactions that otherwise could involve payment of a premium over prevailing market prices for our securities. \nThese provisions include three-year director terms and the ability of the board of directors to designate the terms of and issue new series of preferred shares, which may make more difficult the removal of management and may discourage transactions that otherwise could involve payment of a premium over prevailing market prices for our securities. \nWe will elect in our certificate of incorporation not to be subject to Section 203 of the DGCL. Nevertheless, our certificate of incorporation will contain provisions that have the same effect as Section 203 of the DGCL, except that it will provide that affiliates of our sponsor and their transferees will not be deemed to be interested stockholders, regardless of the percentage of our voting stock owned by them, and will therefore not be subject to such restrictions. \nAs a result, the exercise price of your warrants could be increased, the warrants could be converted into cash or stock (at a ratio different than initially provided), the exercise period could be shortened and the number of shares of our Class A common stock purchasable upon exercise of a warrant could be decreased, all without your approval. \nOur warrants were issued in registered form under a warrant agreement between Continental Stock Transfer & Trust Company, N.A., as warrant agent, and us. The warrant agreement provides that the terms of the warrants may be amended without the consent of any holder to cure any mistake, including to conform the warrant agreement to the description of the warrant agreement herein, or any ambiguity, or correct any defective provision, but requires the approval by the holders of at least 50% of the then outstanding public warrants to make any change that adversely affects the interests of the registered holders of public warrants. Please see Item 1. \n\nThe exercise price for our public warrants is $11.50 per share, subject to adjustments as provided herein. \n\n\nWe do not have an employment agreement with, or key-man insurance on the life of any of our other directors or officers. \n\nWhile we intend to closely scrutinize any individuals we engage after our initial business combination, our assessment of these individuals may not prove to be correct. \n\n\n\n\n\nAs a result, we may need to reconstitute the management team of the post-transaction company in connection with our initial business combination, which may adversely impact our ability to complete an initial business combination in a timely manner or at all. \nOur officers and directors are affiliated with entities engaged in business activities similar to those intended to be conducted by us and, accordingly, may have conflicts of interest in determining to which entity a particular business opportunity or other transaction should be presented. \nOur sponsor and officers and directors are affiliated with entities, including operating companies and investment vehicles that are engaged in a similar business. \nAs described in Item 1. Businessand Item 10. , each of our officers and directors presently has, and any of them in the future may have additional, fiduciary, contractual or other obligations or duties to one or more other entities pursuant to which such officer or director is or will be required to present a business combination opportunity to such entities. \nPlease see Item 10. \n\nIn fact, we may enter into a business combination with a target business that is affiliated with our sponsor<|endoftext|>Officer or director unless such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of our company and such opportunity is one we are legally and contractually permitted to undertake and would otherwise be reasonable for us to pursue. \nOur officers have agreed not to become an officer or director of any other special purpose acquisition company with a class of securities registered under the Exchange Act, until we have entered into a definitive agreement regarding our initial business combination or we have failed to complete our proposed business combination by October 22, 2021. \n\n\n\nAs such, we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding anon-bindingadvisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. \n\n\n### Financial Position \nWith funds available for a business combination in the amount of $136,398,500 as of December 31, 2020, after payment of $2,760,000 of deferred underwriting fees, in each case before fees and expenses associated with our initial business combination, we offer a target business a variety of options such as creating a liquidity event for its owners, providing capital for the potential growth and expansion of its operations or strengthening its balance sheet by reducing its debt or leverage ratio. \nEffecting a Business Combination \n### General \nWe intend to utilize cash derived from the proceeds of our initial public offering and the private placement of private warrants, our share capital, debt or a combination of these in effecting a business combination. Although substantially all of the net proceeds of our initial public offering and the private placement of private warrants are intended to be applied generally toward effecting a business combination as described in this Amendment, the proceeds are not otherwise being designated for any more specific purposes. Accordingly, investors are investing without first having an opportunity to evaluate the specific merits or risks of any one or more business combinations. These include time delays, significant expense, loss of voting control and compliance with various United States federal and state securities laws. \n\nOur business combination must be with a target business or businesses that collectively satisfy the minimum valuation standard at the time of such acquisition. This process may entail the simultaneous acquisitions of several operating businesses at the same time. \n\n\nAlthough we intend to scrutinize the management of a prospective target business when evaluating the desirability of effecting a business combination, we cannot assure you that our assessment of the target business management will prove to be correct. \n\n\n\nIn connection with any proposed business combination, we will either (1) seek shareholder approval of our initial business combination at a meeting called for such purpose at which public shareholders may seek to convert their public shares, regardless of whether they vote for or against the proposed business combination, into their pro rata share of the aggregate amount then on deposit in the trust account (net of taxes payable) or (2) provide our public shareholders with the opportunity to sell their public shares to us by means of a tender offer (and thereby avoid the need for a shareholder vote) for an amount equal to their pro rata share of the aggregate amount then on deposit in the trust account (net of taxes payable), in each case subject to the limitations described herein. If we determine to engage in a tender offer, such tender offer will be structured so that each shareholder may tender any or all of his, her or its public shares rather than some pro rata portion of his, her or its shares. If we so choose and we are legally permitted to do so, we have the flexibility to avoid a shareholder vote and allow our shareholders to sell their shares pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act which regulate issuer tender offers. We will only consummate our initial business combination if we have net tangible assets (after redemption) of at least $5,000,001 either immediately prior to or upon such consummation and, solely if we seek shareholder approval, a majority of the issued and outstanding ordinary shares voted are voted in favor of the business combination. \nWe chose our net tangible asset threshold of $5,000,001 as described above to ensure that we would avoid being subject to Rule 419 promulgated under the Securities Act. Public shareholders may therefore have to wait until October 22, 2021in order to be able to receive a pro rata share of the trust account. \nOur initial shareholders and our officers and directors and underwriters have agreed (1) to vote any ordinary shares owned by them in favor of any proposed business combination, (2) not to convert any ordinary shares in connection with a shareholder vote to approve a proposed initial business combination and (3) not sell any ordinary shares in any tender in connection with a proposed initial business combination. As a result, if we sought shareholder approval of a proposed transaction, we would need only 5,100,001 of our public shares (or approximately 37.0% of our public shares) to be voted in favor of the transaction in order to have such transaction approved (assuming that the initial shareholders do not purchase any units or shares in the after-market and that the 150,000 representative shares are voted in favor of the transaction). \nIf we hold a meeting to approve a proposed business combination and a significant number of shareholders vote, or indicate an intention to vote, against such proposed business combination, our officers, directors, initial shareholders or their affiliates could make such purchases in the open market or in private transactions in order to influence the vote. Notwithstanding the foregoing, our officers, directors, initial shareholders and their affiliates will not make purchases of ordinary shares if the purchases would violate Section 9(a)(2) or Rule 10b-5 of the Exchange Act, which are rules designed to stop potential manipulation of a companys stock. \n\nNotwithstanding the foregoing, if we seek shareholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our amended and restated memorandum and articles of association will provide that a public shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a group (as defined under Section 13 of the Exchange Act), will be restricted from seeking redemption rights with respect to more than an aggregate of 15% of the shares sold in our initial public offering (the Excess Shares). \n\n### Conversion/Tender Rights \nAt any meeting called to approve an initial business combination, public shareholders may seek to convert their public shares, regardless of whether they vote for or against the proposed business combination, into their pro rata share of the aggregate amount then on deposit in the trust account, less any taxes then due but not yet paid. If we hold a meeting to approve an initial business combination, a holder will always have the ability to vote against a proposed business combination and not seek conversion of his shares. \n\nOur initial shareholders, officers and directors will not have conversion rights with respect to any ordinary shares owned by them, directly or indirectly, whether acquired prior to our initial public offering or purchased by them in the aftermarket. \nWe may also require public shareholders, whether they are a record holder or hold their shares in street name, to either tender their certificates to our transfer agent or to deliver their shares to the transfer agent electronically using the DWAC System, at the holders option, at any time at or prior to the vote on the business combination. Under our amended and restated memorandum and articles of association, we are required to provide at least 10 days advance notice of any general meeting, which would be the minimum amount of time a shareholder would have to determine whether to exercise conversion rights. As a result, if we require public shareholders who wish to convert their ordinary shares into the right to receive a pro rata portion of the funds in the trust account to comply with the foregoing delivery requirements, holders may not have sufficient time to receive the notice and deliver their shares for conversion. \nThe transfer agent will typically charge the tendering broker $80.00 and it would be up to the broker whether or not to pass this cost on to the converting holder. \n\nIf the initial business combination is not approved or completed for any reason, then our public shareholders who elected to exercise their conversion or tender rights would not be entitled to convert their shares for the applicable pro rata share of the trust account. \n\nIf we do not complete the proposed business combination by October 22, 2021it will trigger our automatic winding up, liquidation and dissolution pursuant to the terms of our amended and restated memorandum and articles of association. \nFurthermore, while we seek to have all vendors and service providers (which would include any third parties we engaged to assist us in any way in connection with our search for a target business) and prospective target businesses execute agreements with us waiving any right, title, interest or claim of any kind they may have in or to any monies held in the trust account, there is no guarantee that they will execute such agreements. \nThere will be no distribution from the trust account with respect to our warrants or rights, which will expire worthless. If we are unable to complete an initial business combination and expend all of the net proceeds of our initial public offering, other than the proceeds deposited in the trust account, and without taking into account interest, if any, earned on the trust account, the initial per-share distribution from the trust account would be $10.00. \nAlthough we seek to have all vendors, including lenders for money borrowed, prospective target businesses or other entities we engage execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account for the benefit of our public shareholders, there is no guarantee that they will execute such agreements or even if they execute such agreements that they would be prevented from bringing claims against the trust account, including but not limited to, fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain an advantage with a claim against our assets, including the funds held in the trust account. \nAccordingly, the actual per-share distribution could be less than $10.00 due to claims of creditors. \nAdditionally, if we are forced to file a bankruptcy case or an involuntary bankruptcy case is filed against us which is not dismissed, the proceeds held in the trust account could be subject to applicable bankruptcy law, and may be included in our bankruptcy estate and subject to the claims of third parties with priority over the claims of our shareholders. To the extent any bankruptcy claims deplete the trust account, we cannot assure you we will be able to return to our public shareholders at least $10.00 per share. \n### Competition \nIn identifying, evaluating and selecting a target business, we encounter intense competition from other entities having a business objective similar to ours. \nour obligation to pay EarlyBirdCapital an aggregate fee of 3.5% of the gross proceeds of our initial public offering upon consummation of our initial business combination pursuant to the business combination marketing agreement; \n\n\n### Facilities \nOur principal executive offices are located at 1049 Park Ave. 14A, New York,<|endoftext|>Our public shareholders with the opportunity to redeem their public shares upon approval of any such amendment at aper-shareprice, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account and not previously released to us to pay our taxes, if any, divided by the number of the then-outstanding public shares. \nWe expect that all costs and expenses associated with implementing our plan of dissolution, as well as payments to any creditors, will be funded from amounts remaining out of the approximately $1 million held outside the trust account plus up to $100,000 of funds from the trust account available to us to pay dissolution expenses, although we cannot assure you that there will be sufficient funds for such purpose. \n\n\n\nWe will have access to up to approximately $1 million following our initial public offering and the sale of the private placement warrants with which to pay any such potential claims (including costs and expenses incurred in connection with our liquidation, currently estimated to be no more than approximately $100,000). \n\n\n### Competition \n\nFacilities \nWe currently utilize office space at 600 Steamboat Road, Suite200, Greenwich, CT 06830 from our sponsor and the members of our management team as our executive offices. \n### Employees \nWe currently have three officers, Todd Boehly, Carlton McMillen and Robert Ott. Mr.Boehly, Mr.McMillen and Mr.Ott are not obligated to devote any specific number of hours to our matters but they intend to devote as much of their time as they deems necessary to our affairs until we have completed our initial business combination. \n\n\nWe will provide shareholders with audited financial statements of the prospective target business as part of the proxy solicitation materials or tender offer documents sent to shareholders to assist them in assessing the target business. These financial statement requirements may limit the pool of potential target businesses we may conduct an initial business combination with because some targets may be unable to provide such statements in time for us to disclose such statements in accordance with federal proxy rulesand complete our initial business combination within the required time period. \n\nPrior to the date of this Report, we filed a Registration Statement on Form8-A with the SEC to voluntarily register our securities under Section12 of the Exchange Act. \nAs an exempted company, we applied for and received a tax exemption undertaking from the Cayman Islands government that, in accordance with Section6 of the Tax Concessions Act (2020 Revision) of the Cayman Islands, for a period of 20 years from the date of the undertaking, no law which is enacted in the Cayman Islands imposing any tax to be levied on profits, income, gains or appreciations will apply to us or our operations and, in addition, that no tax to be levied on profits, income, gains or appreciations or which is in the nature of estate duty or inheritance tax will be payable (i)on or in respect of our shares, debentures or other obligations or (ii)by way of the withholding in whole or in part of a payment of dividend or other distribution of income or capital by us to our shareholders or a payment of principal or interest or other sums due under a debenture or other obligation of us. \n\n\n\n\n### Legal Proceedings \n\n\nWe are a blank check company that has conducted no operations and has generated no revenues to date. Our initial public offering was not conducted in compliance with Rule419 promulgated under the Securities Act. Accordingly, you will not be entitled to protections normally afforded to investors in Rule419 blank check offerings. \n\n\nWe were formed on July 22, 2020 under the laws of the Cayman Islands and have no operating results. \n\n\nOur public shareholders may not be afforded an opportunity to vote on our proposed initial business combination, which means we may complete our initial business combination even though a majority of our public shareholders do not support such a combination. \nAccordingly, we may complete our initial business combination even if holders of a majority of our outstanding ordinary shares do not approve of the business combination we complete. \n\n\n\nIn addition, an affiliate of our sponsor purchased 15,500,000units in our initial public offering. \n\n\n\n\n\n\n\n\n\nOn January31, 2020, U.S. \nIn addition, our ability to consummate a transaction may be dependent on the ability to raise equity and debt financing which may be impacted by COVID-19 and other events (such as terrorist attacks, natural disasters or a significant outbreak of other infectious diseases), including as a result of increased market volatility, decreased market liquidity in third-party financing being unavailable on terms acceptable to us or at all. \n\n\nOur ability to complete our initial business combination may be negatively impacted by general market conditions, volatility in the capital and debt markets and the other risks described herein, including as a result of terrorist attacks, natural disasters, or a significant outbreak of infectious diseases. \nIf we seek shareholder approval of our initial business combination, our sponsor, directors, officers, advisors and their affiliates may elect to purchase public shares or warrants, which may influence a vote on a proposed business combination and reduce the public float of our ClassA ordinary shares or public warrants. \nIf we seek shareholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our sponsor, directors, officers, advisors or their affiliates may purchase public shares or warrants in privately negotiated transactions or in the open market either prior to or following the completion of our initial business combination, although they are under no obligation to do so. \nIn the event that our sponsor, directors,officers, advisors or their affiliates purchase shares in privately negotiated transactions from public shareholders who have already elected to exercise their redemption rights, such selling shareholders would be required to revoke their prior elections to redeem their shares. \n\n\n\n\n\n\n\n\n\nAs of December31, 2020, we had approximately $0.8 million in cash held outside the trust account to fund our working capital requirements. \nThe units would be identical to the private placement warrants. \n\n\n\n\nPursuant to a letter agreement, our sponsor has agreed that it will be liable to us if and to the extent any claims by a third party (other than our independent auditors) for services rendered or products sold to us, or a prospective target business with which we have discussed entering into a transaction agreement, reduce the amounts in the trust account to below the lesser of (i)$10.00 per public share and (ii)the actual amount per share held in the trust account as of the date of the liquidation of the trust account if less than $10.00 per share due to reductions in the value of the trust assets, in each case net of the interest that may be withdrawn to fund our Regulatory Withdrawals and/or to pay our tax obligations, provided that such liability will not apply to any claims by a third party or prospective target business that executed a waiver of any and all rights to seek access to the trust account nor will it apply to any claims under our indemnity of the underwriters of our initial public offering against certain liabilities, including liabilities under the Securities Act. \n\n\nIn the event that the proceeds in the trust account are reduced below the lesser of (i)$10.00 per share and (ii)the actual amount per share held in the trust account as of the date of the liquidation of the trust account if less than $10.00 per share due to reductions in the value of the trust assets, in each case net of the interest that may be withdrawn to fund our Regulatory Withdrawals and/or to pay our tax obligations, and our sponsor asserts that it is unable to satisfy its obligations or that it has no indemnification obligations related to a particular claim, our independent directors would determine whether to take legal action against our sponsor to enforce its indemnification obligations. \n\n\n\n\n\n\n\n\n\nAs an exempted company, there is no requirement under the Companies Act for us to hold annual or general meetings to elect directors. \n\n\n\n\n\n\n\n\nIn the event we elect to pursue an acquisition outside of the areas of our managements expertise, our managements expertise may not be directly applicable to its evaluation or operation, and the information contained in this prospectus regarding the areas of our managements expertise would not be relevant to an understanding of the business that we elect to acquire. \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nUpon the closing of our initial public offering, our initial shareholders own, on an as-converted basis, 20% of our issued and outstanding ordinary shares. Accordingly, they may exert a substantial influence on actions requiring a shareholder vote, potentially in a manner that you do not support, including amendments to our amended and restated memorandum and articles of association and approval of our initial business combination. In addition, our board of directors, whose members were appointed by our sponsor, is divided into three classes, each of which (except for those directors elected prior to our first annual general meeting) will serve for a term of three years with only one class of directors being appointed in each year. If there is an annual general meeting, as a consequence of our staggered board of directors, only a minority of the board of directors will be considered for appointment and our initial shareholders, because of their ownership position, will control the outcome, as only holders of our ClassB ordinary shares will have the right to vote on the election of directors and to remove directors prior to our initial business combination. In addition, the Company has agreed not to enter into a definitive agreement regarding an initial business combination without the prior consent of our sponsor. \n\nOur sponsor and its permitted transferees, if any, who will collectively beneficially own, on an as-converted basis, 20% of our ClassA ordinary shares upon the closing of our initial public offering, will participate in any vote to amend our amended and restated memorandum and articles of association and/or trust agreement and will have the discretion to vote in any manner they choose. \nOur sponsor, officers and directors have agreed, pursuant to agreements with us, that they will not propose any amendment to our amended and restated memorandum and articles of association (A)that would modify the substance or timing of our obligation to provide holders of our ClassA ordinary shares the right to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of our initial public offering or (B)with respect to any other provision relating to the rights of holders of our ClassA ordinary shares, unless we provide our public shareholders with the opportunity to redeem their ClassA ordinary shares upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account and not previously released to us to pay our taxes, if any, divided by the number of the then-outstanding public shares. Our shareholders are not parties to, or third-party beneficiaries of, these agreements and, as a result, will not have the ability to pursue remedies against our sponsor, officers or directors for any breach of these agreements. \n\n\n\nUnlike most blank check companies, if (i)we issue additional ClassA ordinary shares or equity-linked securities for capital raising purposes in connection with the closing of our initial business combination at a Newly Issued Price of less than $9.20 per ordinary share, (ii)the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of our initial business combination on the date of the consummation of our initial business combination (net of redemptions), and (iii)the Market Value is below $9.20 per share, then the exercise price<|endoftext|>A ratio greater than one-to-one at the time of our initial business combination as a result of the anti-dilution provisions described herein. However, our amended and restated certificate of incorporation provides, among other things, that prior to our initial business combination, we may not issue additional shares of capital stock that would entitle the holders thereof to (1)receive funds from the trust account or (2)vote on any initial business combination, pre-initial business combination activity or amendments to our amended and restated certificate of incorporation. The issuance of additional shares of common or preferred stock, including the issuance of the forward purchase shares: may significantly dilute the equity interest of investors in the IPO; and may adversely affect prevailing market prices for our units, common stock and/or redeemable warrants. \nIf we are unable to complete our initial business combination, our public stockholders may receive only approximately $10.00 per share, or less than such amount in certain circumstances, on the liquidation of our trust account and our detachable redeemable warrants will expire worthless and no distributable redeemable warrants will have been issued. \n\n\n\n\n\nWe may only be able to complete one business combination with the proceeds of the IPO and the sale of the private placement warrants to the sponsor, which will cause us to be solely dependent on a single business which may have a limited number of products or services. \nThe net proceeds from the IPO, the sale of the private placement warrants to the sponsor and the partial exercise of the over-allotment option provided us with approximately $404.2 million that we may use to complete our initial business combination (which includes approximately $18.2 million of deferred underwriting commissions being held in the trust account). \n\n\n\n\n\n\n\n\n\n\n\nOur amended and restated certificate of incorporation provides that any of its provisions (other than amendments relating to the appointment of directors, which require the approval by the holders of at least 90% of our common stock entitled to vote thereon) related to pre-business combination activity (including the requirement to deposit proceeds of the IPO and the private placement warrants sale to the sponsor into the trust account and not release such amounts, except in specified circumstances and to provide redemption rights to public stockholders as described herein) may be amended if approved by holders of at least 65% of our common stock, and corresponding provisions of the trust agreement governing the release of funds from our trust account may be amended if approved by holders of 65% of our common stock. \nOur sponsor, officers and directors have agreed, pursuant to a written agreement, that they will not propose any amendment to our amended and restated certificate of incorporation to modify the substance or timing of our obligation to provide holders of our ClassA common stock the right to have their shares redeemed or to provide for the redemption of our public shares in connection with an initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24months from the closing of the IPO, or with respect to any other material provision relating to stockholder rights or pre-initial business combination activity, unless we provide our public stockholders with the opportunity to redeem their shares of ClassA common stock upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, divided by the number of then outstanding public shares. \n\nCertain agreements, including the underwriting agreement relating to the IPO, the letter agreement among us and our sponsor, officers and directors, and the registration rights agreement among us and our initial stockholders, may be amended without stockholder approval. It may be possible that our board, in exercising its business judgment and subject to its fiduciary duties, chooses to approve one or more amendments to any such agreement in connection with the consummation of our initial business combination. \n\nAlthough we believe that the net proceeds of the IPO and the sale of the private placement warrants to the sponsor and the forward purchase shares will be sufficient to allow us to complete our initial business combination, we cannot ascertain the capital requirements for any particular transaction. If the net proceeds of the IPO and the sale of the private placement warrants and the forward purchase shares prove to be insufficient, either because of the size of our initial business combination, the depletion of the available net proceeds in search of a target business, the obligation to redeem for cash a significant number of shares from stockholders who elect redemption in connection with our initial business combination or the terms of negotiated transactions to purchase shares in connection with our initial business combination, we may be required to seek additional financing (including from Starboard) or to abandon the proposed business combination. Starboard is not obligated to provide, or seek, any such financing or, except as expressly set forth herein, to provide any other services to us. If we are unable to complete our initial business combination, our public stockholders may receive only approximately $10.00 per share, or less in certain circumstances, on the liquidation of our trust account, and our detachable redeemable warrants will expire worthless and no distributable redeemable warrants will have been issued. \n\nThe federal proxy rulesrequire that a proxy statement with respect to a vote on a business combination include historical and/or pro forma financial statement disclosure. \n\n\n\n\ntariffs and trade barriers; longer payment cycles; tax consequences; rates of inflation; employment regulations; \n\n\nFollowing our initial business combination, any or all of our management could resign from their positions as officers or directors of the company, and the management of the target business at the time of the business combination could remain in place. securities laws. \n\n\nFor example, we may require our public stockholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in street name, to either tender their certificates to our transfer agent prior to the date set forth in the tender offer or proxy materials documents mailed to such holders, or up to two business days prior to the initially scheduled vote on the proposal to approve the initial business combination in the event we distribute proxy materials, or to deliver their shares to the transfer agent electronically. In addition, we will require that beneficial holders identify themselves. Please see Item 1. \n\n(2)the redemption of any public shares properly submitted in connection with a stockholder vote to amend our amended and restated certificate of incorporation to modify the substance or timing of our obligation to provide holders of our ClassA common stock the right to have their shares redeemed or to provide for the redemption of our public shares in connection with an initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of the IPO, or with respect to any other material provision relating to stockholder rights or pre-initial business combination activity; and (3)the redemption of all of our public shares if we are unable to complete our initial business combination within 24 months from the closing of the IPO, subject to applicable law and as further described herein. In addition, if we are unable to complete an initial business combination within 24 months from the closing of the IPO for any reason, compliance with Delaware law may require that we submit a plan of dissolution to our then-existing stockholders for approval prior to the distribution of the proceeds held in our trust account. In that case, public stockholders may be forced to wait beyond 24 months from the closing of the IPO before they receive funds from our trust account. Accordingly, to liquidate your investment, you may be forced to sell your public shares or redeemable warrants, potentially at a loss. \n\nOur units, ClassA common stock and detachable redeemable warrants are listed on Nasdaq. \n\nOur units, ClassA common stock and redeemable warrants are listed on Nasdaq and, as a result, qualify as covered securities under such statute. \n\nIf we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our amended and restated certificate of incorporation provides that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a group (as defined under Section13 of the Exchange Act), will be restricted from seeking redemption rights with respect to more than an aggregate of 15% of the shares sold in the IPO, without our prior consent, which we refer to as the Excess Shares. As a result, you will continue to hold the Excess Shares and, in order to dispose of such shares, would be required to sell your Excess Shares in open market transactions, potentially at a loss. \n\nUpon redemption of our public shares, if we are unable to complete our initial business combination within 24 months from the closing of the IPO, or upon the exercise of a redemption right in connection with our initial business combination, we will be required to provide for payment of claims of creditors that were not waived that may be brought against us within the 10 years following redemption. \nor (2)the actual amount per public share held in the trust account as of the date of the liquidation of the trust account, if less than $10.00 per share due to reductions in the value of the trust assets, in each case net of permitted withdrawals, except as to any claims by a third party that executed a waiver of any and all rights to the monies held in the trust account (whether any such waiver is enforceable) and except as to any claims under our indemnity of the underwriters of the IPO against certain liabilities, including liabilities under the Securities Act. \n\n\n\nThe pro rata portion of our trust account distributed to our public stockholders upon the redemption of our public shares in the event we do not complete our initial business combination within 24 months from the closing of the IPO may be considered a liquidating distribution under Delaware law. However, it is our intention to redeem our public shares as soon as reasonably possible following the 24th month from the closing of the IPO in the event we do not complete our initial business combination and, therefore, we do not intend to comply with the foregoing procedures. \nBecause we do not intend to comply with Section280, Section281(b)of the DGCL requires us to adopt a plan, based on facts known to us at such time that will provide for our payment of all existing and pending claims or claims that may be potentially brought against us within the 10 years following our dissolution. However, because we are a blank check company, rather than an operating company, and our operations will be limited to searching for prospective target businesses to acquire, the only likely claims to arise would be from our vendors (such as lawyers, investment bankers, consultants,etc.) or prospective target businesses. Furthermore, if the pro rata portion of our trust account distributed to our public stockholders upon the redemption of our public shares in the event we do not complete our initial business combination within 24 months from the closing of the IPO is not considered a liquidating distribution under Delaware law and such redemption distribution is deemed to be unlawful, then pursuant to Section174 of the DGCL, the statute of limitations for claims of creditors could then be six years after the unlawful redemption distribution, instead of three years, as in the case of a liquidating distribution. \n, and such registration may not be in place when an investor desires to exercise redeemable warrants, thus precluding such investor from being able to exercise its warrants except on a cashless basis and potentially causing such warrants to expire worthless.<|endoftext|>Of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain an advantage with respect to a claim against our assets, including the funds held in the trust account. In order to protect the amounts held in the trust account, our sponsor agreed that it will be liable to us if and to the extent any claims by a third party for services rendered or products sold to us, or a prospective target business with which we have discussed entering into a transaction agreement, reduce the amounts in the trust account to below the lesser of (i)$10.00 per public share and (ii)the actual amount per public share held in the trust account as of the date of the liquidation of the trust account if less than $10.00 per public share due to reductions in the value of the trust assets, in each case net of the interest that may be withdrawn to pay our tax obligations, provided that such liability will not apply to any claims by a third party or prospective target business who executed a waiver of any and all rights to seek access to the trust account nor will it apply to any claims under our indemnity of the underwriters of our Initial Public Offering against certain liabilities, including liabilities under the Securities Act. \nIn the event that the proceeds in the trust account are reduced below the lesser of (i)$10.00 per public share and (ii)the actual amount per public share held in the trust account as of the date of the liquidation of the trust account if less than $10.00 per public share due to reductions in the value of the trust assets, in each case net of the interest that may be withdrawn to pay our tax obligations, and our sponsor asserts that it is unable to satisfy its indemnification obligations or that it has no indemnification obligations related to a particular claim, our independent directors would determine whether to take legal action against our sponsor to enforce its indemnification obligations. \nWe will have access to up to $1,000,000 from the proceeds of our Initial Public Offering and the sale of the private placement shares with which to pay any such potential claims (including costs and expenses incurred in connection with our liquidation, currently estimated to be no more than approximately $100,000). however, such liability will not be greater than the amount of funds from our trust account received by any such shareholder. \n\nOur public shareholders are entitled to receive funds from the trust account only (i)in the event of the redemption of our public shares if we do not consummate an initial business combination within 24months from the closing of our Initial Public Offering, (ii)in connection with a shareholder vote to amend our amended and restated memorandum and articles of association (A)to modify the substance or timing of our obligation to provide holders of our ClassA ordinary shares the right to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we do not consummate an initial business combination within 24months from the closing of our Initial Public Offering or (B)with respect to any other provision relating to the rights of holders of our ClassA ordinary shares, and (iii)if they redeem their respective shares for cash upon the completion of the initial business combination. \n### Competition \nIn identifying, evaluating and selecting a target business for our initial business combination, we anticipate intense competition from other entities having a business objective similar to ours, including other blank check companies, private equity groups and leveraged buyout funds, public companies and operating businesses seeking strategic acquisitions. Furthermore, our obligation to pay cash in connection with our public shareholders who exercise their redemption rights may reduce the resources available to us for our initial business combination, and the future dilution they potentially represent, may not be viewed favorably by certain target businesses. \nFacilities \n\n### Employees \n\n\nWe registered our ClassA ordinary shares under the Exchange Act and have reporting obligations, including the requirement that we file annual, quarterly and current reports with the SEC. \n\nWe will be required to evaluate our internal control procedures for the fiscalyear ending December31, 2021, as required by the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act. \nPrior to the date of this Annual Report on Form10-K, we filed a Registration Statement on Form8-A with the SEC to voluntarily register our securities under Section12 of the Exchange Act. \nAs an exempted company, we applied for and received, a tax exemption undertaking from the Cayman Islands government that, in accordance with Section6 of the Tax Concessions Law (2020 Revision) of the Cayman Islands, for a period of 30years from the date of the undertaking, no law which is enacted in the Cayman Islands imposing any tax to be levied on profits, income, gains or appreciations will apply to us or our operations and, in addition, that no tax to be levied on profits, income, gains or appreciations or which is in the nature of estate duty or inheritance tax will be payable (i)on or in respect of our shares, debentures or other obligations or (ii)by way of the withholding in whole or in part of a payment of dividend or other distribution of income or capital by us to our shareholders or a payment of principal or interest or other sums due under a debenture or other obligation of us. \n\nIn other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. \n\n\n### Legal Proceedings \n\nItem1A.Risk Factors \nYou should consider carefully all of the risks described below, together with the other information contained in this Annual Report on Form10-K, in evaluating the Company and our business. The risks described below are not intended to be exhaustive and are not the only risks facing the Company. New risk factors can emerge from time to time, and it is not possible to predict the impact that any factor or combination of factors may have on our business, prospects, financial condition and results of operations. \n\n\nWe were formed in October2020 under the laws of the Cayman Islands and have no operating results. \n\nInformation regarding performance by, or businesses associated with, our management team or their affiliates, including Omega Funds, is presented for informational purposes only. Any past experience of and performance by our management team or their affiliates, including Omega Funds, is not a guarantee either: (1)that we will be able to successfully identify a suitable candidate for our initial business combination; You should not rely on the historical record of our management team, Omega Funds or any of their affiliates or managed funds performance as indicative of the future performance of an investment in us or the returns we will, or are likely to, generate going forward. An investment in us is not an investment in Omega Funds. \n\nAs of the date of this report, we had $825,777 in cash held outside the trust account to fund our working capital requirements. We believe that the funds available to us outside of the trust account, together with funds available from loans from our sponsor, members of our management team or any of their affiliates will be sufficient to allow us to operate for at least the 24months following the closing of our Initial Public Offering; \nUp to $1,500,000 of such loans may be convertible into shares of the post-business combination entity at a price of $10.00 per share at the option of the lender. Consequently, our public shareholders may only receive an estimated $10.00 per public share, or possibly less, on our redemption of our public shares. \n\n\nFor instance, the Nasdaq rulescurrently allow us to engage in a tender offer in lieu of a shareholder meeting but would still require us to obtain shareholder approval if we were seeking to issue more than 20% of our issued and outstanding shares (excluding the private placement shares) to a target business as consideration in any business combination. Therefore, if we were structuring a business combination that required us to issue more than 20% of our issued and outstanding ordinary shares (excluding the private placement shares), we would seek shareholder approval of such business combination. \n\nAccordingly, your only opportunity to affect the investment decision regarding a potential business combination may be limited to exercising your redemption rights within the period of time (which will be at least 20 businessdays) set forth in our tender offer documents mailed to our public shareholders in which we describe our initial business combination. \n\nOur sponsor owns, on an as-converted basis, 20% of our outstanding ordinary shares (excluding the private placement shares). As a result, in addition to our initial shareholders founder shares and private placement shares, we would need 4,924,501, or 35.68%, of the 13,800,000 public shares public shares sold in our Initial Public Offering to be voted in favor of an initial business combination in order to have our initial business combination approved. \n\n\n\n\n\n\n\nConsequently, such target business may obtain leverage over us in negotiating a business combination, knowing that if we do not complete our initial business combination within the required time period with that particular target business, we may be unable to complete our initial business combination with any target business. \n\nOn January31, 2020, U.S. The COVID-19 outbreak has resulted in a widespread health crisis that could adversely affect the economies and financial markets worldwide, and the business of any potential target business with which we consummate a business combination could be materially and adversely affected. Furthermore, we may be unable to complete a business combination if continued concerns relating to COVID-19 continue to restrict travel, limit the ability to conduct due diligence activities and have meetings with potential investors or the target companys personnel, vendors and services providers are unavailable to negotiate and consummate a transaction in a timely manner. \n\n\n\n\n\n\nWe may not be able to find a suitable target business and consummate an initial business combination within 24months after the closing of our Initial Public Offering. \nIn either such case, our public shareholders may receive only $10.00 per public share, or less than $10.00 per public share, on the redemption of their shares. \n\nIf we seek shareholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our sponsor, directors, executive officers, advisors or their affiliates may purchase public shares in privately negotiated transactions or in the open market either prior to or following the completion of our initial business combination, although they are under no obligation to do so. The purpose of any such transaction could be to (1)vote in favor of the business combination and thereby increase the likelihood of obtaining shareholder approval of the business combination or (2)satisfy a closing condition in an agreement with a target that requires us to have a minimum net worth or a certain amount of cash at the closing of our initial business combination, where it appears that such requirement would otherwise not be met. See Item1. \n\nWe expect to encounter intense competition from other entities having a business objective similar to ours, including private investors (which may be individuals or investment partnerships), other blank check companies and other entities, domestic and international, competing for the types of businesses we intend to acquire. Many of these competitors possess greater technical, human and other resources or more local industry knowledge than we do and our financial resources will be relatively limited when contrasted with those of many of these competitors. While we believe there are numerous target businesses we could potentially acquire with the net proceeds of our Initial Public Offering and the sale of the private placement shares, our ability to compete with respect to the acquisition of certain target businesses that are sizable will be limited by our available financial resources.<|endoftext|>Outstanding securities of Yabez (Hong Kong) Company Limited, a Hong Kong corporation, together with its wholly owned subsidiary, Yabez Business Service (SZ) Company Limited in Shenzhen, China (collectively, Yabez). As consideration thereto, we issued to the shareholders of Yabez 486,171 restricted shares of our Common Stock, representing an aggregate purchase price of $252,808 based on the average closing price of the ten trading days preceding the date of the acquisition agreement on July 31, 2015, of $0.52 per share. The purchase price was determined based on the business value generated from Yabez at the time of acquisition. Yabez provides company formation advisory services, corporate secretarial services and IT-related services to both of Hong Kong and Shenzhen-based clients. \n### Disposal of subsidiaries \nDisposal of Yabez (Hong Kong) Company Limited, a Hong Kong company and its wholly owned subsidiary, Yabez Business Service (SZ) Company Limited, a Shenzhen, China company \nOn February 29, 2020, the Company sold its entire 60% interest in Yabez (Hong Kong) Limited and Yabez Business Service (SZ) Company Limited (collectively, Yabez) to an unrelated party for $1. The transaction closed on February 29, 2020, and Yabez was deconsolidated following the closing. \nAt February 29, 2020, Yabezs assets totaled $167,017, and consisted of cash of $24,887, trade accounts receivable of $129,792, and other assets of $12,338. At February 29, 2020, Yabezs liabilities consisted of trade accounts payables of $173,680. At February 29, 2020, Yabezs net deficit was ($6,663), of which the non-controlling interest was ($7,446) and the Companys basis was $783, resulting in a loss on disposal of $727, after consideration of foreign currency adjustments. \n### Disposal of Global Leaders Corporation, an \nAnguilla corporation \nOn May 20, 2020, Global Leaders Corporation (GVCQH) allotted an additional 196 shares to an unrelated party at a price of $196. As a result, an immediate holding company of GVCQH, Greenpro Venture Capital Limited (GVCL), holds a 2% interest in GVCQH, and GVCQHs sole asset, cash of $129, was disposed and a loss on disposal of $125 was recorded. On August 17, 2020, GVCL sold the balance of the 2% interest in GVCQH to the unrelated party for $4. \n### Acquisition of an associate company \nAcquisition of Greenpro KSP Holding Group Company Limited (formerly known as KSP Holding Group Company Limited) \nOn July 20, 2018, our wholly owned subsidiary, GVCL entered into a sale and purchase agreement with Mr. Prapakorn Saokliew and Ms. Surapa Jamjang, each holding 45.13% and 45.12% shareholdings in KSP Holding Group Company Limited, respectively (collectively, the Sellers). Pursuant to the agreement, GVCL agreed to acquire approximately 49% of the shareholdings of KSP Holding Group Company Limited (KSP, renamed to Greenpro KSP Holding Group Company Limited on August 7, 2018) in exchange for $363,930, made up of $75,000 in cash and 38,524 shares of the Companys Common Stock valued at $288,930. The Company also issued 578 shares of the Companys Common Stock valued at $7.50 per share, or a total of $4,335, as a commission that was also capitalized as cost of investment in KSP. KSP provides accounting, auditing and consulting services in Thailand. The Company accounted for its investment in KSP under the equity method of accounting. \nAs at December 31, 2018, the Company determined that its investment in KSP was impaired and recorded an impairment of unconsolidated investment of $363,930. We currently hold approximately 48% of the issued and outstanding shares of KSP. \nAcquisitions of other investments \n1. \n### Acquisition of Greenpro Trust Limited \nOn March 30, 2015, our wholly owned subsidiary, GRBVI acquired 300,000 shares, representing approximately 8% of the issued and outstanding shares of Greenpro Trust Limited, a Hong Kong company (GTL), from its shareholders at a price of HK$300,000 (approximately $38,710) or HK$1 per share. GTL is principally engaged in provision of trusteeship, custodial and fiduciary services to clients in Hong Kong. \nOn April 13, 2016, another wholly owned subsidiary of the Company, Asia UBS Global Limited, a Belize company (AUB) acquired 100,000 shares, representing approximately 3% of the issued and outstanding shares of GTL for HK$100,000 (approximately $12,903) or HK$1 per share. \nThe Company indirectly has an aggregate of approximately 11% interest in GTL with an investment value of $51,613 which was recorded at cost and approximates its fair value. Messrs. Lee and Loke are common directors of GTL and the Company. \n2. \n### Acquisition of Agape ATP Corporation \nOn April 14, 2017, GVCL acquired 17,500,000 shares of common stock of Agape ATP Corporation, a Nevada corporation (Agape), par value of $0.0001 per share, for $1,750. Agape is principally engaged in providing health and wellness products and advisory services to clients in Malaysia. Currently, we hold approximately 5% of the total outstanding shares of Agape. \n3. \n### Acquisition of Millennium Fine Art Inc. \nOn June 29, 2020, the Company entered into a purchase and sale agreement with the Companys subsidiary, Millennium Fine Art Inc. (MFAI), pursuant to which the Company agreed to sell its 4% ownership interest in a 12.3 kilogram carved natural blue sapphire (the Millennium Sapphire) to MFAI and MFAI agreed to acquire the 4% ownership of the Millennium Sapphire from the Company. As consideration thereto, on July 1, 2020, MFAI issued 2,000,000 restricted shares of its Class B common stock to the Company valued at $5,000,000 ($5 per share), in which 1,000,000 shares were retained by the Company and the other 1,000,000 shares were reserved as a dividend to the shareholders of the Company. The Company expects to distribute these 1,000,000 shares to its shareholders in 2021. A gain on disposal of $1,000,000 was recorded at the Company level but was eliminated upon consolidation. \nOn July 1, 2020, MFAI issued 19,200,000 restricted shares of its Class A common stock to the a majority owner of the Millennium Sapphire, Mr. Daniel McKinney valued at $96,000,000 ($5 per share) to acquire the remaining 96% interest in the Millennium Sapphire. MFAI is an investment company and has a 100% interest in the Millennium Sapphire. \nAs of December 31, 2020, the Company owns 2,000,000 shares of Class B common stock of MFAI, in which 1,000,000 shares were retained by the Company and recognized at historical cost of $4,000,000 under other investments, representing approximately 5% of the issued and outstanding shares of MFAI and approximately 1% of MFAIs total voting rights. The other 1,000,000 shares were reserved as a dividend to the shareholders of the Company and the Company expects to distribute these 1,000,000 shares to its shareholders in 2021. \n4. \n### Acquisition of Ata Plus Sdn. Bhd. \nOn July 8, 2020, GVCL entered into an acquisition agreement with all of eight shareholders of Ata Plus Sdn. Bhd. and Ata Plus Sdn. Bhd., a company incorporated in Malaysia and a Recognized Market Operator (RMO) by the Securities Commission of Malaysia (APSB). Pursuant to the agreement, GVCL agreed to acquire 15% of the issued and outstanding share of APSB for a purchase price of $749,992. The purchase price was paid by the Company issuing to the shareholders approximately 457,312 restricted shares of the Companys Common Stock, which was based on the average closing price of the Companys Common Stock for the five trading days preceding the date of the agreement, $1.64 per share, on November 18, 2020. \n5. \n### Acquisition of Global Leaders Corporation \nOn August 30, 2020, GVCL entered into a subscription agreement with Global Leaders Corporation, a Nevada corporation (GLC) to acquire 9,000,000 shares of common stock of GLC at a price of $900 or $0.0001 per share, representing approximately 6% of the total issued and outstanding shares of GLC. GLCs principal activities are providing training and consulting services to corporate clients in Hong Kong and China. \n6. \n### Acquisition of First Bullion Holdings, Inc. \nOn October 19, 2020, the Company entered into a stock purchase and option agreement with Mr. Tang Ka Siu Johnny and First Bullion Holdings Inc., a British Virgin Islands company (FBHI). Pursuant to the agreement, the Company agreed to acquire 10% of the issued and outstanding shares of FBHI for a purchase price of $1,000,000 by issuing approximately 685,871 restricted shares of the Companys Common Stock to Mr. Tang, which was based on the average closing price of the Companys Common Stock for the five trading days preceding the date of the agreement, $1.458 per share. \nOn December 11, 2020, the Company issued 685,871 shares of its Common Stock to two designees of Mr. Tang at $1.458 per share. FBHI is in the business of banking, payment gateway, credit cards, debit cards, money lending, crypto trading and securities token offerings, with corporate offices in the Philippines and Hong Kong. \nPursuant to the agreement, Mr. Tang and FBHI also granted to the Company an option for 180 days following the date of the agreement to purchase an additional 8% of the issued and outstanding shares of FBHI, at an agreed valuation of FBHI equal to $20,000,000. In consideration of acquisition of the option, the Company agreed to issue 250,000 restricted shares of the Companys Common Stock to Mr. Tang, which shall constitute partial payment for the option should the Company elect to exercise the option. Pursuant to the agreement, the purchase price of the option shall be based on the average closing price of the Companys Common Stock for the five trading days preceding the date of exercise of the option. \nOn February 17, 2021, the Company exercised its option and FBHI issued to our wholly owned subsidiary, GVCL, 160,000 ordinary shares of FBHI, comprising the additional 8% of the shares sold under the agreement valued at $20,000,000. \nOn February 26, 2021, the Company issued an additional 342,592 restricted shares of its Common Stock to two designees of Mr. Tang at $2.70 per share (valued at approximately $925,000). \n7. \n### Acquisition of New Business Media Sdn. Bhd \nOn November 1, 2020, the Company entered into an acquisition agreement with Ms. Lee Yuet Lye and Mr. Chia Min Kiat, shareholders of New Business Media Sdn. Bhd. New Business Media Sdn. Bhd., a Malaysian company involved in operating a Chinese media portal, which provides digital news services focusing on Asian capital markets (NBMSB). NBMSB is one of the biggest Chinese language digital business news networks in Malaysia and has readers from across South East Asia. \nPursuant to the agreement, both Ms. Lee and Mr. Chia have agreed to sell to the Company an 18% equity stake in NBMSB in consideration of a new issuance of 257,591 restricted shares of the Companys Common Stock, valued at $411,120. The consideration was derived from an agreed valuation of NBMSB of $2,284,000, based on its assets including customers, fixed assets, cash and cash equivalents, liabilities as of November 1, 2020. \n8. \n### Acquisition of Adventure Air Race Company Limited \nOn December 21, 2020, GVCL entered into a subscription agreement with Adventure Air Race Company Limited, a company incorporated in Nevada and is principally engaged in promoting and managing an air race series (AARC). Pursuant to the agreement, GVCL acquired 2,000,000 shares of common stock of AARC at a price of $200 or $0.0001 per share. \nOn December 22, 2020, GVCL entered another subscription agreement with AARC to acquire an additional 996,740 shares of common stock of AARC at a price of $249,185 or $0.25 per share. \nThe Company in aggregate holds approximately 4% of the issued and outstanding shares of AARC. \n9. \n### Acquisition of Pentaip Technology Inc. \nOn December 29, 2020, GVCL entered into a subscription agreement with Pentaip Technology Inc., a Nevada corporation (PTI) to acquired 4,000,000 shares of common stock of PTI at a price of $400 or $0.0001 per share, representing 10% of the issued and outstanding shares of PTI. PTI uses artificial intelligence (AI) to provide investors and traders with financial data. \nBusiness Overview \nWe currently operate and provide a wide range of business solution services to small and medium-size businesses located in South-East Asia and East Asia, with an initial focus on Hong Kong, China and Malaysia, and subsequently in Thailand and Taiwan. Our comprehensive range of services includes cross-border business solutions, record<|endoftext|>Environmental and labor, could cause serious disruption to operations abroad and negatively impact our results. \n\nFollowing our initial business combination, our management team may resign from their positions as officers or directors of the company and the management of the target business at the time of the business combination will remain in place. securities laws. If new management is unfamiliar with such laws, they may have to expend time and resources becoming familiar with such laws. This could be expensive and time-consuming and could lead to various regulatory issues, which may adversely affect our operations. \nCurrency policies may cause a target business ability to succeed in the international markets to be diminished. \n\n\nWe may structure an initial business combination so that the post-transaction company in which our public shareholders own shares will own less than 100% of the outstanding equity interests or assets of a target business, but we will only complete such business combination if the post- transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target business sufficient for us not to be required to register as an investment company under the Investment Company Act. However, as a result of the issuance of a substantial number of new ordinary shares, our shareholders immediately prior to such transaction could own less than a majority of our outstanding ordinary shares subsequent to such transaction. \n\nOur amended and restated memorandum and articles of association does not provide a specified maximum redemption threshold, except that in no event will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 (such that we do not then become subject to the SECs penny stock rules) or any greater net tangible asset or cash requirement which may be contained in the agreement relating to our initial business combination. \nIn order to effectuate an initial business combination, blank check companies have, in the past, amended various provisions of their constitutional documents. We cannot assure you that we will not seek to amend our amended and restated memorandum and articles of association that will make it easier for us to consummate an initial business combination that some of our shareholders may not support. \nFor example, blank check companies have amended the definition of initial business combination, increased redemption thresholds and changed industry focus. We cannot assure you that we will not seek to amend our amended and restated memorandum and articles of association prior to our initial business combination, however, to do so would require the approval of at least 65% of the issued and outstanding shares attending and voting at a meeting of shareholders. \nOur sponsor, officers and directors agreed, each pursuant to a written agreement with us, that they will not propose any amendment to our amended and restated memorandum and articles of association that would affect the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial business combination by August 10, 2022, unless we provide our public shareholders with the opportunity to redeem their ordinary shares upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account (less any interest released to us for taxes, if any), divided by the number of then outstanding public shares. These agreements are contained in letter agreements that we entered into with our sponsor, officers and directors. \nProvisions of our amended and restated memorandum and articles of association (and corresponding provisions of the agreement governing the release of funds from our trust account) relating to the rights and obligations attaching to our ordinary shares and certain aspects of our pre- business combination activity may be amended prior to the consummation of our initial business combination by a resolution of shareholders holding 65% of the issued and outstanding ordinary shares attending and voting at the meeting at which the resolution is considered, which is a lower amendment threshold than that of many blank check companies. It may be easier for us, therefore, to amend our amended and restated memorandum and articles of association and the trust agreement to facilitate the consummation of an initial business combination that some of our shareholders may not support. \nSome other blank check companies have a provision in their constitutional documents which prohibits the amendment of certain provisions, including those which relate to a companys pre-business combination activity, without approval by a certain percentage of the companys shareholders. Amendment of these provisions requires approval by between 90% and 100% of the companys public shareholders in many cases. Our amended and restated memorandum and articles of association provide that any of its provisions, including those related to pre-business combination activity, may be amended if approved by holders of 65% of our ordinary shares, and corresponding provisions of the trust agreement governing the release of funds from our trust account may be amended if approved by holders of 65% of our ordinary shares, which is a lower amendment threshold than that of many blank check companies. This is a lower amendment threshold than that of many blank check companies. It may be easier for us, therefore, to amend our amended and restated memorandum and articles of association to facilitate the consummation of an initial business combination that some of our shareholders may not support. \nOur sponsor, officers and directors have agreed, each pursuant to a written agreement with us, that they will not propose any amendment to our amended and restated memorandum and articles of association that would affect the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial business combination by August 10, 2022, unless we provide our public shareholders with the opportunity to redeem their ordinary shares upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account (less any interest released to us for taxes, if any), divided by the number of then outstanding public shares. Our shareholders are not parties to, or third-party beneficiaries of, these agreements and, as a result, will not have the ability to pursue remedies against our sponsor, officers and directors for any breach of these agreements. \n\nIf we are unable to complete our initial business combination, our public shareholders may receive only approximately $10.00 per share plus any pro rata interest earned on the funds held in the trust account and not previously released to us to pay our taxes, if any, less up to $100,000 of interest for dissolution expenses, on the liquidation of our trust account. If we are unable to complete our initial business combination within the required time period, our public shareholders may receive only approximately $10.00 per share, or less in some circumstances, on the liquidation of our trust account, and our warrants will expire worthless. \nOur sponsor and affiliated entities control a substantial interest in us and thus may exert a substantial influence on actions requiring shareholder vote, potentially in a manner that you do not support. \nOur sponsor currently owns approximately 21% of our issued and outstanding ordinary shares. Our sponsor, officers and directors or their affiliates could determine in the future to make purchases of our securities in the open market or in private transactions, to the extent permitted by law. In connection with any vote for a proposed business combination, our sponsor, as well as all of our officers and directors have agreed to vote the ordinary shares owned by them in favor of such proposed business combination. \nIt is unlikely that there will be an annual meeting of shareholders to elect new directors prior to the consummation of our initial business combination, in which case all of the current directors will continue in office until at least the consummation of the business combination. Accordingly, you may not be able to exercise your voting rights under corporate law until August 10, 2022. If there is an annual meeting, as a consequence of our staggered board of directors, fewer than half of the board of directors will be considered for election and our sponsor, because of its ownership position, will have considerable influence regarding the outcome. Accordingly, our sponsor will continue to exert control at least until the consummation of our initial business combination. \nOur outstanding warrants may have an adverse effect on the market price of ordinary shares and make it more difficult to effect a business combination. \nWe issued warrants to purchase 12,500,000 ordinary shares as part of the units sold in our initial public offering and 6,750,000 private placement warrants, each exercisable to purchase one ordinary share. We may also issue additional warrants to our sponsor, officers, directors or their affiliates upon redemption of promissory notes issued to such entities or individuals for loans made to supplement our working capital requirements, as described elsewhere in this Annual Report. To the extent we issue ordinary shares to effect a business combination, the potential for the issuance of a substantial number of additional shares upon exercise of these warrants could make us a less attractive acquisition vehicle in the eyes of a target business. Such securities, when exercised, will increase the number of issued and outstanding ordinary shares and reduce the value of the shares issued to complete the business combination. \n\nUnlike most blank check companies, if (i) we issue additional ordinary shares or equity-linked securities for capital raising purposes in connection with the closing of our initial business combination at a Newly Issued Price of less than $9.20 per share, (ii) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of our initial business combination on the date of the completion of our initial business combination (net of redemptions), and (iii) the Market Value is below $9.20 per share, then the exercise price of the warrants will be adjusted to be equal to 115% of the higher of the Market Value and the Newly Issued Price, the $18.00 per share redemption trigger price will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price, and the $10.00 per share redemption trigger price will be adjusted (to the nearest cent) to be equal to the higher of the Market Value and the Newly Issued Price. \nIf we do not hold an annual meeting of shareholders until after the consummation of our initial business combination, shareholders will not be afforded an opportunity to elect directors and to discuss company affairs with management until such time. \nUnless otherwise required by law or the Nasdaq, we do not currently intend to call an annual meeting of shareholders until after we consummate our initial business combination. If our shareholders want us to hold a meeting prior to our consummation of our initial business combination, they may do so by members holding not less than thirty percent of voting rights in respect of the matter for which the meeting is requested making a request in writing to the directors in accordance with Section 82(2) of the Companies Act. Under British Virgin Islands law, we may not increase the required percentage to call a meeting above thirty percent. \n\nThe price of our securities may vary significantly due to one or more potential business combinations and general market or economic conditions, including as a result of the COVID-19 outbreak and other events (such as terrorist attacks, natural disasters or a significant outbreak of other infectious diseases). Additionally, if our securities become delisted from Nasdaq for any reason, and are quoted on the OTC Pink Sheets, an inter-dealer automated quotation system for equity securities not listed on a national exchange, the liquidity and price of our securities may be more limited than if we<|endoftext|>Met or not and would have vested on a pro rata basis (based on the elapsed number of days in the calendar year of termination) to the extent determined by the compensation committee. \n(4) \nBased on (i)the number of vested options held by Mr.Maffei at December31, 2020 and (ii)the number of unvested RSUs that would vest pursuant to the following: If Mr.Maffeis employment had been terminated for cause as of December31, 2020, he would have forfeited his 2019 Maffei Term RSUs and 2020 Maffei Term RSUs. His 2020 Maffei RSUs would remain outstanding until any performance criteria had been determined to have been met or not and would have vested to the extent determined by the compensation committee. \n(5) \nBased on (i)the number of vested options held by Mr.Maffei at December31, 2020 and (ii)the number of unvested RSUs that would vest pursuant to the following: If Mr.Maffeis employment had been terminated without cause (as defined in the 2019 Maffei Employment Agreement), for good reason (as defined in the 2019 Maffei Employment Agreement) (whether before or within a specific period following a change in control) or due to Mr.Maffeis death or disability as of December31, 2020, his 2019 Maffei Term RSUs, 2020 Maffei Term RSUs and 2020 Maffei RSUs would have vested in full. \n(6) \nBased on (i)the number of vested options held by Mr.Maffei at December31, 2020 and (ii)the number of unvested RSUs that would vest pursuant to the following: Upon a change in control, we have assumed for purposes of the tabular presentation above that Mr.Maffeis 2020 Maffei RSUs would have vested in full. \n(7) \nIf Mr.Maffeis employment had been terminated at our companys election for any reason (other than cause) or by Mr.Maffei for good reason (as defined in his employment agreement) or by reason of disability, as of December31, 2020, he would have been entitled to receive personal use of the corporate aircraft for 120 hours per year over a 12-month period. Perquisite amount of $595,044 represents the maximum potential cost of using the corporate aircraft for 120 hours based on an hourly average of the incremental cost of use of the corporate aircraft. \n(8) \nEach of Messrs.Wendling and Rosenthaler and Ms.Wilm would have forfeited his or her 2020 NEO Multiyear Options and 2020 Chief RSUs if his or her employment had been terminated without good reason or for cause as of December31, 2020. Ms.Wilm would have forfeited the stock options awarded to her in 2019 if her employment had been terminated by her without good reason or by the company for cause as of December31, 2020. \n(9) \nBased on the number of unvested options and unvested RSUs held by the named executive officer as of December31, 2020 that would vest pursuant to the following: If Messrs.Wendlings or Rosenthalers or Ms.Wilms employment had been terminated without cause or for good reason as of December31, 2020, their 2020 Chief RSUs would have remained outstanding until any performance criteria had been determined to have been met or not and would have vested to the extent determined by the compensation committee. As described above in Compensation Discussion and AnalysisEquity Incentive Compensation, our compensation committee vested all of the 2020 Chief RSUs, which is reflected in the table above. Additionally, the portion of Messrs.Wendlings and Rosenthalers and Ms.Wilms 2020 NEO Multiyear Options and Ms.Wilms stock options granted in 2019 that would have vested pursuant to the forward-vesting provisions in such named executive officers award agreements. \n(10) \nBased on the number of unvested options and unvested RSUs held by the named executive officer as of December31, 2020 that would vest pursuant to the following: If Messrs.Wendlings or Rosenthalers or Ms.Wilms employment had been terminated due to death or disability as of December31, 2020 all of the 2020 NEO Multiyear Options, 2020 Chief RSUs and Ms.Wilms stock options granted in 2019 would have vested in full. \n(11) \nBased on the number of unvested options and unvested RSUs held by the named executive officer as of December31, 2020 that would vest pursuant to the following: Upon a change of control, we have assumed for purposes of the tabular presentation above that the 2020 NEO Multiyear Options, 2020 Chief RSUs and Ms.Wilms stock options granted in 2019 would have vested in full. \n### Director Compensation \nNonemployee Directors \nDirector Fees \nEach of our directors who is not an employee of, or service provider to, our company is paid an annual fee of $162,000 (which we refer to as the director fee \n) for 2021 ($159,000 for 2020), of which fee each director was permitted to elect to receive 50%, 75% or 100% of such director fee in RSUs or options to purchase LTRPA, which will vest one year from the grant date, with the remainder payable in cash. The awards issued to our directors with respect to their service on our board in 2020 were issued in December2019, except with respect to Mr.OHara, whose prorated awards were issued in March2020. See Director RSU Grants and Director Option Grants below for information on the equity awards granted in 2020 to the nonemployee directors with respect to service on our board in 2021. Fees for service on our audit committee, compensation committee, executive committee and nominating and corporate governance committee are the same for 2020 and 2021. With respect to our audit committee, compensation committee and nominating and corporate governance committee, each member thereof receives an additional annual fee of $15,000, $10,000 and $10,000, respectively, for his participation on each such committee, except that the chairman of each such committee instead receives an additional annual fee of $25,000, $15,000 and $15,000, respectively, for his participation on that committee. With respect to our executive committee, each member thereof who is not an employee of, or service provider to, our company receives an additional annual fee of $5,000 for his participation on that committee. The cash portion of the director fees and the fees for participation on committees are payable quarterly in arrears. \n### Equity Incentive Plans \nAs discussed above, awards granted to our nonemployee directors under the 2019 incentive plan are currently administered by our full board of directors. Our board of directors has full power and authority to grant eligible persons the awards described below and to determine the terms and conditions under which any awards are made. The 2019 incentive plan is designed to provide additional remuneration to our nonemployee directors for services rendered, and to encourage their investment in our capital stock, thereby increasing their proprietary interest in our business. Our board of directors may grant non-qualified stock options, SARs, restricted shares, RSUs, cash awards, performance awards or any combination of the foregoing under the 2019 incentive plan. \nAs described above, in connection with the Spin-Off, our companys board of directors adopted the transitional plan, which governs the terms and conditions of awards issued in the Spin-Off in connection with adjustments made to awards previously granted by Qurate Retail with respect to its former Liberty Ventures common stock. \n### Director RSU Grants. \nPursuant to our director compensation policy described above and the 2019 incentive plan, we granted the following RSU awards during 2020: \n(1) \nThese RSUs were granted to Mr.OHara upon his appointment to our board of directors and vested in full on December10, 2020. \nThe RSUs granted in December2020 will vest on the first anniversary of the grant date, or on such earlier date that the grantee ceases to be a director because of death or disability and, unless our board of directors determines otherwise, will be forfeited if the grantee resigns or is removed from the board before the vesting date. \n### Director Option Grants. \nPursuant to our director compensation policy described above and the 2019 incentive plan, on December7, 2020, Mr.Romrell was granted options to purchase 49,263 LTRPA shares and Mr.Wargo was granted options to purchase 98,526 LTRPA shares, all of which had an exercise price equal to $4.31, which was the closing price of such stock on the grant date. The options will become exercisable on the first anniversary of the grant date, or on such earlier date that the grantee ceases to be a director because of death or disability, and, unless our board determines otherwise, will be terminated without becoming exercisable if the grantee resigns or is removed from the board before the vesting date. Once vested, the options will remain exercisable until the seventh anniversary of the grant date, or, if earlier, until the first business day following the first anniversary of the date the grantee ceases to be a director. \nAircraft Usage. \nLiberty Media has a fractional ownership contract with NetJets, Inc. for business travel purposes. Such use resulted in no incremental cost to the company and the directors did not incur any taxable income in connection therewith. \n\nIn March 2016, our board of directors adopted stock ownership guidelines that require each nonemployee director to own shares of our companys stock equal to at least 1.5 times the value of the nonemployee director fee. Nonemployee directors will have five years from the later of (i) the effective date of the guidelines and (ii) the nonemployee directors initial appointment to our board to comply with these guidelines. \nDirector Compensation Table \n(1) \nGregory B. Maffei and Albert E. Rosenthaler, each of whom is a director of our company and a named executive officer, received no compensation for serving as a director of our company during 2020. \n(2) \nAs of December31, 2020, our directors (other than Mr.Maffei and Mr.Rosenthaler, whose equity awards are listed in Executive CompensationOutstanding Equity Awards at Fiscal Year-End above) held the following equity awards: \n(3) \nReflects the grant date fair value of RSUs awarded to Messrs.Malone, Mueller and OHara, which has been computed based on the closing price of LTRPA shares on the grant date in accordance with FASB ASC Topic 718, but (pursuant to SEC regulations) without reduction for estimated forfeitures. \n(4) \nThe aggregate grant date fair value of the stock option awards has been computed in accordance with FASB ASC Topic 718, but (pursuant to SEC regulations) without reduction for estimated forfeitures. \n(5) \nMr.OHara was appointed to our board of directors effective March26, 2020. \n\nNo member of our compensation committee during 2020 is or has been an officer or employee of our company or has engaged in any related party transaction in which our company was a participant. \n\nThe compensation committee has reviewed and discussed with our management the Compensation Discussion and Analysis included under Executive Compensation above. Based on such review and discussions, the compensation committee recommended to our board that the Compensation Discussion and Analysis be included in this Form10-K/A. \nSubmitted by the Members of the Compensation Committee \n### Larry E. Romrell \nMichael J. Malone \nJ. David Wargo \nItem 12. \n\nThe following table sets forth information concerning shares of our common stock beneficially owned by each person or entity known by us to own more than five percent of the outstanding shares of any series of our common stock. Beneficial ownership of our common stock is set forth below only to the extent known by us or ascertainable from public filings. \nThe security ownership information is given as of February28, 2021 and, in the case of percentage ownership information, is based upon 72,227,256 LTRPA shares and 2,973,665 LTRPB shares, in each case, outstanding on February28, 2021. The percentage voting power is presented on an aggregate basis for all series of common stock. \n(1) \nInformation with respect to shares of our common stock beneficially owned by Mr.Maffei, our Chairman of the Board, President and Chief Executive Officer, is set forth in Security Ownership of Management. \n(2) \nBased on Amendment No.6 to Schedule 13G, filed January29, 2021 by BlackRock,Inc. ( \n### BlackRock \n), which states that, with respect to LTRPA, BlackRock has sole voting power over 5,040,719 shares and sole dispositive power over 5,103,724 shares. \n(3) \nBased on a Schedule 13G, filed February2, 2021 by Russell Investments Group Ltd. ( \n### Russell Investments \n), which states that, with respect to LTRPA, Russell Investments has sole<|endoftext|>And (iii)as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, liquidate and dissolve, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. \nIn addition, our ability to consummate a transaction may be dependent on the ability to raise equity and debt financing and the coronavirus pandemic and other related events could have a material adverse effect on our ability to raise adequate financing. \nIf we seek stockholder approval of our initial Business Combination, our sponsor, directors, executive officers, advisors and their affiliates may elect to purchase shares or public warrants from public stockholders, which may influence a vote on a proposed Business Combination and reduce the public float of our ClassA common stock. \nIf we seek stockholder approval of our initial Business Combination and we do not conduct redemptions in connection with our initial Business Combination pursuant to the tender offer rules, our sponsor, directors, executive officers, advisors or their affiliates may purchase shares or public warrants in privately negotiated transactions or in the open market either prior to or following the completion of our initial Business Combination, where otherwise permissible under applicable laws, rules and regulations, although they are under no obligation to do so. \nSuch a purchase may include a contractual acknowledgment that such stockholder, although still the record holder of our shares is no longer the beneficial owner thereof and therefore agrees to vote in favor of the initial Business Combination or abstain and in any event not to exercise its redemption rights. In the event that our sponsor, directors, executive officers, advisors or their affiliates purchase shares in privately negotiated transactions from public stockholders who have already elected to exercise their redemption rights, such selling stockholders would be required to revoke their prior elections to redeem their shares. The purpose of any such purchases of shares could be to vote such shares in favor of the Business Combination, or abstain, and thereby increase the likelihood of obtaining stockholder approval of the Business Combination or to satisfy a closing condition in an agreement with a target that requires us to have a minimum net worth or a certain amount of cash at the closing of our initial Business Combination, where it appears that such requirement would otherwise not be met. \nIn addition, if such purchases are made, the public float of our ClassA common stock or public warrants and the number of beneficial holders of our securities may be reduced, possibly making it difficult to maintain or obtain the quotation, listing or trading of our securities on a national securities exchange. \n\nFor example, we may require our public stockholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in street name, to either tender their certificates to our transfer agent prior to the date set forth in the tender offer documents or proxy materials mailed to such holders, or for up to two business days prior to the vote on the proposal to approve the Business Combination in the event we distribute proxy materials, or to deliver their shares to the transfer agent electronically. \n\nOur public stockholders will be entitled to receive funds from the trust account only upon the earlier to occur of: (i)our completion of an initial Business Combination, and then only in connection with those shares of our ClassA common stock that such stockholder properly elected to redeem, subject to the limitations described herein, (ii)the redemption of any public shares properly tendered in connection with a stockholder vote to amend our amended and restated certificate of incorporation (A)to modify the substance or timing of our obligation to allow redemption in connection with our initial Business Combination or to redeem 100% of our public shares if we do not complete an initial Business Combination within 24months from the closing of our initial public offering or (B)with respect to any other provisions relating to the rights of our ClassA common stock, and (iii)the redemption of our public shares if we have not completed an initial Business Combination within 24months from the closing of our initial public offering, subject to applicable law and as further described herein. Public stockholders who redeem their ClassA common stock in connection with a stockholder vote described in clause(ii) in the preceding sentence shall not be entitled to funds from the trust account upon the subsequent completion of an initial Business Combination or liquidation if we have not completed an initial Business Combination within 24months from the closing of our initial public offering, with respect to such ClassA common stock so redeemed. In addition, if we do not complete an initial Business Combination within 24months from the closing of our initial public offering is not completed for any reason, compliance with Delaware law may require that we submit a plan of dissolution to our then-existing stockholders for approval prior to the distribution of the proceeds held in our trust account. In that case, public stockholders may be forced to wait beyond 24months from the closing of our initial public offering before they receive funds from our trust account. \n\nAlthough we met, on a proforma basis, the minimum initial listing standards set forth in the NYSE listing standards, we cannot assure you that our securities will be, or will continue to be, listed on the NYSE in the future or prior to our initial Business Combination. \nAdditionally, our units will not be traded after completion of our initial Business Combination and, in connection with our initial Business Combination, we will be required to demonstrate compliance with the NYSEs initial listing requirements, which are more rigorous than the NYSEs continued listing requirements, in order to continue to maintain the listing of our securities on the NYSE. For instance, our share price would generally be required to be at least $4.00 per share and our stockholders equity would generally be required to be at least $4.0million. \na determination that our ClassA common stock are a penny stock which will require brokers trading in our ClassA common stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities; \nFurther, if we were no longer listed on the NYSE, our securities would not qualify as covered securities under the statute, and we would be subject to regulation in each state in which we offer our securities. \n\nMoreover, if our initial public were subject to Rule419, that rule would prohibit the release of any interest earned on funds held in the trust account to us unless and until the funds in the trust account were released to us in connection with our completion of an initial Business Combination. \n\n\nIf we do not complete our initial Business Combination, our public stockholders may receive only their prorata portion of the funds in the trust account that are available for distribution to public stockholders, and our warrants will expire worthless. \nIf we do not complete our initial Business Combination our public stockholders may receive only their prorata portion of the funds in the trust account that are available for distribution to public stockholders, and our warrants will expire worthless. \nIf the net proceeds of our initial public offering and the sale of the private placement warrants not being held in the trust account are insufficient to allow us to operate for at least the next 24months, it could limit the amount available to fund our search for a target business or businesses and complete our initial Business Combination, and we will depend on loans from our sponsor or management team to fund our search and to complete our initial Business Combination. \nThe funds available to us outside of the trust account to fund our working capital requirements may not be sufficient to allow us to operate for at least the next 24months, assuming that our initial Business Combination is not completed during that time. We believe that the funds available to us outside of the trust account, together with funds available from loans from our sponsor will be sufficient to allow us to operate for at least the next 24months; \n\nThe recent coronavirus \n\nIn December 2019, a novel strain of coronavirus \n(COVID-19) was reported to have surfaced in Wuhan, China, which has and is continuing to spread throughout China and other parts of the world, including the United States and Europe. On January30, 2020, the World Health Organization declared the outbreak of the coronavirus a Public Health Emergency of International Concern. On January31, 2020, U.S. healthcare community in responding to the coronavirus, and on March11, 2020, the World Health Organization characterized the outbreak as a pandemic. A significant outbreak of the coronavirus and other infectious diseases could result in a widespread health crisis that could adversely affect the economies and financial markets worldwide, business operations and the conduct of commerce generally and could have a material adverse effect on the business of any potential target business with which we consummate a Business Combination. Furthermore, we may be unable to complete a Business Combination if continued concerns relating to the coronavirus restrict travel, limit the ability to have meetings with potential investors or the target companys personnel, vendors and services providers are unavailable to negotiate and consummate a transaction in a timely manner. The extent to which the coronavirus impacts our search for a Business Combination will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of the coronavirus pandemic and the actions to contain the coronavirus or treat its impact, among others. If the disruptions posed by the coronavirus or other matters of global concern continue for an extensive period of time, it could have a material adverse effect on our ability to consummate a Business Combination, or the operations of a target business with which we ultimately consummate a Business Combination. \n\nEven if we conduct due diligence on a target business with which we combine, we cannot assure you that this diligence will surface all material issues with a particular target business, that it would be possible to uncover all material issues through a customary amount of due diligence, or that factors outside of the target business and outside of our control will not later arise. \n\nAlthough we will seek to have all vendors, service providers (other than our independent auditors), prospective target businesses and other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account for the benefit of our public stockholders, such parties may not execute such agreements, or even if they execute such agreements, they may not be prevented from bringing claims against the trust account, including, but not limited to, fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain advantage with respect to a claim against our assets, including the funds held in the trust account. \nUpon redemption of our public shares, if we have not completed an initial Business Combination within 24months from the closing of our initial public offering, or upon the exercise of a redemption right in connection with our initial Business Combination, we will be required to provide for payment of claims of creditors that were not waived that may be brought against us within the ten years following redemption. Pursuant to the letter agreement the form of which was filed as an exhibit to the registration statement for our initial public offering, our sponsor has agreed that it will be liable to us if and to the extent any claims by a third party (other than our independent auditors) for services rendered or products sold to us, or a prospective target business with which we<|endoftext|>"},"task":{"kind":"string","value":"{\"file\": \"/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz\"}"}}},{"rowIdx":73,"cells":{"text":{"kind":"string","value":"<|endoftext|>Cantor, BGC Partners or any member of the Cantor group or affiliated entity, or to engage in any competing business (as defined below) or hires, employs, engages (including as a consultant or partner) or otherwise enters into a competing business with any such person; \n(2) solicits any of the customers of Cantor, BGC Partners or any member of the Cantor group or affiliated entity (or any of their employees), induces such customers or their employees to reduce their volume of business with, terminate their relationship with or otherwise adversely affect their relationship with, Cantor, BGC Partners or any member of the Cantor group or affiliated entity; \n(3) does business with any person who was a customer of Cantor, BGC Partners or any member of the Cantor group or affiliated entity during the 12-month period prior to such partner becoming a terminated or bankrupt partner if such business would constitute a competing business; \n(4) directly or indirectly engages in, represents in any way, or is connected with, any competing business, directly competing with the business of Cantor, BGC Partners or any member of the Cantor group or affiliated entity, whether such engagement will be as an officer, director, owner, employee, partner, consultant, affiliate or other participant in any competing business; or \n(5) assists others in engaging in any competing business in the manner described in the foregoing clause (4). Competing business means an activity that (a)involves the development and operations of electronic trading systems, (b)involves the conduct of the wholesale or institutional brokerage business, (c)consists of marketing, manipulating or distributing financial price information of a type supplied by Cantor, BGC Partners, or any member of the Cantor group or affiliated entity to information distribution services or (d)competes with any other business conducted by Cantor, BGC Partners, any member of the Cantor group or affiliated entity if such business was first engaged in by Cantor or BGC Partners took substantial steps in anticipation of commencing such business and prior to the date on which such founding/working partner or limited partnership unit holder, as the case may be, ceases to be a founding/working partner or limited partnership unit holder, as the case may be. \nNotwithstanding anything to the contrary, and unless Cantor determines otherwise, none of such partner obligations apply to any founding/working partner or limited partnership unit holder that is also a Cantor Company. Cantor Company means Cantor or any of its affiliates (other than, if applicable, BGC and any of our subsidiaries, including Newmark and its subsidiaries).Such partners are exempt from these partner obligations. \nThe determination of whether a founding/working partner or limited partnership unit holder has breached his or her partner obligations will be made in good faith by the BGC Holdings general partner in its sole and absolute discretion, which determination will be final and binding. If a founding/working partner or a limited partnership unit holder breaches his, her or its partner obligations, then, in addition to any other rights or remedies that the BGC Holdings general partner may have, and unless otherwise determined by the BGC Holdings general partner in its sole and absolute discretion, BGC Holdings will redeem all of the units held by such partner for a redemption price equal to their base amount, and such partner will have no right to receive any further distributions, or payments of cash, stock or property, to which such partner otherwise might be entitled. \nAny founding/working partner or limited partnership unit holder, as the case may be, that breaches his or her partner obligations is required to indemnify BGC Holdings for and pay any resulting attorneys fees and expenses, as well as any and all damages resulting from such breach. In addition, upon breach of the BGC Holdings limited partnership agreement by or the termination or bankruptcy of a founding/working or a limited partnership unit holder, as the case may be, that is subject to the partner obligations, or if any such partner owes any amount to BGC Holdings or to any affiliated entity or fails to pay any amount to any other person with respect to which amount BGC Holdings or any affiliated entity is a guarantor or surety or is similarly liable (in each case whether or not such amount is then due and payable), BGC Holdings has the right to set off the amount that such partner owes to BGC Holdings or any affiliated entity or any such other person under any agreement or otherwise and the amount of any cost or expense incurred or projected to be incurred by BGC Holdings in connection with such breach, such termination or bankruptcy or such indebtedness (including attorneys fees and expenses and any diminution in value of any BGC Holdings assets and including in each case both monetary obligations and the fair market value of any non-cash item and amounts not yet due or incurred) against any amounts that it owes to such partner under the BGC Holdings limited partnership agreement or otherwise, or to reduce the capital account, the base amount and/or the distributions (quarterly or otherwise) of such partner by any such amount. \nA founding/working partner or a limited partnership unit holder, as the case may be, will become a terminated partner upon (a)the actual termination of the employment of such partner, so that such partner is no longer an employee of BGC U.S. OpCo, BGC Global OpCo or any affiliated entity, with or without cause by the employer, by such partner or by reason of death, (b)the termination by the BGC Holdings general partner, which may occur without the termination of a partners employment, of such partners status as a partner by reason of a determination by the BGC Holdings general partner that such partner has breached the BGC Holdings limited partnership agreement or that such partner has ceased to provide substantial services to BGC Holdings or any affiliated entity, even if such cessation is at the direction of BGC Holdings or any affiliated entity or (c)ceasing to be a partner for any reason. With respect to a corporate or other entity partner, such partner will also be considered terminated upon the termination of the beneficial owner, grantor, beneficiary or trustee of such partner. \nA founding/working partner or a limited partnership unit holder, as the case may be, will become a bankrupt partner upon (a)making an assignment for the benefit of creditors, (b)filing a voluntary petition in bankruptcy, (c)the adjudication of such partner as bankrupt or insolvent, or the entry against such partner of an order for relief in any bankruptcy or insolvency proceeding; provided that such order for relief or involuntary proceeding is not stayed or dismissed within 120 days, (d)the filing by such partner of a petition or answer seeking for himself, herself or itself any reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any bankruptcy statute, law or regulation, (e)the filing by such partner of an answer or other pleading admitting or failing to contest the material allegations of a petition filed against it in any proceeding of that nature or (f)the appointment of or seeking of the appointment of (in each case by any person) a trustee, receiver or liquidator of it or of all or any substantial part of the properties of such founding/working partner. With respect to a corporate founding/working partner, bankruptcy will also include the occurrence of any of the foregoing events with respect to the beneficial owner of the majority of the stock of such partner. Notwithstanding the foregoing, no event constitutes a bankruptcy of a founding/working partner or limited partnership unit holder, as the case may be, unless the BGC Holdings general partner so determines in its sole and absolute discretion. \nRedemption of BGC Holdings Founding/Working Partner Interests and Limited Partnership Units \nUnlike the BGC Holdings limited partnership interests held by Cantor, the classes of BGC Holdings limited partnership interests held by founding partners, working partners and limited partnership unit holders (in each case, to the extent such interests have not become exchangeable) are subject to purchase and redemption by BGC Holdings in the following circumstances (subject to Cantors right to purchase such interests from BGC Holdings as described in Cantors Right to Purchase Exchangeable BGC Holdings Limited Partnership Interests Upon Redemption or Exchange of BGC Holdings Founding Partner Interests): except as otherwise agreed to by each of the BGC Holdings general partner, the BGC Holdings exchangeable limited partners (by a majority in interest of the BGC Holdings exchangeable limited partnership interests) and the applicable founding partner, upon any termination or bankruptcy of a founding partner (or the termination or bankruptcy of the beneficial owner of the stock or other ownership interest of any such founding partner that is a corporation or other entity), BGC Holdings will purchase and redeem from such founding partner or his, her or its representative, and such founding partner or his, her or its representative will sell to BGC Holdings, all of the founding partner interests held by such founding partner (and, with the consent of the BGC Holdings general partner and Cantor, BGC Holdings may assign its right to purchase such founding partner interests to another partner); and except as otherwise agreed to by each of the BGC Holdings general partner and the applicable working partner or limited partnership unit holder, as the case may be, upon (1)any termination or bankruptcy of a working partner or limited partnership unit holder, as the case may be (or the termination or bankruptcy of the beneficial owner of the stock or other ownership interest of any such working partner or limited partnership unit holder that is a corporation or other entity) or (2)an election of the BGC Holdings general partner for any reason or for no reason whatsoever, BGC Holdings will purchase and redeem from such working partner or his, her or its representative, and such working partner or his, her or its representative will sell such REUs to BGC Holdings, all of the working partner interests held by such working partner (and, with the consent of the BGC Holdings general partner and Cantor, BGC Holdings may assign its right to purchase such partner interests to another partner). \nFounding/working partner interests or REU or RPU interests, as the case may be, will be redeemed at a pre-determined formula redemption price. The redemption price for a BGC Holdings founding/working partner interest or limited partnership unit holder interest, as the case may be, generally reflects the purchase price paid by such partner for his or her interest, adjusted to reflect such partners share of changes in the book value of BGC Holdings. For purposes of determining the redemption price, the book value is determined in accordance with the BGC Holdings limited partnership agreement, which in general does not take into account goodwill or going concern value, provided, however, in all cases where the BGC Holdings unit is a legacy BGC Holdings unit and the distribution has not yet occurred, the redemption price will be adjusted to address the portion of BGC Holdings legacy units and Newmark Holdings legacy units held by such founding partners, working partners and limited partnership unit holders. In the circumstances described above, BGC Holdings limited partnership interests that have become exchangeable will be automatically exchanged for BGC Partners ClassA common stock, provided that in all cases where the distribution has not yet occurred and the exchangeable BGC Holdings unit is a legacy BGC Holdings unit, instead of common stock, BGC Holdings shall purchase the BGC Holdings legacy unit at a price determined in accordance with the terms of the BGC Holdings limited partnership agreement. \nEach grant of REUs or RPUs will have associated with it a post-termination amount, which represents an amount payable to the REU or RPU holder upon redemption of such units. A partners entitlement to the post- termination amount will vest ratably over three years or according to such schedule as determined by BGC Holdings at the time of grant. In lieu of paying all or a portion of the post-termination amount, BGC Holdings may cause<|endoftext|>The purpose of this Annual Report on Form 10-K/A is to amend Part III, Items 10 through 14 of CNS Pharmaceuticals, Inc.s (Company, we, our, us) Annual Report on Form 10-K for the year ended December 31, 2020, which was filed with the Securities and Exchange Commission (the SEC) on February 12, 2021 and amended on February 16, 2021 (the 2020 10-K), to include information previously omitted from the 2020 10-K in reliance on General Instruction G to Form 10-K, which provides that registrants may incorporate by reference certain information from a definitive proxy statement filed with the SEC within 120 days after the end of the fiscal year. We will not file our definitive proxy statement before April 30, 2021 (i.e., within 120 days after the end of our 2020 fiscal year) pursuant to Regulation 14A. The reference on the cover of the Annual Report on Form 10-K to the incorporation by reference of the registrant's definitive proxy statement into Part III of the Annual Report has been deleted. \nFor purposes of this Annual Report on Form 10-K/A, and in accordance with Rule 12b-15 under the Securities Exchange Act of 1934, as amended (the Exchange Act), Items 10 through 14 of our 2020 10-K have been amended and restated in their entirety. Except as stated herein, this Form 10-K/A does not reflect events occurring after the filing of the Form 10-K on February 12, 2021 and no attempt has been made in this Annual Report on Form 10-K/A to modify or update other disclosures as presented in the 2020 10-K. Accordingly, this Form 10-K/A should be read in conjunction with our filings with the SEC subsequent to the filing of the Form 10-K. \nIn addition, as required by Rule 12b-15 under the Exchange Act, new certifications by our principal executive officer and principal financial officer are filed as exhibits to this Annual Report on Form 10-K/A. \n### PART III \nItem 10. \n\nThe following table sets forth the names and ages of all of our directors and executive officers as of April 26, 2021. Our officers are appointed by, and serve at the pleasure of, the Board of Directors. \n### Name \nAge \nPosition \n### John M. Climaco \n\nChristopher S. Downs \n### Chief Financial Officer \nSandra L. Silberman \nChief Medical Officer \n### Donald Picker \nChief Science Officer \nJerzy (George) Gumulka \n### Director \nJeffry R. Keyes \nDirector \n### Andrzej Andraczke \nDirector \nCarl Evans \n### Director \nSet forth below is biographical information about each of the individuals named in the tables above: \nJohn M. Climaco, Esq. \nMr. Climaco joined CNS in September 2017 as its Chief Executive Officer. Mr. Climaco has served in leadership roles in a variety of healthcare companies. From April 2015 to June 2017 Mr. Climaco served as the Executive Vice-President of Perma-Fix Medical S.A where he managed the development of a novel method to produce Technitium-99. Mr. Climaco also served as President and CEO of Axial Biotech, Inc., a DNA diagnostics company, from January 2003 to January 2013. In the process of taking Axial from inception to product development to commercialization, Mr. Climaco created strategic partnerships with Medtronic, Johnson & Johnson and Smith & Nephew. Mr. Climaco currently serves as a director of several public companies including Moleculin Biotech, Inc., a pharmaceutical company focused on anticancer drug candidates, where he has served since May 2017. Mr. Climaco served on the boards of Digirad, Inc., a leading national provider of imaging services, from May 2012 until April 2020, and Birner Dental Management Services, Inc., a provider of practice management services in the dental industry, since June 2017. Mr. Climaco also served as a director of PDI, Inc., a provider of outsourced commercial services to pharma companies, in 2015, and InfuSystem Holdings, Inc., the largest supplier of infusion services to oncologists in the U.S., from April 2012 to April 2014. Mr. Climaco obtained his Juris Doctorate Degree from the University of California Hastings College of Law in San Francisco, CA in January 2000 and a Bachelor of Philosophy from Middlebury College in Middlebury, VT, in May 1991. Mr. Climaco is active with the State Bar of Utah. We believe Mr. Climacos history with our company, coupled with his vast experience with development stage companies and his legal background provides him with the qualifications to serve as our chairman of the board. \nChristopher S. Downs, CPA Chief Financial Officer. \nMr. Downs has served as our chief financial officer since the closing of our IPO in November 2019. From March 2018 until September 2019, Mr. Downs served as vice president of finance and treasurer of Innovative Aftermarket Systems, L.P., a privately held provider of finance and insurance solutions. Mr. Downs served as director of finance (from June 2011 to September 2013), vice president and treasurer (October 2013 to August 2016), executive vice president and interim chief financial officer (August 2016 to May 2017), and executive vice president, interim chief financial officer and member of the office of the president (May 2017 to March 2018) for InfuSystem Holdings, Inc., a supplier of infusion services to oncologists in the United States. Mr. Downs spent 10 years in investment banking with various firms including Citigroup. Mr. Downs has also served as a director of Esports Technologies, Inc., a technology company developing and operating platforms focused on esports and competitive gaming, from March 2021. Mr. Downs is a graduate of the United States Military Academy at West Point where he earned his Bachelor of Science. Mr. Downs earned his MBA at Columbia Business School and his Master of Science in Accounting at the University of Houston-Clear Lake. Mr. Downs is a Certified Public Accountant in Utah and Texas. \n### Sandra L. Silberman, MD PhD Chief Medical Officer \nDr. Silberman joined CNS in December 2017 and currently serves on a part-time basis. Dr. Silberman has served as chief medical officer for new products of Moleculin Biotech, Inc. since November 2017 on a part-time basis. In 2018, Dr. Silberman became an advisor to WPD Pharmaceuticals in Poland. Dr. Silberman advanced several original, proprietary compounds into Phases I through III during her work with leading biopharmaceutical companies, including Bristol Myers Squibb, AstraZeneca, Imclone and Roche. Dr. Silberman is a Hematologist/Oncologist who earned her B.A., Sc.M. and Ph.D. from the Johns Hopkins University School of Arts and Sciences, School of Public Health and School of Medicine, respectively, and her M.D. from Cornell University Medical College, and then completed both a clinical fellowship in Hematology/Oncology as well as a research fellowship in tumor immunology at the Brigham & Women s Hospital and the Dana Farber Cancer Institute in Boston, MA. Dr. Silberman is currently devoting only 45% of her work time to us and provides services as needed to us. \nDonald Picker, PhD - Chief Science Officer \nDr. Picker has served as our part-time chief science officer since June 2019. Dr. Picker has served as the chief scientific officer of Moleculin Biotech, Inc. since August 2017 after serving as its chief operating officer from July 2015 until August 2017 and as its president from January 2016 to August 2017. In 2007, Dr. Picker became the chief executive officer of IntertechBio Corp. From 2006 through 2007, Dr. Picker was the President of Tapestry Pharmaceuticals. From 1998 to 2003, Dr. Picker was CEO of Synergy Pharmaceuticals. Synergy was merged into Callisto Pharmaceuticals where he was vice present of research and development until 2006. In 2018, Dr. Picker became an advisor to WPD Pharmaceuticals in Poland. From 2017 to 2018, Dr. Picker served on our board of directors. Dr. Picker received his B.S. degree from Brooklyn Polytechnic University and his PhD from SUNY Albany in 1975. Dr. Picker is currently devoting only 25% of his work time to us and provides services as needed to us. \n### Jerzy (George) Gumulka, PhD Director \nDr. Gumulka joined our board of directors on November 8, 2017. Dr. Gumulka has been retired since 2016. From 2001 until his retirement he served as a Global Technology Manager ASC, a Technology Manager, Special Projects/New Technology Platforms, Kraton Polymers US LLC and a Technical Director of Kraton Polymers do Brasil. Dr. Gumulka served on the Board of Directors of Moleculin LLC from 2010 through 2016. Dr. Gumulka received a PhD from the University of Warsaw, Warsaw, Poland. We believe Dr. Gumulkas technical knowledge and experience in the field of biochemistry coupled with his vast experience in corporate leadership provides him with the qualifications to serve as a director. \nJeffry R. Keyes Director \nMr. Keyes joined our board on June 25, 2018. Mr. Keyes is currently the Chief Financial Officer of Custopharm, Inc., a private equity backed developer of generic sterile injectable pharmaceuticals, a role he has held since April 2018. From September 2012 to April 2018, Mr. Keyes was the Chief Financial Officer and Corporate Secretary of Digirad Corporation, a publicly traded healthcare services and medical device company. From August 2011 until September 2012, Mr. Keyes was Corporate Controller of Sapphire Energy, Inc., a venture capital backed start-up renewable energy company. From April 2011 to August 2011, Mr. Keyes was the Corporate Controller of Advanced BioHealing, Inc., a venture backed provider of regenerative medicine solutions, until its sale to Shire, PLC in August 2011. Prior to April 2011 Mr. Keyes held a variety of leadership roles in healthcare and medical device companies in finance, accounting, and M&A support, and he started his career in public accounting. Mr. Keyes earned a B.A. degree in accounting from Western Washington University and is a certified public accountant licensed by the Washington State Board of Accountancy. Mr. Keyes is considered a financial expert under relevant rules of the SEC, the NYSE and NASDAQ. We believe Mr. Keyes financial knowledge and experience, which qualify him as an Audit Committee Financial Expert, coupled with his vast experience in corporate leadership provides him with the qualifications to serve as a director. \n### Andrzej Andraczke Director \nMr. Andraczke joined our board on July 9, 2018. Mr. Andraczke is currently Chief Executive Officer of Pol-Tex Holdings, LLC, a role he has held since November 2012. He is also currently Chief Technology Officer of Syntech LLC (Ireland), a role he has held since November 2017. From March 2016 to April 2016 Mr. Andraczke served as an expert witness for the International Chamber of Commerce for downhole air hammer drilling of the well in volcanic rocks for a geothermal project in Slovakia. From March 2000 through November 2012 Mr. Andraczke was Vice-President of Pol-Tex Methane. Mr. Andraczke earned a M.Sc. in Engineering from Warsaw Technical University. We believe Mr. Andraczkes vast experience in corporate leadership provides him with the qualifications to serve as a director. \nCarl Evans \n### Director \nMr. Evans joined our board on July 9, 2018. Mr. Evans has been retired since 2015. From 2011 until his retirement Mr. Evans was Executive Vice President Exploration for KMD Operating Company, LLC. Prior to 2011, he managed international and domestic oil exploration and production projects for several oil companies, including British Petroleum, Texaco, and Pennzoil. Mr. Evans earned Bachelor of Science degree in Geology from the University of California, Los Angeles. We believe Mr. Evans vast experience in corporate leadership provides him with the qualifications to serve as a director. \nNo director is related to any other director or executive officer of our company or our subsidiaries, and, there are no arrangements or understandings between a director and any other person pursuant to which such person was elected as director. \nOur Board of Directors has adopted a written Code of Business Conduct and Ethics applicable to all officers, directors and employees, which is available on our website (www.cnspharma.com) under Governance Documents within the Corporate Governance section. We intend to satisfy the disclosure requirement under Item 5.05 of Form 8-K regarding amendment to, or waiver from, a provision of this Code and by posting such information on the website address and location specified above. \n### Nomination of Director Candidates \nWe receive suggestions for potential director nominees from many sources, including members of the Board,<|endoftext|>Shares of common stock at a conversion price which provides the holders of such share of Class B or Class B-1 redeemable convertible preferred stock with a number shares of common stock equal in value to the value such holder would have received had the offering been made at a price per share of common stock equal to $14.4951 and $19.9357, respectively, subject to certain adjustments. \n### Liquidation Preference \nIn the event of any liquidation, dissolution, or winding up of the Company and its subsidiaries,holders of shares of Class B and Class B-1 redeemable convertible preferred stock are entitled to preferences over all other classes of stock. Upon such an event, holders of shares of Class B redeemable convertible preferred stock are entitled to be paid, in cash, an amount per share of Class B redeemable convertible preferred stock equal to the sum of $7.73072 plus any accrued but unpaid dividends on such share of Class B redeemable convertible preferred stock (such sum, the Class B preference amount). However, the Class B preference amount must be at least equal to a minimum of $10.8230 per share (subject to reduction for certain other amounts received by holders of shares of Class B redeemable convertible preferred stock with respect to other shares of capital stock of the Company). Holders of shares of Class B-1 redeemable convertible preferred stock are entitled to be paid, in cash, an amount per share of Class B-1 redeemable convertible preferred stock equal to the greater of (a) $15.15108 and (b) $10.8222, plus any accrued but unpaid dividends on such share of redeemable convertible Class B-1 preferred stock (such sum, the Class B-1 preference amount), plus the amounts described in the next following sentence, in each case subject to reduction for certain amounts received by holders of Class B-1 redeemable convertible preferred stock with respect to other shares of capital stock of the Company. In addition, holders of Class B and Class B-1 redeemable convertible preferred stock are entitled to participate on an as-converted basis in amounts distributable in respect of the common stock, in the case of the Class B-1 redeemable convertible preferred stock only in the event the amounts distributable on account thereof would exceed $15.15108 per share of Class B-1 redeemable convertible preferred stock. A change of control of the Company is deemed to be a liquidation for purposes of the liquidation preferences of the Class B and Class B-1 redeemable convertible preferred stock. \nVoting Rights \nThe holders of outstanding shares of Class B redeemable convertible preferred stock are entitled to elect one director of the Company. The holders of outstanding shares of Class B and Class B-1 redeemable convertible preferred stock are entitled to a number of votes equal to the number of shares of common stock into which the shares of such class of redeemable convertible preferred stock are then convertible. \n### Redemption \nAt any time on or after April 12, 2022 or October 12, 2024, holders of a majority of the outstanding shares of Class B or Class B-1 redeemable convertible preferred stock, respectively, may elect to have any or all of the then-outstanding shares of such class redeemed, provided that any such redemption will be for at least 25% of the then-outstanding shares of such class and only one such election may be made within any 12-month period for each class. \nThe redemption price for each share of Class B and Class B-1 redeemable convertible preferred stock will be, at the election of the Company, an amount equal to (a) the Class B preference amount or the Class B-1 preference amount, as applicable, or (b) the fair market value of the Class B preference amount or the Class B-1 preference amount of each share, as applicable, plus each such shares residual value pursuant to the distribution provisions applicable to each such class in liquidation. \nIf any shares of Class B or Class B-1 redeemable convertible preferred stock are not redeemed within six months of the redemption date for any reason, all such unredeemed shares will remain outstanding and be entitled to all rights, preferences and privileges, and the Company will be required to pay interest on the redemption price applicable to such unredeemed shares at an aggregate per annum rate equal to six percent (increased by one-half percent at the end of each six-month period thereafter until the redemption price, and any interest thereon, is paid in full), with such interest to accrue daily in arrears and to be compounded annually. \nUpon the closing of the IPO in February 2021, all of the Company's outstanding shares of redeemable convertible preferred stock were automatically converted into an aggregate of \n27,227,466 shares of common stock. \n\n### Common Stock \nThe Company had the following shares of common stock reserved for future issuance: \nEquity Incentive Plan \nIn January 1998, November 1999, and March 2000, the Company authorized the 1998, 1999, and 2000 Stock Option Plans (collectively, the Plans) under which the Board of Directors may issue incentive stock options (ISOs) and nonqualified stock options (NSOs). In 2009, the 1998 and 1999 Stock Option Plans expired. \nIn June 2014, the Company authorized the 2014 Stock Option Plan (2014 Plan) under which the Board of Directors may issue ISOs, NSOs, restricted stock awards and restricted stock unit awards to employees, directors, and consultants. All shares cancelled or forfeited under the Companys 2000 Stock Option Plan (2000 Plan) are consolidated into the 2014 Plan. Under the 2014 Plan, the Company may grant up to 6,381,215 shares. The Board of Directors approved an increase to the share reserve under the 2014 Plan by an additional 1,200,000 shares in September 2014 and 1,850,000 in January 2016. In January and October 2020, the Board of Directors approved an increase of an additional 2,000,000 shares and 3,000,000 shares, respectively, to the share reserve under the 2014 Plan. In January 2021, the Board of Directors approved an increase of an additional 950,000 shares to the share reserve under the 2014 Stock Plan. Further, in February 2021 in connection with the IPO, the Company adopted the 2021 Equity Incentive Plan (2021 Plan), which serves as a successor to and continuation of the 2014 Plan and 2000 Plan. \nOptions may be granted with exercise prices at no less than 100% of the fair value of the common stock on the date of grant. ISOs and NSOs granted under the 2014 Plan generally will vest 25% after the completion of one year of service and then vest in equal monthly installments over the next 36 months of service and expire ten years from the grant date. NSOs vest according to the specific agreement and expire ten years from the date of grant. \nA summary of stock option activity under the Companys equity incentive plans and related information is as follows: \nThe weighted-average grant date fair value of options granted to employees during the years ended December31, 2020, 2019 and 2018 was $11.51, $1.19 and $1.27, respectively. The total intrinsic value of options exercised during the years ended December 31, 2020, 2019 and 2018 was $5.2 million, $0.3 million and $0.9 million. As of December31, 2020, unrecognized stock-based compensation cost related to outstanding unvested stock options was $41.8million, which is expected to be recognized over a weighted-average period of 3.80 years. \nThe Black-Scholes assumptions used to value the employee options at the grant dates are as follows: \nThese assumptions and estimates were determined as follows: \n\nAs the Companys common stock is not publicly traded prior to its IPO, the fair value was determined by the Companys Board of Directors, with input from management and valuation reports prepared by independent third-party valuation firms. Stock-based compensation for financial reporting purposes is measured based on updated estimates of fair value when appropriate, such as when additional relevant information related to the estimate becomes available in a valuation report issued as of a subsequent date. \n### Risk-Free Interest Rate. \n\n### Expected Term. \nThe Companys historical stock option exercise experience does not provide a reasonable basis upon which to estimate an expected term due to a lack of sufficient data. For stock options granted to employees, the Company estimates the expected term by using the simplified method. For stock options granted to non-employees, the expected term equals the contractual term of the option. \n### Expected Volatility. \nAs the Company does not have a trading history for its common stock prior to its IPO, the expected volatility was estimated by taking the average historic price volatility for industry peers, consisting of several public companies in our industry that are either similar in size, stage of life cycle or financial leverage, over a period equivalent to the expected term of the awards. \n### Expected Dividend Yield. \nThe Company has not declared or paid any cash dividends and do not presently plan to pay cash dividends in the foreseeable future. \n### Restricted Stock Unit Award with Conditions \nIn June 2014, the Companys Board of Directors approved the issuance of 187,500 restricted stock units to an executive officer with a grant date fair value of $0.5million. No monetary payment was required as a condition to receiving the shares of stock. The award provided that the restricted stock units would vest upon the satisfaction of the following two conditions occurring before June17, 2021: (i)satisfaction of a service condition of one year and (ii)the occurrence of a liquidity event defined as a change of control or an IPO. The grant date fair value of the awards will be recognized as compensation expense once the performance criteria are probable. As of December 31, 2020, t hese restricted stock units had not been vested as the requisite conditions had not yet occurred. \nAccordingly, no expense was recorded for the years ended December 31, 2020, 2019 and 2018. These restricted stock units fully vested upon the closing of the IPO in February 2021. \n### Stock-Based Compensation \nThe stock-based compensation expense by line item in the accompanying consolidated statements of operations is summarized as follows: \n8. Income Taxes \nThe components of the income (loss) before the provision for income taxes were as follows: \n### The provision for income taxes were as follows: \nThe provision for income taxes differs from the amount computed by applying the statutory federal tax rate as follows: \nAs a result of the Tax Cuts and Jobs Act (the Tax Act), foreign accumulated earnings that were subject to the mandatory transition tax as of December31, 2017, can be repatriated to the U.S. without incurring further U.S. federal tax. The Tax Act moves towards a modified territorial tax system through the provision of a 100% dividend received deduction for the foreign-source portions of dividends received from controlled foreign subsidiaries. As a result, the Company continues to evaluate the indefinite reinvestment assertions with regard to unremitted earnings for our foreign subsidiaries. As of December 31, 2020, and 2019, the total undistributed earnings of the Companys non-U.S. subsidiaries were approximately $3.5 million and $1.4million, respectively. Historically, the Company has asserted its intention to indefinitely reinvest the undistributed earnings of foreign subsidiaries. The unrecognized deferred tax liability on the portion of the undistributed earnings considered indefinitely reinvested is not material. \nDeferred income taxes result from differences in the recognition of expenses for tax and financial reporting purposes, as well as operating loss and tax credit carryforwards. Significant components of our deferred income tax assets as of the periods presented are as follows: \nDue to the losses the Company generated in prior years, management believes it is more likely than not that the deferred tax assets will not be realized; accordingly, a valuation allowance has been established on U.S. net deferred tax assets. The valuation allowance decreased by $6.4million for the year ended December31, 2020. \nAs of December31, 2020, the Company had net operating loss carryforwards of approximately $89.8 million for federal income tax purposes, of which a portion will begin to expire in 2021 if unused. As a result of Tax Act, $39.4million of the federal net operating loss carryovers will carryover indefinitely<|endoftext|>This Annual Report on Form 10-K (this Report) contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the Securities Act), and Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act). Because they discuss future events or conditions, forward-looking statements may include words such as anticipate, believe, estimate, intend, could, should, would, may, seek, plan, might, will, expect, predict, project, forecast, potential, continue negatives thereof or similar expressions. \n\nWe cannot predict all of t he risks and uncertainties. These forward-looking statements are found at various places throughout this Report and include information concerning possible or assumed future results of our operations, including statements about potential acquisition or merger targets; business strategies; future cash flows; financing plans; \nYou are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this Report. All subsequent written and oral forward-looking statements concerning other matters addressed in this Report and attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this Report. \n\n### CERTAIN TERMS USED IN THIS REPORT \nWhen this report uses the words we, us, our, and the Company, they refer to Max Sound Corporation, and SEC refers to the Securities and Exchange Commission. \nPART I \n### ITEM 1. BUSINESS \nOverview \nMax Sound Corporation (we, us, our, or the Company) was incorporated in the State of Delaware on December 9, 2005 as 43010, Inc. As part of the acquisition, and pursuant to the Stock Purchase Agreement, \n### Table Of Contents \nRaleigh, resigned from all the key executive positions he held in the company, and Mr. Halpern was appointed as our President, CEO, CFO and Chairman. The original business model was developed by Mr. Halpern from October 2008 until January 2011, which focused on developing an Internet search engine and social networking web site launched in January of 2010 featuring an outstanding endorsement and web based commercial by William Shatner for stock warrants. \nBetter capitalized, Silicon Valley, Venture-funded companies crowding the same space with more advanced products, caused the Company to diversify on May 11, 2010, when it acquired the worldwide rights, title and interest to all fields of use for MAX-D HD Audio Technology to which our current website [IDX] what finally in 2021, is living up to its original vision as major breakthrough technology. \nOn March 8, 2011, the Company changed its name to Max Sound Corporation and its trading symbol on the OTC Bulletin Board to MAXD. \nMAX-D is to Audio what High Definition is to Video and today it works by delivering the best-in-class consumer audio experience rivaling any existing product available to listeners globally. Remarkably, MAX-D accomplishes its auditory miracle without increasing file size and saves on bandwidth usage and cost in the process \nIn Q2 of 2014, MAXD announced that it had acquired the license and representation rights to VSLs patented video and data technology known as Optimized Data Transmission System and Method (ODT) which enables end-user licensees to transport 100% of data bandwidth content in only 3% of the bandwidth with the identical lossless quality. Significantly, this represented a 33 times reduction associated with transport cost and the time it takes for the video or digital content to be delivered to and viewed by the end-user. \nAlso, in Q2 of 2014, MAXD entered into a representation agreement with architect Eli Attia giving MAXD the exclusive rights to sue violators of Eli Attias intellectual property rights. While Eli Attia was teaching his invention at Google [x], the project was internally valued by Google at $120 Billion USD a year in the Architecture, Engineering and Construction industry to which Attia has been a leader for half a century. \nThe Racketeering (RICO) version of the case has been spearheaded by John E. Floyd, the leading authority on RICO in all fifty states and the protg of G. Robert Blakey, the creator of the original RICO statute and the co-author of the Attias initial RICO suit against Google and the founders, Larry Page and Sergey Brin as well as Google X CEO Astro Teller, Sebastian Thrun, and Flux Factory with its falsely claimed co-inventors Nicholas Chim, Jennifer Carlile, Michelle Kaufmann, Augusto Roman and Astro Teller. In the appealed RICO opening brief, Floyd makes the following points as part of his argument - \nThe district court misapplied the law in each of its rulings. The courts statutory standing finding was premised on an unduly restrictive reading of the DTSA and 18 U.S.C. 1832 that actually protectsindeed, rewardsthe most egregious trade secret mis-appropriators those who, like Google, steal and then extinguish trade secrets altogether by wrongfully publishing them. Neither the DTSA nor 1832, however, can be construed in such a self-defeating manner. And in any event, Google and Flux are equitably estopped from invoking Googles wrongful publication of Plaintiffs trade secrets to evade liability under either the DTSA or RICO. \nIn October 2019, the Federal Circuit ruled that the Inter Partes Review (IPR) Judges at the Patent Trademark and Appeals Board (PTAB) were not qualified under the United States Constitution, so therefore Googles impairment of the 339 ODT Patent was illegal in the process Max Sounds Chairman Halpern has been calling criminal theft of legitimate American Small Business Inventors under the license for big Corporations to steal known as America Invents Act. \n### Table Of Contents \nTo further clarify MAXDs current role in the Attia and ODT legal matters described above, the Company is not a party to any of these legal cases that it has an interest in and the potential to profit from in the future. The Company has brought together IP rights holders since 2014 with both Contingency Law Firms and Litigation Financed Law Firms to create the enforcement of Intellectual Property rights holders with cases currently addressing Patent Infringement, Trade Secret Theft, Breach of Contract and Racketeering (RICO). MAXD has secured the potential to profit therefrom, as the power of attorney, to negotiate and approve a final financial deal with Google on behalf of the rights holders as either settlements or licensing arrangements both of which have been in and out of negotiations for the past six years. Halpern recently was quoted, \"There are many more cases that will be filed against Anti-trust Monopoly Google for its bad-business-practices for the past decade ultimately going forward until they change their worst-in-class, anti-American approach to inventors. Samsung recently called them the most dishonest company in history. Eight years ago, Google never had heard of little MAX-D. Now, they wish they'd never heard of us. Next up is a few trillion dollars more of exposure to theft where the courts have just looked the other way. While we are finally able to build our business successfully around Google's premeditated thefts, their judicial manipulation and total lack of any ethical standard, MAX-D will never bow down until Google is forced to pay.\" \nDescription of Our Business \nAfter years of R & D and business development that pushed and pulled the company and its HD Audio and Biometric Security technologies in many directions, \nMAX-D has finally become an important player to several major industries, requiring the best-in-class solutions it offers. \nAs subsequent events all this month of March, MAXD has signed three actual revenue events that create a standard for licensing going forward as follows - MAX-D receives at least 6 figures of upfront money, at least 7 figures over ten years to maintain exclusivity in specific industry or geographical categories, and finally the clear potential for up to 8 figures of residuals from related joint revenue sharing opportunities. \nThanks now to the massive value growth and popularity of Tesla Motors, the Hende Moto Signed License Agreement, has opened up a host of other incoming offers to license from Electric and Hybrid vehicles in several major countries that are in fast moving negotiations at this time. The sudden positive demand for MAX-D, clearly illustrates that it can provide an immediate competitive market advantage over virtually any other brand solution, while simultaneously co-existing as a tremendous complimentary addition to any other popular brand already imbedded in existing hardware and software in the Audio Categories that MAX-D will effortlessly compete in going forward. \n### Max Sound \n(MAX-D) has finally arrived at the on-time moment in history where it has an endless audience of licensing opportunities resulting in newly closed deals that assure MAX-D - at least 6 figures in up front money, 7 figures over ten years and 8 figures of projectable revenue share residuals. \nQualcomm \n- MAX-D Mobile Voice \nThe Company is currently working under its existing license with Qualcomm offering software code for \n600 series Snap Dragon chip s. MAX-D Mobile Voice provides clean, intelligible voice call over a standard mobile line without increasing file size and it eliminates the need for special codecs. \n### MAX-D Mobile Voice - \nDoes not require special hardware in order to work. \nCan be implemented into ANY Mobile voice application. \nWorks on Any Mobile platforms without extra bandwidth use \n### Can be immediately applied in any cell phone dsp. \nIs a dynamic process that adjusts itself according to the use or the needs of the user \n(1.) Test voice enters \n(2.) the ANALYZE VOICE module where the harmonic and amplitude of the voice are analyzed for content. \n(3.)This analyzing will produce a harmonic and dynamic map in the DETERMINE HARMONIC AND AMPLITUDE module to drive the next module. \n(4.) A new voice will be generated using the GENERATE ENHANCED VOICE module. This module will compare the original voice with a model that has been optimized for harmonic and dynamic ranges and apply the difference of the two to create an entirely new voice that has been optimized for clarity in the host device. \n(5.) The ENHANCED VOICE OUTPUT will be output to the host device. \n### MAX-D Mobile Voice \nThere is a consumer driven need to improve accuracy & quality of Mobile voice audio. \nThe Problem - \nCell phone electronics commonly have a very limited frequency range. This results in anything from degraded to garbled hearing on the receiving device. The voice recognition engines in devices are very DSP intensive. Usually, to \nTable Of Contents implement a better quality one requires more DSP powering the device, or you can add the Max Sound process and increase the productivity of the existing one. \n### The Solution- \nBy applying the MAX-D VOICE ENHANCEMENT to this audio it becomes much clearer and easier to discern the voice you are listening to. This process is a digital process meant to be used in the DSP of a device. It can be used on both inbound and outbound calls for improvement of both. On the outbound call, the device receiving the call will receive better than normal audio quality because of the process. \nAs the process increase the intelligibility of the audio, it provides the existing voice recognition engine with processed audio of much greater intelligibility than without. Thus allowing the existing engine to function with a higher degree of accuracy at a lower DSP cost than totally replacing it. \n### Summary of the Invention \n1.A computer implemented method for enhancing processed voice comprising: a.receiving voice audio; and b.enhancing the voice audio in several harmonic and dynamic ranges. \n2.The computer implemented method of embodiment 1, wherein the audio is enhanced by resynthesizing it into full range PCM wave. \n3.The computer implemented method of embodiment 1 or 2, wherein the received mobile voice audio is in compressed format. \n4.The computer implemented method of any one of embodiments 1-3, wherein the voice audio is from an inbound mobile call. \n5.The computer implemented method of any one of embodiments 1-3, wherein the voice audio is from an outbound mobile call. \n### Detailed Description of the Invention \nMAX-D Mobile Voice process is used to help clarify both inbound and outbound voice on a Mobile Device. This is accomplished by restoring (resynthesizing)<|endoftext|>Other things, \"change in control\" severance provisions. Specifically, we have entered into employment agreements with Messrs. Merryman and Dudley. The agreements with each of Messrs. Merryman and Dudley provide for \"at will\" employment, which means we or the executive can terminate his employment at any time, with or without cause (as defined therein). The employment agreements generally provide that, if we terminate the executive's employment under circumstances constituting a \"triggering termination,\" the executive will be entitled to receive, among other benefits, 2.99 times the sum of (i) the executive's annual salary and (ii) the lesser of (a)two times the bonus that would be payable to the executive for the bonus period in which the change in control occurred and (b)25% of the executive's annual salary. The executive will also receive an additional payment of $18,000, which represents the estimated cost to the executive of obtaining accident, health, dental, disability and life insurance coverage for the 18-month period following the expiration of COBRA coverage. \nA change in control, as used in these employment agreements, generally means a change in the control of us following (1) an event that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the Exchange Act, without the approval of two-thirds of the Board of Directors prior to its occurrence or within 60 days thereafter, (2) a person (an Acquiring Person) acquiring direct or indirect beneficial ownership of 20% or more of our then outstanding voting securities, without the approval of two-thirds of the Board of Directors prior to its occurrence or within 60 days thereafter, (3) a merger, consolidation, sale of assets or other reorganization, or a proxy contest in which our Board of Directors prior to the transaction constitutes less than a majority of our Board of Directors after the transaction or (4) the members of our Board of Directors during any consecutive two-year period who at the beginning of such period constituted the Board of Directors cease to be the majority of the Board of Directors at the conclusion of that period. In addition to the foregoing, a change in control shall be deemed to have occurred if, after the occurrence of the event described in clause (2) above that has been approved by a two-thirds vote of the Board of Directors, the Acquiring Person shall have become the beneficial owner, directly or indirectly, of securities representing an additional 5% or more of the combined voting power of our then outstanding voting securities (a Subsequent Share Acquisition) without the approval prior thereto or within 60 days thereafter of at least two-thirds of the members of the Board of Directors who were in office immediately prior to such Subsequent Share Acquisition and were not appointed, nominated or recommended by, and do not otherwise represent the interests of, the Acquiring Person on the Board of Directors. Each subsequent acquisition by an Acquiring Person of securities representing an additional 5% or more of the combined voting power of our then outstanding voting securities shall also constitute a Subsequent Share Acquisition (and a change in control unless approved as contemplated by the preceding sentence) if the approvals contemplated above were given with respect to the initial Share Acquisition and all prior Subsequent Share Acquisitions by such Acquiring Person. A triggering termination generally occurs when an executive is terminated during a specified period preceding a change in control of us, or if the executive or we terminate the executives employment under circumstances constituting a triggering termination during a specified period after a change in control. A triggering termination also includes a voluntary termination by the executive within five business days before an anticipated change in control with the concurrence of two concurring persons (either the Chairman of the Board of Directors or a member of our Compensation Committee) that the change in control is likely to occur during such five-business day period. In such event, the executive must agree to continue to work on an at-will basis, without compensation, until the change in control occurs. If the change in control does not occur within ten business days, the executive must refund the severance payment to us. \n2007 Equity Compensation Plan. \nOur 2007 Equity Incentive Plan provides that in the event of a Company transaction in which all of the named executive officers unvested option awards or RSUs are not converted, assumed or replaced by the successor company, such options or RSUs will immediately vest and become exercisable and payable immediately prior to the company transaction. In addition, in the event of a change in control, all of the named executive officers unvested option awards and RSUs will immediately vest and become exercisable and payable. \nAssuming the applicable triggering event took place on February 28, 2021, the named executive officers would have been eligible for payments set forth in the following table. These payments are estimates. If a specific triggering event had actually occurred, the named executive officer would only receive the payments that applied to that specific triggering event. These payments would come from us if the triggering event occurred before a change in control and from the successor company if after a change in control. As of February 28, 2021, no outstanding stock option awards for our named executive officers were outstanding. \n(1) \nThese amounts are based on 2.99 times 125% of each executives base salary in place during fiscal year 2021. \n(2) \n\n### Director Compensation \nNon-employee directors are generally compensated with a combination of cash retainers for serving on committees of the Board of Directors and annual equity grants. Our director compensation policy for fiscal year 2021 provided for the following compensation to our non-employee directors: \nCash \n### Retainer. \nNon-employee directors receive cash retainers for their service on the committees of the Board of Directors and on the Board of Directors. Each non-employee director is paid $3,125 quarterly. Members of our Compensation Committee are paid $750 quarterly, with the chairman of the Compensation Committee being paid $1,500 quarterly. Audit Committee members are paid $500 quarterly, with the chairman of the Audit Committee being paid $1,500 quarterly. Additionally, Audit Committee members receive $250 for each meeting held by phone and $500 for each meeting held in person. Also, an Audit Committee member attending all of the Audit Committee meetings for any fiscal year receives a $1,000 bonus for that year. Directors may elect to receive stock in lieu of cash compensation. In fiscal year 2021, no directors elected to receive a portion of their cash compensation in the form of equity. \nEquity Awards. \nNon-employee directors generally receive annual equity awards under our 2007 Equity Incentive Plan at the discretion of the Compensation Committee. Each non-employee director is typically granted 2,000 shares of common stock and an additional 500 shares of common stock are granted to the chairman of each of the Audit Committee and the Compensation Committee. However, no equity awards were granted to our non-employee directors in fiscal year 2021 due to a limited number of shares being available for issuance under our 2007 Equity Incentive Plan. Any cash payment in lieu of an equity award is paid in an amount equal to the potential grant date fair value of the equity award. \nThe following table summarizes the total compensation paid to each of our non-employee directors who served during fiscal year 2021. Mr. Merryman, our current President, Chief Executive Officer, Chief Financial Officer and Treasurer, does not receive any compensation for his service as a director. See Executive Compensation above for information regarding the compensation for Mr. Merryman. \n(1) \nMr. Farid served as a director until his resignation in January 2021. The payments above represent payments for his service from the start of fiscal year 2021 until his resignation. \n(2) \nRepresents the grant date fair value for stock awards granted during fiscal year 2021 computed in accordance with the requirements of \nFASB ASC Topic 718. A summary of the assumptions we applied in calculating these amounts is set forth in the Notes to Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended February28, 2021. \nITEM 12. \n\nThe following table sets forth information, as of June 10, 2021, with respect to the shares of our common stock beneficially owned (i) by each person known to us to be the beneficial owner of more than 5% of our common stock, (ii) by each director, (iii) each named executive officer set forth in the Summary Compensation Table above and (iv) by all of our directors and executive officers as a group. As of June 25, 2021, 6,124,288 shares of our common stock were outstanding. \nThe number of shares beneficially owned includes shares of our common stock with respect to which the persons named below have either investment or voting power. A person is also deemed to be the beneficial owner of a security if that person has the right to acquire beneficial ownership of that security within 60 days of June 10, 2021 through the exercise of options, vesting of RSUs, or through the conversion of another security. For purposes of calculating each persons or groups percentage ownership, shares of our common stock issuable upon the exercise of options, vesting of RSUs or through conversion of another security within 60 days of June 10, 2021 are included as outstanding and beneficially owned for that person or group, but are not treated as outstanding for the purpose of computing the percentage ownership of any other person or group. Except as noted, each beneficial owner has sole investment and voting power with respect to our common stock. \nUnless otherwise indicated, the address for each director and named executive officer listed below is c/o , 265 Turner Drive, Durango, Colorado 81303. \n* Less than 1% \n(1) \nBased solely on the information contained in a filing on Schedule 13G/A filed with the SEC on February 8, 2021. The address of FMR LLC is 245 Summer Street, Boston, Massachusetts 02210. \n(2) \nBased solely on the information contained in a filing on Schedule 13G/A filed with the SEC on February 11, 2021. The shares are beneficially owned by Renaissance Technologies LLC and its affiliate, Renaissance Technologies Holdings Corporation. The address of Renaissance Technologies LLC and its affiliates is 800 Third Avenue, New York, New York 10022. \n(3) \nThe address of AB Value Management LLC is 200 Sheffield Street, Suite 311, Mountainside, New Jersey 07092. \n(4) \nBased solely on the information contained in a filing on Schedule 13D/A filed with the SEC on June 17, 2021. \n(5) \nMr. Berger, as managing member of AB Value Management LLC, may be deemed to beneficially own the 460,189 shares of common stock beneficially owned by AB Value Management LLC. See Footnote 2. \n(6) \nIncludes approximately 97,900 shares held within the 401(K) Plan. \n\nThe following table provides information with respect to the Companys equity compensation plan, as of February 28, 2021, which consists solely of the Companys 2007 Equity Incentive Plan: \n(1) \nAwards outstanding under the 2007 Equity Incentive Plan as of February 28, 2021 consist of 209,450 unvested restricted stock units. The Company had no outstanding stock options as of February 28, 2021. \n(2) \nRepresents shares remaining available under the Companys 2007 Equity Incentive Plan. Shares available for future issuances under the 2007 Equity Incentive Plan may be issued in the form of stock options, stock appreciation rights, restricted stock and stock units, performance shares and performance units, and other stock- and cash-based awards. \nITEM 13. \n\nWe had no transactions with related persons during fiscal year 2021 which are required to be disclosed pursuant to SEC rules. \nThe following is a description of transactions entered into, or in effect, after March 1, 2019 to which we have been a party, in which the amount involved in the transaction that exceeds the lesser of $120,000 or 1% of our total assets at fiscal year-end for the last two completed fiscal years, and in which any of our directors, executive officers or beneficial owners of<|endoftext|>This Amendment No. 1 on Form 10-K/A (the Amendment) amends the Annual Report on Form 10-K (the 2021 Form 10-K) of Aspen Group, Inc. (the Company) for the year ended April 30, 2021 (Fiscal 2021), as filed with the Securities and Exchange Commission (the SEC) on July 13, 2021. We are filing this Amendment to amend Part III of the 2021 Form 10-K to include the information required by and not included in Part III of the 2021 Form 10-K because we do not intend to file our definitive proxy statement within 120 days of the end of Fiscal 2021. \nIn addition, the Exhibit Index in Item 15 of Part IV of the 2021 Form 10-K is hereby amended and restated in its entirety and currently dated certifications required under Section 302 of the Sarbanes-Oxley Act of 2002 are filed as exhibits to this Amendment. Because no financial statements are contained within this Amendment, we are not filing currently dated certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. \nExcept as described above, no other changes have been made to the 2021 Form 10-K. The 2021 Form 10-K continues to speak as of the date of the 2021 Form 10-K, and we have not updated the disclosures contained therein to reflect any events which occurred at a date subsequent to the filing of the 2021 Form 10-K other than as expressly indicated in this Amendment. \nPART III \nITEM 10. \nThe following table represents our Board of Directors (the \"Board\"): \n### Director Biographies \nMichael Mathews has served as the Companys Chief Executive Officer and a director since March 2012 and as Chief Executive Officer of Aspen University Inc. (Aspen University), a subsidiary of the Company, since May 2011. He served as Chief Executive Officer of Interclick, Inc. (Interclick) (Nasdaq: ICLK) from August 28, 2007 until January 31, 2011. From June 2007 until it was acquired by Yahoo, Inc. (Nasdaq: YHOO) in December 2011, Mr. Mathews also served as a director of Interclick. From May 15, 2008, until June 30, 2008, Mr. Mathews served as the interim Chief Financial Officer of Interclick. From 2004 to 2007, Mr. Mathews served as the senior vice-president of marketing and publisher services for World Avenue U.S.A., LLC, an Internet promotional marketing company. Mr. Mathews was selected to serve as a director due to his knowledge of the for profit education industry, his commitment to making college affordable again, his track record of success in managing early stage and growing businesses, his extensive knowledge of the Internet marketing industry and his knowledge of running and serving on the boards of public companies. \nNorman D. Dicks has served as a director since November 17, 2016. He was a member of the United States House of Representatives for approximately 36 years. He has served as Senior Policy Advisor to law firm Van Ness Feldman LLP since 2013, advising clients on a wide-range of public policy, strategic, and regulatory issues, particularly those in the environmental sector. Prior to joining the firm, Congressman Dicks represented Washington States 6th Congressional District from 1977 to 2013, during which time he received a first-term appointment to the House Appropriations Committee, a committee he served on for his entire tenure in Congress. In addition, Congressman Dicks served on and chaired the Interior Appropriations Subcommittee, where he made environmental issues a priority, and worked on issues affecting the National Parks, National Forests, and Native American issues. Congressman Dicks also was the chair of the Defense Appropriations Committee, and concluded his tenure in Congress as top-ranking Democratic Member on that Committee, and top-ranking Democrat on the House Appropriations Committee. From 1990 to 1998, Congressman Dicks served on the House Intelligence Committee and was awarded the CIA Directors Medal. Upon his retirement, Congressman Dicks received the Department of Defense Distinguished Public Service Medal, the highest honor bestowed upon a civilian, for his work on behalf of military members and their families. Congressman Dicks was appointed a director for his experience and expertise on a wide range of public policy, strategic and regulatory issues. Given the regulatory nature of our business, Congressman Dicks experience provides invaluable insight and advice to the Board and management regarding our debtless education solution to adults across America. \nAndrew Kaplan has served as a director of the Company since June 2014. Since January 1, 2015, Mr. Kaplan has been a Managing General Partner in Education Growth Partners, a private equity firm focused exclusively on the education and training industry. From July 2000 through March 2014, Mr. Kaplan was a partner in Quad Partners (Quad) a private equity firm focused exclusively on the education industry. During his tenure with Quad, Mr. Kaplan also served as a Managing Director of Quad College Group, the operational team focused on Quads postsecondary portfolio. From March 2014 to December 2014, Mr. Kaplan was a consultant to the education industry. Mr. Kaplan was selected as a director for his extensive knowledge of the education industry. \nDouglas Kass has served as a director since July 2020. Mr. Kass has been the President of Seabreeze Partners Management, Inc., which, up to July 2013, was the General Partner of Seabreeze Partners, LP. From 2014 to 2020, Seabreeze managed individual accounts. Since early 2021, Mr. Kass has been the President of Seabreeze Partners Management LLC, a hedge fund sponsor and the General Partner of Seabreeze Capital Partners LP. Mr. Kass served on the board of directors of MVC Capital, Inc. (formerly NYSE: MVC), a non-diversified, closed-end management investment company, from June 2019 until December 2020 when the company was merged with Barings BDC, Inc. (NYSE: BBDC). From July 2011 through May 2017, Mr. Kass served on the board of directors of Empire Resources Inc. (formerly Nasdaq: ERS), a distributor of value added, semi-finished metal products. In 2017 Empire was sold to a unit of Ta Chen Stainless Pipe Co. Ltd. He is currently special advisor to the board of directors of Ocwen Financial Corp (NYSE: OCN). Mr. Kass was selected as a director due to his prior experience serving on boards of directors of several organizations as well as his background in finance. \nMichael Koehneman has served as a director since July 2020. Prior to his recent retirement, Mr. Koehneman previously held various positions at Pricewaterhouse Coopers, a global accounting firm (PwC), including the Global Advisory Chief Operating Officer and Human Capital Leader from 2016 through 2019, the U.S. Advisory Operations Leader from 2005 through 2016, and the Lead Engagement Partner for Financial Statement Audits and Internal Control and Security Reviews from 1993 through 2004. Since June 9, 2021, Mr. Koehneman has served as a director of Ipsidy Inc. (OTCQB: AUID), a provider of secure, mobile, biometric identity verification solutions. Mr. Koehneman was selected as a director due to his background in accounting and technology. \n### Dr. Joan Prince \n, was appointed as a director of the Company effective July 14, 2021. Dr. Prince previously served as the Vice Chancellor of Global Inclusion and Engagement at the University of Wisconsin-Milwaukee from September 2000 to March 1, 2021. During this time, Dr. Prince was the chief administrator for the Divisions of Global Inclusion and Engagement and Partnerships and Innovation the University of Wisconsin-Milwaukee, with responsibilities as the chief inclusion officer. In 2012, President Barack Obama nominated Dr. Prince to the key administrative post of alternate representative to the 67th General Assembly of the United Nations with the honorary rank of ambassador. This diplomatic position also maintained an appointment as a senior advisor to the State Department and Public Delegate. She also served in an advisory capacity to the 2013 United States Delegation to the Commission on the Status of Women. Dr. Prince was selected as a director due to her background and leadership in higher education, and her work to foster diversity and inclusion. \nSanford Rich has served as a director of the Company since March 2012. Since January 2016 Mr. Rich has served as the Executive Director of the New York City Board of Education Retirement System. From November 2012 to January 2016, Mr. Rich served as the Chief of Negotiations and Restructuring for the Pension Benefit Guaranty Corporation (a United States Government Agency). From October 2011 to September 2012, Mr. Rich served as Chief Executive Officer of In The Car LLC. Mr. Rich served as a director of Interclick from August 28, 2007 until June 5, 2009 and as Audit Committee Chairman from August 2007 to June 2009. From April 2006 to April 2020, Mr. Rich has served as a director and Audit Committee Chairman for InsPro Technologies (OTCQB: ITCC). Mr. Rich had a 35-year career as investment and commercial banker. Mr. Rich was selected as a director for his 40 years of experience in the financial sector and his experience serving on the audit committees of public companies. \n### Executive Officers \n(1) As previously disclosed, on July 8, 2021, the Board appointed Mr. Matthew LaVay as the Companys Chief Financial Officer, effective August 16, 2021. Matthew LaVay, 51, has served as the Chief Financial Officer of Amerit Fleet Solutions, Inc. since August 2018. Prior to that, Mr. LaVay served as the Executive Vice President and Chief Financial Officer of Ellie Mae, Inc., a cloud-based platform provider for the mortgage finance industry, from April 2017 to June 15, 2018. From October 2014 to March 2017, Mr. LaVay served as the Senior Vice President of Finance of Ellie Mae, Inc. Mr. LaVay is a certified public accountant. \nSee \"Director Biographies\" above for Mr. Michael Mathews biography. \nRobert Alessi has served as Interim Chief Financial Officer since February 25, 2021. He was appointed Chief Accounting Officer of the Company on December 1, 2019. \nPreviously from July 15, 2019 until that date, Mr. Alessi was the Companys Vice President and Controller. Mr. Alessi is a Certified Public Accountant (CPA) in the State of New York. Alessi served as the Vice President and Financial Controller for Prometheus Global Media, a New York City based media company, from August 2017 through June 2019. Mr. Alessi was previously the Controller for FunctionX, Inc., a social publishing and interactive media platform from January 2017 through August 2017. Between August 2015 and December 2016, Mr. Alessi worked as a Financial Consultant for Anchor Consultants. From May 2015 through July 2015 Mr. Alessi worked for Milestone Consultants. From May 2014 through April 2015, Mr. Alessi performed part time financial consulting and accounting services. From February 2007 through April 2014 Mr. Alessi was the Vice President and Financial Controller at KCAP Financial, Inc., a Business Development Company. \nDr. Cheri St. Arnauld has been the Companys Chief Academic Officer since June 11, 2017 and has served as the President of Aspen University since October 2020. Dr. St. Arnauld previously served as Aspen Universitys Chief Academic Officer since March 6, 2014. From January 2012 until March 6, 2014, Dr. St. Arnauld was an educational consultant for the St. Arnauld Group. From 2008 to 2012, Dr. St. Arnauld was the Provost and Chief Academic Officer of Grand Canyon University. \nGerard Wendolowski has been the Companys Chief Operating Officer since March 11, 2014. From May 2011 until March 11, 2014, Mr. Wendolowski served as Aspen Universitys Senior Vice President of Marketing and Business Development. Previously, from January 2008 until May 2011, Mr. Wendolowski was the VP, Marketing at Atrinisic, a New-York based digital media company, where he led customer acquisition and monetization. \nAnne McNamara was appointed Chief Nursing Officer of the Company on October 31, 2019 and has served as Chief Nursing Officer of Aspen University Inc., our wholly-owned subsidiary, since June 2018. Dr. McNamaras principal duties are to lead and oversee our hybrid online/campus BSN Pre-Licensure nursing program including its expansion. From January 2017 to date, she has been the President of McNamara Solutions, LLC, a consulting firm whose principal client was Aspen University until she became an employee. From April 2015 to December 2016, Dr. McNamara was Academic President of Galen School of Nursing. From March 2007 to October 2014, Dr. McNamara was<|endoftext|>By the holders of at least 50% of the then-outstandingPublic Warrants to make any change that adversely affects the interests of the registered holders of Public Warrants. Accordingly, we may amend the terms of the Public Warrants in a manner adverse to a holder if holders of at least 50% of the then-outstandingPublic Warrants approve of such amendment. Although our ability to amend the terms of the Public Warrants with the consent of at least 50% of the then-outstandingPublic Warrants is unlimited, examples of such amendments could be amendments to, among other things, increase the exercise price of the Warrants, convert the Warrants into cash or stock (at a ratio different than initially provided), shorten the exercise period or decrease the number of shares of our ClassA common stock purchasable upon exercise of a Warrant. \nWe may redeem unexpired Warrants prior to their exercise at a time that is disadvantageous to warrant holders, thereby making their Warrants worthless. \nWe have the ability to redeem outstanding Warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01 per Warrant, provided that the last reported sales price of our ClassA common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a 30 trading-dayperiod ending on the third trading day prior to the date on which we give proper notice of such redemption and provided certain other conditions are met. Redemption of the outstanding Warrants could force you (a)to exercise your Warrants and pay the exercise price therefor at a time when it may be disadvantageous for you to do so, (b)to sell your Warrants at the then-currentmarket price when you might otherwise wish to hold your Warrants or (c)to accept the nominal redemption price which, at the time the outstanding Warrants are called for redemption, is likely to be substantially less than the market value of your Warrants. None of the Private Placement Warrants will be redeemable by us for cash so long as they are held by our Sponsor or its permitted transferees. \nIn addition, we may redeem your Warrants after they become exercisable for a number of shares of ClassA common stock determined based on the redemption date and the fair market value of our ClassA common stock. \nBecause certain of our shares of ClassA common stock and Warrants currently trade as units consisting of one share of ClassA common stock and one-third of one Warrant, the units may be worth less than units of other blank check companies. \nEach unit contains one-thirdof one Warrant. This is different from other blank check companies similar to ours whose units include one share of common stock and one Warrant to purchase one whole share. This unit structure may cause our units to be worth less than if it included a Warrant to purchase one whole share. We have established the components of the units in this way in order to reduce the dilutive effect of the Warrants upon completion of an initial business combination since the Warrants will be exercisable in the aggregate for one-thirdof the number of shares compared to units that each contain a whole Warrant to purchase one share, thus making us, we believe, a more attractive merger partner for target businesses. \nWe may issue additional common stock or preferred stock to complete the Business Combination or under an employee incentive plan after completion of the Business Combination. \nWe may issue a substantial number of additional shares of common or preferred stock to complete the Business Combination or under an employee incentive plan after completion of the Business Combination. The issuance of additional shares of common or preferred stock: may significantly dilute the equity interests of our investors; could cause a change in control if a substantial number of shares of our common stock are issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers and directors; and may adversely affect prevailing market prices for our units, ClassA common stock and/or Public Warrants. \n\nWe cannot assure you that our securities will continue to be listed on the NYSE after the Business Combination. In connection with the Business Combination, we will be required to demonstrate compliance with the NYSEs initial listing requirements, which are more rigorous than the NYSEs continued listing requirements, in order to continue to maintain the listing of our securities on the NYSE. For instance, our stock price would generally be required to be at least $4.00 per share, our aggregate market value would be required to be at least $150million, and the market value of our publicly heldshares would be required to be at least $40million. Our continued eligibility for listing may depend on, among other things, the number of our shares that are redeemed. \nIf the NYSE delists our securities from trading on its exchange and we are not able to list our securities on another national securities exchange, we expect our securities could be quoted on an over-the-countermarket. \n\nThe National Securities Markets Improvement Act of 1996, which is a federal statute, prevents or pre-emptsthe states from regulating the sale of certain securities, which are referred to as covered securities. Because our units, ClassA common stock and Public Warrants are listed on the NYSE, our units, ClassA common stock and Public Warrants qualify as covered securities. Although the states are pre-emptedfrom regulating the sale of our securities, the federal statute does allow the states to investigate companies if there is a suspicion of fraud, and, if there is a finding of fraudulent activity, then the states can regulate or bar the sale of covered securities in a particular case. Further, if we were no longer listed on the NYSE, our securities would not be covered securities and we would be subject to regulation in each state in which we offer our securities. \nOur board of directors did not obtain a third-party valuation or fairness opinion in determining whether or not to proceed with the Business Combination. \nOur board of directors did not obtain a third-partyvaluation or fairness opinion in connection with its determination to approve the Business Combination. Our officers and directors have substantial experience in evaluating the operating and financial merits of companies from a wide range of industries and concluded that their experience and backgrounds, together with the experience and sector expertise of our advisors, enabled them to make the necessary analyses and determinations regarding the Business Combination. Accordingly, investors will be relying solely on the judgment of our board of directors in valuing ChargePoint and assuming the risk that our board of directors may not have properly valued the business. The lack of a third-partyvaluation or fairness opinion may also lead an increased number of stockholders to vote against the proposed Business Combination or demand redemption of their shares for cash, which could potentially impact our ability to consummate the Business Combination. \nA significant portion of our total outstanding shares are restricted from immediate resale but may be sold into the market in the near future. This could cause the market price of our ClassA common stock to drop significantly, even if our business is doing well. \nSales of a substantial number of shares of ClassA common stock in the public market could occur at any time. These sales, or the perception in the market that the holders of a large number of shares intend to sell shares, could reduce the market price of our ClassA common stock. After the Business Combination (and assuming no redemptions by our public stockholders of public shares), our Sponsor and our current officers and directors will hold approximately 2.5% of our ClassA common stock, including the 6,868,235shares of ClassA common stock into which the Founder Shares will convert (or 2.8% of our ClassA common stock, assuming a maximum redemption by our public stockholders of 100% of the public shares). Pursuant to the terms of a letter agreement entered into at the time of the IPO, and reaffirmed in the Founders Stock Letter, the Founder Shares (which will be converted into shares of ClassA common stock at the Closing) may not be transferred until the earlier to occur of (a)one year after the Closing or (b)the date on which we complete a liquidation, merger, stock exchange or other similar transaction that results in all of our stockholders having the right to exchange their shares of common stock for cash, securities or other property. Notwithstanding the foregoing, if the last reported sale price of our ClassA common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30 trading day period commencing at least 150days after the Closing, the shares of ClassA common stock into which the Founder Shares convert will be released from these transfer restrictions. \nFurther, pursuant to the Subscription Agreements, the Company agreed that, within 15 business days after the consummation of the Business Combination, New ChargePoint will file with the SEC (at New ChargePoints sole cost and expense) a registration statement registering the resale of the shares of ClassA common stock that are issued in the PIPE Financing (the PIPE Resale Registration Statement), and New ChargePoint will use its reasonable best efforts to have the PIPE Resale Registration Statement declared effective as soon as practicable after the filing thereof. This registration statement will also cover shares issuable upon exercise of the Public Warrants. The sale of shares under the PIPE Resale Registration Statement is likely to have an adverse effect on the trading price of the ClassA common stock. \nIf the Business Combinations benefits do not meet the expectations of investors, stockholders or financial analysts, the market price of our securities may decline. \nIf the benefits of the Business Combination do not meet the expectations of investors or securities analysts, the market price of our securities prior to the Closing may decline. The market values of our securities at the time of the Business Combination may vary significantly from their prices on the date the Business Combination Agreement was executed or the date on which our stockholders vote on the Business Combination. \nIn addition, following the Business Combination, fluctuations in the price of our securities could contribute to the loss of all or part of your investment. Prior to the Business Combination, trading in the shares of our ClassA common stock has not been active. Accordingly, the valuation ascribed to our ClassA common stock in the Business Combination may not be indicative of the price that will prevail in the trading market following the Business Combination. If an active market for our securities develops and continues, the trading price of our securities following the Business Combination could be volatile and subject to wide fluctuations in response to various factors, some of which are beyond our control. \nFactors affecting the trading price of our securities following the Business Combination may include: actual or anticipated fluctuations in our quarterly financial results or the quarterly financial results of companies perceived to be similar to us; success of competitors; changes in financial estimates and recommendations by securities analysts concerning New ChargePoint or the market in general; our ability to market new and enhanced products and technologies on a timely basis; commencement of, or involvement in, litigation involving New ChargePoint; the volume of shares of our ClassA common stock available for public sale; sales of substantial amounts of ClassA common stock by our directors, executive officers or significant stockholders or the perception that such sales could occur; \nThe stock market in general and the NYSE have experienced price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of the particular companies affected. A loss of investor confidence in the market for retail stocks or the stocks of other companies which investors perceive to be<|endoftext|>We elect to acquire. \n\n\nIn addition, if shareholder approval of the transaction is required by law, or we decide to obtain shareholder approval for business or other legal reasons, it may be more difficult for us to attain shareholder approval of our initial business combination if the target business does not meet our general criteria and guidelines. \nWe are not required to obtain an opinion from an independent accounting or investment banking firm, and consequently, you may have no assurance from an independent source that the price we are paying for the business is fair to our shareholders from a financial point of view and we will not be required to obtain an opinion if our board of directors is able to independently determine the fair market value of the target business. \nUnless we complete our initial business combination with an affiliated entity or our board cannot independently determine the fair market value of the target business or businesses, we are not required to obtain an opinion from an independent accounting firm or independent investment banking firm which is a member of FINRA that the price we are paying is fair to our shareholders from a financial point of view. If, however, our board of directors is not able to determine independently that the target business has a sufficient fair market value to meet the threshold criterion required by the rules of the NYSE for our initial business combination, we will obtain an opinion from an unaffiliated, independent accounting firm or investment banking firm with respect to the satisfaction of such criterion. Such opinion, if obtained, would merely state that the fair market value of the target business meets the 80% of assets threshold. \nWe have entered into the Investor Subscription Agreements and Individual Subscription Agreements in connection with the \n### Business Combination \nOur amended and restated memorandum and articles of association authorizes the issuance of up to 180,000,000 Class A ordinary shares, par value $0.0001 per share, 25,000,000 Class B ordinary shares, par value $0.00008 per share, and 1,000,000 preference shares, par value $0.0001 per share. At December 31, 2020, there were 162,750,000 and 19,437,500 authorized but unissued Class A ordinary shares and Class B ordinary shares, respectively, available for issuance, which amount does not take into account shares reserved for issuance upon exercise of outstanding warrants and the forward purchase warrants, shares issuable upon conversion of the Class B ordinary shares or shares issued upon the sale of the forward purchase shares. The Class B ordinary shares are automatically convertible into Class A ordinary shares at the time of our initial business combination. At December 31, 2020, there were no preference shares issued and outstanding. \nConcurrently with the execution of the Business Combination Agreement, the Company and HoldCo entered into (i) the Investor Subscription Agreements pursuant to which HoldCo agreed to issue and sell an aggregate of $150,000,000 shares in HoldCo, which will take effect immediately prior to the closing of the Rockley Business Combination, and (ii) the Individual Subscription Agreements pursuant to which HoldCo agreed to issue and sell an aggregate of $2,100,000 shares in HoldCo, which will take effect immediately prior to the closing of the Rockley Business Combination. \nWe may otherwise issue a substantial number of additional Class A ordinary shares or preference shares to complete our initial business combination or under an employee incentive plan after completion of our initial business combination. We may also issue Class A ordinary shares to redeem the warrants or upon conversion of the Class B ordinary shares at a ratio greater than one-to-one at the time of our initial business combination as a result of the anti-dilution provisions as set forth herein. \nUnlike most other similarly structured blank check companies, our initial shareholders will receive additional Class A ordinary shares if we issue shares to consummate an initial business combination. \nThe founder shares will automatically convert into Class A ordinary shares on the first business day following the consummation of our initial business combination at a ratio such that the number of Class A ordinary shares issuable upon conversion of all founder shares will equal, on an as-converted basis, 20% of the total number of Class A ordinary shares, plus the total number of Class A ordinary shares issued or deemed issued or issuable upon conversion or exercise of any equity-linked securities or rights issued or deemed issued, by us in connection with or in relation to the consummation of our initial business combination (including the forward purchase shares, but not the forward purchase warrants), excluding any Class A ordinary shares or equity-linked securities exercisable for or convertible into Class A ordinary shares issued, or to be issued, to any seller in the initial business combination and any warrants issued in a private placement to our Sponsor or an affiliate of our Sponsor upon conversion of working capital loans. \n\n\n\n\n\nOur obligation to indemnify our officers and directors may discourage shareholders from bringing a lawsuit against our officers or directors for breach of their fiduciary duties. \n\n\n\n\n\nIf we are deemed to be an investment company under the Investment Company Act, our activities may be restricted, including restrictions on the nature of our investments and restrictions on the issuance of securities, each of which may make it difficult for us to complete our initial business combination. In addition, we may have imposed upon us burdensome requirements, including registration as an investment company, adoption of a specific form of corporate structure and reporting, record keeping, voting, proxy and disclosure requirements and other rules and regulations. \n\nThe trust account is intended as a holding place for funds pending the earliest to occur of either: (i) the completion of our initial business combination, (ii) the redemption of any public shares properly tendered in connection with a shareholder vote to amend our amended and restated memorandum and articles of association (A) to modify the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial business combination by April 16, 2021 or (B) with respect to any other provisions relating to the rights of our Class A ordinary shares or (iii) absent an initial business combination by April 16, 2021, our return of the funds held in the trust account to our public shareholders as part of our redemption of the public shares. \n\nCompliance with, and monitoring of, applicable laws and regulations may be difficult, time-consuming and costly. \nIf we are unable to consummate our initial business combination by April 16, 2021, our public shareholders may be forced to wait beyond such time before redemption from our trust account. \nIf we are unable to consummate our initial business combination by April 16, 2021, the proceeds then on deposit in the trust account, including interest (less up to $100,000 of interest to pay dissolution expenses and net of taxes payable), will be used to fund the redemption of our public shares, as further described herein. In that case, investors may be forced to wait beyond April 16, 2021 before the redemption proceeds of our trust account become available to them, and they receive the return of their pro rata portion of the proceeds from our trust account. \n\n\n\nWe will not hold our first annual meeting until after our first full fiscal year. \n\n\nWe may engage in a business combination with one or more target businesses that have relationships with entities that may be affiliated with our Sponsor, executive officers, directors or existing holders, which may raise potential conflicts of interest. \nDespite our agreement to obtain an opinion from an independent investment banking firm which is a member of FINRA or an independent accounting firm regarding the fairness to our company from a financial point of view of a business combination with one or more domestic or international businesses affiliated with our Sponsor, executive officers, directors or existing holders, potential conflicts of interest still may exist and, as a result, the terms of the business combination may not be as advantageous to our public shareholders as they would be absent any conflicts of interest. \nSince our Sponsor will lose its entire investment in our founder shares and/or private placement warrants if our initial business combination is not completed (other than with respect to public shares they may acquire during or after our initial public offering), a conflict of interest may arise in determining whether a particular business combination target is appropriate for our initial business combination. \nAs of December 31, 2020, our Sponsor held an aggregate of 5,562,500 founder shares, 4,312,500 of which were issued in exchange for a capital contribution of $25,000, or approximately $0.006 per share. In 2019, our Sponsor transferred 25,000 founder shares to each of our independent director nominees at their original purchase price. The founder shares held by our Sponsor will be worthless if we do not complete an initial business combination. In addition, our Sponsor purchased an aggregate of 5,450,000 private placement warrants, each exercisable to purchase one Class A ordinary share at $11.50 per share, at a price of $1.00 per warrant ($5,450,000 in the aggregate), in a private placement that closed simultaneously with the closing of the initial public offering. If we do not complete our initial business combination by April 16, 2021, the private placement warrants will expire worthless. \n\nAlthough we have no commitments as of the date of this Form 10-K to issue any notes or other debt securities, we may choose to incur substantial debt to complete our initial business combination. \nWe may only be able to complete one business combination with the proceeds of the initial public offering and the sale of the private placement warrants and forward purchase shares, which will cause us to be solely dependent on a single business which may have a limited number of products or services. \nThe net proceeds from our initial public offering and the sale of the private placement warrants and forward purchase shares will provide us with up to $217,725,593 (after deducting payment of offering expenses of $736,907 and underwriting commissions of $9,487,500 but not deducting any of the proceeds not held in trust which may be used to pay working capital expenses) that we may use to complete our initial business combination. \n\n\n\n\n\n\n\nFor example, we could pursue a transaction in which we issue a substantial number of new Class A ordinary shares in exchange for all of the outstanding capital stock of a target. However, as a result of the issuance of a substantial number of new Class A ordinary shares, our shareholders immediately prior to such transaction could own less than a majority of our outstanding Class A ordinary shares subsequent to such transaction. \n\nOur amended and restated memorandum and articles of association do not provide a specified maximum redemption threshold, except that we will only redeem our public shares so long as (after such redemption) our net tangible assets will be at least $5,000,001either prior to or upon consummation of our initial business combination and after payment of underwriters fees and commissions (such that we are not subject to the SECs penny stock rules). \n\nAmending our amended and restated memorandum and articles of association will require a special resolution of our shareholders as a matter of Cayman Islands law, meaning the approval of holders of at least two-thirds of our ordinary shares who attend and vote at a general meeting of the company, and amending our warrant agreement will require a vote of holders of at least 50% of the public warrants. In addition, our amended and restated memorandum and articles of association require us to provide our public shareholders with the opportunity to redeem their public shares for cash if we propose an amendment to our amended and restated memorandum and articles of association (A) to modify the substance or timing of our obligation to redeem 100% of our public shares if we do not complete an initial business combination by April 16, 2021 or (B) with respect to any other provisions<|endoftext|>Legal Proceedings \nOn September 9, 2019, Purple LLC filed a Statement of Claim against PerfectSense Home Inc. and PerfectSense Trading Co. Ltd. (collectively, PerfectSense) in the Federal Court of Canada. PerfectSense is a manufacturer and supplier of mattresses and related products. PerfectSense owns the domain name www.purplesleep.ca \n, whichused to, but no longer,redirects to its website at www.perfectsense.ca \nIn addition to this, Purple LLC has alleged that PerfectSense has: designed their mattresses with the same look as the Purple mattresses (white mattress top, purple stripe, and grey bottom); used many of the marketing elements on Purples website (including a similar exploded view image of their mattress); and adopted the color purple as their dominant marketing color. Purple LLC is suing for a declaration that PerfectSense has infringed Purple LLCs copyright and trademark rights and committed the tort of passing off. Purple LLC is asking for injunctive relief, damages, an accounting of profits, interest, costs, and delivery up or destruction of the infringing products (including delivery up of the www.purplesleep.ca domain). After filing the statement of claim, Purple LLC posted $15,000 CAD as security for PerfectSenses costs.PerfectSense brought a motion to strike that was resolved on consent. Pleadings are now closed, and the action is proceeding under case management.Counsel for the defendant was removed from the record at their own request by Court Order. The Court further ordered the defendant to either appoint counsel or file a motion to permit an officer or director to represent the defendant in legal proceedings. On November 6, 2020, the defendant informally requested that the Court permit Mr. Henderson, the CEO and shareholder of the defendant, to represent the defendant in the action until such time as a lawyer could be appointed. Purple opposed this informal request, and it was denied by the Court. After granting PerfectSense a final extension of time to either appoint counsel or file a motion to permit Mr. Henderson to represent the defendant, PerfectSense appointed new counsel. The action will now proceed with the parties scheduled to exchange affidavits of documents by March 31, 2021. \nOn September 20, 2020, the Company filed a complaint at the U.S. Court of International Trade seeking to recover approximately $7.0 million of Section 301 duties paid at the time of importation on certain Chinese-origin goods. More than 4,000 other complaints have been filed by other companies seeking similar refunds. The United States has not yet filed an answer to our complaint. If successful, this litigation could result in a refund of some or all of the Section 301 duties. \nOn October 13, 2020, Purple Innovation, LLC (Purple) filed a lawsuit against Responsive Surface Technology, LLC and its parent company, PatienTech, LLC (collectively referred to as ReST) in the United States District Court for the District of Utah. The lawsuit arises from ReSTs multiple breaches of its obligations to Purple, including infringing upon Purples trademarks, patents, and trade dress, among other claims. Purple seeks monetary damages, injunctive relief, and declaratory judgment based on certain conduct by ReST (Case I). On October 21, 2020, shortly after the complaint was filed in Case I, ReST filed a retaliatory lawsuit against Purple, Gary DiCamillo, Adam Gray, Joseph Megibow, Terry Pearce, and Tony Pearce, also in the United States District Court for the District of Utah (Case II). Subsequently, the two cases were consolidated into one. Case II (now combined with Case I) involves many of the same facts and transactions as Case I. On January 19, 2021, ReST filed a motion to compel arbitration of the claims in Case I. On February 26, 2021, Purple opposed the motion to compel arbitration, arguing that ReST has waived any rights they may have had to arbitration and that all of the claims in both cases should stay in the courts. On March 5, 2021, Purple, Gray, Megibow, Terry Pearce, and Tony Pearce, filed a motion to dismiss the claims set forth in Case II. Purple seeks over $4 million in damages from ReST, whereas ReST claims that Purple is liable to it for tens of millions of dollars. The outcome of this litigation cannot be predicted at this early stage. However, Purple intends to vigorously pursue its claims and defend against the claims made by ReST. \nOn November 19, 2020, Purple Innovation, LLC sued Advanced Comfort Technologies, Inc., dba Intellibed (Intellibed) in the U.S. District Court for the District of Utah for patent infringement, trademark infringement, trade secret misappropriation, and a number of state law based claims. The principal allegations are that Intellibed has manufactured and sold unauthorized, infringing products under the Sleepys brand name. Purple also requested declaratory relief related to certain assignment terms of a license agreement in which Purple is the licensor and Intellibed is the licensee. On December 14, 2020, Intellibed filed a motion to dismiss Counts I through XI of Purples Complaint on the ground that these Counts fail to state a claim upon which relief can be granted. On December 15, 2020, Intellibed filed an Answer to Purples complaint and also asserted against Purple a total of eight counterclaims, including a number of declaratory judgment claims, breach of contract, and tortious interference claims. Intellibeds main allegations are that its use of Purples patents, trademark, and trade secrets in connection with the Sleepys products is authorized under the license agreement. On January 19, 2021, Purple filed a motion to dismiss Intellibeds fifth, sixth, seventh, and eighth counterclaims on the ground that these counterclaims fail to state a claim upon which relief can be granted. On January 19, 2021, Purple also filed an Answer to Intellibeds counterclaims, which were not subject to Purples motion to dismiss. On January 27, 2021, Purple filed a First Amended Complaint in response to Intellibeds initial motion to dismiss. On February 10, 2021, Intellibed filed a motion to dismiss Counts I through XI of Purples First Amended Complaint. Intellibeds motion to dismiss and Purples motion to dismiss are still pending before the Court. The case is in the early stages. No substantial discovery has taken place. The Court has not yet entered a Scheduling Order governing the case. No trial date has been set. \nThe Company is from time to time involved in various other claims, legal proceedings and complaints arising in the ordinary course of business. The Company does not believe that adverse decisions in any such pending or threatened proceedings, or any amount that the Company might be required to pay by reason thereof, would have a material adverse effect on the financial condition or future results of the Company. \n15. Related-Party Transactions \nThe Company had various transactions with entities or individuals which are considered related parties. \n### Coliseum Capital Management LLC \nImmediately following the Business Combination, Adam Gray was appointed to the Companys Board of Directors. Mr. Gray is a manager of Coliseum Capital, LLC, which is the general partner of CCP and CDF, and he is also a managing partner of Coliseum Capital Management, LLC (CCM), which is the investment manager of Blackwell. Mr. Gray has voting and dispositive control over securities held by CCP, CDF and Blackwell which were also the Lenders under the Amended and Restated Credit Agreement. In 2018, the Lenders agreed to make the Original Loan in an aggregate principal amount of $25.0 million pursuant to the 2018 Credit Agreement entered into as part of the Business Combination. In conjunction with the 2018 Credit Agreement, the Sponsor agreed to assign to the Lenders an aggregate of 2.5 million warrants to purchase 1.3 million shares of its Class A Stock. In 2019, the Incremental Lenders agreed to provide the $10.0 million Incremental Loan. In accordance with the First Amendment to the Amended and Restated Credit Agreement, the Company did not make any cash interest payments to the Lenders during the first and second quarters of 2020. On September 3, 2020, the Company paid $45.0 million to retire, in full, all indebtedness related to Purple LLCs 2018 Credit Agreement. The payment included the $25.0 million Original Loan, the $10.0 Incremental Loan, $6.6 million of paid-in-kind interest, $2.5 million in a prepayment fee and $0.9 million in accrued interest (See Note 11 \n### Debt) \nIn connection with the Coliseum Private Placement, the Sponsor assigned (i)an aggregate of 1.3 million additional shares of ClassA Stock to CCP and Blackwell and (ii)an aggregate of 3.3 million warrants to purchase 1.6million shares of ClassA Stock to CCP, Blackwell, and CDF. It also provides them with a right of first refusal with respect to certain debt and preferred equity financings by the Company.The Company also entered into a registration rights agreement with CCP, Blackwell, and CDF, providing for the registration of the shares of ClassA Stock issued and assigned to CCP and Blackwell in the Coliseum Private Placement, as well as the shares of ClassA Stock underlying the warrants received by CCP, Blackwell and CDF. \nAs part of the Amended and Restated Credit Agreement, CCP and Blackwell were also granted 2.6 million warrants to purchase 2.6 million shares of the Companys Class A Stock at a price of $5.74 per share, subject to certain adjustments. In May 2020, pursuant to the terms of the warrant agreement upon the condition that Tony Pearce or Terry Pearce individually or together ceased to beneficially own at least 50% of the voting securities of the Company, the exercise price of the warrants was adjusted to zero. On November 9, 2020, the Company issued 2.6 million shares of Class A common stock in exchange for the Incremental Loan Warrants held by the Incremental Lenders. The Company determined the fair value of the Incremental Loan Warrants to be $81.0 million at the time of the exchange. The Company recorded losses of $59.4 million and $16.8 million related to increases in the fair value of the Incremental Loan Warrants for the years ended December 31, 2020 and 2019, respectively (See Note 12 \nWarrant Liabilities). \n### Purple Founder Entities \nTNT Holdings, LLC (herein TNT Holdings), EdiZONE, (wholly owned by TNT Holdings) and InnoHold (the Purple Founder Entities) were entities under common control with Purple LLC prior to the Business Combination. TNT Holdings and InnoHold are majority owned and controlled by Terry Pearce and Tony Pearce (the Purple Founders), who were appointed to the Companys Board of Directors following the Business Combination. InnoHold was a majority shareholder of the Company until it sold a portion of its interests in a secondary public offering in May 2020 and the remainder of its interests in a secondary public offering in September 2020. The Purple Founders also resigned as employees of the Company and retired from the Board in August 2020. \nTNT Holdings owns the Alpine facility Purple LLC has been leasing since 2010. Effective as of October 31, 2017, Purple LLC entered into an Amended and Restated Lease Agreement with TNT Holdings. The Company determined that TNT Holdings is not a VIE as neither the Company nor Purple LLC hold any explicit or implicit variable interest in TNT Holdings and do not have a controlling financial interest in TNT Holdings. The Company incurred $0.9 million and $1.0 million in rent expense to TNT Holdings for the building lease of the Alpine facility for the years ended December 31, 2020 and 2019, respectively. The Company continues to lease the Alpine facility that was formerly the Company headquarters, for use in production, research and development and video production. \nDuring the year ended December 31, 2020, 30.9 million Paired Securities have been exchanged for Class A Stock by InnoHold and certain current and former employees of the Company who received distributions of such Paired Securities from InnoHold. \nOn November 9, 2018, Purple LLC and EdiZONE executed the Second Amended and Restated Confidential Assignment and License Back Agreement (the Revised License Agreement), pursuant to which EdiZONE assigned all of its comfort and cushioning intellectual property to Purple LLC and further limited the subset of such intellectual property licensed back to EdiZONE to only those uses that enabled EdiZONE to comply with its obligations under previously<|endoftext|>And an MBA from Northeastern University. He is well qualified to serve on our Board due to his extensive investment and management experience in the software industry. \nStephanie Davis, who has served as one of our Directors since September 2020, has since 2017 served as a Senior Client Partner at Korn Ferry where she leads the Private Equity/Technology practice in North America and is a member of the CEO & Board practices and the Global Technology Practice. She is an expert in executive talent and leadership and has spent over two decades working with Chief Executive Officers to build their leadership capabilities and teams. Ms. Davis works extensively with public and private company board of directors on succession and board recruitment. She is a frequent speaker on board governance and women in the boardroom. Since 2019, Ms. Davis has been a member of the board of directors of biopharmaceutical company, Athenex (NASDAQ:ATNX). Prior to joining Korn Ferry in 2017, Ms. Davis spent 17 years at Spencer Stuart where she was a member of the CEO & Board Practice. During her tenure, she co-foundedthe Business/ Technology Services practice, led the Software practice, and managed global private equity relationships. From 2019 to October 2020, she was a director of Software Acquisition Group Inc. Ms. Davis has a Bachelor of Science in Engineering from Princeton University and an MBA from Harvard Business School. She is well qualified to serve on our Board due to her extensive consulting and private and public company board experience. \n### Steven Guggenheimer \n, who has served as one of our Directors since September 2020, has since 2018 served as Corporate Vice President of Microsoft Corporation (NASDAQ: MSFT) responsible for its artificial intelligence business as well as Microsofts engagement with its independent software vendor partners. In addition Mr Guggenheimer is a non-executiveboard member of HSBC Holdings plc (OTC:HBCYF) since May 2020, Forrit Technology Ltd., a private cloud technology company, since 2019, an advisor to Tensility Venture Partners, a seed stage venture capital firm, since 2017 as well as an advisor to the 5G Open Innovation Lab since May 2020. Over his 26 years at Microsoft, Mr.Guggenheimer has held leadership roles in strategically important areas including close to a decade helping to build Microsofts hardware and software ecosystem as the head of Developer Evangelism (DX) and the OEM division from 2008 to 2018. He has also worked on the product teams for Microsofts Application Platform, Windows, IE, MSN, SQL Server, Visual Studio and more. Mr.Guggenheimer received a Bachelors degree in Applied Physics from the University of California, Davis, and a Masters Degree in Engineering Management from Stanford University. He is well qualified to serve on our Board due to his extensive operational and management experience in the software industry. \nPeter H. Diamandis, MD, who has served as one of our Directors since September 2020, has been the Chief Executive Officer of PHD Ventures, Inc., which is his personal holding company for his writing, speaking, and consulting activities, since 1993. In 2014, Dr. Diamandis founded and served as Vice-Chairmanof Human Longevity, Inc., an advanced health diagnostic company committed to delivering data driven health diagnostics; he resigned from the board of directors in 2018 and remains a shareholder. He is also the Executive Founder of Singularity University, a graduate-levelSilicon Valley institution founded in 2008 that counsels the worlds leaders on exponentially growing technologies. He is the Vice Chairman and co-Founderof Celularity Inc., founded in 2017, a commercial-stagecell therapeutics company delivering allogenic cellular therapies engineered from the postpartum human placenta. Dr. Diamandis is also a founder and board member of Fountain Therapeutic Services Inc., which was formed in 2018 to increase lifespan and optimize healthspan by harnessing regenerative medicine technologies and integrating extensive wellness solutions. In March 2020 Dr.Diamandis co-Foundedand is the Vice-Chairmanof Covaxx, Inc., a pharmaceutical company that has developed a COVID-19lgG antibody test and which has a vaccine candidate in clinical trials. As an entrepreneur, Dr. Dr. He earned degrees in Molecular Engineering and Aerospace Engineering from MIT and holds an M.D. from Harvard Medical School. He is well qualified to serve on our Board due to his extensive operational and management experience in the technology industry. \n\n\n\nWe have seven directors. Olton and Diamandis, will expire at our first annual meeting of stockholders. Davis and Mr.Guggenheimer, will expire at the second annual meeting of stockholders. Huberman, Nikzad and Nikou, will expire at the third annual meeting of stockholders. \n\nPursuant to an agreement, our sponsor, upon and following consummation of an initial business combination, will be entitled to nominate three individuals for election to our board of directors, as long as the sponsor holds any securities covered by the registration and shareholder rights agreement. \n\n\nAudit Committee \nMs.Davis and Messrs. Olton and Guggenheimer serve as members of our audit committee, and Mr.Olton chairs the audit committee. Each of Ms. Davis and Messrs. Oltonand Guggenheimer meet the independent director standard under Nasdaq listing standards and under Rule10-A-3(b)(1) of the Exchange Act. \nEach member of the audit committee is financially literate and our board of directors has determined that Mr.Olton qualifies as an audit committee financial expert as defined in applicable SEC rules. \nobtaining and reviewing a report, at least annually, from the independent registered public accounting firm describing (i) the independent registered public accounting firms internal quality-controlprocedures, (ii)any material issues raised by the most recent internal quality-controlreview, or peer review, of the audit firm, or by any inquiry or investigation by governmental or professional authorities within the preceding five years respecting one or more independent audits carried out by the firm and any steps taken to deal with such issues and (iii) all relationships between the independent registered public accounting firm and us to assess the independent registered public accounting firms independence; \n### Compensation Committee \nMs. Davis and Mr.Diamandis serve as members of our compensation committee. Ms. Davis and Mr.Diamandis are independent and Ms. Davis will chair the compensation committee. \n\nNotwithstanding the foregoing, as indicated above, other than the payment to our sponsor of $10,000 per month, for up to 18months, for office space, utilities and secretarial and administrative support and reimbursement of expenses, no compensation of any kind, including finders, consulting or other similar fees, will be paid to any of our existing stockholders, officers, directors or any of their respective affiliates, prior to, or for any services they render in order to effectuate the consummation of an initial business combination. \n\n### Director Nominations \nDavis and Messrs. Olton, Guggenheimer and Diamandis. \n\n\n### Code of Ethics \n\nAvailability of Documents \n\n\n\nItem 11. \nExecutive Compensation. \n\nUpon completion ofour initial business combination or our liquidation, we will cease paying these monthly fee. \n\n\n### Item 12 \n\nThe following table sets forth information regarding the beneficial ownership of our common stock as of March 15, 2021 based on information obtained from the persons named below, with respect to the beneficial ownership of shares of our common stock, by: each person known by us to be the beneficial owner of more than 5% of our outstanding shares of common stock; \n\n* less than 1% \n(1) \nUnless otherwise noted, the business address of each of the following entities or individuals is c/o Software Acquisition Group Inc. II, 1980 Festival Plaza Drive, Ste. 300, Las Vegas, Nevada 89135. \n(2) \n\n(3) \nSoftware Acquisition Holdings II LLC, our sponsor, is the record holder of such shares. Our sponsor is controlled by a board of managers which consists of Jonathan Huberman, our Chairman, Chief Executive Officer and Chief Financial Officer, Mike Nikzad, our Vice President of Acquisitions and a director, and Andrew Nikou, one of our directors. As such, they have voting and investment discretion with respect to the common stock held of record by our sponsor and may be deemed to have shared beneficial ownership of the common stock held directly by our sponsor. \n(4) \n\n(5) \nBased on a Schedule 13G filed on September 25, 2020. Represents shares beneficially owned by a private investment partnership (the Partnership) of which BIP GP LLC, a Delaware limited liability company (BIP GP), is the sole general partner. Weiss Asset Management LP, a Delaware limited partnership (Weiss Asset Management), is the sole investment manager to the Partnership. WAM GP LLC, a Delaware limited liability company (WAM GP), is the sole general partner of Weiss Asset Management. Andrew Weiss, a United States citizen (Andrew Weiss), is the managing member of WAM GP and BIP GP. Shares reported for WAM GP, Andrew Weiss and Weiss Asset Management include shares beneficially owned by the Partnership (and reported above for BIP GP). Each of BIP GP, WAM GP, Weiss Asset Management, and Andrew Weiss disclaims beneficial ownership of the shares reported herein as beneficially owned by each except to the extent of their respective pecuniary interest therein. The business address of each such persons is 222 Berkeley St., 16th floor, Boston, Massachusetts 02116. \n(5) \nAccording to the Schedule 13G filed on February 22, 2021 by Mithaq Capital SPC, Mithaq Capital SPC, Turki Saleh A. AlRajhi and Muhammad Asif Seemab have shares voting and dispositive power over 3,021,759 shares of common stock. The business address of Mithaq Capital SPC and the other beneficial owners is Mithaq Capital SPC, c/o Synergy, Anas Ibn Malik Road, Al Malqa, Riyadh 13521 Saudi Arabia. \n\n\nNone. \n### Changes in Control \nFor more information on the Otonomo Business Combination, see Item 1. Business. \nItem 13. \n\n\n\nOur sponsor has purchased an aggregate of 5,200,000 private placement warrants at a price of $1.00 per warrant $5,200,000 in the aggregate). As such, our sponsors interest in this transaction is valued at $5,200,000. \n\nCommencing September 14, 2020, we have agreed to pay our sponsor a total of $10,000 per month for office space, utilities and secretarial and administrative support. \n\nPrior to the closing of our initial public offering, our sponsor has agreed to loan us up to $300,000 under a promissory note to be used for a portion of the expenses of our initial public offering. As of December 30, 2020, we repaid the note in full. \nIn addition, in order to finance transaction costs in connection with an intended initial business combination, such as the Otonomo Business Combination, our sponsor or an affiliate of our sponsor or certain of our officers and directors may, but are not obligated to, loan us funds on a non-interestbearing basis as may be required. If we complete an initial business combination, such as the Otonomo Business Combination, we would repay such loaned amounts. \n\n\nFor more information about the Otonomo Business Combination, the Business Combination Agreement and the other contemplated agreements related to the Otonomo Business Combination, see Item 1. Business. \n### Director Independence \nDavis and Messrs. Olton, Guggenheimer and Diamandis are independent directors as defined in the Nasdaq listing standards and applicable SEC rules. \n### Item 14 \n\n\n### Audit Fees \nThe aggregate fees billed by Marcum for professional services rendered for the audit of our annual financial statements, review of the financial information included in our Forms 10-Q for the respective periods and other required filings with the SEC for the period from June 16, 2020 (inception) through December 31, 2020 totaled $62,830. \nAudit-Related Fees. \nWe did not pay Marcum for consultations concerning financial accounting and reporting standards for the period from June 16, 2020 (inception) through December 31, 2020. \n### Tax Fees \nWe did not pay Marcum for tax planning and tax advice for the period from June 16, 2020 (inception) through December 31, 2020. \nAll Other Fees \nWe did not pay Marcum for other services for the period from June 16, 2020 (inception) through December 31, 2020. \n### Pre-Approval Policy \n\nPART IV \nItem 15.<|endoftext|>Indemnification obligations. If our independent directors choose not to enforce these indemnification obligations, the amount of funds in the Trust Account available for distribution to our public shareholders may be reduced below $10.10 per share. \n\n\n\nWhile short-term U.S. In the event that we are unable to complete our initial business combination or make certain amendments to our articles of association, our public shareholders are entitled to receive their prorata share of the proceeds held in the trust account, plus any interest income, net of taxes paid or payable (less, in the case we are unable to complete our initial business combination, $100,000 of interest). Negative interest rates could reduce the value of the assets held in trust such that the per-share redemption amount received by public shareholders may be less than $10.10 per share. \n\n\n\n\n\n\n\nTo this end, the proceeds held in the Trust Account may only be invested in United States government securities within the meaning of Section 2 (a)(16) of the Investment Company Act having a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act which invest only in direct U.S. The trust account is intended as a holding place for funds pending the earliest to occur of: (a) the completion of our initial business combination; (b) the redemption of any public shares properly tendered in connection with a shareholder vote to amend our memorandum and articles of association (i) to modify the substance or timing of our obligation to allow redemption in connection with our initial business combination or to redeem 100% of our public shares if we do not complete an initial business combination by November 27, 2021, prior to the applicable Contractual Redemption Date if extended at our Sponsors option or during any Extension Period, or (ii) with respect to any other provisions relating to the rights of holders of our Class A ordinary shares; and (c) absent our completing an initial business combination by November 27, 2021, prior to the applicable Contractual Redemption Date if extended at our Sponsors option or during any Extension Period, our return of the funds held in the trust account to our public shareholders as part of our redemption of the public shares. If we do not complete our initial business combination, our public shareholders may only receive their pro rata portion of the funds in the trust account that are available for distribution to public shareholders, and our warrants will expire worthless. \n\n\nIf we are unable to consummate our initial business combination by November 27, 2021, prior to the applicable Contractual Redemption Date if extended at our Sponsors option or during any Extension Period, our public shareholders who invested in our initial public offering may be forced to wait beyond such period before redemption from our Trust Account. \nIf we are unable to consummate our initial business combination by November 27, 2021, prior to the applicable Contractual Redemption Date if extended at our Sponsors option or during any Extension Period, the proceeds then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account (less taxes payable and up to $100,000 of interest to pay dissolution expenses), will be used to fund the redemption of our public shares, as further described herein. If we are required to wind-up, liquidate the Trust Account and distribute such amount therein, pro rata, to our public shareholders, as part of any liquidation process, such winding up, liquidation and distribution must comply with the applicable provisions of the Companies Law (2020 Revision) of the Cayman Islands as the same may be amended from time to time (the Companies Law). In that case, investors in our initial public offering may be forced to wait until beyond such period before the redemption proceeds of our Trust Account become available to them, and they receive the return of their pro rata portion of the proceeds from our Trust Account. \n\n\n\nWe will not hold our first annual general meeting until after our first fiscal year. There is no requirement under the Companies Law for us to hold annual or general meetings to appoint directors. Our board of directors is elected as a single class with concurrent terms of three years. \nHolders of Class A ordinary shares will not be entitled to vote on any election of directors we hold prior to the completion of our initial business combination. \nHolders of our public shares will not be entitled to vote on the appointments of directors during such time. \n\n\nHowever, under the terms of the warrant agreement, we have agreed that, as soon as practicable, but in no event later than 15 business days, after the closing of our initial business combination, we will use our commercially reasonable efforts to file with the SEC a registration statement covering the registration under the Securities Act of the Class A ordinary shares issuable upon exercise of the warrants and thereafter will use our commercially reasonable efforts to cause the same to become effective within 60 business days following our initial business combination and to maintain a current prospectus relating to the Class A ordinary shares issuable upon exercise of the warrants until the expiration of the warrants in accordance with the provisions of the warrant agreement. If the shares issuable upon exercise of the warrants are not registered under the Securities Act, we will be required to permit holders to exercise their warrants on a cashless basis, in which case the number of Class A ordinary shares that you will receive upon cashless exercise will be based on a formula subject to a maximum number of shares equal to 0.361 Class A ordinary shares per warrant (subject to adjustment). Notwithstanding the above, if our Class A ordinary shares are at the time of any exercise of a warrant not listed on a national securities exchange such that it satisfies the definition of a covered security under Section 18(b)(1) of the Securities Act, we may, at our option, require holders of public warrants who exercise their warrants to do so on a cashless basis in accordance with Section 3(a)(9) of the Securities Act and, in the event we so elect, we will not be required to file or maintain in effect a registration statement, but we will be required to use our commercially reasonable efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available. There may be a circumstance where an exemption from registration exists for holders of our private placement warrants to exercise their warrants while a corresponding exemption does not exist for holders of the public warrants included as part of units sold in this offering. In such an instance, our sponsor and their transferees (which may include our directors and executive officers) would be able to sell the ordinary shares underlying their warrants while holders of our public warrants would not be able to exercise their warrants and sell the underlying ordinary shares. \nOur ability to require holders of our warrants to exercise such warrants on a cashless basis after we call the warrants for redemption or if there is no effective registration statement covering the offer and sale of the Class A ordinary shares issuable upon exercise of these warrants will cause holders to receive fewer Class A ordinary shares upon their exercise of the warrants than they would have received had they been able to pay the exercise price of their warrants in cash. \n\n\nPursuant to the warrant agreement, the surviving company will be required to use commercially reasonable efforts to register the issuance of the security underlying the warrants within fifteen business days of the closing of an initial business combination. \n\nPursuant to an agreement entered into concurrently with the Public Offering, the holders of the private placement warrants, the warrants that may be issued upon conversion of the working capital loans, and the Founder Shares will be entitled to registration rights with respect to such warrants and the ordinary shares underlying such warrants and Founder Shares. Pursuant to the forward purchase agreement, we have agreed that we will use our commercially reasonable best efforts (i) to file within fifteen business days after the closing of the initial business combination a registration statement with the SEC for a secondary offering of the forward purchase securities and Class A ordinary shares underlying the forward purchase warrants and Founder Shares (ii) to cause such registration statement to be declared effective promptly thereafter, but in no event later than 60 days after the closing of the initial business combination or within 30 days following announcement of the results of the shareholder vote relating to our initial business combination or the results of our offer to shareholders to redeem their Class A ordinary shares in connection with our initial business combination (whichever is later), as the case may be and (iii) to maintain the effectiveness of such registration statement until the date all of the securities covered thereby can be sold publicly without restriction or limitation under Rule 144 under the Securities Act, and without the requirement to be in compliance with Rule 144(c)(1) under the Securities Act, subject to certain conditions and limitations set forth in the forward purchase agreement. \n\nWe may pursue business combination targets in any locations or sectors, except that we will not, under our memorandum and articles of association, be permitted to effectuate our initial business combination with another blank check company or similar company with nominal operations. Accordingly, any shareholders or warrant holders who choose to remain shareholders or warrant holders, respectively following our initial business combination could suffer a reduction in the value of their securities. \n\nAlthough we intend to focus on identifying business combination candidates with substantial operations in or related to our managements areas of expertise, we will consider a business combination outside of these industries if a business combination candidate is presented to us and we determine that such candidate offers an attractive initial business combination opportunity for our company or we are unable to identify a suitable candidate with substantial operations in or related to our managements areas of expertise, after having expended a reasonable amount of time and effort in an attempt to do so. We also cannot assure you that an investment in our units will not ultimately prove to be less favorable to investors in this offering than a direct investment, if an opportunity were available, in a business combination candidate. Accordingly, any shareholder or warrant holder who chooses to remain a shareholder or warrant holder, respectively, following our business combination could suffer a reduction in the value of their securities. \nAlthough we have identified general criteria and guidelines that we believe are important in evaluating prospective target businesses, we may enter into our initial business combination with a target does not meet such criteria and guidelines, and as a result, the target business with which we enter into our initial business combination may not have attributes entirely consistent with our general criteria and guidelines. \n\n\nThese risks include investing in a business without a proven business model and with limited historical financial data, volatile revenues, cash flows or earnings, intense competition and difficulties in obtaining and retaining key personnel. \nWe are not required to obtain an opinion from an independent investment banking firm or from an independent accounting firm, and consequently, you may have no assurance from an independent source that the price we are paying for the business is fair to our shareholders from a financial point of view. \n\n\nThere are 172,400,000 and 13,100,000 authorized but unissued Class A ordinary shares and Class B ordinary shares, respectively, available for issuance, which amount takes into account shares reserved for issuance upon exercise of outstanding warrants but not upon conversion of the Class B ordinary shares. The Class B ordinary shares are automatically convertible into Class A ordinary shares at the time of our initial business combination, initially<|endoftext|>Management. \nBase Salary \nBase salary is targeted to be competitive to attract and retain executives qualified to manage a hotel REIT. Base salary is intended to compensate the executive for satisfying the requirements of the position. Salaries for executive officers are typically reviewed by the Compensation Committee on an annual basis and may be changed based on the individuals performance or a change in competitive pay levels in the marketplace. No changes were made to base salaries during 2020. \n### Annual Incentive Plans \nIn 2020, the Compensation Committee established and approved the annual incentive compensations plans for the named executive officers.A target incentive was established for each executive ranging from 50% to 100% of base salary, with a portion of the incentive allocated to each executives individual performance objective. The performance objectives consist of strategic alternatives pursued by the Company, line of credit and funding modifications, execution of the capital plan, and accounting, audit and regulatory filings.In October 2020, Arinn Cavey resigned as Chief Financial Officer and Chief Accounting Officer and Jill Burger was appointed Interim Chief Financial Officer and Chief Accounting Officer.Ms. Burgers base salary is $140,000 and eligible for a $15,000 bonus, to be paid at the discretion of the Chief Executive Officer, for 2020 performance.An executive must achieve the particular performance objectives established for the executive to earn the portion of the executives target incentive allocated to that performance objective.Payout under the plans to an executive will be in cash and/or equity (from shareholder approved employee stock plans).The Compensation Committee has discretion, including to make partial awards, and to take into account events and circumstances not contemplated when performance objectives were set. \nIn December 2020, the Compensation Committee reviewed Mr. Blackhams performance against his performance goals of his 2020 incentive plan.The Compensation Committee approved a cash payout for Mr. Blackham of 85% of his base salary with respect to his 2020 incentive plan, and in March 2021, Ms. Burger was paid a bonus of $15,000 for 2020 performance. The Compensation Committee awarded $50,000 to Mr. Blackham for adjusted funds from operations performance in 2020. \n### Equity Incentive Plans \nEquity stock incentives are paid to executive officers from the shareholder approved Company 2016 Stock Plan.The Committee recognizes the value of equity incentives in assisting the Company in the hiring and retaining of management personnel and in enhancing the long-term mutuality of interest between the Company shareholders and its directors, officers and employees. Mr. Blackhams employment agreement provides for share awards upon achievement of adjusted funds from operations of share price targets and specific share price targets.No share grants were awarded with respect to the 2020 incentive plans or 2020 achievements under Mr. Blackhams employment agreement. \nThe Company does not have a pension plan. The Companys executive officers may participate in its 401(k) Plan on the same terms as other participating employees. The Company does not maintain a perquisite program for its executive officers. \n(1) \nNon-equity incentive awards were made with respect to the executive officers 2020 incentive plans.See \nfor description of these plans. \n(1) \nRestricted stock grants vests in five equal installments on each anniversary of issuance beginning on the first anniversary of the grant.Mr. Blackhams remaining unvested restricted stock vests in 1,223 share monthly increments \nMs. Burgers unvested shares vest in 244 share increments annually in March. \nRestricted stock grants may vest earlier upon termination and change of control events. \n(2) \nBased on the number of shares at the closing market price at th e end of 20 \n20 fiscal year ($ \n3.94 \n) \nEmployment Agreement a nd Potential Payments u pon Termination o r Change- i n-Contro l \n### Chief Executive Officer Employment Agreement \nOn March 2, 2015, \nJ. William \nBlackham was appointed Chief Executive Officer of the Company by the board of directors. Mr. Blackham s employment agreement, entered into on March 2, 2015 \n, and subsequently amended \n, has a term until March 31, 2022. Under the employment agreement he (i) receives an annual base salary, (ii) receives consideration for an annual bonus and (iii) is eligible to participate in any Company long-term incentive programs. \nThe terms of Mr. Blackhams employment were approved by the Compensation Committee and provide: participation in annual incentive plan; \n$500,000, and at the sole discretion of the Compensation Committee up to $1,000,000, upon a Change in Control prior to March 31, 2022 based on his inability to earn future stock awards under his employment agreement. issuance on June 28, 2017 of 73,385 restricted shares of common stock, with vesting commencing March 29, 2018 through March 29, 2022, subject to continued employment, with vesting acceleration on Change in Control, termination without Cause or Good Reason, death or disability; up to 36,692 shares of common stock earned each time share price target achieved from $11 to $18 when first achieved, if achieved prior to March 31, 2022, based on weighted market sales price over 60 consecutive trading days; \n11,741 shares to 19,569 shares of common stock which are earned each time the Company achieves 85% to 101% of budgeted funds from operation for a fiscal year, 2017 through 2021; with an additional 391 shares earned for a fiscal year for each 2% above 101% target achieved, up to a maximum of additional 3,910 shares for the year; if his employment is terminated with Cause, he will receive (i) accrued and unpaid base salary to the date of termination, (ii) the accrued and unused vacation to the date of termination, (iii) unpaid expense reimbursements, and (iv) vested amounts under qualified retirement plans; if he voluntarily terminates employment, he will receive the amounts referenced in the preceding bullet point plus unpaid bonuses earned for completed prior fiscal years; if his employment is terminated without Cause or if he terminates employment with Good Reason, in addition to the items referenced in the foregoing two bullet points, he will receive: (i) an amount equal to one times (1x) base salary, (ii) an amount equal to one times (1x) the average annual bonus previously earned for up to the prior three (3) years, (iii) the immediate vesting of equity awards solely subject to time vesting, (iv) any awards, not yet earned but which may be earned based on the achievement of the applicable performance criteria, vested at a pro rata amount based on the performance period to the date of termination, and (v) COBRA premiums during the period that he elects to receive COBRA coverage under the Companys group health plans, not to exceed 18 months; if within 12 months following a Change in Control his employment is terminated other than for Cause or by reason of death or disability or he terminates his employment for Good Reason, the additional base salary payment will be increased to two times (2x) base salary and the annual bonus payment will be increased to two times (2x) the average annual bonus previously earned for up to the prior three (3) years; \nCause under Mr. Blackhams employment agreement includes certain (i) dishonest or fraudulent actions or a felony conviction, (ii) a material failure to devote substantially all of his business time to the business of the Company or to follow the Companys good faith instructions and directives, (iii) unreasonable and material neglect, refusal or failure to perform assigned duties, (iv) material breach by him of his employment agreement, the Companys Code of Business Conduct and Ethics or similar codes, (v) any act bringing substantial public disrespect \n8 or scandal or ridicule of the Company, or (vi) any governmental regulatory agency recommends or orders that the Company terminate his employment or relieve him of his duties. \nChange in Control under his employment agreement includes certain acquisitions of 50% or more of common stock or voting power of the Company, or certain changes in the board of directors, or certain mergers or similar transactions if the shareholders prior to the transaction do not hold 50% of the voting power afterwards, or a liquidation or sale of more than 50% of the Company assets. \nGood Reason under his employment agreement means the occurrence of one of the following events, without his prior written consent, provided such event is not corrected within 60 days following the board s receipt of written notice of his intention to terminate his employment with the Company for Good Reason, which notice must be provided within ninety (90) days of the initial existence of one of the following events: (i) a material breach of his employment agreement by the Company, (ii) a diminution of, or reduction or adverse alteration of his compensation, duties or responsibilities, or the Companys assignment of duties, responsibilities or reporting requirements that are materially inconsistent with his positions or that materially expand his duties, responsibilities, or reporting requirements, (iii) a Change in Control has occurred and he is involuntarily removed from the board or at any time he has requested to be nominated but is not nominated for election to the b oard at the subsequent election of directors, (iv) a Change in Control has occurred and within 12 months thereafter he is required to relocate more than 50 miles from his first relocation site, or (v) a Change in Control occurs on or before March 31, 2019: (A) if no later than 10 days after the date he is advised by the b oard that a Change in Control will be considered for approval by the b oard, he notifies the b oard in writing that if that Change in Control occurs, he terminates his employment pursuant to this provision, and (B) with the termination date to be effective date of the Change in Control, unless the b oard, for purposes of an orderly management transition within 7 days after his notice specifies a later termination date, provided that the extended termination date may not be later than 60 days following the Change in Control. \nDirector Compensation \n### M r. Iadanza joined the board of d irectors in \nAugust 2020 and Mr. Zang joined the board of directors in December 2020 \nMessrs. \n### Wall and \n### Davis served on the board of directors until \nAugust and December 2020, respectively \n(1) \nDirectors receive an annual retainer of $30,000 paid in quarterly installments in cash and common stock.Additionally, directors received fees of $1,000 per board meeting attended in person and $500 per telephonic board meeting. From time to time, directors, as authorized representatives of the board, engage in board duties outside of meetings, and receive fees for the performance of such additional board duties in an hourly or daily amount previously set by the board. Committee chairmen received compensation as follows: Audit Committee chairman annual retainer of $9,000, Nominating Committee chairman annual retainer of $1,500 and Compensation Committee chairman annual retainer of $1,500.Each Audit Committee member, other than the chairman, receives a fee of $750 per quarter.The chairman of the Investment Committee receives a monthly fee of $750, and the other members of the Investment Committee who are independent directors each receive a monthly fee of $500. \n(2) \nStock awards consist of the grant date fair value of common stock issued as fees to independent directors. $5,000 of the annual retainer is paid in shares of restricted common stock of the Company, vesting in equal monthly installments over 3 years, subject to continuous board membership. The \n9 number of restricted shares were determined for 20 \n20 based on the closing price of th e common stock on March 4, 2019 of $8.20 \nThe directors may also make an annual voluntary election to receive any portion of the remaining balance of their annual retainer in the form of common stock valued at a 20% premium to the cash that would have otherwise been received, with the shares valued at the closing price of the common stock on the last trading day of the applicable calendar quarter. The fees of the members of the Investment Committee are paid quarterly in common stock issued under the 2016 Stock Plan, based on a value per share equal to the average<|endoftext|>"},"task":{"kind":"string","value":"{\"file\": \"/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz\"}"}}},{"rowIdx":74,"cells":{"text":{"kind":"string","value":"<|endoftext|>### EXPLANATORY NOTE \nThis Form 10-K/A (Amendment No. 1) amends the annual report on Form 10-K of Repay Holdings Corporation for the fiscal year ended December 31, 2020, filed with the Securities and Exchange Commission (the SEC) on March 1, 2021 (the 2020 Form 10-K). The primary purpose of Amendment No. 1 is to provide the information required by Items 10 through 14 of Part III of the 2020 Form 10-K. \nThis Amendment No. 1 speaks as of the original filing date of the 2020 Form 10-K (unless otherwise noted or as the context otherwise requires) and reflects only the changes to the cover page, and Items 10, 11, 12, 13 and 14 of Part III and in the exhibit index in Item 15 of Part IV. No other information included in the 2020 Form 10-K, including the information set forth in Part I and Part II, has been modified or updated in any way. The 2020 Form 10-K continues to speak as of the date of the original filing, and the Company has not updated the disclosures contained therein to reflect any events which occurred at a date subsequent to the original filing other than as expressly indicated in this Amendment No. 1. 1 should be read in conjunction with the 2020 Form 10-K and the Companys other SEC filings. \nRepay Holdings Corporation was incorporated as a Delaware corporation on July 11, 2019 in connection with the closing of a transaction (the Business Combination) pursuant to which Thunder Bridge Acquisition Ltd., a special purpose acquisition company organized under the laws of the Cayman Islands (Thunder Bridge), (a) domesticated into a Delaware corporation and changed its name to Repay Holdings Corporation and (b) consummated the merger of a wholly owned subsidiary with and into Hawk Parent Holdings, LLC, a Delaware limited liability company (Hawk Parent). The Business Combination was governed by the terms of the \nSecond Amended and Restated Agreement and Plan of Merger dated effective as of January21, 2019 (as amended or supplemented from time to time, the Merger Agreement). \nUnless otherwise noted or unless the context otherwise requires, the terms we, us, Repay and the Company and similar references refer (1) before the Business Combination, to Hawk Parent and its consolidated subsidiaries and (2) from and after the Business Combination, to Repay Holdings Corporation and its consolidated subsidiaries.Unless otherwise noted or unless the context otherwise requires, Thunder Bridge refers to Thunder Bridge Acquisition. Ltd. \nWe are headquartered in Atlanta, Georgia.Our legacy business was founded as M & A Ventures, LLC, a Georgia limited liability company doing business as REPAY: Realtime Electronic Payments (REPAY LLC), in 2006 by current executives John Morris and Shaler Alias. Hawk Parent was formed in 2016 in connection with the acquisition of a majority interest in the successor entity of REPAY LLC and its subsidiaries by certain investment funds sponsored by, or affiliated with, Corsair Capital LLC (Corsair). \n- \n- \n### PART III \nItem 10. \n\nThe following table sets forth the names, ages and positions of our current executive officers and directors as of the date hereof. \n### Name \nAge \nPosition \n### John Morris \nChief Executive Officer and Co-Founder, Director \nShaler Alias \n### President and Co-Founder, Director \nNaomi Barnett \nExecutive Vice President, Human Resources \n### Tyler B. Dempsey \nGeneral Counsel \nMichael F. Jackson \n### Chief Operating Officer \nJason Kirk \nChief Technology Officer \n### Jacob H. Moore \nExecutive Vice President, Corporate Development and Strategy \nTimothy J. Murphy \n### Chief Financial Officer \nSusan Perlmutter \nChief Resource Officer \nPaul R. Garcia \n(1) \n(2) \n### Director \nMaryann Goebel \n(1) \n(4) \n### Director \nRobert H. Hartheimer \n(1) \n### Director \nWilliam Jacobs \n(2) \n(3) \n### Director \nPeter J. Kight \n(3) \n(4) \n### Chairman \nJeremy Schein \n(2) \n### Director \nRichard E. Thornburgh \n(3) \n(4) \nDirector \n(1) \n\n(2) \n\n(3) \n\n(4) \n### Member of the technology committee \nJohn Morris has served as our Chief Executive Officer and a director since the Business Combination. He co-foundedREPAY LLC and has served as its Chief Executive Officer since 2010. Morris served as a member of the board of directors of Hawk Parent. Mr. Morris has also been a member of the board of directors of Repay Holdings, LLC since its formation in September 2013. From 1997 to 2008, Mr. Morris served as President of Security Check Atlanta, a check processing and recovery solutions company, until its acquisition by Payliance, where he served as Executive Vice President of Sales and Marketing prior to commencing his role as Chief Executive Officer of REPAY LLC. From 1994 to 1997, Mr. Morris served in several corporate finance positions for Bass Hotels and Resorts, including Director of Corporate Finance. We believe that Mr. Morris is well-qualified to serve as a member of our board of directors (the Board) because of the experience that he brings as a co-founder as well as his over 20 years of experience in the payments industry. \nShaler Alias has served as our President and a director since the Business Combination. He co-foundedREPAY LLC in 2006 and has served as its President since 2008. Alias served as a member of the board of directors of Hawk Parent. Mr. Alias has also been a member of the board of directors of Repay Holdings, LLC since its formation in September 2013. Mr.Alias served as Vice President of Sales of REPAY LLC from 2006 to 2008. Prior to 2006, Mr.Alias co-foundedand served as Director of Sales and Marketing for Capital Recovery Solutions, a collection agency that served community banks and consumer finance lenders. We believe that Mr.Alias is well-qualified to serve as a member of our Board because of the experience that he brings as a co-founderas well as his knowledge of the payments industry. \nNaomi Barnett has served as our Executive Vice President, Human Resources since March 2021. From January 2020 to March 2021, Ms. Barnett served as Vice President, Human Resources for REPAY LLC. Previously, Ms. Barnett served as Director, Human Resources of REPAY LLC from July 2018 to January 2020. Prior to joining REPAY LLC, Ms. Barnett was Director, Head of Human Resources, for Gold Star Mortgage Financial Group from October 2017 to July 2018. From June 2011 to September 2017, Ms. Barnett served in various human resources roles for Patriot National, Inc., including as Assistant Vice President, Human Resources, from May 2016 to September 2017. \n- \n- \nTyler B. Dempsey has served as our General Counsel since September 2019. Prior to joining us, Mr. Dempsey provided legal counsel and support to REPAY LLC for more than nine years as outside counsel at Troutman Sanders LLP (now Troutman Pepper Hamilton Sanders LLP), where he served as a Partner since 2008. Prior to joining Troutman Sanders, Mr. Dempsey was an attorney at King & Spalding LLP. \nMichael Mike F. Jackson has served as Chief Operating Officer since the Business Combination and as Chief Operating Officer of REPAY LLC since October 2016. Prior to joining REPAY LLC, Mr.Jackson served in numerous executive roles for enterprise software and payment service providers, including as Senior Vice President, Business Unit Head Cash Management at D+H Ltd. (now known as Finastra), a global payments and lending technology provider, from January 2014 to June 2016 and as Vice President and the Head of EBPP Business/Community Financial Services for ACI Worldwide, Inc. a provider of electronic payments solutions, from August 2012 to December 2013. Prior to ACI Worldwide, Inc., Mr.Jackson worked for S1 Software Corp., from 2008 to 2012, until it was acquired by ACI Worldwide, Inc. Prior to 2008, he worked for the U.S.-basedRegions Financial Corporation, where he was responsible for card and merchant services, internet banking and online products and services as Executive Vice President of Alternative Delivery, and President of the Internet Bank. \nJason Kirk has served as Chief Technology Officer since the Business Combination and as Chief Technology Officer of REPAY LLC since December 2014. Prior to joining REPAY LLC, from May 2001 to December 2014, Mr.Kirk held various positions at CCBill, LLC, a provider of third-partypayment processing, including leading a team that developed products and platform relating to card payment processing. In addition, Mr.Kirk served as an NBC Defense Specialist in the United States Marine Corps from August 1997 to May 2001. \nJacob Jake H. Moore has served as our Executive Vice President, Corporate Development and Strategy since March 2020. From January 2018 to March 2020, Mr. Moore served as the Head of Corporate Development for REPAY LLC. Previously, Mr. Moore served as Vice President, Corporate Development of REPAY LLC from January 2017 to December 2017. Before joining REPAY LLC, Mr. Moore was a private equity investment professional, serving as a Senior Associate at BlueArc Capital Management from May 2016 to January 2017 and as an Associate at Trinity Hunt Partners from March 2012 to June 2014. From 2010 to 2012, Mr. Moore was an investment banker in the Mergers and Acquisitions Group at SunTrust Robinson Humphrey. \nTimothy Tim J. Murphy has served as our Chief Financial Officer since the Business Combination and as Chief Financial Officer of REPAY LLC since January 2014. Mr. Murphy has been a member of the board of directors of Repay Holdings, LLC since September 2016. He oversees our financial operations including accounting, tax, treasury, financial planning, reporting and investor relations. Prior to joining REPAY LLC, Mr.Murphy served as Director of Corporate Development for Amaya Gaming Group Inc. (now known as The Stars Group Inc.), a Canadian online and mobile gaming and interactive entertainment company, from January 2013 to January 2014. Mr.Murphy previously served as Director of Finance for Cadillac Jack, Inc., a company engaged in the design, development, and supply of electronic gaming machines, from August 2009 to December 2012. Mr.Murphy began his professional career as an investment banker at Credit Suisse. \nSusan Perlmutter has served as Chief Revenue Officer since the Business Combination and as Chief Revenue Officer of REPAY LLC since January 2016. Ms. Perlmutter previously served as Chief Revenue Officer at Sigma Payment Solutions, Inc. (Sigma), a provider of electronic payment solutions to the automotive finance industry, from October 2012 to January 2016, and joined Repay LLC when it acquired Sigma in January 2016. In connection with its acquisition of Sigma, REPAY LLC agreed to retain Ms. Perlmutters services as its Chief Revenue Officer. Prior to Sigma, Ms. Perlmutter held various positions with PAYTEK Solutions, LLC a provider of payment processing services, from February 1995 to February 2011. \nPaul R. Garcia has served as a director since the Business Combination. Mr. Garcia served as Chairman and CEO of Global Payments Inc. (NYSE:GPN), a leading provider of credit card processing, check authorization and other electronic payment processing services, from June 1999 to May 2014. Mr. Garcia has served as a director of Truist Financial Corp. (NYSE: TFC), a bank holding company, since December 2019 (as well as a director of SunTrust Banks, Inc. (NYSE: STI) from August 2014 through December 2019) and as director The Deluxe Corporation (NYSE: DLX) since August 2020. Mr. Garcia also serves as a director of Payment Alliance International. He previously served on the board of directors of The Dun & Bradstreet Corporation (from May 2012 until February 2019), West Corporation (from March 2013 until October 2017) and Global Payments Inc. (from February 2001 until May 2014). We believe that Mr. Garcia is well-qualified to serve as a member of our Board due to his extensive experience in the payment services industry. \nMaryann Goebel has served as a director since the Business Combination. Ms. Goebel has been an IT management consultant, providing assessments and recommendations regarding IT management and coaching to chief information officers, since July 2012. Ms. Goebel has served as a director of Seacoast Banking Corporation of Florida (Seacoast) (NASDAQ: SBCF), a bank holding company, since February 2014. She is also a member of Seacoasts audit committee and enterprise risk management committee and chairs its \n- \n- compensation and governance committee. From June 2009 to July 2012, Ms. Goebel served as Executive Vice President and Chief Information Officer of Fiserv, Inc. (Fiserv) (NASDAQ: FISV), where she<|endoftext|>Products sold to us, or a prospective target business with which we have discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account to below: (1) $10.00 per public share; \n\n\n\n\nWhile short-term U.S. In the event that we are unable to complete our Initial Business Combination or make certain amendments to our amended and restated certificate of incorporation, our public stockholders are entitled to receive their pro-rata share of the proceeds held in the Trust Account, plus any interest income, net of taxes paid or payable (less, in the case we are unable to complete our Initial Business Combination, $100,000 of interest). \n\n\n\n\n\n\n\nWe do not plan to buy businesses or assets with a view to resale or profit from their resell. \n\n(ii)the redemption of any public shares properly submitted in connection with a stockholder vote to amend our amended and restated certificate of incorporation (A)to modify the substance or timing of our obligation to allow redemptions in connection with our Initial Business Combination or to redeem 100% of our public shares if we do not complete our Initial Business Combination within 24 months from the Closing Date or (B)with respect to any other provision relating to stockholders rights or pre-Initial \n\nChanges in laws or regulations, including different or heightened rules or requirements promulgated by the SEC, or a failure to comply with any laws and regulations, may adversely affect our business, including our ability to negotiate and complete our Initial Business Combination, and results of operations. \nIt is possible that we will become subject to different or heightened rules or requirements promulgated by the SEC, and we may become subject to heightened or increased scrutiny by the SEC. On December 10, 2020, the SECs Office of Inspector Education and Advocacy issued an investor bulletin entitled \n### What You Need to Know About SPACs \nOn December 22, 2020, the SECs Division of Corporate Finance issued CF Disclosure Guidance: Topic No. 11 regarding special purpose acquisition companies. Those laws and regulations and their interpretation and application may also change from time to time. In particular, it is possible that we may become subject to different or heightened rules or requirements, or face increased regulatory scrutiny, by the SEC, including in connection with our Initial Business Combination or the Post-Initial Business Combination company. Those changes could have a material adverse effect on our business, investments and results of operations. \nIf we have not completed an Initial Business Combination within 24 months from the Closing Date or during any Extension Period, our public stockholders may be forced to wait beyond such 24months before redemption from our trust account. \nIf we have not completed an Initial Business Combination within 24 months from the Closing Date or during any Extension Period, the proceeds then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account and not previously released to us to pay taxes (less up to $100,000 of the interest to pay dissolution expenses), will be used to fund the redemption of our public shares, as further described herein. In that case, investors may be forced to wait beyond 24 months from the Closing Date or the expiration of any Extension Period before the redemption proceeds of our Trust Account become available to them, and they receive the return of their pro rata portion of the proceeds from our Trust Account. We have no obligation to return funds to investors prior to the date of our redemption of public shares or liquidation unless we complete our Initial Business Combination or amend certain provisions of our amended and restated certificate of incorporation prior thereto and only then in cases where investors have properly sought to redeem their Class A common stock. Only upon our redemption or any liquidation will public stockholders be entitled to distributions if we do not complete our Initial Business Combination or amend certain provisions of our amended and restated certificate of incorporation. \n\n\n\n\nHowever, it is our intention to redeem our public shares as soon as reasonably possible following the 24th month from the Closing Date (or the end of any Extension Period) in the event we do not complete our Initial Business Combination and, therefore, we do not intend to comply with the foregoing procedures. \n\n\n\nThe Warrants may become exercisable and redeemable for a security other than the shares of Class A common stock, and you will not have any information regarding such other security at this time. \nPursuant to the warrant agreement, the surviving company will be required to use commercially reasonable efforts to file a registration statement for the registration of the security underlying the Warrants as soon as practicable, but in no event later than 15 business days after the closing of the Initial Business Combination. \n\nFirst, if a registration statement covering the shares of Class A common stock issuable upon exercise of the warrants is not effective by the 60th business day after the closing of our Initial Business Combination, warrant holders may, until such time as there is an effective registration statement and during any period when we shall have failed to maintain an effective registration statement, exercise warrants on a cashless basis in accordance with Section 3(a)(9) of the Securities Act or another exemption. Second, if our Class A common stock is at any time of any exercise of a warrant not listed on a national securities exchange such that it satisfies the definition of a covered security under Section 18(b)(1) of the Securities Act, we may, at our option, require holders of warrants who exercise their warrants to do so on a cashless basis in accordance with Section 3(a)(9) of the Securities Act and, in the event we so elect, we will not be required to file or maintain in effect a registration statement, but we will use our commercially reasonable efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available. In the event of an exercise on a cashless basis, a holder would pay the warrant exercise price by surrendering the warrants for that number of shares of Class A common stock equal to the lesser of (A) the quotient obtained by dividing (x) the product of the number of shares of Class A common stock underlying the warrants, multiplied by the excess of the applicable fair market value of our Class A common stock (as calculated in the warrant agreement governing the warrants) over the exercise price of the warrants by (y) the fair market value and (B) 0.365 shares of Class A common stock per warrant, and the number of shares of our Class A common stock received by a holder upon exercise will be fewer than it would have been had such holder exercised the warrant for cash. \n\n\nPursuant to an agreement entered into in connection with our Public Offering, our initial stockholders and their permitted transferees can demand that we register the resale of their Founder Shares after those shares convert to shares of our ClassA common stock at the time of our Initial Business Combination. This is because the stockholders of the target business may increase the equity stake they seek in the combined entity or ask for more cash consideration to offset the negative impact on the market price of our ClassA common stock that is expected when the common stock owned by our initial stockholders or their permitted transferees, the Private Placement Warrants or Warrants issued in connection with working capital loans are registered for resale. \n\n\n\nWe will consider a business combination outside of our managements areas of expertise if such business combination candidate is presented to us and we determine that such candidate offers an attractive acquisition opportunity for our company. \n\n\n\n\n\nUnless we complete our Initial Business Combination with an affiliated entity, we are not required to obtain an opinion from an independent investment banking firm that is a member of FINRA or from an independent accounting firm that the price we are paying is fair to our company from a financial point of view. \nWe may also issue shares of ClassA common stock upon the conversion of the ClassB common stock at a ratio greater than one-to-one at the time of our Initial Business Combination as a result of the anti-dilution provisions amended and restated certificate of incorporation. \nOur amended and restated certificate of incorporation authorizes the issuance of up to 500,000,000 shares of ClassA common stock, par value $0.0001 per share, and 50,000,000 shares of ClassB common stock, par value $0.0001 per share and 5,000,000 shares of undesignated preferred stock, par value $0.0001 per share. At December31, 2020, there were no shares of preferred stock issued and outstanding. \nWe may issue a substantial number of additional shares of ClassA common stock, and may issue shares of preferred stock, in order to complete our Initial Business Combination (including pursuant to a specified future issuance) or under an employee incentive plan after completion of our Initial Business Combination. We may also issue shares of ClassA common stock to redeem the Warrants or upon conversion of the ClassB common stock at a ratio greater than one-to-one at the time of our Initial Business Combination as a result of the anti-dilution provisions. However, our amended and restated certificate of incorporation provides, among other things, that prior to our Initial Business Combination, we may not issue additional shares of capital stock that would entitle the holders thereof to (1)receive funds from the Trust Account or (2)vote pursuant to our amended and restated certificate of incorporation on any Initial Business Combination or any amendments to our amended and restated certificate of incorporation. The issuance of additional shares of common or preferred stock: may significantly dilute the equity interest of investors in our Public Offering, which dilution would increase if the anti-dilution provisions in the ClassB common stock resulted in the issuance of ClassA shares on a greater than one-to-one basis upon conversion of the ClassB common stock; \n\n\nGoldman Sachs engagement with other entities may limit its ability to participate in certain transactions on our behalf or preclude us from taking certain actions. \nWe may, but are not required to, engage Goldman Sachs for services as a financial advisor in connection with identifying and investigating potential targets for our business combination, or for other services in connection with our Initial Business Combination, such as placement agent, or financing or capital markets advisor. Goldman Sachs is often engaged as a financial advisor, or to provide financing, to corporations and other entities and their directors and managers in connection with the sale of those entities, their assets or their subsidiaries, and Goldman Sachs compensation in connection with these engagements may be substantial. Sellers generally require Goldman Sachs to act exclusively on their behalf and Goldman Sachs may be precluded in many instances from participating in our Initial Business Combination with such a target business. Additionally, for these reasons and/or for other reasons, we may be precluded in many instances from attempting to acquire securities of the business being sold or otherwise participate as a buyer in the transaction. \nWe may engage in a business combination with one or more target businesses that have relationships with entities that may be affiliated with Goldman Sachs, our Sponsor, officers or directors which may raise potential conflicts of interest. \nIn light of the involvement of our Sponsor, officers and directors with other businesses, we may decide to acquire one or more businesses affiliated with or competitive with Goldman Sachs, our Sponsor, officers and directors, GS Accounts and their respective affiliates. Our directors also serve as officers and/or board members for other entities, including, without limitation, those described under Item 10. Business Effecting our Initial Business Combination and Item 1. Business and such transaction was approved by a majority of our independent and disinterested directors. Despite our agreement to obtain an opinion from an independent investment banking firm that is a member of FINRA or from an<|endoftext|>Of the net proceeds of the initial public offering, only $750,000 were available to us initially outside the trust account to fund our working capital requirements. We believe that the funds available to us outside of the trust account are sufficient to allow us to operate for at least until June 22, 2022; \nPrior to the completion of our initial business combination, we do not expect to seek loans from parties other than the Sponsor or an affiliate of the Sponsor as we do not believe third parties will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in our trust account. \n\n\n\nAlthough we will seek to have all vendors, service providers (except for the Companys Independent Registered Public Accounting Firm), prospective target businesses and other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account for the benefit of our public stockholders, such parties may not execute such agreements, or even if they execute such agreements they may not be prevented from bringing claims against the trust account, including, but not limited to, fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain advantage with respect to a claim against our assets, including the funds held in the trust account. \nPursuant to the letter agreement the form of which is filed as an exhibit to the registration statement of which this Annual Report on Form 10-K forms a part, the Sponsor has agreed that it will be liable to us if and to the extent any claims by a third party for services rendered or products sold to us, or a prospective target business with which we have entered into a written letter of intent, confidentiality or other similar agreement or business combination agreement, reduce the amount of funds in the trust account to below the lesser of (i) $10.00 per public share and (ii)the actual amount per public share held in the trust account as of the date of the liquidation of the trust account, if less than $10.00 per public share due to reductions in the value of the trust assets, less taxes payable, provided that such liability will not apply to any claims by a third party or prospective target business who executed a waiver of any and all rights to the monies held in the trust account (whether or not such waiver is enforceable) nor will it apply to any claims under our indemnity of the underwriters of the initial public offering against certain liabilities, including liabilities under the Securities Act. However, we have not asked the Sponsor to reserve for such indemnification obligations, nor have we independently verified whether the Sponsor has sufficient funds to satisfy its indemnity obligations and we believe that the Sponsors only assets are securities of our company. \n\nIn the event that the proceeds in the trust account are reduced below the lesser of (i) $10.00 per share and (ii)the actual amount per public share held in the trust account as of the date of the liquidation of the trust account if less than $10.00 per public share due to reductions in the value of the trust assets, in each case less taxes payable, and the Sponsor asserts that it is unable to satisfy its obligations or that it has no indemnification obligations related to a particular claim, our independent directors would determine whether to take legal action against the Sponsor to enforce its indemnification obligations. While we currently expect that our independent directors would take legal action on our behalf against the Sponsor to enforce its indemnification obligations to us, it is possible that our independent directors in exercising their business judgment and subject to their fiduciary duties may choose not to do so in any particular instance. \n\n\n\n\n\n\n\nThe pro rata portion of our trust account distributed to our public stockholders upon the redemption of our public shares in the event we do not complete our initial business combination by June 22, 2022 may be considered a liquidating distribution under Delaware law. \nFurthermore, if the pro rata portion of our trust account distributed to our public stockholders upon the redemption of our public shares in the event we do not complete our initial business combination by June 22, 2022 is not considered a liquidating distribution under Delaware law and such redemption distribution is deemed to be unlawful (potentially due to the imposition of legal proceedings that a party may bring or due to other circumstances that are currently unknown), then pursuant to Section174 of the DGCL, the statute of limitations for claims of creditors could then be six years after the unlawful redemption distribution, instead of three years, as in the case of a liquidating distribution. \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nAs a result, we may be able to complete our initial business combination even though a substantial majority of our public stockholders do not agree with the transaction and have redeemed their shares or, if we seek stockholder approval of our initial business combination and do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, have entered into privately negotiated agreements to sell their shares to the Sponsor, officers, directors, advisors or any of their affiliates. \n\nIn addition, our amended and restated certificate of incorporation requires us to provide our public stockholders with the opportunity to redeem their public shares for cash if we propose an amendment to our amended and restated certificate of incorporation to modify the substance or timing of our obligation to redeem 100% of our public shares if we do not complete an initial business combination by June 22, 2022 or with respect to any other material provisions relating to stockholders rights or pre-initial business combination activity. \n\n\nThe Sponsor, executive officers and directors have agreed, pursuant to written agreements with us, that they will not propose any amendment to our amended and restated certificate of incorporation to modify the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial business combination by June 22, 2022 or with respect to any other material provisions relating to stockholders rights or pre-initial business combination activity, unless we provide our public stockholders with the opportunity to redeem their ClassA common stock upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account and not previously released to us to pay our taxes, divided by the number of then outstanding public shares. Our stockholders are not parties to, or third-party beneficiaries of, these agreements and, as a result, will not have the ability to pursue remedies against the Sponsor, executive officers or directors for any breach of these agreements. \n\nWe have not selected any specific business combination target but intend to target businesses with enterprise values that are greater than we could acquire with the net proceeds of this offering and the sale of the private placement warrants. \n\nIn addition, our board of directors, whose members were elected by the Sponsor, is and will be divided into three classes, each of which will generally serve for a terms for three years with only one class of directors being elected in each year. \n\n\n\n\n\n\n\n\n\ntariffs and trade barriers; longer payment cycles; rates of inflation; employment regulations; corruption; terrorist attacks and wars; \n\n\n\n\nThe net proceeds from the initial public offering and the private placement provided us with $172,500,000 that we may use to complete our initial business combination (after taking into account the $6,037,500 of deferred underwriting commissions being held in the trust account). \n\n\n\n\n\n\n\n\n\n\n\nSince the Sponsor, executive officers and directors will lose their entire investment in us if our initial business combination is not completed (other than with respect to public shares they may acquire during or after the initial public offering), a conflict of interest may arise in determining whether a particular business combination target is appropriate for our initial business combination. \nOn July 10, 2020, the Sponsor purchased an aggregate of 3,737,500 founder shares for a purchase price of $25,000, or approximately $0.007 per share. \n/ \nIn addition, the Sponsor purchased an aggregate of 4,850,000 private placement warrants, each exercisable for one share of Class A common stock at $11.50 per share, subject to adjustment as described herein, for an aggregate purchase price of $4,850,000, or $1.00 per warrant, that will also be worthless if we do not complete our initial business combination within the allocated time period. \n\n\n\nIn addition, the Sponsor and our officers and directors may Sponsor or form other special purpose acquisition companies similar to ours or may pursue other business or investment ventures during the period in which we are seeking an initial business combination. \n\nIn fact, we may enter into a business combination with a target business that is affiliated with the Sponsor, our directors or executive officers, although we do not intend to do so. \n\nWe may engage in a business combination with one or more target businesses that have relationships with entities that may be affiliated with the Sponsor, executive officers, directors or existing holders which may raise potential conflicts of interest. \nIn light of the involvement of the Sponsor, executive officers and directors with other entities, we may decide to acquire one or more businesses affiliated with the Sponsor, executive officers, directors or existing holders. The Sponsor, officers and directors are not currently aware of any specific opportunities for us to complete our initial business combination with any entities with which they are affiliated, and there have been no substantive discussions concerning a business combination with any such entity or entities. Despite our agreement to obtain an opinion from an independent investment banking firm which is a member of FINRA or a valuation or appraisal firm regarding the fairness to our company from a financial point of view of a business combination with one or more domestic or international businesses affiliated with the Sponsor, executive officers, directors or existing holders, potential conflicts of interest still may exist and, as a result, the terms of the business combination may not be as advantageous to our public stockholders as they would be absent any conflicts of interest. \n\n\n\n\n\n\n\n\n(ii)the redemption of any public shares properly tendered in connection with a stockholder vote to amend our amended and restated certificate of incorporation to modify the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial business combination by June 22, 2022; and (iii)absent an initial business combination by June 22, 2022 or with respect to any other material provisions relating to stockholders rights or pre-initial business combination activity, our return of the funds held in the trust account to our public stockholders as part of our redemption of the public shares. \n\n\n\nOur units, ClassA common stock and warrants qualify as covered securities under the statute. \n\nOur amended and restated certificate of incorporation authorizes the issuance of up to 380,000,000 shares of Class A common stock, par value $0.0001 per share, 20,000,000 shares of Class B common stock, par value $0.0001 per share, and 1,000,000 shares of preferred stock, par value $0.0001 per share. Immediately after the initial public offering, there will be 362,750,000 and 15,687,500 authorized but unissued shares of ClassA common stock and ClassB common stock, respectively, available for issuance which amount does not take into account shares reserved for issuance upon exercise of outstanding warrants or shares issuable upon conversion of the ClassB common stock. \nHowever, our amended and restated certificate of incorporation provides, among other things, that prior to our initial business combination, we may not issue additional shares that would entitle the holders thereof to (i)receive<|endoftext|>7. \n### Overview \nSince April 2016, the Company has been engaged in the identification of suitable opportunities for a business transaction. As per Note 8 below, the Company has entered into a non-binding letter of intent with CBD Brand Partners. Pursuant to the letter of intent, the Company filed a proxy statement to allow it to take the steps required to complete the transaction contemplated. Specifically, the Company amended and restated its articles of incorporation and created three (3) series of preferred stock. We will not engage in any substantive commercial business activities unless and until we consummate a business transaction, which may never occur. \nOur management has broad discretion with respect to identifying and selecting a prospective target business. We have not established any specific attributes or criteria (financial or otherwise) for prospective target businesses. There are numerous risks in connection with our current and proposed business plans, including that any target business that is selected may be a financially unstable company or an entity in its early stages of development or growth, including entities without established records of sales or earnings. In that event, we will be subject to numerous risks inherent in the business and operations of financially unstable and early stage or potential growth companies. In addition, we may affect a business combination with an entity in an industry characterized by a high level of risk, and, although our management will endeavor to evaluate the risks inherent in a particular target business, there can be no assurance that we will properly ascertain or assess all significant risks. \nWe expect that in connection with any business transaction, we will issue a significant number of shares of our common stock (equal to at least 80% of the total number of shares outstanding after giving effect to the transaction and likely, a significantly higher percentage), in order to ensure that such transaction qualifies as a tax free transaction under federal tax laws). The issuance of additional shares of our capital stock will significantly reduce the equity interest of our stockholders as of the date of the transaction and will likely result in the resignation or removal of our management as of the date of the transaction. \nOur management anticipates that the Company likely will be able to affect only one business transaction, due primarily to our financial resources and the dilution of interest for present and prospective stockholders, which is likely to occur as a result of our management's plan to offer a controlling interest to a target business in order to achieve a tax-free reorganization. This lack of diversification should be considered a substantial risk in investing in us, because it will concentrate the chance for our success into a single business and not permit us to offset potential losses from one venture against potential gains from another. \nManagement anticipates that the selection of a target business and the consummation of a business transaction will be complex and extremely risky and cannot assure investors that the Company ever will enter into such a transaction or that if we do consummate of a business transaction that the Company will achieve long-term or immediate short-term earnings. \n### Results of Operations \nResults of Operations during the year ended December 31, 2020 as compared to the year ended December 31, 2019 \nDuring the fiscal years ended December 31, 2020 and 2019, Our net revenue for the year ended December31, 2020, was $1,316,304, compared to $0 for the same period in 2019 \nOur cost of goods sold for the year ended December31, 2020, was $914,759, compared to $0 for the same period in 2019. \nOur general and administrative expense for the year ended December31, 2020, was $110,520, compared to $56,177 for the same period in 2019. \nOur salaries expense for the year ended December31, 2020, was $258,913, compared to $0 for the same period in 2019. \nOur rent expense for the year ended December31, 2020, was $146,013, compared to $10,000 for the same period in 2019. \nOur Utilities expense for the year ended December31, 2020, was $29,956, compared to $0 for the same period in 2019. \nOur professional fees expense for the year ended December31, 2020, was $18,728, compared to $16,284 for the same period in 2019. \nOur consulting expense for the year ended December31, 2020, was $667,976 compared to $383,973 for the same period in 2019. \nOur depreciation expense for the year ended December31, 2020, was $232,271, compared to $0 for the same period in 2019. \nOur financing fees expense for the year ended December31, 2020, was $36,860, compared to $23,800 for the same period in 2019. \nOur Interest expense for the year ended December31, 2020, was $70,974, compared to $0 for the same period in 2019. \nOur net loss for the year ended December31, 2020, was $1,170,666 compared to $490,234 for the same period in 2019. This increase was mainly due to the factors listed above. \n\nAs of December 31, 2020 the Company current assets of $450,711 and total assets of $3,193,657. As of December 31, 2019 the Company current assets of $1,045 and total assets of $1,045. \nAs of December 31, 2020 the Company current liabilities of $3,483,329 and total Liabilities of $4,457,673 As of December 31, 2019 the Company current liabilities of $433,116 and total liabilities of $473,916 \nThe Company has funded its operations from contributions made by management. The Company has no present sources of capital or liquidity. \nAt present, the Company has no business operations and no cash resources other than as are provided by management. We are dependent upon interim funding provided by management to pay professional fees and expenses. Our management has agreed to provide funding as may be required to pay for professional fees and other administrative expenses of the Company until the Company enters into a business transaction. The Company would be unable to continue as a going concern without interim financing provided by management. If we require additional financing, we cannot predict whether equity or debt financing will become available at terms acceptable to us, if at all. The Company depends upon services provided by management to fulfill its filing obligations under the Exchange Act. At present, the Company has no financial resources to pay for such services and may be required to issue restricted shares in lieu of cash or, in the alternative, issue debt instruments evidencing financial obligations if and when they arise. Any funds advanced by management will be advanced as loans that will bear interest at the rate of 8% per year and which shall mature on the closing of a business transaction. \nOver the next twelve months, we expect to incur costs and expenses related to: maintaining our corporate existence, such as annual fees due to the State of Nevada; filing periodic reports under the Exchange Act including filing accounting and legal fees; investigating and analyzing targets and possibly consummating a business transaction. \nThese costs are difficult to quantify given the multitude of variables associated with such activities. Our ongoing expenses will result in continued net operating losses that will increase until we can consummate a business transaction with a profitable target business, if ever. We estimate that these costs will be in the range of to six to eight thousand dollars per year, and that we will be able to meet these costs as necessary, to be advanced to us by management. \nThe following table summarizes our cash flows for the fiscal years ended December 31, 2020 and December 31, 2019: \n### Going Concern \nOur lack of revenues, continuing operating losses and lack of operating capital create substantial doubt about the Companys ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent on its ability to obtain capital from our affiliates to fund our operations, generate cash from the sale of its securities and attain future profitable operations. Managements plans include selling its equity securities and obtaining debt financing to fund its capital requirement and ongoing operations; however, there can be no assurance the Company will be successful in these efforts. \n\nThe Company does not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on the Companys financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors. \n### Contractual Obligations \nAs a smaller reporting company, as defined by Item 10 of Regulation S-K, the Company is not required to provide the information required by this Item. \nITEM 7A. \n\nITEM 8. \n\n\nTo the shareholders and the board of directors of XLR Medical Corp \n\nWe have audited the accompanying consolidated balance sheets of XLR Medical Corp as of December 31, 2020 and 2019, the related statements of operations, stockholders' equity (deficit), and cash flows for the years then ended, and the related notes (collectively referred to as the \"financial statements\"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States. \nBasis for Opinion \nWe are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (\"PCAOB\") and are required to be independent with respect to the Company in accordance with the U.S. \n\n\n\nAs discussed in Note 2 to the financial statements, the Company has suffered recurring losses from operations and has a significant accumulated deficit. In addition, the Company continues to experience negative cash flows from operations. These factors raise substantial doubt about the Company's ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 2. \n/S/ BF Borgers CPA PC \n### BF Borgers CPA PC \n\nLakewood, CO \n### April 15, 2021 \n\n\n\n\nBloomios, Inc. \n\nDecember 31, 2020 \nNOTE 1 - BUSINESS ACTIVITY \nXLR Medical Corp. (the \"Company) was organized under the laws of the State of Nevada on February 2, 2001 under the name Relay Mines Limitedsubsequently the name of the Company was changed to XLR Medical Corp. After the October 31, 2007 10Q filing, the management of the Company abandoned the Company and it became a dormant company until 2018 when a new shareholder acquired stock to become the majority shareholder and owner of the Company. The Companys fiscal year end is December 31 st \n### NOTE 2 - GOING CONCERN \nThe financial statements have been prepared on a going concern basis, which contemplates continuity of operations, realization of assets and liquidation of liabilities in the normal course of business. The Company had a total stockholders deficit of $1,264,016 and a net loss of $1,170,666 for the year ended December 31, 2020. The company also had an accumulated deficit of $4,324,061 as of December 31, 2020. Therefore, there is substantial doubt about the ability of the Company to continue as a going concern. There can be no assurance that the Company will achieve its goals and reach profitable operations and is still dependent upon its ability (1) to obtain sufficient debt and/or equity capital and/or (2) to generate positive cash flow from operations. \nThe Companys ability to continue as a going concern is dependent upon its ability to generate future profitable operations and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. These circumstances raise substantial doubt about the Companys ability to continue as a going concern. The accompanying financial statements do not include any adjustments that might arise because of this uncertainty. \nTo address these aforementioned, management has undertaken the following initiatives: 1) enter into discussions to secure additional equity funding from current or new shareholders; 2) undertake a program to continue to monitor the Companys ongoing working capital requirements and minimum expenditure commitments; 3) continue their focus on maintaining an appropriate level of corporate overhead in<|endoftext|>, \n( \n) \n### Large accelerated filer \nNon-accelerated filer \nSmaller reporting company \nEmerging growth company \n### EXPLANATORY NOTE \nThis Amendment No. 1 on Form 10-K/A (the Form 10-K/A) is being filed by MDC Partners, Inc. (the Company) in order to disclose information required by Items 10, 11, 12, 13 and 14 of Part III, which was previously omitted in reliance on Instruction G to Form 10-K from its Annual Report on Form 10-K (the Original Form 10-K) for the year ended December 31, 2020, filed with the Securities and Exchange Commission (the SEC) on March 16, 2021. The Company is not filing its definitive proxy statement for its 2021 annual stockholder meeting within 120 days of the end of its most recent fiscal year as required under Instruction G to Form 10-K in order to incorporate information contained in the definitive proxy statement into the Original Form 10-K. This Form 10-K/A discloses such information. In connection with the filing of this Form 10-K/A and pursuant to the rules of the SEC, we are including with this Form 10-K/A, as exhibits, certifications with respect to this filing by our principal executive officer and principal financial officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002; accordingly, Item 15 of Part IV has also been amended to reflect the filing of these new exhibits. Further, because we are a smaller reporting company, as defined in Item 10 of Regulation S-K promulgated under the Securities Exchange Act of 1934 (the Exchange Act), we have elected to provide in this 10-K/A certain scaled disclosures permitted under the Exchange Act for smaller reporting companies. This Form 10-K/A is limited in scope to the items identified above and should be read in conjunction with the Original Form 10-K and our other filings with the SEC. Except as otherwise expressly stated herein, this Form 10-K/A does not reflect events occurring after the filing of the Original Form 10-K or modify or update those disclosures affected by subsequent events. Consequently, all other information is unchanged and reflects the disclosures made at the time of the filing of the Original Form 10-K. \nPART III \nItem 10. \nThe names of, and certain information regarding, our current directors are set forth below. \n### Directors of MDC Partners \nMark Penn \nMark Penn has been the Chief Executive Officer of MDC Partners since March 18, 2019. He has also been the President and Managing Partner of The Stagwell Group, a private equity fund that invests in digital marketing services companies, since its formation in June 2015. Prior to The Stagwell Group, Mr. Penn served in various senior executive positions at Microsoft. As Executive Vice President and Chief Strategy Officer of Microsoft, he was responsible for working on core strategic issues across the company, blending data analytics with creativity. Mr. Penn also has extensive experience growing and managing agencies. As the co-founder and CEO of Penn Schoen Berland, a market research firm that he built and later sold to WPP Group, he demonstrated value-creation, serving clients with innovative techniques such as being the first to offer overnight polling and unique ad testing methods now used by politicians and major corporations. At WPP Group, he also became CEO of Burson Marsteller, and managed the two companies to substantial profit growth during that period. A globally recognized strategist, Mr. Penn has advised corporate and political leaders both in the United States and internationally. He served for six years as White House Pollster to President Bill Clinton and was a senior adviser in his 1996 re-election campaign, receiving recognition for his highly effective strategies. Mr. Penn later served as chief strategist to Hillary Clinton in her Senate campaigns and her 2008 Presidential campaign. Internationally, Mr. Penn helped elect more than 25 leaders in Asia, Latin America and Europe, including Tony Blair and Menachem Begin. Mr. Penn has extensive leadership experience as a CEO and an agency operator, and his background as an agency founder, executive strategist and marketer, and global thought leader were critical qualifications that led to his appointment as CEO and a member of the Board. Mr. Penn was nominated as a director of the Company by Stagwell Agency Holdings LLC (Stagwell) pursuant to its rights as purchaser of Class A Subordinate Voting Shares and the Series 6 Convertible Preference Shares. Please see Executive Officers of MDC Partners below. \n### Charlene Barshefsky \nCharlene Barshefsky is Chair of Parkside Global Advisors, a position she has held since April 2021. Prior to this, she was a Senior International Partner at WilmerHale, a multinational law firm based in Washington, D.C., from 2001 through March 2021. At WilmerHale, Ambassador Barshefsky advised multinational corporations on their market access, regulatory, investment and acquisition strategies in major markets across the globe. Prior to joining WilmerHale, Ambassador Barshefsky was the United States Trade Representative (USTR) and a member of President Clintons Cabinet from 1997 to 2001 and Acting and Deputy USTR from 1993 to 1996. As the USTR, she served as chief trade negotiator and principal trade policymaker for the United States and, in both roles, negotiated complex market access, regulatory and investment agreements with virtually every major country in the world. She serves on the boards of directors of the American Express Company and the Estee Lauder Companies and is a member of the board of trustees of the Howard Hughes Medical Institute. She is also a member of the Council on Foreign Relations. Ambassador Barshefsky served on the boards of directors of Intel Corporation from 2004 to 2018 and Starwood Hotels & Resorts from 2004 to 2016. Ambassador Barshefskys distinguished record as a policymaker and negotiator, ability to assess regulatory risks, as well as exceptional Board director experience for some of the worlds most respected consumer companies across a range of sectors focused on digital innovation are key qualifications for the Board. Ambassador Barshefsky was initially nominated as a director of the Company by Stagwell pursuant to its rights as purchaser of Class A Subordinate Voting Shares and the Series 6 Convertible Preference Shares and subsequently renominated by the Board. \nAsha Daniere \nAsha Daniere is a strategic and legal advisor in the media and technology sectors. From 2012 through February 2020, she was Executive Vice-President, Legal & Business Affairs at Blue Ant Media, a global multi-platform media company. Prior to her position at Blue Ant, Ms. Daniere was Senior Vice President and General Counsel at Score Media Inc., a sports media company that formerly traded on the TSX . Prior to her role at Score Media, Ms. Daniere was General Counsel at Fun Technologies Inc., an Internet start-up that previously traded on the TSX. She is on the Boards of Directors of Canopy Rivers Inc., traded on the TSX, and GP-ACT III Acquisition Corp. She is also on the Board of Directors of the Toronto International Film Festival. From December 2015 to September 2018, Ms. Daniere served on the Board of Directors of Tangelo Games Corp. Ms. Daniere brings to the Board significant experience in media and technology, as well as experience assessing and mitigating regulatory and legal risk in public companies. \n### Bradley Gross \nBradley Gross is a member of the Global Equity Leadership Group and head of corporate private equity investment activities in the Americas and EMEA within the Asset Management Division of Goldman Sachs. He serves as a member of the Merchant Banking Division Corporate and Growth Investment Committees and the Firmwide Retirement Committee. Previously, he was responsible for the Merchant Banking Division's Technology, Media and Telecom investing activities and led the division's portfolio wide valuation creation efforts. He first joined Goldman Sachs in 1995 as an analyst in the Real Estate Principal Investment Area. He rejoined the firm after business school in 2000 as an associate in the Principal Investment Area. He became a vice president in 2003 and was named managing director in 2007 and partner in 2012. Mr. Gross serves on the boards of Neovia Logistics Holdings, Proquest Holdings, Trader Interactive Holdings, Slickdeals, LLC and Aptos, Inc. Previously, Mr. Gross served on the boards of Americold Realty Trust and Griffon Corp. Mr. Gross brings to the board an exceptional risk management track record, extensive public company board experience and technological experience, all of which qualify him for the Board. Mr. Gross was nominated as a director of the Company by Goldman Sachs pursuant to its rights as the purchaser of the Series 4 Convertible Preference Shares. \nWade Oosterman \nWade Oosterman is Vice Chairman of Bell Canada, Canadas largest telecommunications service provider, a position he has held since 2018. Mr. Oosterman is also President of Bell Media, Canadas largest media company, since January 2021. Mr. Oosterman previously served as President of Bell Mobility from 2006 to 2018, as President of Bell Residential Services from 2010 to 2018 and as Chief Brand Officer of Bell Canada, and BCE, from 2006 to 2020. Prior to joining Bell Canada, Mr. Oosterman served as Chief Marketing and Brand Officer for TELUS Corp., and Executive Vice President, Sales and Marketing for TELUS Mobility. In 1987, Mr. Oosterman co-founded Clearnet Communications Inc. and served on its board of directors until the successful sale of Clearnet to TELUS Corp. Mr. Oosterman serves on the board of directors of Telephone Data Systems Inc., a U.S. telecom provider, and EnStream, a joint venture of the three largest Canadian telecom providers engaged in the business of mobile payments and identity verification. He has also served on the boards of directors of Ingram Micro and Virgin Mobile Canada. \nMr. Oosterman brings to the board financial acumen, risk assessment and mitigation, and exceptional operations experience. His leadership includes extensive experience in both sell-side and buy-side transactions \n### Desire Rogers \nDesire Rogers is the Chief Executive Officer and Co-Owner of Black Opal, LLC, a masstige makeup and skincare company. She served as Chairman of Choose Chicago, the tourism agency for the city of Chicago with over $1 billion in revenue, from 2013 until 2019. At Choose Chicago, Ms. Rogers digital marketing leadership resulted in record results of over 57 million visitors in 2018. Ms. Rogers was Chief Executive Officer of Johnson Publishing Company, a publishing and cosmetics firm, from 2010 to 2017. During the period of 2009 to 2010, Ms. Rogers was The White Houses Special Assistant to the President and Social Secretary under the Obama Administration. Ms. Rogers is a member of the boards of directors of World Business Chicago, the Economic Club of Chicago, the Conquer Cancer Foundation, Donors Choose, and Inspired Entertainment Inc., and is formerly a member of the board of directors of Pinnacle Entertainment, Inc. Ms. Rogers is a results-oriented business leader, with key digital marketing experience, and brings to the board strong interpersonal, collaborative and diplomatic skills that qualify her for the Board. \nIrwin D. Simon \nIrwin Simon is a business executive who in 1993 founded The Hain Celestial Group, Inc., traded on Nasdaq, which he built into a leading, global organic and natural products company and served as its Chairman and Chief Executive Officer through 2018. Mr. Simon currently serves as Chairman and Chief Executive Officer of Aphria Inc., a leading global cannabis company traded on the NYSE. Mr. Simon also serves as Executive Chairman of Whole Earth Brands, Inc., a global food company traded on Nasdaq. Mr. Simon previously served on the boards of directors of Barnes & Noble, Inc., the largest retail bookseller in the United States, and Jarden Corp., a global consumer products company. In addition, he is a member of the board of trustees of Tulane University in New Orleans, Louisiana, and is a member of the board of trustees at Poly Prep Country Day School in Brooklyn, New York. Mr. Simon is also the majority owner of the Cape Breton Screaming Eagles, a Quebec Major Junior Hockey League team and co-owner of St. Johns Edge of the National Basketball League of Canada. Mr. Simon qualifies for the Board because of his unique perspectives on aspects of advertising and marketing services, as well as extensive operational and<|endoftext|>None. \nEXPLANATORY NOTE \nThis Amendment No. 1 on Form 10-K/A (this Amendment) amends the Annual Report on Form 10-K of Medley Management Inc. (the Company) for the year ended December 31, 2020, originally filed with the U.S. Securities and Exchange Commission (SEC) on March 31, 2021(the Original Filing). \nThis Amendment is being filed to provide the information required by Items 10 through 14 of Part III of the Annual Report on Form 10-K. At this time, the Company is filing this Amendment to include Part III information in its Annual Report on Form 10-K because the Company does not intend to file a definitive proxy statement within 120 days of December 31, 2020. \nIn addition, this Amendment includes information under Item 9B of Part II with respect to an investment period termination notification received by the Company from a separately managed account client on April 28, 2021. \nThe reference on the cover page of the Original Filing to the incorporation by reference of portions of the registrants definitive proxy statement into Part III of the Original Filing is hereby deleted. Item 9B of Part II and Items 10 through 14 of Part III of the Original Filing are hereby amended and restated in their entirety as set forth in this Amendment. In addition, pursuant to Rule 12b-15 under the Securities Exchange Act of 1934, as amended, the Company is including with this Amendment in Item 15 of Part IV certain currently dated certifications under the Sarbanes-Oxley Act of 2002. \n\nPART II. \nItem 9B. \n### Other Information. \nOn April 28, 2021, the Company was notified by a separately managed account client (the Client) that the Client has elected to terminate the investment period of the Clients separately managed accounts effective as of May 5, 2021. As a result, the Client will have no obligation to make further capital contributions to fund new investments.As of April 28, 2021, the Clients undrawn capital commitment was approximately $130 million in the aggregate. In accordance with the Clients investment management agreement, the Company will continue to manage the repayment and realization of investments remaining in the Clients accounts to their scheduled maturities or disposition, as the case may be.The orderly realization of the Clients accounts is expected to be a multi-year process, consistent with other similar accounts managed by the Company. \nThe Companys investment advisory relationship with the Client represented approximately 11.6% and 8.5% the Companys total management fees for the years ended December 31, 2020 and 2019, respectively. As of December 31, 2020, the Client represented approximately 14.0% of the Companys AUM and 18.6% of the Companys Fee Earning AUM. \nPART III. \n### Item 10. \n\n\nOur Board of Directors is elected annually and each of our directors serve one year terms. The following table sets forth certain information about our directors and executive officers as of April 30, 2021.For information regarding our executive officer promotions which become effective as of May 3, 2021 (including the appointments of Howard Liao as our new Chief Executive Officer, Dean Crowe as our President and David Richards as our Chief Operating Officer), see the discussion appearing below under the caption Executive Officer Appointments Effective May 3, 2021. \n### Directors \nBrook Taube \n\nsince its formation in 2014. Hecurrentlyserveson the Board of Directors of Sierra Income Corporation and has servedsince April 2012. From January 2011 through December 2020 he served as Chief Executive Officer and from January 2011 through January 2021 he served on the Board of Directors of Medley Capital Corporation.Chairman of the Board of Directors of Medley Capital Corporation. Prior to forming Medley, Mr. Mr. Taube began his career at Bankers Trust in leveraged finance in 1992. Mr. Taube received a B.A. from Harvard University. \n### Seth Taube \n\nsince its formation in 2014. From April 2012 through April 2021, heserved as Chief Executive Officer and Chairman of the Board of Directors of Sierra Income Corporation.From January 2011 through December 2020 he served as Chief Executive Officer and from January 2011 through January 2021 he served on the Board of Directors of Medley Capital Corporation. Prior to forming Medley, Mr. Mr. Taube previously worked with Tiger Management and held positions with Morgan Stanley & Co. in the Investment Banking and Institutional Equity Divisions. Mr. Taube received a B.A. from Harvard University, an M. Litt. in Economics from St. Andrews University in Great Britain, where he was a Rotary Foundation Fellow, and an M.B.A. \n### Peter Kravitz, \n51, was appointed to the Board of Directorson February 9, 2021. Mr. Kravitz was also appointed Chair of the Restructuring Subcommittee of theBoard of Directors, and was appointed to the Audit Committee of the Board. The focus of Mr. Kravitzs national practice is dedicated to serving as a professional fiduciary. Additionally, Mr. Kravitz provides services in connection with his engagements as a chief restructuring officer; advisor to and member of bankruptcy oversight and creditor committees; Chapter 11/Liquidating Trustee/Plan Administrator; Disbursing Agent; and member of boards of directors where his legal and business backgrounds are well-served. Mr. Kravitz received his J.D. from Rutgers University Law School in 1995 and was a member of the Editorial Board of Rutgers Law Journal, and received his B.A. from Lehigh University in 1992.Mr. Kravitz is a Directors Consortium Graduate (Fall 2013; jointly offering by Chicago Booth School of Business, Stanford Graduate School of Business, Rock Center for Corporate Governance and the Tuck School of Business at Dartmouth). Mr. Kravitz is admitted to the California bar and United States District Court for the Central District of California. \n### Guy Rounsaville, Jr. \n, 77, has been a member of the Board of Directors since September 2014. Mr. Rounsaville is currently the General Counsel of \nQueensCare, a California not-for-profit organization that specializes in providing medical care to low income and indigent individuals in the Los Angeles area. He also is currently a member of the board of directors of Colorado National Bank and was previously a director of Tri-Valley Bank, First Banks, Inc. and United American Bank. Mr. Rounsaville served as Director of Diversity of the law firm Allen Matkins Leck Gamble Mallory & Natsis LLP from 2009 until May 2012 and as co-managing partner of their San Francisco office from 1999 to 2001. Mr. Rounsaville served as General Counsel and Corporate Secretary of LaSalle Bank from 2006 until it was acquired by Bank of America in October 2007, after which he served, for transition purposes, as Bank of Americas Senior Vice President and Assistant General Counsel until May 2008. From 2001 to 2006, Mr. Rounsaville served as General Counsel and Corporate Secretary of Visa International. Prior to that, Mr. Rounsaville served in several roles at Wells Fargo from 1969 through 1998, including General Counsel and Corporate Secretary. Mr. Rounsaville has served on numerous civic and professional committees and boards. He received a B.A. from Stanford University and a J.D. from Hastings College of the Law. \nJohn Hathaway Dyett \n, \n51, has been a member of the Board of Directors since August 2020. Mr. Dyett previously served on the board of Sierra Total Return Fund from 2016 to 2020. Mr. Dyett has also served as the Co-CEO of Salem Partners Wealth Management, LLC since 2004 and the Co-CEO of Salem Partners, LLC, an investment banking firm, since 1997. Mr. Dyett also serves on the Board of Directors of Femasys, Inc.and OncoNano Medicine, Inc. Hewas also an advisor to Akashi Therapeutics. Mr. Dyett was previously a banker with Gerard Klauer Mattison & Co., Inc. and Needham and Co., Inc. Mr. Dyett also servedon the Board of Trustees of Middlesex School in Concord, Massachusetts. Mr. Dyett received a BA from Harvard University. \n### Executive Officers \nRichard T. Allorto, Jr. \n, 49, has served as our Chief Financial Officer since July 2010. Mr. Allorto currentlyservesas the Chief Financial Officer and \nSecretary of Sierra Income Corporation. From January 2011 through December 2020he served as Chief Financial Officer and Secretary of Medley Capital Corporation. Prior to joining Medley, Mr. Allorto held various positions at GSC Group, Inc., a registered investment adviser, including, Chief Financial Officer of GSC Investment Corp, a business development company that was externally managed by GSC Group. Mr. Allorto began his career at Arthur Andersen in public accounting in 1994. Mr. Allorto is a licensed CPA and received a B.S. in Accounting from Seton Hall University. \nExecutive Officer Appointments Effective May 3, 2021 \nAs previously disclosed in our Current Report on Form 8-K filed with the SEC on April 16, 2021, on April 14, 2021, Brook Taube and Seth Taube submitted their resignations as Co-Chief Executive Officers of Medley Management Inc. and Medley LLC (Medley LLC and, collectively with Medley Management Inc., Medley), effective as of May 3, 2021. Messrs. Brook Taube and Seth Taube are expected to continue to serve as Co-Chairmen of the Board of Directors and to support the existing management team and provide strategic guidance. \nOn April 14, 2021, the Board of Directors appointed Howard Liao as Chief Executive Officer of Medley Management Inc. and Medley LLC, Dean Crowe as President of Medley Management Inc. and Medley LLC, and David Richards as Chief Operating Officer of Medley Management Inc. and Medley LLC, each effective as of May 3, 2021. Mr. Liao is a member of Medley's Investment Committee and currently serves as Medleys Chief Investment Officer andwill retain this title. Mr. Richards is amember of of Medley's Investment Committeeand currently serves as Medleys Chief Credit Officer and will retain this title. Mr. Crowe currently serves as a Senior Managing Director and member of Medleys Investment Committee. Messrs. Liao, Crowe and Richards will each serve at the pleasure of the Board of Directors. \nCertain information regarding Mr. Liao, Mr. Crowe and Mr. Richards is set forth below: \n### Howard Liao, \n45,who will be Medleys new Chief Executive Officer effective as of May 3, 2021, has served as a Senior Managing Director and the Chief Investment Officer of Medley since March 2020. He served as Medleys Head of Corporate Credit from January 2016 to March 2020 and has served as a member of Medleys Investment Committee since January 2016. Mr. Liao joined Medley as a Managing Director in October 2014. Mr. Liao has over 20 years of leveraged finance, direct lending and private equity experience originating, structuring and investing in a variety of credit-oriented alternative investments. Prior to joining Medley, Mr. Liao held several positions at Lehman Brothers. He was a Managing Director in Lehmans Private Equity Principal Investments Group managing private debt and private equity investments for the Lehman estate. He was a founding principal of Lehmans Mezzanine Fund and was a member of Lehmans Leveraged Finance Group. Mr. Liao received a BSBA from Georgetown University and an MBA from UCLA Anderson School of Management. \nDean Crowe, \n58,who will be Medleys President effective as of May 3, 2021, has served as a Senior Managing Director of Medley since August 2015 and a member of the Investment Committee since June 2014. He served as the Head of Investing of Medley from December 2015 to March 2020 and has served as the President of Sierra Income Corporation since March 2020 and was the Chief Operating Officer of Sierra Income Corporation from August 2015 to March 2020. Prior to joining Medley as a Managing Director in 2011, Mr. Crowe was a Portfolio Manager with UBS OConnor, the Alternative Investment subsidiary of UBS Asset Management, where he managed corporate credit investments and the OConnor Credit Arbitrage Fund. Before joining UBS, Mr. Crowe held various positions at Merrill Lynch in New York, where he managed proprietary credit trading. Mr. Crowe began his career with Salomon Brothers in New York, where he traded and invested in privately placed corporate debt. Mr. Crowe received a BBA in Accounting from James Madison University. \n### David G. Richards, \n48, who will be Medleys Chief Operating Officer effective as of May 3, 2021, has served as a Senior Managing Director and the Chief Credit Officer of Medley since May 2020. Prior to rejoining Medley, Mr. Richards was the CFO for<|endoftext|>### EXPLANATORY NOTE \nOn February 8, 2021, Tesla, Inc. (Tesla, the Company, we, us, or our) filed our Annual Report on Form 10-K for the fiscal year ended December 31, 2020 (the Original Form 10-K). The Original Form 10-K omitted Part III, Items 10 ( \n\n), 11 ( \nExecutive Compensation \n) \n, 12 ( \n\n), 13 ( \n\n) and 14 ( \n\n) in reliance on General Instruction G(3) to Form 10-K, which provides that such information may be either incorporated by reference from the registrants definitive proxy statement or included in an amendment to Form 10-K, in either case filed with the Securities and Exchange Commission (the SEC) not later than 120 days after the end of the fiscal year. \nWe currently expect that our definitive proxy statement for the 2021 annual meeting of stockholders will be filed later than the 120 th day after the end of the last fiscal year. 1 to Form 10-K (this Amendment) is being filed solely to: amend Part III, Items 10, 11, 12, 13 and 14 of the Original Form 10-K to include the information required by such Items; delete t he reference on the cover of the Original Form 10-K to the incorporation by reference of portions of our proxy statement into PartIII of the Original Form 10-K; and file new certifications of our principal executive officer and principal financial officer as exhibits to this Amendment under Item 15 of Part IV hereof, pursuant to Rule 12b-15 under the Securities Exchange Act of 1934, as amended (the Exchange Act). \nThis Amendment does not otherwise change or update any of the disclosures set forth in the Original Form 10-K and does not otherwise reflect any events occurring after the filing of the Original Form 10-K. \nTESLA, INC. \nAMENDMENT NO. \n\n### INDEX \nPage \nE \nXPLANATORY NOTE \nPART III. \n### Item10. \n\nItem 11. \n### Executive Compensation \nItem 12. \n\n### Item 13. \n\nItem 14. \n### \nPARTIV. \nItem 15. \n\nSignatures \n65 i \nPART III \nI \nTEM10. \n\n### Board of Directors \nBackground and Qualifications \nThe names of the members of Teslas Board of Directors (the Board), their respective ages, their positions with Tesla and other biographical information as of April29, 2021 are set forth below. Except for Messrs. \n( \n) \nMr. Gracias will not stand for re-election when his current term expires at the 2021 annual meeting of stockholders. \nElon Musk is the Technoking of Tesla and has served as our Chief Executive Officer since October 2008 and as a member of the Board since April 2004. Mr.Musk has also served as Chief Executive Officer, Chief Technology Officer and Chairman of Space Exploration Technologies Corporation, an advanced rocket and spacecraft manufacturing and services company (SpaceX), since May 2002, and served as Chairman of the Board of SolarCity Corporation, a solar installation company (SolarCity), from July 2006 until its acquisition by us in November 2016. Mr.Musk is also a founder of The Boring Company, an infrastructure company, and of Neuralink Corp., a company focused on developing brain-machine interfaces. Prior to SpaceX, Mr.Musk co-founded PayPal, an electronic payment system, which was acquired by eBay in October 2002, and Zip2 Corporation, a provider of Internet enterprise software and services, which was acquired by Compaq in March 1999. Mr. Musk has also served on the board of directors of Endeavor Group Holdings, Inc. since April 2021. Mr.Musk holds a B.A. in physics from the University of Pennsylvania and a B.S. in business from the Wharton School of the University of Pennsylvania. \nWe believe that Mr.Musk possesses specific attributes that qualify him to serve as a member of the Board, including the perspective and experience he brings as our Chief Executive Officer, one of our founders and our largest stockholder, which brings historic knowledge, operational expertise and continuity to the Board. \nRobyn Denholm has been a member of the Board since August 2014 and its Chair since November 2018. \nSince January 2021, Ms. Denholm has been an operating partner of Blackbird Ventures, a venture capital firm. \nFrom January 2017 through June 2019, Ms. Denholm was with Telstra Corporation Limited, a telecommunications company (Telstra), where she served as Chief Financial Officer and Head of Strategy from October 2018 through June 2019, and Chief Operations Officer from January 2017 to October 2018. Prior to Telstra, from August 2007 to July 2016, Ms. Denholm was with Juniper Networks, Inc., a manufacturer of networking equipment, serving in executive roles including Executive Vice President, Chief Financial Officer and Chief Operations Officer. Prior to joining Juniper Networks, Ms. Denholm served in various executive roles at Sun Microsystems, Inc. from January 1996 to August 2007. Ms. Denholm also served at Toyota Motor Corporation Australia for seven years and at \nArthur Andersen & Company for five years in various finance assignments. Ms. Denholm previously served as a director of ABB Ltd. from 2016 to 2017. Ms.Denholm is a \nFellow of the Institute of Chartered Accountants of Australia \n/New Zealand, a member of the Australian Institute of Company Directors \n, and holds a Bachelors degree in Economics from the University of Sydney \n, and a Masters degree in Commerce and a Doctor of Business Administration (honoris causa) from the University of New South Wales. \nWe believe that Ms.Denholm possesses specific attributes that qualify her to serve as a member of the Board and as its Chair as well as the chair of each of our Audit Committee and Disclosure Controls Committee, such as her executive leadership experience and her financial and accounting expertise with international companies, including in the technology and automotive industries. \nIra Ehrenpreis has been a member of the Board since May 2007. Mr. Ehrenpreis has been a venture capitalist since 1996. He is founder and managing member of DBL Partners, a leading impact investing venture capital firm formed in 2015, and previously led the Energy Innovation practice at Technology Partners. In the venture capital industry, Mr. Ehrenpreis has served on the Board, Executive Committee, and as Annual Meeting Chairman of the National Venture Capital Association (NVCA). Mr. Ehrenpreis currently serves as the President of the Western Association of Venture Capitalists (WAVC) and as the Chairman of the VCNetwork, the largest and most active California venture capital organization. In the Cleantech sector, he has served on several industry boards, including the American Council on Renewable Energy and the Cleantech Venture Network (Past Chairman of Advisory Board), as the Chairman of the Clean-Tech Investor Summit for nine years, and on the Stanford Precourt Institute for Energy (PIE) Advisory Council. Mr. Ehrenpreis also serves as Chairman of the World Energy Innovation Forum. Mr. Ehrenpreis was awarded the 2018 NACD Directorship 100 for his influential leadership in the boardroom and corporate governance community. Mr.Ehrenpreis holds a B.A. from the University of California, Los Angeles and a J.D. and M.B.A. from Stanford University. \nWe believe that Mr.Ehrenpreis possesses specific attributes that qualify him to serve as a member of the Board and to serve as chair of each of our Nominating and Corporate Governance Committee and our Compensation Committee, including his experience in the Cleantech and venture capital industries. \nLawrence J. Ellison has been a member of the Board since December 2018. Mr. Ellison is the founder of Oracle Corporation, a software and technology company, has served as its Chief Technical Officer since September 2014 and previously served as its Chief Executive Officer from June 1977 to September 2014. Mr. Ellison has also served on Oracles board of directors since June 1977, including as its Chairman since September 2014 and previously from May 1995 to January 2004. \nWe believe that Mr. Ellison possesses specific attributes that qualify him to serve as a member of the Board, including his long-term leadership of one of the most successful technology companies in the world and experience with technology product development and strategy. \nAntonio Gracias has been a member of the Board since May 2007 and served as our Lead Independent Director from September 2010 to April 2019. Since 2003, Mr.Gracias has been Chief Executive Officer of Valor Management LLC, a private equity firm. Mr.Gracias is a director of SpaceX, and was a director of SolarCity until its acquisition by us in November 2016. Mr.Gracias holds a joint B.S. and M.S. degree in international finance and economics from the Georgetown University School of Foreign Service and a J.D. \nWe believe that Mr.Gracias possesses specific attributes that qualify him to serve as a member of the Board, including his management experience with a nationally recognized private equity firm and his operations management and supply chain optimization expertise. \nMr. Gracias will not stand for re-election when his current term expires at Teslas 2021 annual meeting of stockholders. \nHiromichi Mizuno has been a member of the Board since April 2020. Since January 2021, Mr. Mizuno has served as the United Nations Special Envoy on Innovative Finance and Sustainable Investments. From January 2015 to March 2020, Mr. Mizuno was Executive Managing Director and Chief Investment Officer of Japans Government \nPension Investment Fund, the largest pension fund in the world. Previously, Mr. Mizuno was a partner at Coller \nCapital, a private equity firm, from 2003. In addition to being a career-long finance and investment professional, Mr. \nMizuno has served as a board member of numerous business, government and other organizations, currently including the Mission Committee of Danone S.A., a global food products company, and the World Economic \nForums Global Future Council. Mr. Mizuno is also involved in academia, having been named to leadership or advisory roles at Harvard University, Oxford University, University of Cambridge, Northwestern University and \nOsaka University. Mr.Mizuno holds a B.A. in Law from Osaka City University and an M.B.A. from the Kellogg \nGraduate School of Management at Northwestern University \nWe believe that Mr.Mizuno possesses specific attributes that qualify him to serve as a member of the Board, including his deep understanding of international economics, financial markets and government policies. \nJames Murdoch has been a member of the Board since July 2017. Mr. Murdoch has been the Chief Executive Officer of Lupa Systems, a private investment company that he founded, since March 2019. Previously, Mr. Murdoch held a number of leadership roles at Twenty-First Century Fox, Inc., a media company (21CF), over two decades, including its Chief Executive Officer from 2015 to March 2019, its Co-Chief Operating Officer from 2014 to 2015, its Deputy Chief Operating Officer and Chairman and Chief Executive Officer, International from 2011 to 2014 and its Chairman and Chief Executive, Europe and Asia from 2007 to 2011. Previously, he served as the Chief Executive Officer of Sky plc from 2003 to 2007, and as the Chairman and Chief Executive Officer of STAR Group Limited, a subsidiary of 21CF, from 2000 to 2003. Mr. Murdoch formerly served on the boards of News Corporation from 2013 to 2020, of 21CF from 2007 to 2019 and of Sky plc from 2003 to 2018. \nWe believe that Mr. Murdoch possesses specific attributes that qualify him to serve as a member of the Board, including his lengthy executive and board experience across numerous companies, extensive knowledge of international markets and strategies and experience with the adoption of new technologies. \nKimbal Musk has been a member of the Board since April 2004. Mr.Musk is co-founder and Executive Chairman of The Kitchen Restaurant Group, a growing family of businesses with the goal of providing all Americans with access to real food that was founded in 2004. In 2010, Mr. Musk became the Executive Director of Big Green (formerly The Kitchen Community), a non-profit organization that creates learning gardens in schools across the United States. Mr. Musk also co-founded Square Roots, an urban farming incubator program, in 2016, and serves as its Chairman. Previously, Mr. Musk was a co-founder of Zip2 Corporation, a provider of enterprise software and services, which was acquired by Compaq in March 1999. Mr.Musk is a director of SpaceX, and was a director of Chipotle Mexican Grill, Inc. from 2013 to 2019. Mr.Musk holds a B. Comm. in business from Queens University and is a graduate of The French Culinary Institute<|endoftext|>Our organizational documents limit your right to bring claims against our officers and directors. \nIn addition, our charter provides that, subject to the applicable limitations set forth therein or under Maryland law, no director or officer will be liable to us or our stockholders for monetary damages. Our charter also provides that we will generally indemnify and advance expenses to our directors, our officers, our advisor and its affiliates for losses they may incur by reason of their service in those capacities subject to any limitations under Maryland law or in our charter. As a result, we and our stockholders may have more limited rights against these persons than might otherwise exist under common law. In addition, we may be obligated to fund the defense costs incurred by these persons in some cases. However, our charter provides that we may not indemnify our directors, our advisor and its affiliates for loss or liability suffered by them or hold our directors or our advisor and its affiliates harmless for loss or liability suffered by us unless they have determined that the course of conduct that caused the loss or liability was in our best interests, they were acting on our behalf or performing services for us, the liability was not the result of negligence or misconduct by our non-independent directors, our advisor and its affiliates or gross negligence or willful misconduct by our independent directors, and the indemnification or obligation to hold harmless is recoverable only out of our net assets, including the proceeds of insurance, and not from the stockholders. \nThe limit on the percentage of shares of our common stock that any person may own may discourage a takeover or business combination that may benefit our stockholders. \nOur charter restricts the direct or indirect ownership by one person or entity to no more than 9.8% of the value of our then outstanding shares of capital stock (which includes common stock and any preferred stock we may issue) and no more than 9.8% of the value or number of shares, whichever is more restrictive, of our then outstanding common stock unless exempted by our board of directors. This restriction may discourage a change of control of us and may deter individuals or entities from making tender offers for shares of our common stock on terms that might be financially attractive to stockholders or which may cause a change in our management. In addition to deterring potential transactions that may be favorable to our stockholders, these provisions may also decrease your ability to sell your shares of our common stock. \nMaryland law prohibits certain business combinations, which may make it more difficult for us to be acquired. \nUnder Maryland law, business combinations between a Maryland corporation and an interested stockholder or an affiliate of an interested stockholder are prohibited for five years after the most recent date on which the interested stockholder becomes an interested stockholder. These business combinations include a merger, consolidation, share exchange, or, in circumstances specified in the statute, an asset transfer or issuance or reclassification of equity securities. An interested stockholder is defined as: any person who beneficially owns 10% or more of the voting power of the then outstanding voting stock of the corporation; or an affiliate or associate of the corporation who, at any time within the two-year period prior to the date in question, was the beneficial owner of 10% or more of the voting power of the then outstanding voting stock of the corporation. \nA person is not an interested stockholder under the statute if the board of directors approved in advance the transaction by which he otherwise would have become an interested stockholder. However, in approving a transaction, the board of directors may provide that its approval is subject to compliance, at or after the time of approval, with any terms and conditions determined by the board. \nAfter the expiration of the five-year period described above, any business combination between the Maryland corporation and an interested stockholder must generally be recommended by the board of directors of the corporation and approved by the affirmative vote of at least: \n80% of the votes entitled to be cast by holders of the then outstanding shares of voting stock of the corporation; and two-thirds of the votes entitled to be cast by holders of voting stock of the corporation other than shares held by the interested stockholder with whom or with whose affiliate the business combination is to be effected or held by an affiliate or associate of the interested stockholder. \nThese super-majority vote requirements do not apply if the corporations common stockholders receive a minimum price, as defined under Maryland law, for their shares in the form of cash or other consideration in the same form as previously paid by the interested stockholder for its shares. Maryland law also permits various exemptions from these provisions, including business combinations that are exempted by the board of directors before the time that the interested stockholder becomes an interested stockholder. \nMaryland law also limits the ability of a third party to buy a large stake in us and exercise voting power in electing directors. \nMaryland law provides a second anti-takeover statute, the Control Share Acquisition Act, which provides that control shares of a Maryland corporation acquired in a control share acquisition have no voting rights except to the extent approved by the corporations disinterested stockholders by a vote of two-thirds of the votes entitled to be cast on the matter. Shares of stock owned by interested stockholders, that is, by the acquirer, by officers or by directors who are employees of the corporation, are excluded from the vote on whether to accord voting rights to the control shares. Control shares are voting shares of stock that would entitle the acquirer to exercise voting power in electing directors within specified ranges of voting power. A control share acquisition means the acquisition of control shares. The control share acquisition statute does not apply (1) to shares acquired in a merger, consolidation or share exchange if the corporation is a party to the transaction or (2) to acquisitions approved or exempted by a corporations charter or bylaws. Our charter contains a provision exempting from the Control Share Acquisition Act any and all acquisitions by any person of shares of our stock. We can offer no assurance that this provision will not be amended or eliminated at any time in the future. This statute could have the effect of discouraging offers from third parties to acquire us and increasing the difficulty of successfully completing this type of offer by anyone other than our affiliates or any of their affiliates. \nOur charter includes an anti-takeover provision that may discourage a stockholder from launching a tender offer for our shares. \nOur charter provides that any tender offer made by a stockholder, including any mini-tender offer, must comply with most provisions of Regulation 14D of the Exchange Act. The offering stockholder must provide our company notice of such tender offer at least ten business days before initiating the tender offer. If the offering stockholder does not comply with these requirements, our company will have the right to redeem that stockholders shares and any shares acquired in such tender offer. In addition, the non-complying stockholder shall be responsible for all of our companys expenses in connection with that stockholders noncompliance. This provision of our charter may discourage a stockholder from initiating a tender offer for our shares and prevent a stockholder from receiving a premium price for their shares in such a transaction. \nYour investment return may be reduced if we are required to register as an investment company under the Investment Company Act; if we are subject to registration under the Investment Company Act, we will not be able to continue our business. \nNeither we, our operating partnership nor any of our subsidiaries intend to register as an investment company under the Investment Company Act. Our operating partnerships and subsidiaries intended investments in real estate will represent the substantial majority of our total asset mix. In order for us not to be subject to regulation under the Investment Company Act, we intend to engage, through our operating partnership and our wholly and majority owned subsidiaries, primarily in the business of buying real estate. \nWe expect that most of our assets will be held through wholly-owned or majority-owned subsidiaries of our operating partnership. We expect that most of these subsidiaries will be outside the definition of an investment company under Section 3(a)(1) of the Investment Company Act as they are generally expected to hold at least 60% of their assets in real property. Section 3(a)(1)(A) of the Investment Company Act defines an investment company as any issuer that is or holdsitself out as being engaged primarily in the business of investing, reinvesting or trading in securities. Section 3(a)(1)(C) of the Investment Company Act defines an investment company as any issuer that is engaged or proposes to engage in the business of investing, reinvesting, owning, holding or trading in securities and owns or proposes to acquire investment securities having a value exceeding 40% of the value of the issuers total assets (exclusive of U.S. Excluded from the term investment securities, among other things, are U.S. government securities and securities issued by majority-owned subsidiaries that are not themselves investment companies and are not relying on the exception from the definition of investment company set forth in Section 3(c)(1) or Section 3(c)(7) of the Investment Company Act. \nWe believe that we, our operating partnership and most of the subsidiaries of our operating partnership will not fall within either definition of investment company under Section 3(a)(1) of the Investment Company Act as we intend to invest primarily in real property, through our wholly or majority-owned subsidiaries, the majority of which we expect to have at least 60% of their assets in real property. As these subsidiaries would be investing either solely or primarily in real property, they would be outside of the definition of investment company under Section 3(a)(1) of the Investment Company Act. We are organized as a holding company that conducts its businesses primarily through our operating partnership, which in turn is a holding company conducting its business through its subsidiaries. Both we and our operating partnership intend to conduct our operations so that we comply with the 40% test. We will monitor our holdings to ensure continuing and ongoing compliance with this test. In addition, we believe that neither we nor our operating partnership will be considered an investment company under Section 3(a)(1)(A) of the Investment Company Act because neither we nor our operating partnership will engage primarily or hold itself out as being engaged primarily in the business of investing, reinvesting or trading in securities. Rather, through our operating partnerships wholly owned or majority owned subsidiaries, we and our operating partnership will be primarily engaged in the non-investment company businesses of these subsidiaries, namely the business of purchasing or otherwise acquiring real property. \nIn the event that the value of investment securities held by a subsidiary of our operating partnership were to exceed 40% of the value of its total assets, we expect that subsidiary to be able to rely on the exclusion from the definition of investment company provided by Section 3(c)(5)(C) of the Investment Company Act. Section 3(c)(5)(C), as interpreted by the staff of the SEC, requires each of our subsidiaries relying on this exception to invest at least 55% of its portfolio in mortgage and other liens on and interests in real estate, which we refer to as qualifying real estate assets, and maintain at least 80% of its assets in qualifying real estate assets or other real estate-related assets. The remaining 20% of the portfolio can consist of miscellaneous assets. What we buy and sell is therefore limited by these criteria. How we determine to classify our assets for purposes of the Investment Company Act will be based in large measure upon no-action letters issued by the SEC staff in the<|endoftext|>Or for working capital. \nWe are not able to determine at this time whether we will complete a Business Combination with any of the target businesses that we have reviewed or with any other target business. Some of the members of our management team are employed by certain affiliates of Marquee and The Raine Group. Marquee and The Raine Group are continuously made aware of potential business opportunities, one or more of which we may desire to pursue for a Business Combination, and we may not be given an opportunity to consider a Business Combination with any company that has already been identified to Marquee and The Raine Group as a suitable acquisition candidate for either of Marquee or The Raine Group unless Marquee and The Raine Group, in their sole discretion, decline such potential Business Combination or makes available to the Company a co-investment opportunity. \n\nWe may need to obtain additional financing to complete our Business Combination, either because the transaction requires more cash than is available from the proceeds held in our Trust Account, or because we become obligated to redeem a significant number of our public shares upon completion of the Business Combination, in which case we may issue additional securities (which may include a specified future issuance) or incur debt in connection with such Business Combination (including from Marquee, The Raine Group or their respective affiliates). There are no prohibitions on our ability to issue securities (which may include a specified future issuance) or incur debt in connection with our Business Combination (including from Marquee, The Raine Group or their respective affiliates). \n\nThe Nasdaq rules require that our Business Combination must be with one or more target businesses that together have a fair market value equal to at least 80% of the balance in the Trust Account (less any deferred underwriting commissions and taxes payable on interest earned) at the time of our signing a definitive agreement in connection with a Business Combination. The fair market value of the target or targets will be determined by our Board based upon one or more standards generally accepted by the financial community, such as discounted cash flow valuation or value of comparable businesses. If our Board is not able to independently determine the fair market value of the target business or businesses, we will obtain an opinion from an independent investment banking firm or from an independent accounting firm, with respect to the satisfaction of such criteria. Subject to these rules, our management has virtually unrestricted flexibility in identifying and selecting one or more prospective target businesses, although we will not be permitted to effectuate our Business Combination with another blank check company or a similar company with nominal operations. \nHowever, as a result of the issuance of a substantial number of new shares, our shareholders immediately prior to our Business Combination could own less than a majority of our outstanding shares subsequent to our Business Combination. If the \nBusiness Combination involves more than one target business, the 80% of net assets test will be based on the aggregate value of all of the target businesses and we will treat the target businesses together as the Business Combination for purposes of a tender offer or for seeking shareholder approval, as applicable. \nTo the extent we effect our Business Combination with a target business that may be financially unstable or in its early stages of development or growth we may be affected by numerous risks inherent in such a business. \n\nThe time required to select and evaluate a target business and to structure and complete a Business Combination, and the costs associated with this process, are not currently ascertainable with any degree of certainty. \n\nFor an indefinite period of time after the completion of a Business Combination, the prospects for our success may depend entirely on the future performance of a single business. If we complete our Business Combination with only a single entity, our lack of diversification may: subject us to negative economic, competitive and regulatory developments, any or all of which may have a substantial adverse impact on the particular industry in which we operate after a Business Combination, and cause us to depend on the marketing and sale of a single product or limited number of products or services. \n\nThe determination as to whether any of the members of our management team will remain with the combined company will be made at the time of our Business Combination. \nWe cannot assure you that any of our key personnel will remain in management or advisory positions with the combined company. The determination as to whether any of our key personnel will remain with the combined company will be made at the time of a Business Combination. \n\nShareholders May Not Have the Ability to Approve Our Business Combination \n\nUnder Nasdaqs listing rules, shareholder approval would be required for a Business Combination if, for example: we issue ordinary shares that will be equal to or in excess of 20% of the number of shares of ordinary shares then outstanding (other than in a public offering); any of our directors, officers or substantial security holders (as defined by the Nasdaq rules) has a 5% or greater interest, directly or indirectly, in the target business or assets to be acquired or otherwise and the present or potential issuance of ordinary shares could result in an increase in issued and outstanding ordinary shares or voting power of 1% or more (or 5% or more if the related party involved is classified as such solely because such person is a substantial security holder); \n\n\nIn the event we seek shareholder approval of our Business Combination and we do not conduct redemptions in connection with our Business Combination pursuant to the tender offer rules, our Sponsor, directors, officers, advisors or their respective affiliates may purchase shares in privately negotiated transactions or in the open market either prior to or following the completion of a Business Combination. However, they have no current commitments, plans or intentions to engage in any such transactions and have not formulated any terms or conditions for any such transactions. If they engage in such transactions, they will not make any such purchases when they are in possession of any materialnon-publicinformation not disclosed to the seller or if such purchases are prohibited by Regulation M under the Exchange Act. \nWe have adopted an insider trading policy which requires insiders to: (i)refrain from purchasing shares during certain blackout periods and when they are in possession of any materialnon-publicinformation and (ii)to clear all trades with our legal counsel prior to execution. We cannot currently determine whether our insiders will make such purchases pursuant to a \nRule10b5-1plan, as it will be dependent upon several factors, including but not limited to, the timing and size of such purchases. Depending on such circumstances, our insiders may either make such purchases pursuant to a \nRule10b5-1plan or determine that such a plan is not necessary. \n\nThe purpose of such purchases would be to (i)vote such shares in favor of the Business Combination and thereby increase the likelihood of obtaining shareholder approval of the Business Combination or (ii)to satisfy a closing condition in an agreement with a target that requires us to have a minimum net worth or a certain amount of cash at the closing of our Business Combination, where it appears that such requirement would otherwise not be met. \nIn addition, if such purchases are made, the public float of our ClassA Ordinary Shares may be reduced and the number of beneficial holders of our securities may be reduced, which may make it difficult to maintain or obtain the quotation, listing or trading of our securities on a national securities exchange. \nOur Sponsor, officers, directors and/or their affiliates anticipate that they may identify the shareholders with whom our Sponsor, officers, directors or their affiliates may pursue privately negotiated purchases by either the shareholders contacting us directly or by our receipt of redemption requests submitted by shareholders (in the case of ClassA Ordinary Shares) following our mailing of proxy materials in connection with our Business Combination. To the extent that our Sponsor, officers, directors, advisors or their affiliates enter into a private purchase, they would identify and contact only potential selling shareholders who have expressed their election to redeem their shares for a pro rata share of the Trust Account or vote against the Business Combination but only if such shares have not already been voted at the general meeting related to our Business Combination. \nAny purchases by our Sponsor, officers, directors and/or their affiliates who are affiliated purchasers under \nRule10b-18under the Exchange Act will only be made to the extent such purchases are able to be made in compliance with \nRule10b-18,which is a safe harbor from liability for manipulation under Section9(a)(2) and \nRule10b-5of the Exchange Act. \nOur Sponsor, officers, directors and/or their affiliates will not make purchases of ClassA Ordinary Shares if the purchases would violate Section9(a)(2) or \n### Rule10b-5of the Exchange Act. \nRedemption Rights For public shareholders Upon Completion of a Business Combination \nWe will provide our public shareholders with the opportunity to redeem all or a portion of their ClassA Ordinary Shares upon the completion of our Business Combination, including interest earned on the funds held in the Trust Account and not previously released to us to pay our taxes if such funds are held in an interest-bearing account (less up to $100,000 of interest to pay dissolution expenses), at aper-shareprice, payable in cash, equal to the aggregate amount then on deposit in the Trust Account calculated as of two business days prior to the completion of the Business Combination divided by the number of then outstanding public shares, subject to the limitations described herein. The amount in the Trust Account is approximately $10.00 per public share. There will be no redemption rights upon the completion of our Business Combination with respect to our warrants. Our Sponsor, directors and each member of our management team have each entered into a letter agreement with us, pursuant to which they have agreed to waive their redemption rights with respect to any Founder Shares and any public shares in connection with (i)the completion of our Business Combination and (ii)a shareholder vote to approve an amendment to our amended and restated memorandum and articles of association that would affect the substance or timing of our obligation to allow redemption in connection with our Business Combination or to redeem 100% of our public shares if we have not completed a Business Combination within 24 months from the IPO Closing Date. \n\nWe will provide our public shareholders with the opportunity to redeem all or a portion of their ClassA Ordinary Shares upon the completion of our Business Combination either (i)in connection with a general meeting called to approve the Business Combination or (ii)by means of a tender offer. The decision as to whether we will seek shareholder approval of a proposed Business Combination or conduct a tender offer will be made by us, solely in our discretion, and will be based on a variety of factors such as the timing of the transaction and whether the terms of the transaction would require us to seek shareholder approval under the law or stock exchange listing requirement or whether we were deemed to be a foreign private issuer (which would require a tender offer rather than seeking shareholder approval under SEC rules). Asset acquisitions and stock purchases would not typically require shareholder approval while direct mergers with the Company where we do not survive and any transactions where we issue more than 20% of our outstanding ordinary shares or seek to amend our amended and restated memorandum and articles of association would require shareholder approval. So long as we obtain and maintain a listing for our securities on Nasdaq, we will be required to comply with the Nasdaq rules. \nIf we hold a shareholder vote to approve our Business Combination, we will, pursuant to our amended and restated memorandum and articles of association: conduct<|endoftext|>Trading symbol PQEFF. \nPursuant to articles of amendment filed on May 5, 2017, we changed our name from MCW Energy Group Limited to Petroteq Energy Inc. and we changed our TSXV trading symbol from MCW to PQE. On June 2, 2017, our OTCQX trading symbol was changed from MCW to PQEFF. Since March 15, 2018, our stock has traded on the OTC Pink market when it no longer traded on the OTCQX International Market. \nOn May 5, 2017, we effected a share consolidation (reverse stock split) on a 1-for-30 basis. Unless otherwise included, all shares amounts and per share amounts in this registration statement have been prepared on a pro forma basis to reflect the 1-for-30 reverse stock split of our outstanding common shares. On November 23, 2018, our shareholders approved a resolution authorizing our Board of Directors to consolidate our shares on a basis of up to ten for one. No consolidation has been effected to date. \nAdditional information related to our company may be found on our website at www.petroteq.energy \nInformation contained in our website does not form part of the registration statement and is intended for informational purposes only. \n### ITEM 1A. RISK FACTORS. \nThe following risks relate specifically to our business and should be considered carefully. Our business, financial condition and results of operations could be harmed by any of the following risks. As a result, the trading price of our common shares could decline and the holders could lose part or all of their investment. \nWe have a limited operating history, and may not be successful in developing profitable business operations. \nOur oil extraction segment has a limited operating history. Our business operations must be considered in light of the risks, expenses and difficulties frequently encountered in establishing a business in the oil extraction business. In May 2018 we recommenced our oil extraction activities, which is expected to be a significant source of our revenue. From 2015 until 2018, we temporarily ceased our oil sands mining and processing operations while we relocated our processing plant. For a limited period, we made sales of hydrocarbon products to customers produced at our initial processing facility following completion of its construction and fabrication on September 1, 2015. Due to the volatility in the oil markets production ceased as we were not able to operate profitably at low volumes of output. The losses from continuing operations over the past four fiscal years are largely due to the relocation, reassembly and expansion or our processing facility on land located within our TMC Mineral Lease located in Uintah County, Utah. As of the date of this Fork 10-K, we have generated limited revenue from our oil sands mining and processing activities and do not anticipate generating any significant revenue from these activities until our new (and expanded) processing facility is fully operational for at least a few months, which is not expected until the second quarter of fiscal 2020. We have an insufficient history at this time on which to base an assumption that our oil sands mining and processing operations will prove to be successful in the long-term. Our future operating results will depend on many factors, including: our ability to raise adequate working capital; the demand for oil; the level of our competition; and our ability to efficiently explore, develop, produce or acquire sufficient quantities of marketable gas or oil in a highly competitive and speculative environment while maintaining quality and controlling costs. \nTo achieve profitable operations in the future, we must, alone or with others, successfully manage the factors stated above, as well as continue to develop ways to enhance or increase the efficiency of our mining and processing operations that are being conducted in the Asphalt Ridge area in eastern Utah. Despite our best efforts, we may not be successful in our exploration or development efforts or obtain the regulatory approvals required to conduct our operations. \nWe have suffered operating losses since inception and we may not be able to achieve profitability. \nAt August 31, 2019, August 31, 2018 and August 31, 2017, we had an accumulated deficit of ($78,285,282), ($62,497,396) and ($46,856,367), respectively and we expect to continue to incur increasing expenses in the foreseeable future as we develop our oil extraction business. We incurred a net loss of ($15,787,886) and ($15,641,029), as of the years ended August 31, 2019 and August 31, 2018, respectively. As a result, we are sustaining substantial operating and net losses, and it is possible that we will never be able to sustain or develop the revenue levels necessary to attain profitability. \nOur ability to be profitable will depend in part upon our ability to manage our operating costs and to generate revenue from our extraction operations. Operating costs could be impacted by inflationary pressures on labor, volatile pricing for natural gas used as an energy source in transportation of fuel and in oil sands processes, and planned and unplanned maintenance. \nWe have concluded that certain of our previously issued financial statements should not be relied upon and have restated certain of our previously issued financial statements which was time-consuming and expensive and could expose us to additional risks that could have a negative effect on our Company. \nAs discussed in the Explanatory Note, we have concluded that certain of our previously issued financial statements should not be relied upon. We have restated our previously issued audited consolidated financial statements and related note disclosures as of and for the years ended August 31, 2019 and 2018, and included them in this Amendment. As of the date of this Amendment, we have not yet completed the restatement of our previously issued audited consolidated financial statements and related note disclosures as of and for the years ended August 31, 2020 and 2019 or the quarterly reports on form 10-Q for the periods ended November 30, 2019, February 29, 2020, May 31, 2020, November 30, 2020 and February 28, 2021. We do not intend to restate our unaudited condensed consolidated financial statements and related note disclosures as of and for the three and six months ended February 28, 2019 and 2018 which were included in our initial registration statement on Form 10 originally filed with the SEC on May 22, 2019, and amended by Amendment No. 1 thereto filed with the SEC on June 24, 2019 and by Amendment No. 2 thereto filed with the SEC on July 5, 2019, and such unaudited condensed consolidated financial statements and related note disclosures should not be relied on. The restatement process is time consuming and expensive and, along with the failure to file our quarterly report on Form 10-Q for the period ended May 31, 2021 with the SEC in a timely manner, could expose us to additional risks that could have a negative effect on our Company. In particular, we incurred substantial unanticipated expenses and costs, including audit, legal and other professional fees, in connection with the restatement of our previously issued financial statements. Our managements attention was also diverted from some aspects of the operation of our business in connection with the restatement. \nThe restatement of our financial statements may in the future lead to, among other things, future stockholder litigation, loss of investor confidence, negative impacts on our stock price and certain other risks. \nThere can be no assurance that litigation against the Company and/or its management or Board of Directors might not be threatened or brought in connection with matters related to our restatements. As a result of the circumstances giving rise to the restatements, we have become subject to certain additional risks and uncertainties, including unanticipated costs for accounting and legal fees in connection with or related to the restatements, potential stockholder litigation, government investigations, and potential claims by Redline Capital Management S.A. as described under Part II, Item 1. - \nLegal Proceedings and elsewhere in this Amendment. Any such proceeding could result in substantial defense costs regardless of the outcome of the litigation or investigation. If we do not prevail in any such litigation, we could be required to pay substantial damages or settlement costs. In addition, the restatements and related matters could impair our reputation and could cause our counterparties to lose confidence in us. Each of these occurrences could have an adverse effect on our business, results of operations, financial condition and stock price. \nThe failure to comply with the terms of our secured notes could result in a default under the terms of the note and, if uncured, it could potentially result in action against the pledged assets. \nAs of August 31, 2019, we had issued and outstanding notes in the principal amount of $1,272,858 and convertible notes in the principal amount of $6,329,469 to certain private investors which mature between January 1, 2019 and August 31, 2020 and are secured by a pledge of all of our assets. If we fail to comply with the terms of the notes, the note holder could declare a default under the notes and if the default were to remain uncured, as secured creditors they would havethe right to proceed against the collateral secured by the loans.Any action by secured creditors to proceed against our assets would likely have a serious disruptive effect on our operations. \n\nWe will require additional capital to meet the terms of the TMC Mineral Lease and to continue to grow our business via acquisitions and to further expand our exploration and development programs. We may be unable to obtain additional capital when required. Future acquisitions and future exploration, development, processing and marketing activities, as well as our administrative requirements (such as salaries, insurance expenses and general overhead expenses, as well as legal compliance costs and accounting expenses) will require a substantial amount of additional capital and cash flows. \nIf we do not succeed in raising additional capital, our resources may not be sufficient to fund our planned operations and may force us to curtail operations or cancel planned projects. \nOur ability to obtain financing, if and when necessary, may be impaired by such factors as the capital markets (both generally and in the oil and gas industry in particular), our limited operating history, the location of our oil and gas properties and prices of oil and gas on the commodities markets (which will impact the amount of asset-based financing available to us, if any) and the departure of key employees. Further, if oil or gas prices on the commodities markets decline, our future revenues, if any, will likely decrease and such decreased revenues may increase our requirements for capital. \nAny additional capital raised through the sale of equity may dilute the ownership percentage of our shareholders. \nAny additional debt financing may include conditions that would restrict our freedom to operate our business, such as conditions that: increase our vulnerability to general adverse economic and industry conditions; require us to dedicate a portion of our cash flow from operations to payments on our debt, thereby reducing the availability of our cash flow to fund capital expenditures, working capital, growth and other general corporate purposes; and limit our flexibility in planning for, or reacting to, changes in our business and our industry. \nThe incurrence of additional indebtedness could require acceptance of covenants that, if violated, could further restrict our operations or lead to acceleration of the indebtedness that would necessitate winding up or liquidation of our company. In addition to the foregoing, our ability to obtain additional debt financing may be limited and there can be no assurance that we will be able to obtain any additional financing on terms that are acceptable, or at all. \nWe may also be required to recognize non-cash expenses in connection with certain securities we may issue, which may adversely impact our financial condition. \n\nAt August 31, 2019, we had not yet achieved profitable operations, had accumulated losses of ($78,285,282) since our inception and a working capital deficit of ($9,268,763), and expect to incur further losses in the development of our business, all of which casts substantial doubt about our ability<|endoftext|>Or preferred stock or other securities that are convertible into or exercisable for our common or preferred stock. \nIn the future, we may issue our authorized but previously unissued equity securities, resulting in the dilution of the ownership interests of our present stockholders. We are authorized to issue an aggregate of 500,000,000 shares of common stock and 20,000,000 shares of blank check preferred stock. We may issue additional shares of our common stock or other securities that are convertible into or exercisable for our common stock in connection with hiring or retaining employees, future acquisitions, future sales of our securities for capital raising purposes, or for other business purposes. The future issuance of any such additional shares of our common stock may create downward pressure on the trading price of the common stock. We will need to raise additional capital in the near future to meet our working capital needs, and there can be no assurance that we will not be required to issue additional shares, warrants or other convertible securities in the future in conjunction with these capital raising efforts, including at a price (or exercise or conversion prices) below the price an investor paid for stock. \nBeing a public company is expensive and administratively burdensome. \nAs a company whose common stock is registered under Section 12(g) of the Securities Exchange Act of 1934, as amended (the Exchange Act), we are fully subject to the information and reporting requirements of the Exchange Act and other federal securities laws, rules and regulations related thereto, including compliance with the Sarbanes-Oxley Act. Complying with these laws and regulations requires the time and attention of our Board of Directors and management and increases our expenses. \nAmong other things, we are required to: maintain and evaluate a system of internal controls over financial reporting in compliance with the requirements of Section 404 of the Sarbanes-Oxley Act and the related rules and regulations of the SEC and the Public Company Accounting Oversight Board; maintain policies relating to disclosure controls and procedures; prepare and distribute periodic reports in compliance with our obligations under federal securities laws; institute a more comprehensive compliance function, including corporate governance; and involve, to a greater degree, our outside legal counsel and accountants in the above activities. \nThe costs of preparing and filing annual and quarterly reports, proxy statements and other information with the SEC and furnishing audited reports to stockholders are expensive and much greater than that of a privately-held company, and compliance with these rules and regulations may require us to hire additional financial reporting, internal controls and other finance personnel, and will involve a material increase in regulatory, legal and accounting expenses and the attention of management. There can be no assurance that we will be able to comply with the applicable regulations in a timely manner, if at all. In addition, being a public company makes it more expensive for us to obtain director and officer liability insurance. In the future, we may be required to accept reduced coverage or incur substantially higher costs to obtain this coverage. \nOur common stock is subject to the penny stock rules of the SEC and the trading market in the securities is limited, which makes transactions in the stock cumbersome and may reduce the value of an investment in the stock. \nRule 15g-9 under the Exchange Act establishes the definition of a penny stock, for the purposes relevant to us, as any equity security that has a market price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions. For any transaction involving a penny stock, unless exempt, the rules require: (a) that a broker or dealer approve a persons account for transactions in penny stocks; and (b) the broker or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased. \nIn order to approve a persons account for transactions in penny stocks, the broker or dealer must: (a) obtain financial information and investment experience objectives of the person and (b) make a reasonable determination that the transactions in penny stocks are suitable for that person and the person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks. \nThe broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prescribed by the SEC relating to the penny stock market, which, in highlight form: (a) sets forth the basis on which the broker or dealer made the suitability determination; and (b) confirms that the broker or dealer received a signed, written agreement from the investor prior to the transaction. This may make it more difficult for investors to dispose of our common stock and cause a decline in the market value of our common stock. \nDisclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the commissions payable to both the broker or dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor in cases of fraud in penny stock transactions. \nOffers or availability for sale of a substantial number of shares of our common stock may cause the price of our common stock to decline. \nIf our stockholders sell substantial amounts of our common stock in the public market, including upon the expiration of any lockup periods or the statutory holding period under Rule 144, or issued upon the conversion of preferred stock, it could create a circumstance commonly referred to as an overhang and in anticipation of which the market price of our common stock could fall. The existence of an overhang, whether or not sales have occurred or are occurring, also could make more difficult our ability to raise additional financing through the sale of equity or equity-related securities in the future at a time and price that we deem reasonable or appropriate. \nAn investment in our securities is speculative and there can be no assurance of any return on any such investment. \nAn investment in our securities is speculative and there is no assurance that investors will obtain any return on their investment. Investors will be subject to substantial risks involved in an investment in our Company, including the risk of losing their entire investment. \nOur Articles of Incorporation provide that, unless we consent in writing to the selection of an alternative forum, the Eighth Judicial District Court of Clark County, Nevada will be the sole and exclusive forum for substantially all disputes between us and our stockholders, which could limit our stockholders ability to obtain a favorable judicial forum for disputes with us or our directors, officers, or employees. \nOur Articles of Incorporation provide that, unless we consent in writing to the selection of an alternative forum, the Eighth Judicial District Court of Clark County, Nevada will be the exclusive forum for any derivative action or proceeding brought on our behalf; any action asserting a claim against us arising pursuant to the Nevada Revised Statutes, our Articles of Incorporation or our bylaws. Accordingly, our exclusive forum provision will not relieve us of our duties to comply with the federal securities laws and the rules and regulations thereunder, and our stockholders will not be deemed to have waived our compliance with these laws, rules and regulations. \nThese exclusive-forum provisions may limit a stockholders ability to bring a claim in a judicial forum of its choosing for disputes with us or our directors, officers or other employees, which may discourage lawsuits against us and our directors, officers and other employees. \nIf a court were to find the choice of forum provision contained in our Articles of Incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, results of operations, and financial condition. \n### ITEM 1B. UNRESOLVED STAFF COMMENTS \nConcurrently with the filing of this Annual Report, the Company is responding to a comment issued by the SEC in connection with the filing of the Companys Form 10-K for the fiscal year ended December 31, 2018 filed with the SEC on April 1, 2020. \nITEM 2. PROPERTIES \nOur headquarters are located in Los Angeles, California, where Pineapple Ventures, Inc. leases office space for us of 2,149 sq ft under a two-year lease effective July 29, 2020, at a monthly lease amount of approximately $9,000. We have been at this location for four years and this new lease was just signed. \n### ITEM 3. LEGAL PROCEEDINGS \nIn the normal course of business, the Company is subject to various claims and litigation. While the outcome of any litigation is inherently unpredictable, the Company believes that it has valid defenses with respect to the legal matters pending against it and that the ultimate resolution of these matters will not have a materially adverse impact on its financial condition, results of operations, or cash flows. \nSalem, et al. v. \n\n, filed July 13, 2018. Trademark Reg. No. The arbitrator issued a final award for transfer of the IP rights and the exercise of a put option in or about December 23, 2019, in favor of Claimants. Pineapple Express, Inc. \n### Pineapple Express v. Ramsey Salem \nJAMS Arbitration Reference Number: 1220063897 \n, filed December 4, 2019. v. \n, filed July 13, 2018, by Respondent. \n### Hawkeye v. \nLos Angeles Superior Court Case Number Case Number: BC708868, filed June 6, 2018. Plaintiff claims damages against Defendant in the excess of $900,000 arising from a series of successive amended and revised revenue sharing agreements pertaining to rental income from certain leasehold for premises more commonly known as 65421 San Jacinto Lane, Desert Hot Springs, CA 92240 which was not realized through no fault of Defendants. Nor are Defendants contracting parties to the lease agreement or original revenue sharing agreement for which consideration was paid. However, the matter was reduced to an entry of judgment by the court in or about February 21, 2020 for the amount of $615,000, which monies remain due and outstanding. \nSharper, Inc. v. , \nLos Angeles Superior Court Case Number: 18SMCV00149, filed November 1, 2018. The matter was arbitrated and the arbitrator issued a final award in favor Petitioner in or about September 4, 2019, for the principal amount of $15,375. The award was reduced to an entry of judgment in the total amount of $18,692 on or about February 27, 2020, against Pineapple Express, Inc. \n### Cunningham v. Pineapple Express, Inc, \nLos Angeles Superior Court Case Number: BS171779, Judgment, ordered by the Department of Industrial Relations, Labor Commissioners Office was entered by the Court on December 11, 2017. \nPineapple Express, Inc. v. Cunningham \nLos Angeles Superior Court Case Number: SC127731, filed June 21, 2017. \n### The Hit Channel v. Pineapple Express, Inc. \nLos Angeles Superior Court Case Number: 19STCV09006, filed in or about March 14, 2019. The matter has since resolved pursuant to the confidential settlement agreement entered into by and between the parties, the licensing agreement has been deemed terminated, and the matter has been dismissed with prejudice by order of the court on February 14, 2020. \nPineapple Express, Inc \nJAMS Arbitration Reference Number: 1210037058 \n, filed December 18, 2019. The parties self-represented in arbitration and a final arbitration award was issued in the amount $23,805 on or about October 27, 2020, against respondent, Pineapple Express, Inc. On information and belief, Pineapple Express Inc., a California Corporation is not affiliated with Pineapple Inc., a Nevada Corporation, formerly known as Pineapple Express, Inc., a Wyoming Corporation. \n### Novinger v. Pineapple Express, Inc. \nLos Angeles Superior Court Case Number: 20CHLC10510, filed in or about March 11, 2020. without specificity as to the judgment debtors state of incorporation, for the total of $30,000. On September 23, 2020, a default judgment was entered against Pineapple Express, Inc. \nITEM 4. MINE SAFETY DISCLOSURES<|endoftext|>Serves as a senior advisor to Texas Next Capital, a private equity partnership that invests in Texas businesses to drive economic growth in Texas. He also serves on the boards of directors of TransPecos Financial Corp. and several non-profit organizations, including serving as Chairman of University Health System, a county government-owned public district hospital for the San Antonio, Texas metropolitan area. He previously served as a board member of Texas Instruments Inc. from 1989 to 2010, and as a board member of Storage Tek Inc., Inet Inc., Prodigy Inc., Telefonos de Mexico, Republic Bank Corporation, and Interfirst Corporation. \nWe believe Mr.Adams extensive leadership, business, and board experience bring great value to our company and our board of directors. Mr.Adamss decades of board service for various public and private companies, including over 20 years of board experience with Texas Instruments, two of which as Chairman, provides our board of directors with a unique understanding of corporate governance. In addition, Mr.Adamss 30 years of experience at SBC Communications brings significant management expertise to our board of directors. His roles at SBC Communications also provided him with a great deal of experience in the regulated telecommunications industry, and we believe that regulatory experience is of great value to our regulated transmission and distribution company. \nThomas M. Dunning \n(3) \nThomas M. Dunning has served as a member of our board of directors since \n### October 200 \n7 and in \nJuly 201 \n0 was elected Lead Independent Director by our board of directors. Since his retirement in 2008 as Chairman of Lockton Dunning Benefits, a company specializing in the design and servicing of employee benefits, he has served as Chairman Emeritus. Mr. Dunning also served as Chairman and Chief Executive Officer of Lockton Dunning Benefit Company, its predecessor company, from 1998 to 2007 following the 1998 acquisition of Dunning Benefits Corporation by the Lockton Group of Companies. Mr. Dunning currently serves on the boards of directors of Oncor Holdings, and a number of non-profit organizations. He is also a former Chairman of Dallas Fort Worth International Airport board and a former director of the Southwestern Medical Foundation, as well as a former director of American Beacon Funds. \nWe believe Mr. Dunnings experience with employee benefit programs and his understanding of employee benefits as part of an overall employee compensation program is important to Oncor in his roles as a director and member of the Organization and Compensation Committee (O&C Committee). As member and former chair of the O&C Committee, overseeing the design and effectiveness of Oncors executive compensation programs, Mr. Dunning offers broad experience in understanding and addressing compensation-related issues and challenges. His past appointments by Texas Governors as Chairman of the Texas Water Development Board and a director on the boards of the Texas Department of Transportation, Texas Department of Human Services and Texas Department of Criminal Justice, as well as his past service as Chairman of the Dallas/Fort Worth International Airport board, add to the extensive experience and leadership skills Mr. Dunning provides to our board. His experience and familiarity with Texas government, combined with over 50 years of experience in business and strong record of civic involvement in Texas, are valuable to our Texas-based business. \nRobert A. Estrada \n(1) \nRobert A. Estrada has served as a member of our board of directors since \n### October 200 \n7. Mr. Estrada is Chief Compliance Officer, Senior Managing Director and Chairman Emeritus of Estrada Hinojosa & Company, Inc., an investment banking firm specializing in public finance that he co-founded in 1992. In addition to these positions, he also previously served as Chairman of the Board and as President and Chief Executive Officer of the firm. Since its inception, Estrada Hinojosa & Company, Inc. has been involved in municipal bond underwritings totaling over $80 billion and has provided financial advisory services on financings totaling more than $50 billion \nMr. Estrada is a member of the boards of directors of Oncor Holdings and several civic and arts organizations. From 2001 until 2008, Mr. Estrada served on the Board of Regents of the University of Texas System, a system with over 60,000 employees and a budget of approximately $14 billion \n, pursuant to an appointment by the Governor of Texas. While serving on the University of Texas System Board of Regents, Mr. Estrada chaired its audit, compliance and management review committee. From 2004 until 2010, he served two consecutive terms on the board of directors of the Federal Reserve Bank of Dallas. From 1990 to 1994, Mr. Estrada also served on the board of directors of the Student Loan Marketing Association (Sallie Mae), a $45 billion entity and was a member of the boards executive committee. \nWe believe Mr. Estradas skills and experience in the financial and legal sectors qualify him to serve as a director of Oncor and chair of the Audit Committee. We also believe his comprehensive understanding of financial, compliance and business matters pertinent to us and his experience in serving large clients and boards regarding these matters are significant assets to our board. Mr. Estrada also has over 30 years of legal experience as a securities attorney, giving him a familiarity with securities law issues and investor disclosure requirements relevant to our company. \nPrintice L. Gary \n(1) \nPrintice L. Gary has served as a member of our board of directors since \n### February 201 \n4. Mr. Gary is the founding partner of, and since its founding in 1991 has served as the chief executive officer of, Carleton Residential Properties, a real estate firm engaged in investing, developing, general contracting and asset management of properties throughout Texas and the Southwest. His prior business experience includes serving as a Texas division partner for multi-family development with Trammel Crow Residential from 1985 to 1991 and serving as the president of Centex Corporations homebuilding and mortgage banking subsidiary, Fox & Jacobs Homes, from 1978 to 1985. Mr. Gary also served on the board of directors of the National Equity Fund, Inc., a Chicago-based nonprofit tax credit syndicator and asset manager from 2012 to 2016. Mr. Gary currently serves on the board of directors of Preservation of Affordable Housing Inc. (Boston, Massachusetts) and the board of directors of Oncor Holdings. Mr. Gary has served on the governing bodies of various state entities pursuant to appointments by the Governor(s) of Texas, including the board of directors of the University of Texas Investment Management Company, a $27 billion endowment fund, from 2009 until 2013, the University of Texas System Board of Regents from 2007 until 2013, where he was chairman of the facilities planning and construction committee, the University of Texas System Board for Lease of University Lands from 2008 to 2013, the Texas State Tax Reform Commission in 2003, and the North Texas Tollway Authority board of directors from 1996 to 2000. \nWe believe Mr. Garys extensive skills and experience in the business and financial sectors are a significant asset to us in his role both as a director of Oncor and as a member of the Audit Committee. In addition, Mr. Garys entrepreneurial background, founding Carleton Residential Properties, a residential real estate company active for more than 25 years across Oncors prime North Texas service territory brings valuable development and construction experiences to our board of directors. His experience with Texas government through his service on various state entities also brings great value to our Texas-based business. \nWilliam T. Hill, Jr. \n(2) \nWilliam T. Hill, Jr. has served as a member of our board of directors since \n### October 200 \n7. Mr. Hill currently practices law with the law firm of William T. Hill, Jr., Attorney at Law, a firm he established in 2007.Until 2012, he was also of counsel to the Dallas criminal defense law firm of Fitzpatrick Hagood Smith & Uhl LLP. In 2007, he served as Director of Strategic Initiatives of Mercy Street Ministries. From 1999 to 2007, Mr. Hill was Criminal District Attorney of the Dallas County District Attorneys office. Mr. Hill serves on the boards of directors of Hilltop Holdings, Incorporated, a New York Stock Exchange listed company in the insurance industry, Oncor Holdings and a number of charitable organizations and previously served on the board of directors of the Baylor Hospital Foundation. \nWe believe Mr. Hills experience of over 50 years with legal and compliance matters, along with his management of a large group of highly skilled professionals, have given him considerable knowledge concerning many matters that come before our board of directors. In addition, as District Attorney he developed judgment and decision-making abilities that assist him today in evaluating and making decisions on issues that face our board of directors. Mr. Hill has also served on several civic and charitable boards, which has given him invaluable experience in corporate governance matters. \nTimothy A. Mack \n(2) \nTimothy A. Mack has served as a member of our board of directors since \n### February 201 \n4. Mr. Mack currently is of counsel to the Dallas, Texas law firm, Matheson & Marchesoni PLLC. Mr. Mack was a member of the Dallas, Texas law firm, Mack Matheson & Marchesoni PLLC, from \nMarch 200 \n9 until his retirement in \n### August 201 \n7. Prior thereto, Mr. Mack was a partner at an international law firm, Hunton & Williams LLP (now known as Hunton Andrews Kurth LLP), and its predecessor firm in Dallas, Texas, where he had practiced law since 1980. Mr. Macks law practice focuses on energy-related matters, particularly finance, securities, corporate and partnership law, corporate governance and mergers and acquisitions. Mr. Mack is a member of the board of directors of Oncor Holdings and various local non-profit organizations. \nWe believe Mr. Macks experience of over 40 years in advising energy companies in finance, securities, corporate governance and merger and acquisition matters, as well as his prior experience in participating in the management of a large international law firm, brings to our board of directors additional knowledge and valuable first-hand experience with the duties of directors. \nJeffrey W. Martin \n(3) \nJeffrey W. Martin has served as a member of our board of directors since \n### March 201 \n8. Mr. Martin has served as Chief Executive Officer and a member of the board of directors of Sempra since \nMay \n1, 2018, and has served as Chairman of Sempra since \n### December \n1, 2018. Mr. Martin served as Executive Vice President and Chief Financial Officer of Sempra from \nJanuary 201 \n7 to \n### April \n30, 2018. Mr. Martin served at San Diego Gas & Electric Company (SDG&E), an indirect subsidiary of Sempra, as the Chief Executive Officer and a director beginning in \nJanuary 201 \n4.Continuing in those roles, Mr. Martin was also appointed as the President in \n### October 201 \n5 and as the Chairman in \nNovember 201 \n5, serving in each of these roles through \n### December 201 \n6. From 2010 to 2013, Mr. Martin served as the President and Chief Executive Officer of Sempra U.S. Gas & Power (USGP), a previous business unit of Sempra, and USGPs predecessor organization, Sempra Generation, and before that, served as the Vice President of Investor Relations for Sempra. Prior to joining Sempra in \nDecember 200 \n4, Mr. Martin was chief financial officer of NewEnergy, Inc. He also formerly served as corporate counsel at UniSource Energy Corporation and was an attorney at the law firm of Snell & Wilmer, LLP. Mr. Martin is also a member of the board of directors of Oncor Holdings and serves on the board of directors for the American Petroleum Institute and the Business Roundtable and the board of trustees of the University of San Diego.He also is a governor of the Oil and Gas and Electricity communities for the World Economic Forum.He previously served on the boards of directors of the Edison Electric Institute, California Chamber of Commerce and National Association of Manufacturers. \nMr. Martin was appointed by Sempra (through Oncor Holdings) as a member of our board of directors pursuant to Sempras indirect right under the Limited Liability Company Agreement to designate two directors. We believe<|endoftext|>"},"task":{"kind":"string","value":"{\"file\": \"/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz\"}"}}},{"rowIdx":75,"cells":{"text":{"kind":"string","value":"<|endoftext|>Initial business combination. Our initial stockholders will count toward this quorum and pursuant to the letter agreement, our sponsor, officers and directors have agreed to vote any founder shares and placement shares held by them and any public shares acquired during or after our initial public offering (including in open market and privately negotiated transactions) in favor of our initial business combination. \n\n\nIn addition, we will not redeem any public shares unless our net tangible assets will be at least $5,000,001 either immediately prior to or upon consummation of our initial business combination and after payment of underwriters fees and commissions (so that we are not subject to the SECs penny stock rules) or any greater net tangible asset or cash requirement which may be contained in the agreement relating to our initial business combination. \nOur amended and restated certificate of incorporation provides that we may not redeem our public shares unless our net tangible assets are at least $5,000,001 either immediately prior to or upon consummation of our initial business combination and after payment of underwriters fees and commissions (so that we are not subject to the SECs penny stock rules) or any greater net tangible asset or cash requirement which may be contained in the agreement relating to our initial business combination. \n\n\n\nWe may require our public stockholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in street name, to either tender their certificates to our transfer agent up to two business days prior to the vote on the proposal to approve the initial business combination, or to deliver their shares to the transfer agent electronically using the Depository Trust Companys DWAC (Deposit/Withdrawal At Custodian) System, at the holders option. Accordingly, a public stockholder would have up to two days prior to the vote on the initial business combination to tender its shares if it wishes to seek to exercise its redemption rights. \n\nThe foregoing is different from the procedures used by many special purpose acquisition companies. \nAny request to redeem such shares, once made, may be withdrawn at any time up to the date of the stockholder meeting. \n\nIf our initial proposed initial business combination is not completed, we may continue to try to complete an initial business combination with a different target until 24months from the closing of our initial public offering. \n\nOur amended and restated certificate of incorporation provides that we will have only 24months from the closing of our initial public offering to complete our initial business combination. If we are unable to complete our initial business combination within such 24-monthperiod, we will: (i)cease all operations except for the purpose of winding up, (ii)as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-shareprice, payable in cash, equal to the aggregate amount then on deposit in the trust account including interest earned on the funds held in the trust account and not previously released to us to pay our taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii)as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject in the case of clauses (ii)and (iii)above to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect to our warrants, which will expire worthless if we fail to complete our initial business combination within the 24-monthtime period. \nOur sponsor, officers and directors have entered into a letter agreement with us, pursuant to which they have waived their rights to liquidating distributions from the trust account with respect to any founder shares and (along with the underwriters) placement shares held by them if we fail to complete our initial business combination within 24months from the closing of our initial public offering. However, if our sponsor, officers or directors acquired public shares in or after our initial public offering, they will be entitled to liquidating distributions from the trust account with respect to such public shares if we fail to complete our initial business combination within 24months from the closing of our initial public offering. \nOur sponsor, officers and directors have agreed, pursuant to a written agreement with us, that they will not propose any amendment to our amended and restated certificate of incorporation (i)to modify the substance or timing of our obligation to allow redemption in connection with our initial business combination or certain amendments to our charter prior thereto or to redeem 100% of our public shares if we do not complete our initial business combination within 24months from the closing of our initial public offering or (ii)with respect to any other provision relating to stockholders rights or pre-initialbusiness combination activity, unless we provide our public stockholders with the opportunity to redeem their shares of ClassA common stock upon approval of any such amendment at a per-shareprice, payable in cash, equal to the aggregate amount then on deposit in the trust account including interest earned on the funds held in the trust account and not previously released to us to pay our taxes divided by the number of then outstanding public shares. However, we may not redeem our public shares unless our net tangible assets are at least $5,000,001 either immediately prior to or upon consummation of our initial business combination and after payment of underwriters fees and commissions (so that we are not subject to the SECs penny stock rules). \nWe expect that all costs and expenses associated with implementing our plan of dissolution, as well as payments to any creditors, will be funded from amounts remaining out of the approximately $1,000,000 of proceeds held outside the trust account, although we cannot provide any assurance that there will be sufficient funds for such purpose. Wewill depend on sufficient interest being earned on the proceeds held in the trust account to pay any tax obligations we may owe. However, if those funds are not sufficient to cover the costs and expenses associated with implementing our plan of dissolution, to the extent that there is any interest accrued in the trust account not required to pay taxes, we may request the trustee to release to us an additional amount of up to $100,000 of such accrued interest to pay those costs and expenses. \nIf we were to expend all of the net proceeds of our initial public offering and the concurrent private placement, other than the proceeds deposited in the trust account, and without taking into account interest, if any, earned on the trust account, the per-shareredemption amount received by stockholders upon our dissolution would be approximately $10.00. We cannot provide any assurance that the actual per-shareredemption amount received by stockholders will not be substantially less than $10.00. While we intend to pay such amounts, if any, we cannot provide any assurance that we will have funds sufficient to pay or provide for all creditors claims. \n\nOur sponsor has agreed that it will be liable to us if and to the extent any claims by a third party for services rendered or products sold to us, or a prospective target business with which we have entered into a written letter of intent, confidentiality or similar agreement or business combination agreement, reduce the amount of funds in the trust account to below the lesser of (i) $10.00 per public share and (ii)the actual amount per public share held in the trust account as of the date of the liquidation of the trust account, if less than $10.00 per share due to reductions in the value of the trust assets, less taxes payable, provided that such liability will not apply to any claims by a third party or prospective target business who executed a waiver of any and all rights to the monies held in the trust account (whether or not such waiver is enforceable) nor will it apply to any claims under our indemnity of the underwriters of our initial public offering against certain liabilities, including liabilities under the Securities Act. \nWe have not asked our sponsor to reserve for such indemnification obligations and we cannot provide any assurance that our sponsor would be able to satisfy those obligations. Accordingly, we cannot provide any assurance that due to claims of creditors the actual value of the per-shareredemption price will not be less than $10.00 per public share. \nWe will have access to up to approximately $1,000,000 from the proceeds of our initial public offering and the concurrent private placement with which to pay any such potential claims (including costs and expenses incurred in connection with our liquidation, currently estimated to be no more than approximately $100,000). In the event that our initial public offering expenses exceed our estimate of $550,000, we may fund such excess with funds from the funds not to be held in the trust account. \n\nFurthermore, if the pro rata portion of our trust account distributed to our public stockholders upon the redemption of our public shares in the event we do not complete our initial business combination within 24months from the closing of our initial public offering, is not considered a liquidating distribution under Delaware law and such redemption distribution is deemed to be unlawful (potentially due to the imposition of legal proceedings that a party may bring or due to other circumstances that are currently unknown), then pursuant to Section174 of the DGCL, the statute of limitations for claims of creditors could then be six years after the unlawful redemption distribution, instead of three years, as in the case of a liquidating distribution. If we are unable to complete our initial business combination within 24months from the closing of our initial public offering, we will: (i)cease all operations except for the purpose of winding up, (ii)as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-shareprice, payable in cash, equal to the aggregate amount then on deposit in the trust account including interest earned on the funds held in the trust account and not previously released to us to pay our taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii)as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject in the case of clauses (ii)and (iii)above to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. Accordingly, it is our intention to redeem our public shares as soon as reasonably possible following our 24 th month and, therefore, we do not intend to comply with those procedures. \nAs described above, pursuant to the obligation contained in our underwriting agreement, we will seek to have all vendors, service providers, prospective target businesses or other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account. \nTo the extent any bankruptcy claims deplete the trust account, we cannot provide any assurance that we will be able to return $10.00 per share to our public stockholders. We cannot provide any assurance that claims will not be brought against us for these reasons. \nOur public stockholders will be entitled to receive funds from the trust account only upon the earlier to occur of: (i)the completion of our initial business combination, (ii)the redemption of any public shares properly tendered in connection with<|endoftext|>For Mr. German, $4,763 for Mr. Cook and $4,127 for Mr. Miller and in fiscal 2019 of $5,446 for Mr. German, $3,886 for Ms. Sarhangi, $4,453 for Mr. Cook and $3,998 for Mr. Miller. The amount reported for Mr. Lenns includes $6,000 for a housing allowance provided to Mr. Lenns from July to December 2020 and $13,557 paid to Lenns Consulting Group for June 2020 before he became our chief financial officer. \n(2) \nThe amounts reported include stock grants in fiscal 2019 valued at $9,500 for each of Ms. Sarhangi, Mr. Cook, Mr. Miller, and Mr. Grandinali, and in fiscal 2020 to Mr. Lenns valued at $74,250. \n(3) \nThe amount includes stock options to acquire 10,000 common shares in fiscal 2020 for Mr. Lenns valued at $19,505. \n### Employment Agreements \nPursuant to his employment agreement dated November 30, 2006, Mr. German continues to serve as president and chief executive officer of Corning Gas for 2020 under the automatic renewal provisions of his contract. The employment agreement provides for termination payments to Mr. German as follows: \nIf Mr. German terminates his employment for Good Reason (as defined in the employment agreement generally a decrease in title, position or responsibilities, a decrease in salary or bonus or a reduction in benefits), then he will receive compensation and benefits until the effective date of his termination, plus a severance package equal to his then current annual salary. \nIf Mr. Germans employment is terminated without cause (as defined in the employment agreement), then he will receive compensation and benefits until the effective date of his termination, plus a severance package equal to his then current annual salary. \nIf Mr. Germans employment is terminated for a Change in Control (as defined in the employment agreement), then he will receive compensation and benefits until the effective date of his termination, plus a severance package equal to three times his then current annual salary. \nThe employment agreement also contains standard confidentiality, non-competition and non-solicitation provisions for a period including Mr.Germans employment and the twelve months immediately following the date of the termination of his employment. On April 17, 2012, Corning Gas entered into Change of Control Agreements with all executive officers other than Mr. German. None of our other executive officers have employment agreements. \n### Change of Control Agreements. \nOn April 17, 2017, we entered into Change of Control Agreements with Mr. Cook and Mr. Miller. On August 31, 2020, we entered into a Change of Control Agreement with Mr. Lenns. The Cook and Miller agreements terminate on the first to occur of: (i) termination of the executives employment with the Company prior to a Change of Control (as defined in the agreements); (ii) one year from the date of a Change of Control; or (iii) May 1, 2022, but only if no Change of Control has occurred as of such date. The Lenns agreement is identical to the Cook and Miller agreements, except its termination date is October 1, 2025. \nUnder each agreement, upon termination of the executives employment with the Company within 12 months following a Change of Control, unless such termination is because of the executives death, or by the Company for Cause or Disability (each as defined in the agreements) or by the executive other than for Good Reason (as defined in the agreements), we will be required to pay to the executive the following: (i) the executives full salary through the date of termination and all other unpaid amounts to which the executive is entitled as of the date of termination under any plan or other arrangement of the Company, at the time such payments are due (and in any event within 90 days after the executives separation of service from the Company); and (ii) an amount equal to 1.0 multiplied by the executives annualized includable compensation for the base period (within the meaning of Section 280G of the Internal Revenue Code), subject to reduction if such payment is or will be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code, which payment must be made in a lump sum within 90 days after the executives separation from service. \nThe executives are not required to mitigate the amount of any payment under the Change of Control Agreements by seeking employment or otherwise. We also agreed to pay to each of the executives all legal fees and related expenses incurred by the executive in connection with enforcing the agreement, whether or not the executive prevails. \n### Executive Employee Incentive Program. \nEach year, the Board of Directors approves the performance goals and terms of an Executive Employee Incentive Program. The program is designed to (a) attract and retain high caliber executives who can optimize the Holding Companys and the Gas Companys performance, and (b) reward our executive officers for the achievement of annual corporate and operational goals. Performance bonuses, if earned, are paid in cash during the first calendar quarter of the calendar year following the calendar year for which performance was measured and are based upon the Board of Directors determination of the percentage of the goals that were met. Eligible employees include each of our named executive officers who are officers on the date of payment of the Awards other than Mr. German. Awards under the program are at the discretion of the Board of Directors and may be modified or discontinued at any time. \n### Benefit Plans \nWe provide competitive welfare and retirement benefits to our executive officers as an important element of their compensation packages.Our executives receive medical and dental coverage, life insurance, disability coverage and other benefits on the same basis as our other employees. Our executives are also eligible to participate in our employee savings and pension plans. \nCorning Natural Gas Corporation Employees Savings Plan \nAll employees of Corning Gas who work for more than 1,000 hours per year and who have completed one year of service may enroll in the savings plan at the beginning of each calendar quarter. Under the savings plan, participants may contribute up to 50% of their wages. Corning Gas matches one-half of the participants contributions up to a total of 3% of the participants wages.Matching contributions vest in the participants accounts at a rate of 20% per year and become fully vested after five years. All participants may select one of ten investment plans, or a combination thereof, for their account. Distribution of amounts accumulated under the savings plan occurs upon the termination of employment or death of the participant.The savings plan also contains loan and hardship withdrawal provisions. \n### Pension Plan \nWe maintain a defined benefit pension plan, the Retirement Plan for Salaried and Non-Union Employees of Corning Gas that covers substantially all our employees.We make annual contributions to the plan equal to amounts determined in accordance with the funding requirements of the Employee Retirement Security Act of 1974.The benefit payable under the pension plan is calculated based upon the employees average salary for the four years immediately preceding his retirement.As defined in the plan, the normal retirement age is 62. The compensation covered by the pension plan includes only base salary, identified in the summary compensation table as salary. \n\nIn fiscal 2020, we issued restricted shares and options to our new chief financial officer, Charles Lenns. The following table summarizes Mr. Lenns grants at September 30, 2020. There were no other outstanding equity grants at year-end. \nName \n### Option awards \nStock awards \n### Shares underlying unexercised options exercisable \nShares underlying unexercised options unexercisable \n### Option exercise price \n### Option expiration date \n### Number of shares of stock that have not vested \nMarket value of shares of stock that have not vested \n### Charles Lenns, \nChief Financial Officer and Treasurer \n$16.50 \n08/31/2030 \n$74,250 \n### Director Compensation \nFor fiscal year 2020, the Holding Company paid its directors with restricted stock grants of 450 shares per quarter. The shares awarded become unrestricted upon a director leaving the board.Directors who also serve as officers are not compensated for their service as directors. On February 24, 2020, shares were issued for the quarter ended December 31, 2019, on June 15, 2020, shares were issued for the quarter ended March 31, 2020, on August 14, 2020, shares were issued for the quarter ended June 30, 2020, and on November 17, 2020, shares were issued for the quarter ended September 30, 2020. Information regarding shares of restricted stock awarded to directors in the fiscal year ended September 30, 2020, is summarized below, at the amount recognized for financial statement reporting purposes in accordance with FASB ASC 718. \nAs of September 30, 2020, each director had 450 shares of stock award outstanding, which were issued on November 13, 2020. On January 12, 2021, the Holding Company discontinued the issuance of stock compensation for its directors in connection with the Holding Companys entry into an agreement and plan of merger with companies affiliated with Argo Infrastructure Partners LP. In 2021, the Holding Company intends to compensate its directors with deferred cash payments equal in value to 450 shares a quarter. \n\nSecurity Ownership of Principal Shareholders and Management \nAs of January 20, 2021, there were 3,083,577 shares of common stock outstanding, 260,600 shares of 6% Series A Cumulative Preferred Stock, 244,263 shares of Series B Convertible Preferred Stock and 180,000 shares of 6% Series C Cumulative Preferred Stock. Each share of the Series B Convertible Preferred Stock is convertible into 1.2 shares of common stock at the option of the holder. The following table sets forth, as of January 20, 2021 information regarding the beneficial ownership of our stock by each shareholder known by us to be the beneficial owner of more than 5% of our stock, each director, each executive officer, and all our directors and executive officers as a group. \n* Less than 1% \n(1) \nUnless otherwise indicated, we believe that all persons named in the table have sole investment and voting power over the shares of common stock owned. \n(2) \nUnless otherwise indicated, the address of each beneficial owner is c/o Corning Natural Gas Holding Corporation, 330 West William Street, Corning, New York 14830. \n(3) \nIncludes 513,086 shares of common stock held by Gabelli Funds, LLC, which includes 73,298 shares of Series B Convertible Preferred Stock and 105,664 shares of common stock held by Teton Advisors, Inc. which includes 15,095 shares of Series B Convertible Preferred Stock. The Series C Cumulative Preferred Stockis held by the Gabelli Foundation. Each of Gabelli Funds, Teton Advisors and Gabelli Foundation has sole voting and dispositive power over the shares of stock held by it.Based solely on information in Amendment No. 17 to Schedule 13D filed with the SEC on June 28, 2016. \n(4) \nIncludes 57, 936 shares of Series B Convertible Preferred Stock, 9,382 shares of common stock owned by Mr. Germans son of which Mr. German disclaims beneficial ownership and 50,023 shares of common stock acquired through the Holding Companys Dividend Reinvestment Program. \n(5) \nBased solely on information in Amendment No. 2 to Schedule 13D filed with the SEC on April 23, 2014 adjusted for the 20% stock dividend paid to holders of the common stock on May 30, 2017. \n(6) \nIncludes 48,837 shares of restricted stock. The Series C Cumulative Preferred Stock includes 8,000 shares held by the Gibson Family Trust. \n(7) \nCommon stock shares include 21,450 shares of restricted stock and 2,762 shares of common stock acquired through the Holding Companys Dividend Reinvestment Program. \n(8) \nCommon stock shares include 4,500 shares of restricted stock and options to acquire 10,000 shares of common stock that are currently exercisable. \n(9) \nCommon stock shares include 21,450 shares of restricted stock, 912 shares of Series B Convertible Preferred Stock and 4,791 shares of common stock acquired through the Holding Companys Dividend Reinvestment Program. \n(10) \nCommon stock shares include 17,696 shares of restricted stock, 102 shares of Series B Convertible Preferred Stock and 1,299 shares held by Mr. Mirabitos wife. Mr. Mirabito disclaims beneficial ownership of the securities owned by his wife except to the extent of<|endoftext|>Our option under the master lease to acquire SHCs interest in the ground lease underlying that master lease for $5.9 million. That option was originally scheduled to close on May 31, 2021, but was extended on March 29, 2021 to January 1, 2023. We recorded the Village East Cinema building as a property asset of $4.7 million on our balance sheet based on the cost carry-over basis from an entity under common control with a corresponding capital lease liability of $5.9 million presented under other liabilities. \nIn 2015, we and SHP entered into an amendment to the management agreement dated as of June 27, 2007 governing the management of the Cinemas 1,2,3. The amendment, which was retroactive to December 1, 2014, memorialized our undertaking to SHP to fund approximately $750,000 (the \"Renovation Funding Amount\") of renovations to Cinemas 1,2,3. In consideration of our funding of the renovations, our annual management fee was increased commencing January 1, 2015 by an amount equivalent to 100% of any incremental positive cash flow of Cinemas 1,2,3 over the average annual positive cash flow of the Cinemas 1,2,3 over the three-year period ended December 31, 2014 (not to exceed a cumulative aggregate amount equal to the Renovation Funding Amount), plus a 15% cash-on-cash return on the balance outstanding from time to time of the Renovation Funding Amount, payable at the time of the payment of the annual management fee (the \"Improvements Fee\"). Under the amended management agreement, we retained ownership of (and any right to depreciate) any furniture, fixtures and equipment purchased by us in connection with such renovation and the right (but not the obligation) to remove all such furniture, fixtures and equipment (at our own cost and expense) from the Cinemas 1,2,3 upon the termination of the management agreement. The amendment also provided that, during the term of the management agreement, SHP will be responsible for the cost of repair and maintenance of the renovations. In 2019 and 2018 we charged Improvements Fees of $96,000 and $425,000. Our management fees calculated net of the Improvements Fee, for 2020, 2019, and 2018 were $147,000, $161,000, and $198,000, respectively. \nOn November 6, 2020, we and SHP further amended the management agreement to terminate the Improvements Fee in consideration of a one-time payment to us of $112,500, and the reimbursement in full of the Renovation Funding Amount, and transferred to SHC all of our ownership rights in the renovation assets. \nOn August 31, 2016, we secured a three-year, $20.0 million mortgage loan with Valley National Bank. On March 13, 2020, we refinanced the loan to $25.0 million which now matures on April 1, 2022 with two six-month options to extend through April 1, 2023. The Valley National Loan has been guaranteed by our Company and an environmental indemnity has been provided by our Company. SHC has agreed to indemnify our Company to the extent of 25% of any loss incurred by our Company with respect to any such guarantee and/or indemnity (a percentage reflecting SHC's membership interest in SHP). \nOn October 1, 2020, SHP made a distribution of $1.0 million, paying $750,000 to our Company and $250,000 to SHC. During the period March 1, 2021 to March 5, 2021, SHP loaned our Company the amount of $2.0 million, which has been fully repaid together with interest of $1,181 (representing an interest rate of 4.5%). \n### Live Theatre Play Investment \nFrom time to time, our officers and Directors may invest in plays that lease our live theatres. The play STOMP has been playing in our Orpheum Theatre since prior to the time we acquired the theatre in 2001. The Cotter Estate or the Cotter Trust and a third party own an approximately 5% interest in that play, an interest that they have held since prior to our acquisition of the theatre. \nShadow View Land and Farming, LLC \nDuring 2012, Mr. Cotter, Sr., our former Chair, Chief Executive Officer and controlling stockholder, contributed $2.5million of cash and $255,000 of his 2011 bonus as his 50% share of the purchase price of an approximately 202-acre parcel of undeveloped land in Coachella, California and to cover his 50% share of certain costs associated with that acquisition.This land is held in Shadow View Land and Farming, LLC (\"Shadow View\"), which is owned 50% by our Company, and which is accounted for as a consolidated subsidiary of our Company.The other 50% interest in Shadow View is owned by the Cotter Estate.We are the managing member of Shadow View, with oversight provided by our Audit and Conflicts Committee. These services have been provided without compensation. \nAs managing member, we have from time to time made capital contributions to Shadow View and have funded on an interim basis certain operating and other costs. Our capital contributions have been matched by the Cotter Estate, and the Cotter Estate has, upon billing, paid its 50% share of all such interim costs. \nWe are advised that Director Guy Adams, separate from his roles with our Company, historically performed certain consulting services for Mr. Cotter, Sr. With respect to Mr. Cotter's investment in Shadow View (and other unrelated properties), Mr. Adams was to receive a 5% carried interest in any profits realized by the Cotter Estate calculated after recovery of the Cotter Estate's investment in Shadow View plus 100% return thereon. Any claims by Mr. Adams for payment would be made to the Cotter Estate. \nOn March 5, 2021, Shadow View sold this land for $11.0 million, and distributed the net proceeds to its members, including the Company, and is currently in the process of bring wound up and liquidated. \n\nOur Audit Committee has adopted a written charter, which includes responsibility for approval of \"Related Party Transactions.\" Under its charter, our Audit Committee performs the functions of the \"Conflicts Committee\" of our Board and is delegated responsibility and authority by our Board to review, consider and negotiate, and to approve or disapprove on behalf of the Company the terms and conditions of any and all Related Party Transactions (defined below) with the same effect as though such actions had been taken by our full Board. Any such matter requires no further action by our Board in order to be binding upon the Company, except in the case of matters that, under applicable Nevada law, cannot be delegated to a committee of our Board and must be determined by our full Board. In those cases where the authority of our Board cannot be delegated, the Audit Committee nevertheless provides its recommendation to our full Board. \nAs used in our Audit Committee's Charter, the term \"Related Party Transaction\" means any transaction or arrangement between the Company on one hand, and on the other hand (i) any one or more directors, executive officers or stockholders holding more than 5% of the voting power of the Company (or any spouse, parent, sibling or heir of any such individual), or (ii) any one or more entities under common control with any one of such persons, or (iii) any entity in which one or more such persons holds more than a 10% interest. Related Party Transactions do not include matters related to employment or employee compensation related issues. \nThe charter provides that our Audit Committee review transactions subject to the policy and determines whether or not to approve or ratify those transactions. In doing so, our Audit Committee takes into account, among other factors it deems appropriate: the approximate dollar value of the amount involved in the transaction and whether the transaction is material to us; whether the terms are fair to us, have resulted from arm's length negotiations and are on terms at least as favorable as would apply if the transaction did not involve a related person; the purpose of, and the potential benefits to us of, the transaction; whether the transaction was undertaken in our ordinary course of business; the related person's interest in the transaction, including the approximate dollar value of the amount of the related person's interest in the transaction without regard to the amount of any profit or loss; required public disclosure, if any; \nDirector Independence and Board Oversight Structure \nOur Company has elected to take advantage of the \"controlled company\" exemption under applicable listing rules of the Nasdaq Capital Stock Market (the \"Nasdaq Listing Rules\"). Accordingly, our Company is exempted from the requirement to have a board of directors composed of at least a majority of independent directors, as that term is defined in the Nasdaq Listing Rules and SEC Rules (\"Independent Directors\") and to have an independent nominating committee and Independent Compensation Committee. Nevertheless, our Board has for many years had a majority of Independent Directors. \nIn determining who is an Independent Director, we follow the definition in section 5605(a)(2) of the Nasdaq Listing Rules. Under such rules, we consider the following directors to be independent: Guy Adams, Dr. Judy Codding, Edward L. Kane, Douglas McEachern and Michael Wrotniak. Our Board annually reviews the independence of our directors. \nOur Board has (i) adopted a best practices charter for our Compensation Committee, (ii) adopted a best practices charter for our Audit Committee, (iii) completed, with the assistance of compensation consultants Willis Towers Watson and AON and outside counsel Greenberg Traurig, LLP, annual reviews of our compensation practices, in order to bring them into alignment with current best practices, (iv) adopted a Code of Business Conduct and Ethics, (v) adopted a Supplemental Insider Trading Policy restricting trading in our stock by our Directors and executive officers, (vi) adopted an Anti-Discrimination, Anti-Harassment and Anti-Bullying policy, (vii) updated our Whistleblower Policy, and (viii) adopted a Stock Ownership Policy, setting out minimum stock ownership levels for our directors and senior executives. \nIn recognition of the special risks involved with technology and cyber security, Director Guy W. Adams has been appointed to serve as our Lead Technology and Cyber Risk Director.In this role, Director Adams serves as our Board's liaison with our Chief Executive Officer (\"CEO\"), Chief Financial Officer (\"CFO\") and General Counsel in connection with the assessment of our Company's technology and cyber security needs and the implementation of appropriate policies and procedures to meet those needs.He ensures that relevant information is brought to our Board, and coordinates the timely presentation of such information to and facilitates the consideration of such information by all directors.He also coordinates with our management timely and appropriate director education with respect to such matters to enhance director understanding of the issues involved and the options available to our Company.In preparation for this role, Director Adams, in 2018, completed the Cyber-Risk Oversight course presented by the National Association of Corporate Directors. \nOur Board also has a Special Independent Committee comprised of Directors Dr. Judy Codding and Douglas McEachern to, among other things, review, consider, deliberate, investigate, analyze, explore, evaluate, monitor and exercise general oversight of any and all activities of the Company directly or indirectly involving, or responding to the litigation between Ms. Ellen Cotter and Ms. Margaret Cotter relating to the management of the Cotter Living Trust and the Reading Voting Trust and the voting and disposition of the Class B Stock held by the Cotter Living Trust and to be held by the Reading Voting Trust, and any other litigation or arbitration matters involving any one or more of Ms. Ellen Cotter, Ms. Margaret Cotter, Mr. James J. Cotter, Jr., the Cotter Estate and/or the Cotter Living Trust. This committee was formed due to the potential impact of such matters on the control of our Company. This litigation is described in greater detail in the 2020 Form 10-K. \nWe believe that our Directors bring a broad range of leadership experience to our Company and regularly contribute to the thoughtful discussion involved in effectively overseeing the business and affairs of the Company. We believe that all Board members are well-engaged in their responsibilities and that all Board members express their views and consider the opinions expressed by other Directors. Our Independent Directors are involved in the leadership structure of our Board by serving on our<|endoftext|>2022 and 2023, subject to continued service through each vesting date. \n(4) \nConsists of matching contributions to 401(k) plan. \n(5) \nConsists of matching contributions to 401(k) plan and automobile allowance. \n(6) \nMr. Sperzel resigned as our Chief Executive Officer and President effective as of January 3, 2020. For additional information, including severance benefits paid to Mr. Sperzel, see Employment Agreements below. \n(7) \nConsists of a severance payment over twelve months pursuant to Mr. Sperzels Separation and Release Agreement. For additional information, see Employment Agreements below. \nNarrative Explanation of the Summary Compensation Table \nThe compensation paid to the NEOs consists of the following components: base salary; performance-based annual cash bonuses; long-term incentive compensation in the form of RSUs and stock options; and benefits consisting principally of housing subsidies and health and welfare plan contributions. \n### Annual Performance Evaluations \nOn an annual basis, the compensation committee and any other non-employee directors evaluate the performance of the Chief Executive Officer, based on our overall performance. The Chief Executive Officer evaluates the performance of the other NEOs against their respective predetermined performance objectives. Annual performance objectives for the NEOs are established at the beginning of the applicable year and generally include two parts: (a) our overall target financial objectives; and (b) individual objectives in the functional areas for which the executive is responsible. For each NEO, these objectives are then weighted to reflect their relative importance to our company and the executives functional responsibilities. \nWe did not have an established bonus policy for the NEOs generally for 2020. The compensation committee may decide, in its sole discretion, to reward NEOs with annual cash bonuses based on the achievement of individual NEO performance, our business performance (including revenues and profits, without specified targets), and development generally. \nIn light of numerous changes and developments during 2020, many of which could not be foreseen as of the beginning of 2020, and the individual performance of NEOs during 2020, in 2021 the compensation committee awarded discretionary bonuses to Richard Eberly in the amount of $158,333, Neil Goldman in the amount of $155,000, and Javan Esfandiari in the amount of $182,520. \nPrior to 2020, we did not typically grant stock options to NEOs on an annual basis. From time to time, however, we did grant stock options, when appropriate, as the long-term incentive component of our compensation program. Our stock options allow our employees to purchase covered shares at a price equal to the fair market value on the date of grant. In some cases, we attach performance criteria to the vesting of the stock options. For 2020, the compensation committee approved option grants as discussed above under \"Executive Summary.\" See also \"Outstanding Equity Awards at December 31, 2020\" below. \nOn February 20, 2020, the board of directors adopted Equity Award Grant Guidelines, or the Grant Guidelines, in the form recommended by the compensation committee. The Grant Guidelines are intended to establish procedures for granting of equity-based awards that minimize the opportunity or the perception of an opportunity for us to time an equity award grant in a manner that could take advantage of any material nonpublic information or could result in an assertion that the equity award has been are priced at a value less than the fair market value of common stock on the grant date. Under the Grant Guidelines, the compensation committee generally is to consider and, if approved, grant equity awards to our employees once annually during the first quarter of the fiscal year, on the first Monday that follows the date on which we file our Annual Report on Form 10-K. The Grant Guidelines contemplate that the compensation committee may, from time to time, determine that it is in our best interests to deviate from the foregoing terms with respect to the grant of an equity award, in which case such Equity Award must be reviewed and approved by the board. \n\nThe following table sets forth information regarding each outstanding equity award by each of the NEOs as of December 31, 2020: \n(1) \nRSUs subject to vesting, to acquire common stock. \n(2) \nOptions exercisable, subject to vesting, to acquire common stock. \n(3) \nRestricted stock award, or RSA. \n(4) \nPerformance stock units, or PSU, subject to vesting, to acquire common stock \n(5) \nRSU was granted on March 16, 2020. RSU vests over three years, with one-third vesting on each of the first, second and third anniversary of the grant date, subject to continued service through each vesting date. \n(6) \nOption was granted on December 18, 2017. Option was fully vested and exercisable as of December 18, 2020. \n(7) \nOption was granted on March 16, 2020. Option vests and becomes exercisable over three years, with one-third vesting on each of the first, second and third anniversary of the grant date, subject to continued service through each vesting date. \n(8) \nRSA was granted on October 9, 2018. RSA vests over three years, with one third of the RSA vests on each of the first, second and third, anniversary of the grant date, subject to continued service through each vesting date. \n(9) \nPSU was granted on March 16, 2020. PSU shall vest in equal installments on a daily basis beginning on the first anniversary of the grant date. The number of shares of common stock awarded upon vesting of the PSU depends on the total shareholder return of our company as compared to that of certain peer companies, subject to continued service through the vesting date. \n(10) \nOption was granted on March 11, 2016. Option was fully vested and exercisable as of March 11, 2019. \n(11) \nMr. Sperzels employment as Chief Executive Officer and President ended effective January 3, 2020, and he had no outstanding equity awards as of December 31, 2020. \n### Richard L. Eberly \nEffective as of March 16, 2020, we entered into an employment agreement with Richard Eberly to serve as our Chief Executive Officer and President. The employment agreement provides for our at-will employment of Mr. Eberly as our Chief Executive Officer and President for an initial term commencing March 16, 2020 and expiring December 31, 2021. The term will extend automatically for additional calendar years as of each January 1 (commencing January 1, 2022), unless either party delivers, by no later than the immediately preceding October 1 (initially October 1, 2021), a written notice to the other party that the term will not be extended. Under the terms of the employment agreement, we will pay Mr. Eberly an annual base salary of $400,000, which amount is subject to annual review by the compensation committee and may be increased, but not decreased. \nIn accordance with the terms of the employment agreement, we granted to Mr. Eberly on March 16, 2020 an RSU, award covering 233,589 shares of common stock. Subject to Mr. Eberlys continued service with us, the RSU award will vest in three equal installments as of March 16 of each of 2021, 2022 and 2023, except that vesting will accelerate in full upon the occurrence of a Change in Control or upon his death or Permanent Disability (each such capitalized term as defined in the employment agreement). \nIf Mr. Eberlys employment is terminated or not renewed by us without Cause or by Mr. Eberly for Good Reason (each such capitalized term as defined in the employment agreement), the RSU award will vest in full and, in addition, we will be required to pay to Mr. Eberly a lump sum amount equal to his base salary and a pro rata bonus amount, each with respect to the year in which the termination occurs. \n### Neil A. Goldman \nEffective as of December 18, 2017 and as amended on January 21, 2019, we entered into an employment agreement with Neil Goldman to serve as our Chief Financial Officer and Executive Vice President. In the event Mr. Goldmans employment is terminated by reason of Disability or for Cause (each as defined in the employment agreement), or due to Mr. Goldmans resignation or voluntary termination, all compensation, including his base salary, his right to receive a performance bonus, and benefits, and the vesting of any unvested equity awards, will cease as of his termination date, and Mr. Goldman will receive no severance benefits. If we terminate Mr. Goldmans employment without Cause or Mr. Goldman terminates his employment for a Reasonable Basis (as defined in the employment agreement), which includes involuntary termination within a six-month period upon a Change in Control (as defined in the employment agreement), then we will be required to pay Mr. Goldman his base salary and our monthly share of health insurance premiums for a period of twelve months as severance, and all of his unvested equity awards will vest immediately. Mr. Goldmans employment agreement also contains provisions prohibiting Mr. Goldman from (i) soliciting our employees for a period of twenty-four months following his termination, (ii) soliciting our customers, agents, or other sources of distribution of our business for a period of twelve months following his termination, and (iii) except where termination is involuntary upon a Change in Control, for a period of twelve months following termination of Mr. Goldmans employment agreement (or for a period of six months after termination if Mr. Goldman is not entitled to severance under his employment agreement), competing with us. Mr. Goldmans employment agreement continued in effect through December 31, 2019, and commencing on January 1, 2020 and each January 1 thereafter, the term will be automatically extended for one additional year. \nJavan Esfandiari \nEffective as of March 5, 2016 and as amended on March 20, 2019, we entered into an employment agreement with Javan Esfandiari to continue as our Chief Scientific & Technology Officer and Executive Vice President for an additional term through December 31, 2021. In the event Mr. Esfandiaris employment is terminated by reason of Disability or for Cause, (as defined in the employment agreement), or due to Mr. Esfandiaris resignation or voluntary termination, all compensation, including his base salary, his right to receive a performance bonus, and benefits, and the vesting of any unvested equity awards, will cease as of his termination date, and Mr. Esfandiari will receive no severance benefits. If Mr. Esfandiaris employment agreement is terminated by us without Cause, or if Mr. Esfandiari terminates his employment agreement for a Reasonable Basis(as defined in the employment agreement), including within 12 months of a Change in Control (as defined in the employment agreement), we will be required to pay his base salary and our monthly share of health insurance premiums for a period of twelve months as severance, and all of his unvested equity awards will vest immediately. Mr. Esfandiaris employment agreement also contains provisions prohibiting Mr. Esfandiari from (i) soliciting our employees for a period of 24 months following his termination, (ii) soliciting our customers, agents, or other sources of distribution of our business for a period of twelve months following his termination, and (iii) except where termination is involuntary upon a Change in Control, for a period of twelve months following his termination, competing with us. \n### John J. Sperzel III \nEffective as of March 13, 2017, we entered into an employment agreement with John Sperzel, which we refer to as the Sperzel Employment Agreement, to serve as Chief Executive Officer for a term of three years. Under the Sperzel Employment Agreement: if Mr. Sperzels employment were to be terminated by reason of disability or for Cause, (as defined in the employment agreement), all compensation, including his base salary, his right to receive a performance bonus, and the vesting of any unvested equity awards, would cease as of his termination date and he would receive no severance benefits; and we would be required to pay Mr. Sperzel severance benefits that included continued base salary for twelve months, a pro rata annual bonus (based on actual performance), continued payment of our monthly share of health insurance premiums for twelve months, and accelerated vesting of his outstanding equity awards if: \nMr. Sperzels employment were to be terminated by us without Cause or by<|endoftext|>[\n\nRush Street Interactive Inc\n]\n\nOn March 25, 2021, Rush Street Interactive, Inc. This Amendment No. 1 (the Amendment and collectively with the Original Form 10-K, the Annual Report) amends Part III, Items 10 through 14 of the Original Form 10-K to include information previously omitted from the Original Form 10-K in reliance on General Instruction G(3) to Form 10-K. General Instruction G(3) to Form 10-K provides that registrants may incorporate by reference certain information from a definitive proxy statement that involves the election of directors if such definitive proxy statement is filed with the Securities and Exchange Commission within 120 days after the end of the fiscal year. The Company does not anticipate that its definitive proxy statement involving the election of directors will be filed before April 30, 2021 (i.e., within 120 days after the end of the Companys 2020 fiscal year). \nIn addition, as required by Rule 12b-15 under the Securities Exchange Act of 1934, as amended, new certifications by our principal executive officer and principal financial officer are filed as exhibits to this Amendment under Item 15 of Part IV hereof. Except as stated herein, this Amendment does not reflect events occurring after the filing of the Original Form 10-K with the Securities and Exchange Commission on March 25, 2021 and no attempt has been made in this Amendment to modify or update other disclosures as presented in the Original Form 10-K. \nWe are in the process of evaluating the applicability and potential impact of the Staff Statement on the Companys approach to accounting for warrants, including the potential impact on our financial statements, and any related impacts to our disclosure controls and procedures, and internal control over financial reporting. \nPART III \nITEM 10. \n### Directors \nThe table below identifies and sets forth certain biographical and other information regarding the directors who serve on our Board of Directors (the Board) as of the date of this Annual Report. Our Board currently consists of nine members, divided into three classes of staggered three-year terms. \nEach of the current Class I directors is expected to stand for re-election at our 2021 Annual Meeting of Stockholders (the Annual Meeting) and if elected, will continue to serve as a director until our 2024 Annual Meeting of Stockholders. \nOther than Sheli Rosenberg (a director) and herson-in-law,Greg Carlin (our Chief Executive Officer and a director), and Neil Bluhm (our Executive Chairman and significant stockholder) and his daughter Leslie Bluhm (a director), there are no family relationships among any of our directors or executive officers. \nUnder that certain Investor Rights Agreement, dated as of December 29, 2020 (the Investor Rights Agreement), entered into in connection with the previously consummated business combination with dMY Technology Group, Inc. (the Business Combination), dMY Sponsor, LLC (Sponsor) has the right to designate a certain number of individuals for nomination by the Board as director nominees to be elected by the Companys stockholders if certain criteria are met. Specifically, (i)for so long as the Sponsor or its permitted transferees beneficially own ClassA common stock of the Company (the Class A Common Stock) representing at least 50% of the ClassA Common Stock held by the Sponsor immediately after the closing of the Business Combination, the Sponsor will have the right to nominate two directors to the Board; and (ii)for so long as the Sponsor or its permitted transferees beneficially own ClassA Common Stock representing at least 25% (but less than 50%) of the ClassA Common Stock held by the Sponsor immediately after the closing of the Business Combination, the Sponsor will have the right to nominate one director to the Board. As of the closing of the Business Combination, the Sponsor designated two individuals, Niccolo de Masi and Harry You, for such purpose. Mr. You is one of the Class I directors expected to stand for re-election at our Annual Meeting. \nThe Investor Rights Agreement also provides that for so long as the sellers in the Business Combination (the Sellers) and their permitted transferees, in the aggregate, beneficially own at least a majority of the voting power of the capital stock of the Company and the Company qualifies as a controlled company under applicable NYSE rules, Rush Street Interactive GP, LLC, as the representative (the Sellers Representative) on behalf of the Sellers, has the right to designate the remaining director nominees for nomination by the Board to be elected by the Companys stockholders. In the event that the Sellers Representative is no longer entitled to designate such number of directors or the Company is no longer entitled to nominate the number of directors that the Sellers Representative is entitled to designate, then, subject to the Sponsors right to designate the number of directors described above, (i)for so long as the Company qualifies as a controlled company under applicable NYSE rules, the Sellers Representative will be entitled to designate the maximum number of directors that the Company is entitled to nominate without violating such rules, and (ii)if the Company no longer qualifies as a controlled company under applicable NYSE rules, the Sellers Representative will be entitled to designate the number of directors that is proportionate to the issued and outstanding voting securities of the Company held at the time by the Sellers and their permitted transferees, taken as a whole. As of the closing of the Business Combination, the Sellers Representative designated seven individuals, Neil Bluhm, Greg Carlin, Paul Wierbicki, Leslie Bluhm, James Gordon, Judith Gold, and Sheli Rosenberg, for such purpose. Ms. Gold and Mr. Wierbicki are two of the Class I directors expected to stand for re-election at our Annual Meeting. \n### Class I Directors \nJudith Gold \n, 57, has been a Managing Director, Government Relations& Strategy, and Senior Counsel at LAMB Capital Advisors, LLC since December 2020. Prior to joining LAMB Capital Advisors, LLC, Ms.Gold was a partner at Perkins Coie LLP, which she joined in 2005, where she advised companies and senior executives on corporate communications, public affairs, crisis communications, reputation management and public strategies. Ms.Gold began her legal career in 1989 at Altheimer& Gray, where she was an associate and later became a partner. Ms.Gold has also served in numerous public policy roles throughout her career, including in Chicago Mayor Richard M. Daleys Cabinet as Chief of Policy for the City of Chicago, as a member of the Illinois State Board of Education, and as Chair of the Illinois Commission on the Status of Women. Ms.Gold devotes significant time to service for nonprofit organizations, including currently serving as a member of the boards of directors of Columbia College Chicago, the Illinois Coalition Against Sexual Exploitation and the Chicago Civic Federation. Ms.Gold earned a B.A. from the University of Michigan and a J.D. Ms.Golds qualifications to serve on the Board include her over thirty years of public and private sector experience of providing government relations, communications and public policy advice to companies and senior executives in regulated industries. \n### Paul Wierbicki \n, 41, has been the General Counsel of LAMB Capital Advisors, LLC since June 2015. Prior to joining LAMB Capital Advisors, LLC, Mr. Wierbicki served as Senior Counsel, Business and Legal at AbbVie Inc. from March 2014 to May 2015 and as a Partner at Kirkland & Ellis LLP, specializing in restructuring and debt finance, from October 2011 to February 2014. Mr. Wierbicki has served on the board of directors and compensation committee of Green Rivers Spirits Company (f/k/a Terressentia Corporation) since February 2017 and January 2018, respectively, the board of directors and as treasurer of Sutton Place Association since January 2016, and the board of directors of The Civic Federation from September 2012 to December 2015. Mr. Wierbicki earned a B.A. in Economics and Political Science from Vanderbilt University, an Advanced Professional Certificate in Law and Business from New York University, Stern School of Business and a J.D. Mr. Wierbickis qualifications to serve on the Board include his extensive and varied legal and deal experience throughout his career, including his experience in the casino and gaming industries. \nHarry L. You \n, 62, has been dMYs Chairman since January 2020 and a director since September 2019. Mr. You served as the executive vice president of EMC (formerly NYSE: EMC) in the office of the chairman from 2008 to 2016. In September 2016, Mr. You founded GTY (Nasdaq: GTYH), in which Mr. You served as its president, chief financial officer and director until February 2019 when GTY consummated its initial business combination, served as its president from February 2019 to May 2019 and as its chief financial officer from February 2019 through August 2019, and has served as its vice chairman since May 2019. Mr. You served as a director of Korn/Ferry International from 2004 to October 2016 and has been a trustee of the United States Olympic Committee Foundation since August 2016. Mr. You was chief executive officer of BearingPoint from 2005 to 2007. He also served as BearingPoints interim chief financial officer from 2005 to 2006. From 2004 to 2005, Mr. You served as executive vice president and chief financial officer of Oracle (NYSE: ORCL), and was also a member of the board of directors of Oracle Japan. From 2001 to 2004, Mr. You served as chief financial officer of Accenture. Mr. You also previously spent fourteen years on Wall Street, including serving as a managing director in the Investment Banking Division of Morgan Stanley, where he headed the Computer and Business Services Group. Mr. You has served as a member of the board of directors of Broadcom Inc. (Nasdaq: AVGO) since January 2019, including as a member of its audit and compensation committees. Mr. You holds an M.A. Mr. Yous qualifications to serve on the Board include his extensive and varied deal experience throughout his career, including his experience structuring Dells acquisition of EMC as EMCs executive vice president, his network of contacts in the technology sector, and his prior special purpose acquisition company experience with GTY. \n### Class II Directors \nLeslie Bluhm \n, 57, has been an associate at JMB Realty Corp. since 1991. Prior to joining JMB Realty Corp. Ms. Bluhm co-founded, and served as the President of, Chicago Cares Inc. (Chicago Cares), a nonprofit volunteer service organization, from 1990 to 2016. Since 2013, Ms. Bluhm has served on the executive committee of The Chicago Community Trust, the board of trustees and as vice chair of the Museum of Contemporary Art Chicago, and on the board of directors of both OneGoal and Shining Hope for Communities. Since 2017, Ms. Bluhm has served as trustee of the Whitney Museum of American Art. Ms. Bluhm earned a B.A. degree from the University of Michigan and a J.D. Ms. Bluhms qualifications to serve on the Board include her extensive experience as a community leader, as well as her training as an attorney. \n### James Gordon \n, 71, has been the Managing Partner of Edgewater Growth Capital Partners (Edgewater) since he founded Edgewater in 2001. Prior to forming Edgewater, Mr. Gordon was President of Gordon Foods, Inc. and Gordons Wholesale, Inc. In 1982, Mr. Gordon engineered a leveraged buy-out of his personal and family interests in The Gordon Companies and in 1986 sold the company to a European multinational corporation. Mr. Gordon has served on the boards of directors of numerous Edgewater portfolio companies. Mr. Gordon has also served on the board of directors of numerous philanthropic and non-profit organizations, including The Whitney Museum of American Art as chair of the investment committee, The Art Institute of Chicago as a member of the board of trustees and the investment committee, The Chicago Museum of Contemporary Art on the executive committee of the board and the investment committee and on the board of trustees of Grinnell College as head of the investment committee. Mr. Gordon earned a B.A. from Northwestern University. Mr. Gordons qualifications to serve on the Board include his extensive experience as a private equity investor and his service on numerous other public and private company and philanthropic boards. \nSheli Rosenberg \n, 79, serves as a<|endoftext|>Of high-end healthcare or healthcare delivery assets. We focus on platforms with high standards of clinical quality and strong branding. \nFundamentally sound businesses with the potential for growth in Asia and from SINCaps relationships in the region. We seek a target with a platform already in Asia or a global platform that would benefit from meaningful growth in Asia, but that currently lacks market knowledge. We expect that our target will be a market leader or will have a clear path to market leadership via partnering with our management team and SINCap. We aim to target a business with unrecognized value and/or characteristics that we believe have been misevaluated by the marketplace. \nBuy and Build. We intend to employ a buy and build strategy that would allow us to build a horizontally and vertically integrated value chain around the initial business combination target at a much lower acquisition cost while accelerating growth and delivering increased value to our shareholders. We seek a business model that can be replicated across geographies. \nEstablished target with a history of free cash flow generation. We expect to target one or more businesses that have exhibited profitability historically and that offer attractive risk-adjusted returns to our investors. \nPotential benefit from capital markets access. We seek a target that may benefit from being a public company with an increased public profile, enhanced governance and increased access to a more diversified pool of capital, particularly capital from the Asia Pacific region. \nExperienced and motivated management team. We seek a target with an established management team that is committed to Asia and that we intend to complement. We expect such team to be keen to work with an Investor-Operator like SINCap. To the extent we believe it will enhance shareholder value, we would seek to selectively supplement the existing management team of the business (including senior management) with members of our management team or with proven leaders from our network. \nIn the event that we decide to enter into our initial business combination with a target business that does not meet the above criteria and guidelines, we will disclose that the target business does not meet the above criteria in our shareholder communications related to our initial business combination, which would be in the form of proxy solicitation materials or tender offer documents that we would file with the Securities and Exchange Commission (the SEC). \nNew York Stock Exchange (NYSE) rules require that our initial business combination must occur with one or more operating businesses or assets with a fair market value of at least 80% of the net assets held in the trust account (net of amounts disbursed to management for working capital purposes and excluding the amount of any deferred underwriting discount) at the time of our signing a definitive agreement in connection with our initial business combination. If our board of directors is not able to independently determine the fair market value of the target business or businesses or assets, we will obtain an opinion from an independent investment banking firm which is a member of FINRA or a valuation or appraisal firm with respect to the satisfaction of such criteria. Since any opinion, if obtained, would merely state that the fair market value of the target operating businesses or assets meet the 80% of assets threshold, unless such opinion includes material information regarding the valuation of a target business or the consideration to be provided, it is not anticipated that copies of such opinion would be distributed to our shareholders. \nWe may, however, structure our initial business combination such that the post-transaction company owns or acquires less than 100% of such interests or assets of the target business in order to meet certain objectives of the target management team or shareholders or for other reasons, but we will only complete such business combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act. If less than 100% of the equity interests or assets of a target business or businesses are owned or acquired by the post-transaction company, the portion of such business or businesses that is owned or acquired is what will be taken into account for purposes of NYSEs 80% of net assets test. \n### Our Acquisition Process \nIn evaluating a prospective target business, we expect to conduct a due diligence review that will encompass, among other things, meetings with incumbent management and employees, document reviews and inspection of facilities, as well as a review of financial and other information that will be made available to us. \nIn the event we seek to complete our initial business combination with a business combination target that is affiliated with our Sponsor, officers or directors, we, or a committee of independent directors, will obtain an opinion from an independent investment banking firm which is a member of FINRA or an independent accounting firm that our initial business combination is fair to our company from a financial point of view. Additionally, if our board of directors is not able to independently determine the fair market value of our initial business combination, we will obtain an opinion from an independent investment banking firm which is a member of FINRA or a valuation or appraisal firm. \nCertain of our directors and officers directly or indirectly own founder shares and/or private placement warrants and, accordingly, may have a conflict of interest in determining whether a particular target business is an appropriate business with which to effectuate our initial business combination. \nEach of our officers and directors presently has, and any of them in the future may have additional, fiduciary or contractual obligations to another entity pursuant to which such officer or director is or will be required to present a business combination opportunity to such entity subject to his or her fiduciary duties under Cayman Islands law. \nOur Sponsor and executive officers have agreed, pursuant to a written letter agreement, not to participate in the formation, or become an officer or director of, and blank check company until we have entered into a definitive agreement regarding our initial business combination or we have failed to complete our initial business combination by April 16, 2021. \n\nWe will provide our public shareholders with the opportunity to redeem all or a portion of their Class A ordinary shares upon the completion of our initial business combination at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account calculated as of two business days prior to the consummation of the initial business combination, including interest (net of taxes payable), divided by the number of then outstanding public shares, subject to the limitations described herein. The amount in the trust account was $174,542,012 as of December 31, 2020. Our initial shareholders have entered into agreements with us, pursuant to which they have agreed to waive their redemption rights with respect to their founder shares and public shares in connection with the completion of our initial business combination. \n\n\n\n\n\nIn connection with our initial public offering, our Sponsor deposited cash funds into an escrow account with J.P. Morgan Chase Bank, N.A. The funds held in the escrow account may be used to pay $1.00 per public warrant (other than public warrants held by our Sponsor and its affiliates) in connection with the events described above. \n\n\n\n\nThe decision as to whether we will seek shareholder approval of a proposed business combination or conduct a tender offer will be made by us, solely in our discretion, and will be based on a variety of factors such as the timing of the transaction and whether the terms of the transaction would require us to seek shareholder approval under applicable law or stock exchange listing requirement or whether we were deemed to be a foreign private issuer (which would require a tender offer rather than seeking shareholder approval under SEC rules. Asset acquisitions and share purchases would not typically require shareholder approval, while direct mergers with our company where we do not survive and any transactions where we issue more than 20% of our outstanding ordinary shares or seek to amend our amended and restated memorandum and articles of association would require shareholder approval. \n\n\nIn such case, our initial shareholders have agreed to vote their founder shares and any public shares purchased during or after the initial public offering in favor of our initial business combination. As a result, in addition to our initial shareholders founder shares, we would need 5,000,001, or approximately 33.3%, of the 15,000,000 public shares sold in the initial public offering to be voted in favor of an initial business combination in order to have our initial business combination approved (assuming all outstanding shares are voted and the over-allotment option is not exercised). In addition, our initial shareholders have entered into agreements with us, pursuant to which they have agreed to waive their redemption rights with respect to their founder shares and, with respect to our initial shareholders other than the forward purchase investors, public shares in connection with the completion of a business combination. \n\nIf we conduct redemptions pursuant to the tender offer rules of the SEC, we will, pursuant to our amended and restated memorandum and articles of association: (a) conduct the redemptions pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, which regulate issuer tender offers; \n\nIf we seek shareholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our amended and restated memorandum and articles of association provide that a public shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a group (as defined under Section 13 of the Exchange Act), will be restricted from seeking redemption rights with respect to Excess Shares. Absent this provision, a public shareholder holding more than an aggregate of 20% of the public shares could threaten to exercise its redemption rights if such holders shares are not purchased by us, our Sponsor or our management at a premium to the then-current market price or on other undesirable terms. By limiting our shareholders ability to redeem no more than 20% of the public shares without our prior consent, we believe we will limit the ability of a small group of shareholders to unreasonably attempt to block our ability to complete our initial business combination, particularly in connection with a business combination with a target that requires as a closing condition that we have a minimum net worth or a certain amount of cash. \n\nPublic shareholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in street name, will be required to either tender their certificates (if any) to our transfer agent prior to the date set forth in the proxy solicitation or tender offer materials, as applicable, mailed to such holders, or up to two business days prior to the vote on the proposal to approve the business combination in the event we distribute proxy materials, or to deliver their shares to the transfer agent electronically using The Depository Trust Companys DWAC (Deposit/Withdrawal At Custodian) System, at the holders option. \n\nIn addition, if we conduct redemptions in connection with a shareholder vote, a public shareholder seeking redemption of its public shares must also submit a written request for redemption to our transfer agent two business days prior to the vote in which the name of the beneficial owner of such shares is included. \n\nFurthermore, if a holder of a public share delivered its certificate in connection with an election of redemption \nRedemption of public shares and distribution and liquidation if no initial business combination \nOur amended and restated memorandum and articles of association provide that we will have<|endoftext|>By reference, and shall not otherwise be deemed filed under those Acts. \n### COMPENSATION TABLES \nTable I sets forth certain compensation information for the Companys Named Executive Officers for the years ended December31, 2020, 2019 and 2018. Table II sets forth all restricted stock and option awards to such NEOs in December31, 2020 and indicates the price at which options were granted during 2020. Table III sets forth all unvested restricted stock awards and all outstanding option awards at 2020, to such NEOs. Table IV sets forth all vesting of restricted stock awards and exercises of options by the NEOs during 2020. Table V sets forth non-qualified deferred compensation plan activity during 2020 for such NEOs. Table VI sets forth payments that would be made to such NEOs under certain plans or arrangements in the event of a termination of employment or a change in control of the Company. \nTABLE I \nSUMMARY COMPENSATION TABLE (FISCAL YEARS 2020, 2019 and 2018) \nThe following table sets forth certain compensation information for the Companys NEOs in respect to the fiscal years ended December31, 2020, 2019 and 2018. \n_____________________ \n(1) \nFor 2018 and 2019, 60% of the annual bonus was paid at the time of the award and the remaining 40% was paid in two equal annual installments approximately one and two years after the date of the grant. Interest is currently paid on the deferred portion of bonus compensation at the rate of approximately 1.5% per annum. Any outstanding balance is payable upon the death, disability, qualified retirement, termination without cause of the employee, or the occurrence of a change-in-control of the Company; however, the outstanding balance is generally forfeited if the employee is terminated with cause or resigns without good reason. For 2020, 50% of the annual bonus was paid in March 2021, 20% was paid in April, following the consummation of the Business Combination, and 30% is scheduled to be paid on or about December 31, 2021, subject to continued employment with the Company through such date, subject to exceptions for certain involuntary terminations of employment. \n(2) \nThe dollar amount of restricted stock and stock options set forth in these columns reflects the aggregate grant date fair value of restricted stock and option awards made during 2020, 2019 and 2018 in accordance with the FASB ASC Topic 718 without regard to forfeitures. Discussion of the policies and assumptions used in the calculation of the grant date fair value are set forth in Notes 1 and 15 of the Consolidated Financial Statements included in the Companys Original Filing. \n(3) \nAll Other Compensation for Mr. Charles Fabrikant inclu des $0, $2 \n0,464 and $35,988 in 2020, 2019 and 2018, respectively, of interest earned on the second and third installments of bonus payments, and $9,208, $8,842 and $8,558 in 2020, 2019 and 2018, respectively, of contributions made by the Company to match pre-tax elective deferral contributions (included under Salary) made under the SEACOR Savings Plan, a defined contribution plan established by the Company, effective July1, 1994, that meets the requirements of Section401(k) of the Internal Revenue Code. Mr. Charles Fabrikant was permitted to fly on the Company aircraft for business travel when doing so would make the most efficient use of his time and allowed him to focus on business-related matters while traveling. From time to time, Mr. Fabrikants wife accompanied him on these flights. Because Mr. Charles Fabrikant only flies on the Company aircraft for business and his wifes occasional travel does not result in any incremental cost to the Company, no amount is shown in the All Other Compensation column in connection with this arrangement. In addition, to further enable the efficient use of his time and allow him to focus on business-related matters while he is working from our Ft. Lauderdale office, during 2020, 2019 and 2018 Mr. Fabrikant used the services of a car and driver to transport him between that office and his residence. The Company paid $5,861, $18,444 and $19,770 in 2020, 2019 and 2018, respectively, for these services, which is included in the All Other Compensation column above. \n(4) \nAll Other Compensation for Mr. Weins includ es $3,459, \n$5,321 and $4,907 in 2020, 2019 and 2018, respectively, of interest earned on the second and third installments of bonus payments, and $9,975, $9,800 and $9,625 in 2020, 2019 and 2018, respectively, of contributions made by the Company to match pre-tax elective deferral contributions (included under Salary) made under the SEACOR Savings Plan as described in (3) above. \n(5) \nAll Other Compensation for Mr. E. Fabrikant includ es $12,684, $ \n18,827 and $18,812 in 2020, 2019 and 2018, respectively, of interest earned on the second and third installments of bonus payments, and $5,925, $4,338 and $5,375 in 2020, 2019 and 2018, respectively, of contributions made by the Company to match pre-tax elective deferral contributions (included under Salary) made under the SEACOR Savings Plan as described in (3) above. \n(6) \nAll Other Compensation for Mr. Long inc ludes $3,892, $6,549 and \n$6,134 in 2020, 2019 and 2018, respectively, of interest earned on the second and third installments of bonus payments, and $9,975, $9,800 and $9,625 in 2020, 2019 and 2018, respectively, of contributions made by the Company to match pre-tax elective deferral contributions (included under Salary) made under the SEACOR Savings Plan as described in (3) above. \nTABLE II \n### GRANTS OF PLANBASED AWARDS (FISCAL YEAR 2020) \nThe following table sets forth certain information with respect to grants of share plan-based awards during the year ended December31, 2020, to each of the NEOs. \n______________________ \n(1) \nThe amounts set forth in this column reflect the number of shares of restricted stock granted in 2020. These awards were scheduled to vest in five equal annual installments commencing approximately one year after the date of the award. Restricted stock awards vested immediately upon the consummation of the Business Combination. \n(2) \nOptions granted were originally exercisable in 25% annual increments beginning on March4, 2021. The options were priced in four equal installments over a one-year period, with the first such installment being priced on the date of grant at an exercise price equal to the market price on that date and the remaining installments being priced quarterly thereafter at a price equal to the closing market price of Common Stock on the date of the pricing. Options vested immediately upon the consummation of the Business Combination. \n(3) \nThe dollar amount of restricted stock and stock options set forth in this column reflects the aggregate grant date fair value of restricted stock and option awards in accordance with the FASB ASC Topic 718 without regard to forfeitures. Discussion of the policies and assumptions used in the calculation of the grant date fair value are set forth in Notes 1 and 15 of the Consolidated Financial Statements included in our Annual Report on Form 10-K filed on February 25, 2021. \nTABLE III \nOUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END (2020) \nThe following table sets forth certain information with respect to outstanding equity awards at December31, 2020, held by the NEOs. \n______________________ \n(1) \nOptions were scheduled to vest incrementally at a rate of one-fifth per year for options granted prior to December 31, 2016 and one-fourth per year for options granted after January 1, 2017. \n(2) \nThe amounts set forth in this column equal the number of shares of restricted stock indicated multiplied by the closing price of the Companys common stock on December 30, 2020, which was $41.45. \n(3) \nThese shares vested on March 4, 2021. \n(4) \nThese shares were scheduled to vest on March 4, 2022, assuming continued employment or directorship with the Company. \n(5) \nThese shares were scheduled to vest on March 4, 2023, assuming continued employment or directorship with the Company. \n(6) \nThese shares were scheduled to vest on March 4, 2024, assuming continued employment or directorship with the Company. \n(7) \nThese shares were scheduled to vest on March 4, 2025, assuming continued employment or directorship with the Company. \n(8) \nThese options vested on March 4, 2021. \n(9) \nThese options were scheduled to vest in substantially equal proportions on March 4 of 2021 and 2022, assuming continued employment or directorship with the Company. \n(10) \nThese options were scheduled to vest in substantially equal proportions on March 4 of 2021, 2022 and 2023, assuming continued employment or directorship with the Company. \n(11) \nThese options were scheduled to vest in substantially equal proportions on March 4 of 2021, 2022, 2023 and 2024, assuming continued employment or directorship with the Company. \nTABLE IV \nOPTION EXERCISES AND STOCK VESTED (FISCAL YEAR 2020) \nThe following table sets forth certain information with respect to the number of options that the NEOs exercised in 2020 and the value realized from the vesting of restricted stock awards. \n_____________________ \n(1) \nThe value realized on the exercise of stock options is based on the difference between the exercise price and the market price on the date of exercise. \n(2) \nThe value realized on vesting is determined by multiplying the number of shares vesting by the market price at the close of business on the date of vesting. \nTABLE V \nNON-QUALIFIED DEFERRED COMPENSATION (FISCAL YEAR 2020) \nA non-qualified deferred compensation plan (the Deferred Compensation Plan) was established by the Company in 2005 and provides non-employee directors and a select group of highly compensated employees (including the Named Executive Officers) the ability to defer receipt of up to 75% of their cash base salary and up to 100% of their cash bonus for each fiscal year. Each participants compensation deferrals are credited to a bookkeeping account and, subject to certain restrictions, each participant may elect to have their cash deferrals in such account indexed against one or more investment options, solely for purposes of determining amounts payable for earnings or losses under the Deferred Compensation Plan (the Company is not obligated to actually invest any deferred amounts in the selected investment options). Participants may receive a distribution of deferred amounts, plus any earnings thereon (or less any losses), on a date specified by the participant or, if earlier, upon a separation from service or upon a change of control. All distributions to participants following a separation from service must be in the form of a lump sum, except if such separation qualifies as retirement under the terms of the Deferred Compensation Plan, in which case it may be paid in installments if previously elected by the participant. Distributions to Key Employees upon a separation from service (other than due to death) will not commence until at least six months after the separation from service. Participants are always 100% vested in the amounts that they contribute to their Deferred Compensation Plan accounts. The Company, at its option, may contribute amounts to participants accounts, which may be subject to vesting requirements. \nThe following table sets forth for the NEOs certain information as of December31, 2020, and for the year then ended with respect to the Deferred Compensation Plan. \nTABLE VI \nPOTENTIAL PAYMENTS UPON DEATH, DISABILITY, QUALIFIED RETIREMENT, \n### TERMINATION WITHOUT CAUSE OR A CHANGE OF CONTROL \nThe following table sets forth cash bonus payments and the acceleration of stock options and restricted stock upon the death, disability, qualified retirement, termination without cause of the employee, or, assuming the outstanding awards were not assumed or replaced in accordance with the 2014 Plan, upon the occurrence of a change-in-control, in each case, as of December31, 2020. \n_____________________ \n(1) \nAs described in footnote 1 to Table I, prior to 2020, annual cash bonuses were paid 60% at the time of the award and the remaining 40% is paid in two equal annual installments approximately one and two years after the date of the award. The amount in this table represents the total of all remaining annual installments and any accrued interest yet to be paid as of December31, 2020. \n(2) \nThe dollar amount in this column reflects the accumulated value based on the difference between the strike prices and the closing price of the Common Stock on December31, 2020, which was<|endoftext|>(b) \n\nAs of February2, 2021, the approximate number of holders of record of the Companys common stock was 205,000. \n(c) \n### Dividends \nThe Company paid quarterly dividends per share on its common stock in 2020 and 2019 as follows: \nPayment of dividends is within the discretion of the Board of Directors and depends on, among other factors, net earnings, capital requirements and the financial condition of the Company. However, the Company intends to continue to pay comparable dividends to stockholders in the future. \n(d) \n\n\nShares of common stock repurchased by the Company during the three months ended December 26, 2020 were as follows (amounts are in thousands, except per share amounts): \n____________________________ \n(1) \nCommon stock is made available for sale by the Company only to its current employees and members of its Board of Directors through the ESPP and Directors Plan and to participants of the 401(k) Plan. In addition, common stock is provided to employees through the ESOP. \nThe Company does not believe that these repurchases of its common stock are within the scope of a publicly announced plan or program (although the terms of the plans discussed above have been communicated to the participants). Thus, the Company does not believe that it has made any repurchases during the three months ended December 26, 2020 required to be disclosed in the last two columns of the table. \n(e) \n### Performance Graph \nThe following performance graph sets forth the Companys cumulative total stockholder return during the five years ended December26, 2020, compared to the cumulative total return on the S&P 500 Index and a custom Peer Group Index including retail food supermarket companies. \n(1) \nThe Peer Group Index is weighted based on the various companies market capitalization. The comparison assumes $100 was invested at the end of 2015 in the Companys common stock and in each of the related indices and assumes reinvestment of dividends. \nThe Companys common stock is valued as of the end of each fiscal quarter. After the end of a quarter, however, shares continue to be traded at the prior valuation until the new valuation is received. The cumulative total return for the companies represented in the S&P 500 Index and the custom Peer Group Index is based on those companies trading price as of the Companys fiscal year end. The following performance graph is based on the Companys trading price at fiscal year end based on its market price as of the prior fiscal quarter. For comparative purposes, a performance graph based on the Companys fiscal year end valuation (market price as of March 1, 2021) is provided in the 2021 Proxy Statement. Past stock performance shown below is no guarantee of future performance. \nComparison of Five Year Cumulative Return Based Upon Fiscal Year End Trading Price \n___________________________ \n(1) \nCompanies included in the Peer Group are Ahold Delhaize, Kroger and Weis Markets. \nItem6. Selected Financial Data \n___________________________ \n(1) \nFiscal year 2016 includes 53 weeks. All other years include 52 weeks. \n(2) \nGross profit represents sales less cost of merchandise sold as reported in the consolidated statements of earnings. \n(3) \nDuring 2017, the Company recorded the remeasurement of deferred income taxes due to the Tax Cuts and Jobs Act of 2017 (Tax Act). Excluding the impact of the Tax Act, net earnings would have been $2,067,699,000 or $2.74 per share and 6.0% as a percent of sales. \n(4) \nIn 2019, the Company adopted the Accounting Standards Update requiring the lease rights and obligations arising from existing and new lease agreements be recognized as assets and liabilities on the balance sheet. \n(5) \nIn addition to reporting financial results in accordance with U.S. For a more detailed description of these measures, refer to Non-GAAP Financial Measures in Item 7, Managements Discussion and Analysis of Financial Condition and Results of Operations. \nItem7. \n### Overview \nThe Company is engaged in the retail food industry, operating supermarkets in Florida, Georgia, Alabama, South Carolina, North Carolina, Tennessee and Virginia. As of December26, 2020, the Company operated 1,264 supermarkets including 816 located in Florida, 191 in Georgia, 79 in Alabama, 63 in South Carolina, 49 in North Carolina, 47 in Tennessee and 19 in Virginia. During 2020, the Company opened 21 supermarkets in Florida, five in Georgia, four in North Carolina, four in Virginia, three in Alabama, one in South Carolina and one in Tennessee. In the normal course of operations, the Company replaces supermarkets and closes supermarkets that are not meeting performance expectations. The impact of future supermarket closings is not expected to be material. \nThe Company sells a variety of merchandise to generate revenues. This merchandise includes grocery (including dairy, produce, floral, deli, bakery, meat and seafood), health and beauty care, general merchandise, pharmacy and other products and services. Merchandise includes nationally advertised and private label brands as well as unbranded products such as produce, meat and seafood. The Companys private label brands play an important role in its merchandising strategy. \nProfit is earned by selling merchandise at price levels that produce sales in excess of the cost of merchandise sold and operating and administrative expenses. The Company has generally been able to increase revenues and net earnings from year to year. Further, the Company has been able to meet its cash requirements from internally generated funds without the need for debt financing. The Companys year end cash balances are impacted by its operating results as well as by capital expenditures, investment transactions, common stock repurchases and dividend payments. \n### Operating Environment \nIn addition, the Company competes with other companies for new retail sites. To meet the challenges of this highly competitive environment, the Company continues to focus on its core strategies, including customer service, product quality, shopping environment, competitive pricing and convenient locations. \nCoronavirus Pandemic Impact \nThe effects of economic stabilization efforts, including government payments to affected citizens and industries, remain uncertain. \nThe Company has been classified as an essential business in all locations in which it operates and has remained open to serve the needs of its customers. It remains a top priority of the Company to serve its customers in a way that protects the health and safety of its employees and customers. The Company estimates that its sales for 2020 increased approximately $4.6 billion due to the impact of the coronavirus pandemic. The Company incurred additional payroll related, transportation and other costs to meet the significant sales demand and protect the health and safety of its employees and customers. The profit on the incremental sales resulting from increased customer purchases of food and cleaning supplies more than offset the additional costs incurred. The future impact of the coronavirus pandemic is uncertain and difficult to predict. \n### Results of Operations \n\nSales \nSales for 2020 were $44.9 billion as compared with $38.1 billion in 2019, an increase of $6,747.1 million or 17.7%. The increase in sales for 2020 as compared with 2019 was primarily due to the impact of the coronavirus pandemic. The Company estimates that its sales for 2020 increased approximately $4.6 billion or 12.1% due to the impact of the coronavirus pandemic. Comparable store sales (supermarkets open for the same weeks in both periods, including replacement supermarkets) for 2020 increased 16.0% primarily due to the impact of the coronavirus pandemic. Sales for supermarkets that are replaced on site are classified as new supermarket sales since the replacement period for the supermarket is generally 9 to 12 months. \nSales for 2019 were $38.1 billion as compared with $36.1 billion in 2018, an increase of $2,022.5 million or 5.6%. The increase in sales for 2019 as compared with 2018 was primarily due to new supermarket sales and a 3.6% increase in comparable store sales. Comparable store sales for 2019 increased primarily due to increased product costs. \n### Gross profit \nGross profit (sales less cost of merchandise sold) as a percentage of sales was 27.9%, 27.2% and 27.1% in 2020, 2019 and 2018, respectively. Excluding the last-in, first-out (LIFO) reserve effect of $19.8 million, $39.9 million and $24.2 million in 2020, 2019 and 2018, respectively, gross profit as a percentage of sales would have been 27.9%, 27.3% and 27.2% in 2020, 2019 and 2018, respectively. After excluding the LIFO reserve effect, the increase in gross profit as a percentage of sales for 2020 as compared with 2019 was primarily due to reduced shrink and volume driven efficiencies related to the impact of the coronavirus pandemic. After excluding the LIFO reserve effect, gross profit as a percentage of sales for 2019 as compared with 2018 remained relatively unchanged. \nOperating and administrative expenses \nOperating and administrative expenses as a percentage of sales were 19.7%, 20.6% and 20.3% in 2020, 2019 and 2018, respectively. The decrease in operating and administrative expenses as a percentage of sales for 2020 as compared with 2019 was primarily due to volume driven efficiencies related to the impact of the coronavirus pandemic. The increase in operating and administrative expenses as a percentage of sales for 2019 as compared with 2018 was primarily due to an increase in payroll costs as a percentage of sales. \n### Operating profit \nOperating profit as a percentage of sales was 8.9% in 2020 and 7.6% in 2019 and 2018. The increase in operating profit as a percentage of sales for 2020 as compared with 2019 was primarily due to the increase in gross profit as a percentage of sales and the decrease in operating and administrative expenses as a percentage of sales. \nInvestment income \nInvestment income was $975.0 million, $814.4 million and $56.7 million in 2020, 2019 and 2018, respectively. Excluding the impact of net unrealized gains on equity securities in 2020 and 2019 and net unrealized losses on equity securities in 2018, investment income would have been $596.0 million, $291.7 million and $239.5 million for 2020, 2019 and 2018, respectively. Excluding the impact of net unrealized gains on equity securities, the increase in investment income for 2020 as compared with 2019 was primarily due to an increase in net realized gains on investments. Excluding the impact of net unrealized gains on equity securities in 2019 and net unrealized losses on equity securities in 2018, the increase in investment income for 2019 as compared with 2018 was primarily due to an increase in interest and dividend income. \n### Income tax expense \nThe effective income tax rate was 21.1%, 20.6% and 18.5% in 2020, 2019 and 2018, respectively. The increase in the effective income tax rate for 2020 as compared with 2019 was primarily due to the decreased impact of permanent deductions and credits due to the increase in earnings before income tax expense. The increase in the effective income tax rate for 2019 as compared with 2018 was primarily due to the impact of net unrealized gains on equity securities in 2019 compared with net unrealized losses on equity securities in 2018 and a decrease in investment related tax credits. \nNet earnings \nNet earnings were $3,971.8 million or $5.67 per share, $3,005.4 million or $4.21 per share and $2,381.2 million or $3.28 per share in 2020, 2019 and 2018, respectively. Net earnings as a percentage of sales were 8.9%, 7.9% and 6.6% in 2020, 2019 and 2018, respectively. Excluding the impact of net unrealized gains on equity securities in 2020 and 2019 and net unrealized losses on equity securities in 2018, net earnings would have been $3,689.2 million or $5.27 per share and 8.2% as a percentage of sales for 2020, $2,615.6 million or $3.67 per share and 6.9% as a percentage of sales for 2019 and $2,517.5 million or $3.47 per share and 7.0% as a percentage of sales for 2018. Excluding the impact of net unrealized gains on equity securities, the increase in net earnings as a percentage of sales for 2020 as compared with 2019 was primarily due to the impact of the coronavirus pandemic. Excluding the impact of net unrealized gains on equity securities in 2019 and net unrealized losses on equity securities in 2018, net earnings as a percentage of sales for 2019 as compared with 2018 remained<|endoftext|>Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of large accelerated filer \n, accelerated filer \n, non-accelerated filer \n, emerging growth company and smaller reporting company in Rule12b-2 of the Exchange Act. (Check one): \n### PART I \nForward-looking statements \nStatements made in this Form 10-K that are not historical or current facts are \"forward-looking statements\" made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933 (the \"Act\") and Section 21E of the Securities Exchange Act of 1934. These statements often can be identified by the use of terms such as \"may,\" \"will,\" \"expect,\" \"believe,\" \"anticipate,\" \"estimate,\" \"approximate\" or \"continue,\" or the negative thereof. \nFinancial information contained in this report and in our financial statements is stated in United States dollars and are prepared in accordance with United States generally accepted accounting principles. \n### Item 1. Description of Business \nIn General \nWe were incorporated in the State of Nevada on February 26, 2016. Our initial business direction was production of paper made from elephant dung for making different stationery products and distributing them mainly in Sri Lanka. \nOn February 20, 2019, the Company filed a Certificate of Amendment to its Articles of Incorporation with the Nevada Secretary of State for changing the Company s name from \nGeant Corp. \nto \n### Cannabis Suisse Corp. \nFollowing the acquisition of Cannabis Suisse LLC, we have been engaged in the business of production of OTC (over-the-counter) products - for example Cannabidiol (CBD) oils, as well as retail branded cannabis cigarettes, and other health related supplements. \nWe have never declared bankruptcy, have never been in receivership, and have never been involved in any legal action or proceedings. \nOur business office is located at Lerzenstrasse 12, 8953 Dietikon, Switzerland. The Board of Directors considers the said premises appropriate for the business direction the Company is following. Our telephone number is +15022082098. \n### Stock Transfer Agreement \nOn May 31, 2019, the President of the Company, Suneetha Nandana Silva Sudusinghe, on behalf of the Company entered into a Stock Transfer Agreement with Cecillia Merige Jensen whereby the Company acquired through merger all of the issued and outstanding capital stock of Cannabis Suisse LLC, a Wyoming limited liability company ( \nSubsidiary \n). In exchange, Ms. Sudusinghe. Mr. Sudusinghe s share ownership in the Company has been reduced from 17,400,000 to 7,400,000 shares. Immediately prior to the above-mentioned transaction, the Company had 34,500,000 shares of common stock issued and outstanding and immediately after the above-mentioned transaction, the Company had 34,500,000 shares of common stock issued and outstanding. \nThe Subsidiary owns all of the capital stock of Grow Factory GmbH ( \n### Grow Factory \n), a limited liability company incorporated in Zurich, Switzerland March 13, 2017.Its registered office space is located at Lerzenstrasse 12, 8953 Dietikon, Switzerland. \nProduct Overview \nThe main business of the Company is cultivation and distribution of cannabis and the related products. Switzerland has the highest allowed legislative Tetrahydrocannabinol (THC) content in Europe (1%) for sales of cannabis products in retail outlets (without medical receipt). This condition makes Switzerland a perfect geographic location for manufacturing cannabis products and intending to scale the business into worldwide distribution. \nVarious diluted sequences of THC/CBD ratio can be produced to match legislation and regulation on individual markets with other permitted levels of THC. It enables worldwide production of OTC (over-the-counter) products - for example CBD oils, as well as retail branded cannabis cigarettes, and other health related supplements. \nThe growing process has been streamed online on the website [IDX] since June 25, 2019. \nGrow Factory is distributing 4 gr. and 12 gr. flowerhead packages under the brand name of Alpine Cannabis. They are distributed to 40 CBD sales places in Switzerland and various tank stations on the border between Italy and Switzerland. There are two different forms of packaging: a 12-gr box for the price of 44 CHF and a 4-gr box for the price of 22 CHF. A 12-gr box is specially made for about 40 special CBD stores in Switzerland, where the product is scheduled to come into immediately after production. A 4-gr box is meant for selling in tank stations on the border between Switzerland and Italy. \nAnother line of products is Alpine Cannabis CBD Pure Base being an e-liquid base for electronic cigarettes. It provides a boost of CBD to any favorite e-liquids and is available with various degrees of CBD strengths. Alpine Cannabis CBD Pure Base provides: certified CBD concentration in 10 ml bottles; guaranteed absence of THC & totally nicotine-free e-liquid base; no alcohol and no animal extracts; U.S. pharmacopeia/food grade ingredients; tamper-proof and childproof package; diacetyl free and quality-controlled production. The product contains 100% of propylene glycol and various levels of CBD, such as 100mg, 300mg and 500mg per 10 ml bottle, and 200mg, 500mg and 1000mg per 30 ml bottle. The prices range from \n19.00 for Alpine Cannabis CBD PURE BASE 100 mg 10 ml bottles to \n89.00 for Alpine Cannabis CBD PURE BASE 1000 mg 30 ml bottles. \nThe Company is also engaged in production of pre-rolled cannabis joints based on the V1 Cannabis Strain. They are wrapped in premium quality paper from RAW (rolling papers) brand and are made only of quality fresh buds (no leaves) cultivated with non-pesticide fertilizers and biological control agents. The new product line of handmade pre-rolled CBD joints contains no additives. They are free from pesticides, fungicides, heavy metals or nicotine. Cannabis Suisse is the first company in Switzerland to offer this uniquely blended fusion of organic cones with optimally boosted CBD content. The THC level is naturally kept under 1%. CBD flower pre-rolled joints are an all-natural alternative to CBD oil products. They offer pain-relieving, calming, and anti-inflammatory properties. \n### Market background \nIn August 2018, Forbes magazine listed Switzerland as the third most overlooked marijuana market in the world. \nCannabis users from California, Colorado, Arizona, Oregon, and Washington spent around $36 million in pre-rolled joints only in May of 2019 according to the report introduced by BDS Analytics. ( [IDX] Apart from that, at the end of 2019, the Swiss government finally removed the 25% tobacco tax which was a significant event for the country. In five years from now, Europe is expected to become the largest legal cannabis market in the world. In 2019, the industry there has grown more than in the last six years together. \nSome European countries like Germany, Denmark, Malta, Greece, and Italy discussed the possibility of creating a completely regulated cannabis market by 2028. Furthermore, Luxembourg intends to introduce a regulated market for adult use of cannabis by 2023. \nThe research conducted by the Brightfield Group, and based on impending regulatory changes in EU, indicates that the European CBD market is expected to be worth $1.7 billion by 2023. The cannabis market in general is also set to experience rapid growth, from $318 million in 2018 to nearly $8 billion by 2023. \n### Competition \nWe acknowledge the market of CBD-related items is rather competitive. There are several companies that offer comparative items and we have to compete with them. We see the main competitive advantage of our competitors is the established customer base and marketing outlets. Nevertheless, we arrange on a wholesale exchange, for the most part, so we have capacity to offer our items for extensive organizations in huge amounts. Therefore, we believe our item is more extensive, the quality is better, and our ways to deal with business are more flexible. \nThe Swiss market has a few big competitors now, the rest are small farms with under 1,000 plants in production and mostly outdoor. The big farms have more than 20,000 plants in indoor growing and from 10 to 50 Acres of outdoor growing. With the indoor growing, it is very difficult to get good quality harvest, so a lot of small farms were closed in 2018 as it was difficult to make a profit with farms of 1,000 -3,000 plants. \nGrow Factory has growers with many years of indoor growing experience. This results in the Company making about 20-grams of high-quality flower heads per plant over an 8-week period. It is quite difficult to find a landlord in Switzerland for indoor grow who accepts CBD production. Currently Grow Factory rents the territory of 400 m2. It is not enough for the further development so the Company needs an approval for the new 4000 m2 place which is planned to be available soon. \nThe prices on weed have been decreasing in Switzerland, so in order to get a part of the market, Grow Factory has to reduce the price and produce more hemp. A 12 gr flowerhead box generally costs 50 CF, so Grow Factory will sell 1 gr more than their competitors do for 50 CF and we believe the product is of a much higher quality. We believe Grow Factory will get a huge part of the CBD market when it is known by the customers. A 4 gr flowerhead box costs 22 CF. Competitors sell 3 or 3.5 gr boxes at the same price. Sales price for Grow Factory products will not increase a lot. It is more important for the Company to get well-known and branded in Switzerland. \n### Marketing \nWe use marketing strategies such as web advertisements, press releases, direct mailing, and phone calls to acquire potential customers. We attract traffic to our website by a variety of online marketing tactics, such as registering with top search engines, using selected key words and meta-tags, and utilizing link and banner exchange options. \nThe website related to cannabis cultivation is [IDX] The growing process is streamed online on this website. Also, it includes the information about the main Company s products, our team and our plans for further development. \nWe will intend to continue our marketing efforts during the life of our operations. There is no guarantee that we will be able to attract and more importantly retain enough customers to justify our expenditures. If we are unable to generate a significant amount of revenue and to successfully protect ourselves against those risks, then it would materially affect our financial condition and our business could be harmed. \n### Description of property \nOur chief executive officer, Suneetha Nandana Silva Sudusinghe, has agreed to provide us his own premises at no charge. He will not take any fee for these premises. This premise is used for production of the goods. The Company has discontinued using the mentioned office space on March 1, 2020. \n\n\n### Research and Development Expenditures \n\nBankruptcy or Similar Proceedings \nThere has been no bankruptcy, receivership or similar proceeding. \nEmployees; Identification of Certain Significant Employees \nOther than our officers and directors, we currently do not have any employees. \n### Item 1A. Risk Factors \n\nItem 1B. Unresolved Staff Comments \n\n### Item 2. Description of Property \n\nItem 3. Legal Proceedings \n\n### Item 4. Mine Safety Disclosures \nNot applicable. \nPART II \nItem 5. \n### Market Information \nThe Company s common stock began trading on May 10, 2019, on the over-the-counter market, and is now quoted on the OTC Pink tier of the OTC Markets Group Inc. under the symbol \n### CSUI \nThe closing price of our common stock on the OTC Pink on October 26, 2020 was $0.075. \nNumber of Holders \nAs of May 31, 2020, the 34,500,000 issued and outstanding shares of common stock were held by a total of 42 shareholders of record. \n### Dividends \nNo cash dividends were paid on our shares of common stock during the fiscal years ended May 31, 2020 and 2019. \n\nThe Company has 250,000,000, $0.001 par value shares of common stock authorized. \n\nNone. \nItem 6. Selected Financial Data \n### \nItem 7. \nThe following discussion should be read in conjunction with our consolidated financial statements, including the notes thereto, appearing elsewhere in this annual report. Our audited consolidated financial statements are stated in United States Dollars and are prepared in accordance with United States Generally Accepted<|endoftext|>B-2 Preferred Stock were converted into 25,454.55 shares of Series B-1 Preferred Stock (see below for a discussion of the Companys outstanding Series B-1 Preferred Stock). \nIn July 2020, the Company issued 9,200,000 shares of Class A Common Stock at a price of $15.50 per share pursuant to an underwritten public offering and received gross proceeds of $142.6 million. In connection with this transaction, the Company paid offering costs, inclusive of the underwriting discount, of $10.1 million. \n### Preferred Stock \nIn June 2020, the Company entered into an exchange agreement (the Exchange Agreement) with an investor pursuant to which the investor exchanged 15,810,547 shares of the Companys Class A Common Stock for 158,105.47 shares of Series B-1 Preferred Stock, par value $0.0001 per share. The Series B-1 Preferred Stock liquidation preference is limited to its par value of $0.0001 per share. The Series B-1 Preferred Stock will participate equally and ratably on an as-converted basis with the holders of Class A Common Stock in all cash dividends paid on the Class A Common Stock. The Series B-1 Preferred Stock is non-voting. The holder may convert each share of Series B-1 Preferred Stock into 100 shares of Class A Common Stock (subject to certain anti-dilution adjustments) at its election, except to the extent that following such conversion, the number of shares of Class A Common Stock held by such holder and its affiliates exceed 4.9% of the outstanding Class A Common Stock of the Company. In December 2020, 20,000 shares of Series B-1 Preferred Stock were converted into 2,000,000 shares of Class A Common Stock. \nMarch 2019 Recapitalization Transactions \n### As discussed in Note 10, \nDebt in March 2019, the Company entered into several agreements, amendments and new financing facilities as part of the March 2019 Recapitalization Transactions. In addition to the debt proceeds received as part of these transactions, the Company also received proceeds of $20.0 million for the purchase of members interests pursuant to the Note and Unit Purchase Agreement. \n### Warrants \nAt the Closing of the Business Combination, the Company had 12,666,666 warrants outstanding. Each warrant is exercisable into one share of Class A Common Stock at a price of $11.50 per share. The exercise price and number of shares of Class A Common Stock issuable upon exercise of the warrants may be adjusted in certain circumstances including in the event of a share dividend, or recapitalization, reorganization, merger or consolidation. However, the warrants will not be adjusted for the issuance of common stock at a price below its exercise price. During the year ended December 31, 2020, 6,254,803 warrants were exercised in cashless transactions resulting in the issuance of 1,973,707 shares of Class A Common Stock, which included the redemption of Public Warrants (see below). In addition, during the year ended December 31, 2020, 2,131,315 warrants were exercised for cash proceeds of $24.5 million, resulting in the issuance of 2,131,315 shares of Class A Common Stock. As of December 31, 2020, the Company had 4,280,548 warrants outstanding, which have an expiration date of November 20, 2024. \nThe Company classifies its warrants as liabilities because of certain terms included in the corresponding warrant agreement. The estimated fair value of the warrants is recorded as a liability in the Companys consolidated balance sheet, with such fair value reclassed to stockholders equity upon the exercise of such warrants. Prior to exercise, the change in the estimated fair value of such warrants each period is recognized as a non-cash charge or gain in the Companys consolidated statements of operations. \n### ADAPTHEALTH CORP. AND SUBSIDIARIES \n\nDecember 31, 2020 and 2019 \nA reconciliation of the changes in the warrant liability during the years ended December 31, 2020 and 2019 was as follows (in thousands): \nThe increase in the estimated fair value of the warrant liability of $135.4 million and $7.7 million during the years ended December 31, 2020 and 2019 was recorded as a non-cash charge in the Companys consolidated statements of operations during such periods. As discussed above, the fair value of the warrants at the date of exercise is reclassed to stockholders equity upon the exercise of such warrants. During the year ended December 31, 2020, $49.1 million was reclassified to stockholders equity in connection with the exercise of warrants, which was recorded as an increase to additional paid-in capital. There were no warrant exercises during the year ended December 31, 2019. \n### Refer to Note 20, \n\n, for additional discussion of the correction of certain of the Companys previously issued unaudited quarterly condensed consolidated financial information related to the accounting for the Companys warrants. \n### Redemption of Public Warrants \nOn August 4, 2020, the Company announced its intention to redeem all of its outstanding public warrants (the Public Warrants) to purchase shares of the Companys Class A Common Stock, that were issued under the Warrant Agreement, dated February 15, 2018 (the Warrant Agreement), by and between the Company and Continental Stock Transfer & Trust Company, as warrant agent (the Warrant Agent), as part of the units sold in the Companys initial public offering (the IPO), for a redemption price of $0.01 per Public Warrant (the Redemption Price), that remained outstanding on September 2, 2020 (the Redemption Date). Warrants to purchase common stock that were issued under the Warrant Agreement in a private placement simultaneously with the IPO and still held by the initial holders thereof or their permitted transferees were not subject to this redemption. \nUnder the terms of the Warrant Agreement, the Company was entitled to redeem all of the outstanding Public Warrants if the last sales price of the Companys Class A Common Stock was at least $18.00 per share on each of twenty trading days within any thirty-day trading period ending on the third trading day prior to the date on which a notice of redemption is given. At the direction of the Company, the Warrant Agent delivered a notice of redemption to each of the registered holders of the outstanding Public Warrants. \nIn addition, in accordance with the Warrant Agreement, the Company elected to require that, upon delivery of the notice of redemption, all Public Warrants were to be exercised only on a cashless basis. Accordingly, holders were no longer able to exercise Public Warrants and receive common stock in exchange for payment in cash of the $11.50 per warrant exercise price. Instead, a holder exercising a Public Warrant was deemed to pay the $11.50 per warrant exercise price by the surrender of 0.6144 of a share of common stock (such fraction determined as described below) that such holder would have been entitled to receive upon a cash exercise of a Public Warrant. Accordingly, by virtue of the cashless exercise of the Public Warrants, exercising warrant holders received 0.3856 of a share of common Stock for each Public Warrant surrendered for exercise. Any Public Warrants that remained unexercised on the Redemption Date were voided and no longer exercisable, and the holders will have no rights with respect to those Public Warrants, except to receive the Redemption Price. \n### ADAPTHEALTH CORP. AND SUBSIDIARIES \n\nDecember 31, 2020 and 2019 \nThe number of shares of Class A Common Stock that each exercising warrant holder received by virtue of the cashless exercise (instead of paying the $11.50 per Public Warrant cash exercise price) was calculated in accordance with the terms of the Warrant Agreement and was equal to the quotient obtained by dividing (x) the product of the number of shares underlying the Public Warrants held by such warrant holder, multiplied by the difference between $18.7175, the average last sale price of the Companys Class A Common Stock for the ten trading days ending on July 29, 2020, the third trading day prior to the date of the redemption notice (the Fair Market Value) and $11.50, by (y) the Fair Market Value. If any holder of Public Warrants would, after taking into account all of such holders Public Warrants exercised at one time, be entitled to receive a fractional interest in a share of common stock, the number of shares the holder was entitled to receive was rounded down to the nearest whole number of shares. During the year ended December 31, 2020, 2,285,410 Public Warrants were redeemed resulting in the issuance of 881,239 shares of Class A Common Stock. As a result of these transactions, there are no Public Warrants outstanding. \n### Contingent Consideration Common Shares \nPursuant to the Merger Agreement, the former owners of AdaptHealth Holdings who received Class A Common Stock and Class B Common Stock in connection with the Business Combination are entitled to receive earn-out consideration to be paid in the form of Class A Common Stock, if the average price of the Companys Class A Common Stock for the month of December prior to each measurement date equals or exceeds certain hurdles set forth in the Merger Agreement (Contingent Consideration Common Shares). The former owners of AdaptHealth Holdings are entitled to receive up to an additional 1,000,000 shares of Class A Common Stock on each of December 31, 2020, 2021 and 2022 (each a measurement date) and such average stock price hurdles are $15, $18 and $22 at each measurement date, respectively. The Contingent Consideration Common Shares would be issued immediately in the event of a change of control as defined in the Merger Agreement. The estimated fair value of the Contingent Consideration Common Shares is recorded as a liability in the Companys consolidated balance sheet, with such fair value reclassed to stockholders equity upon the issuance of any shares that are earned. Prior to issuance, the change in the estimated fair value of such shares each period is recognized as a non-cash charge or gain in the Companys consolidated statements of operations. The average stock price of the Companys Class A Common Stock was greater than $15 per share for the applicable measurement period as of the December 31, 2020 measurement date, which triggered the issuance of 1,000,000 Contingent Consideration Common Shares at such date. \nA reconciliation of the changes in the contingent consideration common share liability related to the Contingent Consideration Common Shares during the year ended December 31, 2020 was as follows (in thousands): \nThe total estimated fair value of the contingent consideration common shares liability at December 31, 2020 is classified as a current liability ( \n$36.9 million) and long-term liability ($33.6 million) in the Companys consolidated balance sheet as of such date based on the estimated issuance dates of such shares. \nThe increase in the estimated fair value of the contingent consideration common shares liability of $98.7 million during the year ended December 31, 2020 was recorded as a non-cash charge in the Companys consolidated statements of operations during such period. As discussed above, during the year ended December 31, 2020, 1,000,000 shares of Class A Common Stock were issued in connection with a portion of the Contingent Consideration Common Shares which were earned. As a result, the estimated fair value related to such shares of $37.6 million at December 31, 2020 was reclassified to stockholders equity, resulting in the shares being reflected as issued and outstanding Class A Common Stock at a par value of $0.0001 per share, and the incremental fair value amount was recorded as an increase to additional paid-in capital. \n### ADAPTHEALTH CORP. AND SUBSIDIARIES \n\nDecember 31, 2020 and 2019 \n### Refer to Note 20, \n\n, for additional discussion of the correction of certain of the Companys previously issued unaudited quarterly condensed consolidated financial information related to the accounting for the Contingent Consideration Common Shares. \n\nOn November 7, 2019, the stockholders of the Company approved the AdaptHealth Corp. 2019 Stock Incentive Plan (the 2019 Plan), effective upon closing of the Business Combination. In connection with the 2019 Plan, the Company provides equity-based compensation to attract and retain employees while also aligning employees interest with the interests of its stockholders. The 2019 Plan permits the grant of various equity-based awards to selected employees and directors. The 2019 Plan permits the grant of up to 8,000,000 shares<|endoftext|>(f/k/a Motion Acquisition Corp.) \nForm 10-K/A for the Year Ended December 31, 2020 i \n### EXPLANATORY NOTE \n2 to the Annual Report on Form 10-K/A to we, us, the Company or our company are to Motion Acquisition Corp. (Motion) with respect to periods prior to the consummation of its initial business combination on November 5, 2021 and to its successor, DocGo Inc. (DocGo) for all periods thereafter, unless the context otherwise indicates. \nThis Amendment No. 2 to the Annual Report on Form 10-K/A (this Second Amended Report) amends Amendment No. 1 to the Annual Report on Form 10-K/A of Motion Acquisition Corp. for the fiscal year ended December 31, 2020, as filed with the Securities and Exchange Commission (SEC) on May 28, 2021 (the First Amended Report), as originally filed with the SEC on March 30, 2021 (the Original Report). \nThe Company has re-evaluated Motions application of ASC 480-10-S99-3A to its accounting classification of the redeemable Class A common stock, par value $0.0001 per share (the Public Shares), issued as part of the units sold in Motions initial public offering on October 19, 2020 (the IPO). Historically, a portion of the Public Shares was classified as permanent equity to maintain stockholders equity greater than $5 million on the basis that the Company will not redeem its Public Shares in an amount that would cause its net tangible assets to be less than $5,000,001, as described in the Motions amended and restated certificate of incorporation (the Motion Charter). \nTherefore, on November 22, 2021, the Companys management and the audit committee of the Companys board of directors (the Audit Committee) concluded that the Companys previously issued (i) audited balance sheet as of December 31, 2020 (the Post IPO Balance Sheet), as previously revised in Motions Annual Report on Form 10-K, as amended, for the fiscal year ended December 31, 2020, filed with the SEC on May 28, 2021 (First Amended Report); (ii) audited financial statements included in the First Amended Report; (iii) unaudited interim financial statements included in Motions Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2021, filed with the SEC on June 3, 2021; (iv) unaudited interim financial statements included in Motions Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2021, filed with the SEC on August 11, 2021; and (v) the unaudited interim financial statements included in Motions Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2021, filed with the SEC on November 15, 2021 (collectively, the Affected Periods), should be restated to report all Public Shares as temporary equity and should no longer be relied upon. As such, the Company is restating its financial statements for the Affected Periods in this Form 10-K/A with respect to the Post IPO Balance Sheet and Motions audited financial statements included in the First Amended Report. The Company will also restate its unaudited condensed financial statements for the periods ended March 31, 2021, June 30, 2021, and September 30, 2021 in Motions Amendment No. 1 to the Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2021, to be filed with the SEC (the Q3 Form 10-Q/A No. 1). \nThe change in accounting for redeemable Class A common stock did not have any impact on the Companys cash position, total assets, total liabilities, cash flows, or total net income (loss) for these periods. Notwithstanding this, the Companys management has concluded that in light of the classification error described above, a material weakness exists in the Companys internal control over financial reporting and that the Companys disclosure controls and procedures were not effective. For more information, including the Companys remediation plan with respect to this material weakness, see Item 9A included in Second Amended Report. \n### Items Amended in this Report \nThis Second Amended Report presents the Original Report, as amended by the First Amended Report, amended and restated with modifications necessary to reflect the restatements, but without any other amendments, modifications or updates. \nPart I, Item 1A. Risk Factors \nPart II, Item 7. \nPart II, Item 8. \n### Part II, Item 9A. Controls and Procedures \nPart IV, Item 15. \nFurther, in connection with the filing of this Second Amended Report and pursuant to the rules of the SEC, the Companys Chief Executive Officer and Chief Financial Officer have provided new certifications dated as of the date of this filing in connection with this Second Amended Report. \nExcept as described above, no other information included in the Original Report or the First Amended Report is being amended or updated by this report and, other than as described herein, this report does not purport to reflect any information or events subsequent to the Original Report or the First Amended Report. This Second Amended Report continues to describe the conditions as of the date of the Original Report or the First Amended Report and, except as expressly contained herein, we have not updated, modified or supplemented the disclosures contained in the Original Report or the First Amended Report. Accordingly, this Second Amended Report should be read in conjunction with the Original Report and the First Amended Report and with our filings with the SEC subsequent to the Original Report. \nii \n\nThe statements contained in this Annual Report on Form 10-K (Annual Report) that are not purely historical are forward-looking statements. Forward-looking statements in this Annual Report may include, for example, statements about: our ability to complete our initial business combination with Ambulnz, Inc. (dba DocGo), or any other initial business combination; and our financial performance. \n\niii \n### PART I \nReferences in this Annual Report to we, us or the Company refer to Motion Acquisition Corp. References to our management or our management team refer to our officers and directors, and references to the Sponsor refers to Motion Acquisition LLC, a Delaware limited liability company. \nItem 1. Business \n### Overview \nWe are a blank check company formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. We were incorporated on August 11, 2020 as a Delaware corporation. We consummated an initial public offering (Initial Public Offering) on October 19, 2020. Based on our business activities, the Company is a shell company as defined under the Exchange Act of 1934, as amended (the Exchange Act) because we have no operations and assets consisting almost entirely of cash. \nThe Companys management team is led by James Travers, our Executive Chairman, and Michael Burdiek, our Chief Executive Officer. The Companys sponsor is Motion Acquisition LLC (the Sponsor). \n### Initial Public Offering \nOn October 19, 2020 we consummated a $115,000,000 Initial Public Offering, consisting of 11,500,000 units at a price of $10.00 per unit (Unit). Each Unit consists of one share of the Companys Class A common stock, $0.0001 par value (the Class A common stock) and one-third of one redeemable warrant (each, a Public Warrant). Each whole Public Warrant entitles the holder to purchase one share of Class A common stock at a price of $11.50 per share. Simultaneously with the closing of the Initial Public Offering, we consummated a $3,800,000 private placement (the Private Placement) of an aggregate of 2,533,333 warrants (Private Placement Warrants) at a price of $1.50 per warrant. \nPrior to the Initial Public Offering, in August 2020, we issued an aggregate of 3,737,500 shares of our Class B common stock, par value $0.0001 per share (Founder Shares) for an aggregate purchase price of $25,000, to our Sponsor. Additionally, an aggregate of 431,250 Founder Shares were forfeited in November 2020 because the underwriter did not exercise its over-allotment option. As of December 31, 2020, the Sponsor owned 2,875,000 Founder Shares based on its proportional interest in the Company. \nUpon the closing of the Initial Public Offering and Private Placement, $115,000,000 from the net proceeds of the sale of the Units in the Initial Public Offering and the Private Placement (including $4,025,000 of deferred underwriting commissions) was placed in a U.S.-based trust account maintained by Continental Stock Transfer & Trust Company, acting as trustee (the Trust Account). The Companys amended and restated certificate of incorporation provides that, other than the withdrawal of interest to pay tax obligations, none of the funds held in the Trust Account will be released until the earliest of: (i) the completion of the initial business combination; or (ii) the redemption of any shares of Class A common stock included in the Units being sold in the Initial Public Offering (the Public Shares) properly submitted in connection with a stockholder vote to amend the Companys certificate of incorporation to modify the substance or timing of the Companys obligation to redeem 100% of the Public Shares if the Company does not complete the initial business combination by October 19, 2022 (within 24 months from the closing of the Initial Public Offering); or (iii) the redemption of the Public Shares if the Company is unable to complete the initial business combination by October 19, 2022, subject to applicable law. The proceeds held in the Trust Account can only be invested in permitted United States government securities within the meaning of Section 2(a)(16) of the Investment Company Act of 1940, as amended (the Investment Company Act), having a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act which invest only in direct U.S. As of December 31, 2020, we had a balance in cash and investments held in trust of $115,020,078. As of December 31, 2020, no funds had been withdrawn from the Trust Account to pay taxes. In March 2021, we paid our Delaware franchise tax liability for 2020 of $78,192, funded partially from the earnings on the Trust Account investments. \nThe remaining $3,825,000 held outside of Trust Account was used to pay underwriting commissions of $2,300,000, repay a loan from our Sponsor of approximately $71,000, and pay offering and formation costs. As of December 31, 2020, we had an unrestricted cash balance of $878,653 to satisfy our working capital needs. \n### Letter Agreement \nIn connection with our Initial Public Offering, our Sponsor, each member of our Board and each of our executive officers entered into a letter agreement (the Letter Agreement). Pursuant to the Letter Agreement our Sponsor, directors and members of the management team have agreed to (i) waive their redemption rights with respect to their Founder Shares and Public Shares in connection with the completion of our initial business combination; (ii) waive their redemption rights with respect to their Founder Shares and Public Shares in connection with a stockholder vote to approve an amendment to the amended and restated certificate of incorporation to modify the substance or timing of the Companys obligation to redeem 100% of the public shares if the Company does not complete a business combination by October 19, 2022, or to provide for redemption in connection with a business combination and (iii) waive their rights to liquidating distributions from the Trust Account with respect to their Founder Shares if the Company fails to complete a business combination by October 19, 2022, although they will be entitled to redemption or liquidating distributions from the Trust Account with respect to any Public Shares they hold if the Company fails to complete a business combination within the prescribed time frame; (iv) vote any Founder Shares held by them and any Public Shares purchased during or after the IPO (including in open market and privately-negotiated transactions) in favor of any proposed business combination for which we seek stockholder approval, (v) not to transfer or sell (subject to certain limited exceptions) (1) the Founder Shares until the earlier of(A) one year after the completion of our initial business combination or (B) subsequent to our initial business combination, (x) if the reported closing price of our Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20<|endoftext|>None. \n### EXPLANATORY NOTE \nPhenixFIN Corporation (f/k/a Medley Capital Corporation), a Delaware corporation, or together with its subsidiaries, where applicable, the Company, which may also be referred to as we, us or our, is filing this Amendment No. 1 (the Amendment) to our Annual Report on Form 10-K for the fiscal year ended September 30, 2020, which was filed with the SEC on December 11, 2020 (the Form 10-K). Thepurposeof this Form 10-K/A is solely to disclose the information required inPartIII(Items 10, 11, 12, 13 and 14) of the Form 10-K, which information was previously omitted from the Form 10-K in reliance on General Instruction G(3) to Form 10-K. Accordingly, we hereby amend and replace in its entirety Part III of the Form 10-K. \nThis Form 10-K/A does not amend any other information set forth in the Form 10-K, and we have not updated disclosures included therein to reflect any subsequent events. This Form 10-K/A should be read in conjunction with the Form 10-K and with our filings with the SEC subsequent to the Form 10-K. \n### PART III \nItem 10. \nOur business and affairs are managed under the direction of our Board of Directors. The Board of Directors currently consists of five members, four of whom are not interested persons of the Company as defined in Section 2(a)(19) of the 1940 Act. We refer to these four individuals as our independent directors. Our Board of Directors elects our officers, who serve at the discretion of the Board of Directors. The responsibilities of each director include, among other things, oversight of our investment activity, quarterly valuation of our assets, and oversight of our financing arrangements. The Board of Directors has also established an audit committee, a nominating and corporate governance committee, a compensation committee, and a special committee and may establish additional committees in the future. \n\nPursuant to our charter and bylaws, the Board of Directors is divided into three classes, designated Class I, Class II, and Class III. Directors are elected for a staggered term of three years each, with a term of office of one of the three classes of directors expiring each year. Each director will hold office for the term to which he or she is elected or until his successor is duly elected and qualified. \nDirectors \nInformation regarding the Board of Directors is as follows: \n(1) \nThe business address of the directors is c/o PhenixFIN Corporation, 445 Park Avenue, 9 th \nFloor, New York, NY 10022. \nDavid A. Lorber is an interested person of the Company as defined in the 1940 Act due to his position as Chief Executive Officer of the Company. He was appointed Chairman of the Board of Directors of the Company and Chief Executive Officer effective January 1, 2021. He is a Co-Founder of FrontFour Capital, an investment adviser, and has served as a Portfolio Manager since January 2007. He is also a Co-Founder of FrontFour Corp., an investment adviser, and has been a Principal since January 2011. Previously, Mr. Lorber was a Senior Investment Analyst at Pirate Capital LLC, a hedge fund, from 2003 to 2006. He was an Analyst at Vantis Capital Management LLC, a money management firm and hedge fund, from 2001 to 2003 and an Associate at Cushman & Wakefield, Inc., a global real estate firm, from 2000 to 2001. Mr. Lorber has served as a director of Ferro Corporation (NYSE:FOE), a leading producer of specialty materials and chemicals for manufacturers, since May 2013, where he is also Lead Director, Chairman of its Governance & Nomination Committee and a member of its Compensation Committee. From April 2006 until December 2014, Mr. Lorber served as a director of Aerojet Rocketdyne Holdings, Inc. (formerly GenCorp Inc.) (NYSE:AJRD), a technology-based manufacturer of aerospace and defense products and systems with a real estate segment. He also previously served as a director of Huntingdon Capital Corp., a real estate company, from January 2010 to May 2013 and was a Trustee for IAT Air Cargo Facilities Income Fund, a real estate company, from January 2009 to December 2009. He also served as a director of Fisher Communications Inc. (formerly NASDAQ:FSCI), an integrated media company, from April 2009 to March 2012. Mr. Lorber earned his B.S. from Skidmore College. \nMr. Lorbers position as Chief Executive Officer of the Company and his significant financial and investment industry background as well as his board experience and corporate governance awareness from his current and past service as a director allow him to provide valuable advice and guidance to our Board of Directors. \n### Independent Directors \nArthur S. Ainsberg is not an interested person of the Company as defined in the 1940 Act. Mr. Ainsberg has over 40 years of experience in the financial services industry and a deep understanding of public and accounting matters for financial service companies. Mr. Ainsberg served as a director, Chairman of the Audit Committee and member of the Compliance Committee of Nomura Securities International, Inc. (the U.S. based broker-dealer of The Nomura Group) from 1996 through December 2014. In September 2012, Mr. Ainsberg was named to the Board of Directors of Nomura Global Financial Products, Inc., and in July 2013, he was named to the Board of Directors of Nomura Holding America, Inc., and served on each board through December 2014. In May 2013, Mr. Ainsberg was named to the Board of Directors of AG Mortgage Investment Trust. AG is a NYSE company, structured as a REIT, investing in various types of mortgage investments and served in such capacity until June 2020. From July 2003 through May 2012, Mr. Ainsberg served as a director for National Financial Partners Corporation, an independent financial services distribution company. From August 2009 through June 2011, Mr. Ainsberg served as Chief Operating Officer of Lehman Brothers Inc. in liquidation, the largest and most complex bankruptcy in the United States. Prior to this engagement, Mr. Ainsberg served as the Independent Consultant for Morgan Stanley & Co. from December 2003 until July 2009, under the Global Research Analyst Settlement, and was responsible for selecting and monitoring the providers of independent research for the clients of Morgan Stanley. Previously, Mr. Ainsberg was Chief Operating Officer at two investment partnerships, Brahman Capital Corp. from 1996 to 2000 and Bessent Capital Corp. during 2001. He also served as Chairman of the New York State Board for Public Accountancy from 1999 to 2000 and was a member of that board from 1993 to 2001. From 1998 to 2000, he was also a member of the Board of District 10 of the National Association of Securities Dealers. Mr. Ainsberg is also the author of \nShackleton: Leadership Lessons from Antarctica (2008) and the co-author of \nBreakthrough: Elizabeth Hughes, the Discovery of Insulin, and the Making of a Medical Miracle (2010). \nMr. Ainsberg has extensive experience in the financial services industry and a deep understanding of public and financial accounting matters for financial services companies. \nHoward Amster is not an interested person of the Company as defined in the 1940 Act. Mr. Amster has acted as a General Partner and owner of apartment projects totaling approximately 900 suites in Cleveland, OH. Since 1998, he has acted Principal and registered representative, investment advisor, and financial options and operations principal of Ramat Securities Ltd. (a formerly registered securities brokerage firm), engaged in proprietary trading and investments. From 2015 until July 2020, Mr. Amster was a registered representative of McDonald Partners LLC (a registered securities brokerage firm). Since 2001, he has served as a member of the Board and the Executive Committee and as a major shareholder of Horizon Group Properties Inc., a real estate operating company (formerly a publically held REIT) owning and managing outlet malls, and a shopping center totaling approximately 2 million square feet of space. Since 2009, Mr. Amster has served as a director of Novation Companies, Inc., a home health care company. From 1988 to January 2020, Mr. Amster was a major shareholder and served as a director of Maple Leaf Financial and its subsidiary Geauga Savings Bank based in Newbury, OH. He was chairman of its asset-liability committee, and was a member of the loan, personnel, and executive committees. In early 2020, the holding company and the bank were acquired by Farmers National Banc Corp, (ticker symbol FMNB). \nMr. Amster has extensive experience in the securities industry, has been both an investment advisor and a proprietary investor and has served as a director of various companies in the financial sector. He also has one of the largest investment positions in the Company, aligning his interests with stockholders. \nKarin Hirtler-Garvey is not an interested person of the Company as defined in the 1940 Act. Ms. Hirtler-Garvey has served as a Director of USAA Federal Savings Bank, a privately held consumer bank, where she served as the Compensation Committee Chair from June 2018 to January 2020, and also served as the Risk Committee Chair from December 2013 to June 2018. She also served as a Director of StarStone, a specialty insurance company, from December 2019 to November 2020, a Director of VA Capital Management, a privately held annuities firm, since August 2018, and a Director of Victory Capital Holdings, a publicly traded asset management firm, since October 2014, where she chairs the Audit Committee. \nMs. Hirtler-Garvey served as a Director of Western World Insurance Group from December 2006 to June 2019, and chaired the Audit Committee from December 2009 to June 2019, and also served as a Member of its Compensation Committee and Pension Committee from April 2011 to September 2014. From August 2017 to August 2018, she served as a Director of Validus Holdings Ltd., the publicly-traded parent company of Western World. Ms. Hirtler-Garvey also served on the board of ARO Liquidation Inc., the successor company to Aeropostale, Inc., where she served as the Chairman of the Board of Directors from February 2012 to May 2016. Ms. Hirtler-Garvey served on the board of Aeropostale from August 2005 to April 2018 where she was the lead independent director and served as a member of the Nominating and Corporate Governance Committee and Chairperson of the Audit Committee. From May 2009 to December 2011, Ms. Hirtler-Garvey was the Chief Risk Executive for Ally Financial Inc. From June 2008 to June 2009, Ms. Hirtler-Garvey also served as a Director for Residential Capital LLC, a subsidiary of GMAC. From March 2005 to December 2008, Ms. Hirtler-Garvey was a principal in a start-up real estate development venture based in New Jersey. From 1995 to 2005, Ms. Hirtler-Garvey held various senior level management positions at Bank of America, including Chief Operating Officer, Global Markets, President of Trust and Credit Banking Products, and Chief Financial Officer/Chief Operating Officer for the Wealth and Investment Management division. Ms. Hirtler-Garvey is a C.P.A. \nMs. Hirtler-Garvey has had a lengthy tenure in the financial services industry, where she has accumulated extensive experience in senior management positions. \nLowell W. Robinson is an experienced executive with over thirty years of senior global strategic, financial, M&A, operational, turnaround and governance experience. From 2007 through 2009, Mr. Lowell served as the Chief Financial Officer and Chief Operating Officer of MIVA, Inc. (formerly NASDAQ:MIVA), an online advertising network, after initially joining the company in 2006 as its Chief Financial Officer and Chief Administrative Officer. Prior to that, Mr. Robinson served as the President of LWR Advisors, LLC, a strategic and financial consulting services firm, from 2002 to 2006. Previously, from 2000 to 2002, he served as the Chief Financial Officer and Chief Administrative Officer at HotJobs.com Ltd. (formerly NASDAQ:HOTJ), an online recruiting and job search engine that was sold to Yahoo! Inc. Mr. Robinson was the Chief Financial Officer and Chief Administrative Officer at PRT Group Inc. (formerly NASDAQ:PRTG), a software and IT services company that he helped take public, from 1997 through 1999. Mr. Robinson also previously held senior financial positions at Advo, Inc. (formerly NYSE:AD), a direct-mail and marketing services company (1994 to 1997), Citigroup Inc. (NYSE:C), a multinational diversified financial services corporation (1986 to 1993), Uncle Bens Inc.,<|endoftext|>"},"task":{"kind":"string","value":"{\"file\": \"/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz\"}"}}},{"rowIdx":76,"cells":{"text":{"kind":"string","value":"<|endoftext|>Provide copies of these documents without charge upon request from us in writing at 660 Madison Avenue, 12 th \n\n### ITEM 1A. RISK FACTORS. \nYou should consider carefully all of the risks described below, together with the other information contained in this Annual Report on Form 10-K, the prospectus associated with our initial public offering and the Registration Statement, before making a decision to invest in our securities. \n\n\n\nAccordingly, we may complete our initial business combination even if holders of a majority of our common stock do not approve of the business combination we complete. Please see the section entitled Proposed Business Stockholders May Not Have the Ability to Approve Our Initial Business Combination for additional information. \n\nImmediately following the completion of the Public Offering, our initial stockholders owned 20% of our outstanding common stock. Our Charter provides that, if we seek stockholder approval of an initial business combination, such initial business combination will be approved if we receive the affirmative vote of a majority of the shares voted at such meeting, including the founder shares. As a result, in addition to our initial stockholders founder shares, we would need 11,250,001, or 37.5%, of the 30,000,000 public shares sold in the to be Public Offering voted in favor of an initial business combination in order to have our initial business combination approved (assuming all outstanding shares are voted and the over-allotmentoption is not exercised). \n\n\n\n\n\n\n\n\n\nOn January30, 2020, the World Health Organization declared the outbreak of COVID-19a Public Health Emergency of International Concern. On January31, 2020, U.S. The COVID-19outbreak has resulted in a widespread health crisis that has adversely affected economies and financial markets worldwide, and the business of any potential target business with which we consummate a business combination could be, or may already have been, materially and adversely affected. Furthermore, we may be unable to complete a business combination if concerns relating to COVID-19continue to restrict travel, limit the ability to have meetings with potential investors or the target companys personnel, vendors and services providers are unavailable to negotiate and consummate a transaction in a timely manner. \nIn addition, our ability to consummate a transaction may be dependent on the ability to raise equity and debt financing which may be impacted by COVID-19and other events, including as a result of increased market volatility, decreased market liquidity and third-partyfinancing being unavailable on terms acceptable to us or at all. \nThe requirement that we complete our initial business combination by September 24, 2022 may give potential target businesses leverage over us in negotiating a business combination and may limit the time we have in which to conduct due diligence on potential business combination targets, in particular as we approach our dissolution deadline, which could undermine our ability to complete our initial business combination on terms that would produce value for our stockholders. \nAny potential target business with which we enter into negotiations concerning a business combination will be aware that we must complete our initial business combination by September 24, 2022. \nWe may not be able to complete our initial business combination by September 24, 2022, in which case we would cease all operations except for the purpose of winding up and we would redeem our public shares and liquidate. \nWe may not be able to find a suitable target business and complete our initial business combination by September 24, 2022. If we have not completed our initial business combination within such time period, we will: (i)cease all operations except for the purpose of winding up, (ii)as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-shareprice, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account and not previously released to us (less taxes payable and up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders rights as stockholders (including the right to receive further liquidating distributions, if any), and (iii)as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, liquidate and dissolve, subject in each case, to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. \n\n\n\n\n\n\n\nSince the net proceeds of the Public Offering and the sale of the private placement warrants are intended to be used to complete an initial business combination with a target business, we may be deemed to be a blank check company under the UnitedStates securities laws. However, because we have net tangible assets in excess of $5,000,000 and have filed a Current Report on Form8-K, including an audited balance sheet demonstrating this fact, we are exempt from rules promulgated by the SEC to protect investors in blank check companies, such as Rule419. Moreover, if the Public Offering had been subject to Rule419, that rule would have prohibited the release of any interest earned on funds held in the trust account to us unless and until the funds in the trust account were released to us in connection with our completion of an initial business combination. \n\nIf we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our Charter provides that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a group (as defined under Section13 of the Exchange Act), will be restricted from seeking redemption rights with respect to more than an aggregate of 20% of the shares sold in the Public Offering without our prior consent, which we refer to as the Excess Shares. \n\n\nIf the net proceeds of the Public Offering and Private Placement not being held in the trust account are insufficient to allow us to operate at least until September 24, 2022, it could limit the amount available to fund our search for a target business or businesses and complete our initial business combination, and we will depend on loans from our sponsor or management team to fund our search and to complete our initial business combination. \nOf the net proceeds of the Public Offering, only $1,250,000 was made available to us initially outside the trust account to fund our working capital requirements. We believe that the funds available to us outside of the trust account will be sufficient to allow us to operate at least until September 24, 2022; \n\nThe underwriters of the Public Offering will not execute agreements with us waiving such claims to the monies held in the trust account. \nPursuant to the letter agreement the form of which is filed as an exhibit to this Form 10-K, our sponsor has agreed that it will be liable to us if and to the extent any claims by a third party for services rendered or products sold to us, or a prospective target business with which we have entered into a written letter of intent, confidentiality or other similar agreement or business combination agreement, reduce the amount of funds in the trust account to below the lesser of (i) $10.00 per public share and (ii)the actual amount per public share held in the trust account as of the date of the liquidation of the trust account, if less than $10.00 per public share due to reductions in the value of the trust assets, less taxes payable, provided that such liability will not apply to any claims by a third party or prospective target business who executed a waiver of any and all rights to the monies held in the trust account (whether or not such waiver is enforceable) nor will it apply to any claims under our indemnity of the underwriters of the Public Offering against certain liabilities, including liabilities under the Securities Act. \n\n\nIn the event that our offering expenses exceed our estimate of $750,000, we may fund such excess with funds not to be held in the trust account. Conversely, in the event that the offering expenses are less than our estimate of $750,000, the amount of funds we intend to be held outside the trust account would increase by a corresponding amount. Up to $1,500,000 of such loans may be convertible into warrants of the post-businesscombination entity at a price of $1.50 per warrant at the option of the lender. \n\n\n\n\n\n\n\nWe do not believe that our anticipated principal activities subject us to the Investment Company Act. (ii)the redemption of any public shares properly tendered in connection with a stockholder vote to amend our Charter to modify the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial business combination by September 24, 2022; and (iii)absent an initial business combination by September 24, 2022 or with respect to any other material provisions relating to stockholders rights or pre-initialbusiness combination activity, our return of the funds held in the trust account to our public stockholders as part of our redemption of the public shares. \n\n\n\nThe pro rata portion of our trust account distributed to our public stockholders upon the redemption of our public shares in the event we do not complete our initial business combination by September 24, 2022 may be considered a liquidating distribution under Delaware law. However, it is our intention to redeem our public shares as soon as reasonably possible following the 24th month from the closing of the Public Offering in the event we do not complete our initial business combination and, therefore, we do not intend to comply with the foregoing procedures. \nHowever, because we are a blank check company, rather than an operating company, and our operations are limited to searching for prospective target businesses to acquire, the only likely claims to arise would be from our vendors (such as lawyers, investment bankers, etc.) or prospective target businesses. Furthermore, if the pro rata portion of our trust account distributed to our public stockholders upon the redemption of our public shares in the event we do not complete our initial business combination by September 24, 2022 is not considered a liquidating distribution under Delaware law and such redemption distribution is deemed to be unlawful (potentially due to the imposition of legal proceedings that a party may bring or due to other circumstances that are currently unknown), then pursuant to Section174 of the DGCL, the statute of limitations for claims of creditors could then be six years after the unlawful redemption distribution, instead of three years, as in the case of a liquidating distribution. \n\n\n\nOur management team, led by Alan G. Mnuchin, has established global relationships and has extensive experience in identifying and executing proprietary strategic investments in these sectors. Our Charter prohibits us from effectuating a business combination with another blank check company or similar company with nominal operations. \n\n\n\n\n\nUnless we complete our initial business combination with an affiliated entity, we are not required to obtain an opinion from an independent accounting firm or independent investment banking firm which is a member of FINRA that the price we are paying is fair to our stockholders from a financial point of view. \nWe may also issue shares of ClassA common stock upon the conversion of the founder shares at a ratio greater than one-to-one at the time of our initial business combination as a result of the anti-dilution provisions contained in our Charter. \nOur Charter authorizes the issuance of up to 380,000,000shares of ClassA common stock, par value $0.0001 per share, 20,000,000shares of ClassB common stock, par value $0.0001 per share, and 1,000,000shares of preferred stock, par value $0.0001 per share. There are 345,500,000 and 11,375,000 authorized but unissued shares of ClassA common stock and ClassB common stock, respectively, available for issuance which amount does not take into account shares reserved for issuance upon exercise of outstanding warrants or<|endoftext|>The Director Compensation Policy, each outside director will receive the cash and equity compensation for board services described below. We also will reimburse our outside directors for reasonable, customary, and documented travel expenses to meetings of our board of directors or its committees and other expenses. \n### Maximum Annual Compensation Limit \nThe Director Compensation Policy includes a maximum annual limit of $750,000 of cash compensation and equity compensation awards that may be paid, issued, or granted to an outside director in any fiscal year (increased to $1,000,000 in the outside directors initial year of service as an outside director). For purposes of this limitation, the grant date fair value is determined in accordance with GAAP. \nCash Compensation \nOutside directors are entitled to receive the following cash compensation for their service under the Director Compensation Policy: \n$80,000 per year for service as a board member; \n$22,000 per year for service as lead independent director of our board of directors; \n$25,000 per year for service as chair of the audit committee; \n$12,500 per year for service as member of the audit committee; \n$18,000 per year for service as chair of the compensation committee; \n$9,000 per year for service as member of the compensation committee; \n$13,000 per year for service as chair of the nominating and corporate governance committee; and \n$6,500 per year for service as member of the nominating and corporate governance committee. \nEach outside director who serves as the chair of a committee will receive only the annual cash fee as the chair of the committee, and not the additional annual cash fee as a member of the committee. All cash payments to outside directors are paid quarterly in arrears on apro-ratedbasis. \n### Equity Compensation \nIn the event of a change in control (as defined in the 2020 Plan), each outside directors outstanding awards will fully vest, provided that the outside director continues to be an outside director through the date of the change in control. \nInitial Awards \nEach person who first becomes an outsidedirector following the effective date of the Director Compensation Policy will automatically receive an initial award of RSUs (the Initial Award). The Initial Award will cover a number of shares of our ClassA Common Stock equal to $320,000 divided by the twenty (20)trading day volume weighted average stock price for the twenty (20)trading days prior to the applicable grant date. The Initial Award will vest in equal monthly installments as to 1/12 th quarterly over three years on our quarterly vesting dates, which are February15, May15, August15 and November15, beginning with the first quarterly vesting date to occur more than 3 months after such individual first becomes anon-employeedirector, subject to thenon-employeedirector continuing to be a service provider through the applicable vesting date. If the person was a member of our board of directors and also an employee, becoming anon-employeedirector due to termination of employment will not entitle them to an Initial Award. \n### Annual Award \nEachoutsidedirector will automatically receive, on the date of each annual meeting of our stockholders following the effective date of the Director Compensation Policy, an annual award of RSUs (an Annual Award) covering a number of shares of our ClassA Common Stock equal to $160,000 divided by the twenty (20)trading day volume weighted average stock price for the twenty (20)trading days prior to the applicable grant date. The Annual Award will vest on the first quarterly vesting date to occur following theone-yearanniversary of the date the Annual Award was granted. \nAny person who first becomes an outside director following the effective date of the Director Compensation Policy and on any date other than the date of an annual meeting of our stockholders will automatically receive the Annual Award, with such Annual Award prorated to reflect a partial year of service. Messrs. Blome and Wiese have not received any compensation pursuant to the Director Compensation Policy and have each waived their right to any compensation under the Director Compensation Policy. \n\nThe following table sets forth information regarding the total compensation awarded to, earned by or paid to our outside directors for their service on our board of directors, for the fiscal year ended December31, 2020. Directors who are also our employees receive no additional compensation for their service as directors. During 2020, Mr.Singh was an employee and executive officer of the Company and therefore, did not receive compensation as a director. See Executive Compensation for additional information regarding Mr.Singhs compensation. \n(1) \nEach of Celina Mikolajczak and Jens Wiese joined our board of directors after December31, 2020 and thus are intentionally omitted from this table and the table below regarding outstanding equity awards. \n(2) \nThe amounts in this column represent the aggregate grant-date fair value of awards granted to each named executive officer, computed in accordance with the FASBs ASC Topic 718. \nThe following table lists all outstanding equity awards held by non-employee directors as of December31, 2020: \n\nNone of the members of our compensation committee have ever been an executive officer or employee of our company. None of our executive officers currently serves, or has served during the last completed fiscal year, on the compensation committee or board of directors of any other entity that has one or more executive officers that serve on our board of directors or compensation committee. \nItem12. \nThe following table sets forth the beneficial ownership of our common stock as of March8, 2021 by: each person, or group of affiliated persons, known by us to beneficially own more than 5% of our common stock; each of our directors; \nWe have determined beneficial ownership in accordance with the rules of the SEC, and thus it represents sole or shared voting or investment power with respect to our securities, including options and warrants that are currently exercisable or exercisable within 60 days. Unless otherwise indicated, to our knowledge, the persons or entities identified in the table have sole voting power and sole investment power with respect to all shares shown as beneficially owned by them, subject to community property laws where applicable. \nWe have based our calculation of the percentage of beneficial ownership on 212,058,168 shares of our ClassA Common Stock and 156,161,849 shares of ClassB Common Stock outstanding as of March8, 2021. We have deemed shares of our Common Stock subject to stock options that are currently exercisable or exercisable within 60 days of March 8, \n2021 or issuable pursuant to RSUs which are subject to vesting and settlement conditions expected to occur within 60 days of March 8, \n2021, to be outstanding and to be beneficially owned by the person holding the stock option or RSU for the purpose of computing the percentage ownership of that person. \nUnless otherwise indicated, the address for each person or entity listed in the table is c/o QuantumScape Corporation, 1730 Technology Drive, San Jose, California, 95110. \n* \n\n(1) \nConsists of 53,014,769 shares of ClassA Common Stock and 17,980,436 shares of ClassB Common Stock. The business address of Volkswagen Group of America Investments, LLC (VGA) is 220 Ferdinand Porsche Dr.Herndon, VA 20171. \n(2) \nConsists of 4,830,503 shares of ClassA Common Stock and 30,609,901 shares of ClassB Common Stock. The business address of Khosla Ventures III, LP is 2128 Sand Hill Road Menlo Park, CA 94025. \n(3) \nConsists of 2,005,071 shares of ClassA Common Stock held by Technology Impact Growth Fund, LP, 5,403,570 shares of ClassA Common Stock held by TIGF Direct Strategies LLC Series 3 and 2,927,838 shares of ClassA Common Stock and 14,022,837 shares of ClassB Common stock held by Capricorn-Libra Investment Group, LP. TIGF Partners, LLC is the general partner of Technology Impact Growth Fund, LP and the manager of TIGF Direct Strategies LLC Series 3. TIGF Partners, LLC is owned by Dipender Saluja (40%), Ion Yadigaroglu (40%) and Capricorn Investment Group, LLC (20%). The business address of each of these entities is 250 University Avenue Palo Alto, CA 94301. \n(4) \nConsists of 1,932,201 shares of ClassA Common Stock and 18,349,929 shares of ClassB Common Stock. The business address of KPCB Holdings, Inc., as nominee is 2750 Sand Hill Road, Menlo Park, CA 94025. \n(5) \nConsists of 14,308,051 shares of ClassA Common Stock. The business address ofAl-RayyanHolding \nLLC is Ooredoo Tower (Building 14), Al Dafna Street (Street 801), Al Dafna (Zone 61), Doha, Qatar. \n(6) \nConsists of (a)options to purchase 1,001,414 shares of ClassA Common Stock that are exercisable within 60 days of March8, 2021, (b) options to purchase 333,804 shares of ClassB Common Stock that are exercisable within 60 days of March8, 2021, (c) 134,064 shares of ClassA Common Stock issuable upon the vesting of restricted stock units within 60 days of March8, 2021 and (d) 13,484,992 shares of ClassB Common Stock held by Dr.Holme. \n(7) \nConsists of (a)options to purchase 8,998,273 shares of ClassA Common Stock that are exercisable within 60 days of March8, 2021, (b) options to purchase 2,010,874 shares of ClassB Common Stock that are exercisable within 60 days of March8, 2021, (c) 1,005,440 shares of ClassA Common Stock issuable upon the vesting of restricted stock units within 60 days of March8, 2021, (d) 1,340,582 shares of ClassB Common Stock held by Mr.Singh, (e) 4,021,750 shares of ClassB Common Stock held in trust by Jagdeep Singh, Trustee of the Roshni Singh 2020 Annuity Trust A dated September1, 2020, (f) 4,021,750 shares of ClassB Common Stock held in trust by Jagdeep Singh, Trustee of the Jagdeep Singh 2020 Annuity Trust A dated September1, 2020, (g) 966,100 shares of ClassA Common Stock and 5,541,385 shares of ClassB Common Stock held in trust by Jagdeep Singh& Roshni Singh, Trustees of the Singh Family Trust UDT dated October3, 1996, (h) 561,862 shares of ClassA Common Stock held in trust by Tejbir Singh Phool, Trustee of the Kismet Diya Singh 2013 Trust dated July31, 2013, (i) 561,862 shares of ClassA Common Stock held in trust by Tejbir Singh Phool, Trustee of the Nageena Singh 2013 Trust dated July31, 2013 (j) 561,862 shares of ClassA Common Stock held in trust by Tejbir Singh Phool, Trustee of the Noor Deepika Singh 2013 Trust dated July31, 2013, (k) 1,340,582 shares of ClassB Common Stock held in trust by Friedrich Prinz and Jagdeep Singh, Trustees of the Marie Helen Prinz 2019 Trust dated June17, 2019 and (l) 1,340,582 shares of ClassB Common Stock held in trust by Friedrich Prinz and Jagdeep Singh, Trustees of the Benedikt Prinz 2019 Trust dated June17, 2019. Mr.Singh shares voting and dispositive power and is the trustee of each of Jagdeep Singh, Trustee of the Roshni Singh 2020 Annuity Trust A dated September1, 2020, Jagdeep Singh, Trustee of the Jagdeep Singh 2020 Annuity Trust A dated September1, 2020, Jagdeep Singh& Roshni Singh, Trustees of the Singh Family Trust UDT dated October3, 1996, Tejbir Singh Phool, Trustee of the Kismet Diya Singh 2013 Trust dated July31, 2013, Tejbir Singh Phool, Trustee of the Nageena Singh 2013 Trust dated July31, 2013 and Tejbir Singh Phool, Trustee of the Noor Deepika Singh 2013 Trust dated July31, 2013. Mr.Singh shares dispositive power and is the trustee of each of Friedrich Prinz and Jagdeep Singh, Trustees of the Marie Helen Prinz 2019 Trust dated June17, 2019 and Friedrich Prinz and Jagdeep Singh, Trustees of the Benedikt Prinz 2019 Trust dated June17, 2019. Mr.Singh disclaims voting power with respect to each of Friedrich Prinz and Jagdeep Singh, Trustees of the Marie Helen Prinz 2019 Trust dated June17, 2019 and Friedrich Prinz and Jagdeep Singh, Trustees of the Benedikt Prinz 2019 Trust dated June17, 2019. \n(8) \nConsists of (a)options to purchase 925,937 shares of ClassA Common Stock that are exercisable within 60 days of March8, 2021, (b) 304,022 shares of ClassA Common Stock and (c) 422,283 shares of ClassB Common Stock held by Mr.Hettrich. \n(9) \nConsists of (a)options to purchase 1,995,801 shares of ClassA Common Stock that are exercisable within 60 days of March8, 2021, (b) options to purchase 124,673 shares of ClassB Common Stock that are exercisable within 60 days of March8, 2021, (c)59,074 shares of ClassA Common Stock and (d) 820,435 shares of ClassB Common Stock held<|endoftext|>Code of Conduct does not have the force of law, in that it is not subsidiary legislation, and should not be interpreted in a way that would override the provision of any law. A failure by a licensed insurance broker to comply with the Code of Conduct shall not by itself render the broker liable to any judicial or other proceedings. However, in any proceedings under the IO before a court, the Code of Conduct is admissible in evidence, and if a provision in the Code of Conduct appears to the court to be relevant to a question arising in the proceedings, the court must, in determining the question, take into account any compliance or non-compliance with the Code of Conduct. \nRegulation of Mandatory Provident Fund Intermediaries \nWith the implementation of the Mandatory Provident Fund Schemes (Amendment) Ordinance 2012, a new statutory regulatory regime for MPF intermediaries came into operation as of November 1, 2012. Under this statutory regime, only registered MPF intermediaries (such as our operating subsidiary) are allowed to engage in conducting sales and marketing activities and giving advice in relation to MPF schemes. \nUnder the statutory regime, the Mandatory Provident Fund Schemes Authority (MPFA) is the authority to administer MPF intermediaries, issue guidelines on compliance with statutory requirements applicable to registered MPF intermediaries, and impose disciplinary sanctions. On the other hand, the IA is given the statutory role for monitoring the compliance of the registered MPF intermediaries. As a frontline regulator, the IA supervises the conduct requirements stipulated in the Mandatory Provident Fund Schemes Ordinance (Cap.485) (MPFSO). If the IA has reasonable cause to believe that the registered MPF intermediaries may have failed to comply with the statutory conduct requirements, it may exercise the investigation powers under the MPFSO for investigating the suspected non-compliance. \nRegistered MPF intermediaries must comply with a set of statutory conduct requirements when they engage in conducting sales and marketing activities and giving advice in relation to MPF schemes. The MPFA has issued the Guidelines on Conduct Requirements for Registered Intermediaries to assist the registered MPF intermediaries in understanding how to comply with the conduct requirements. \nThe minimum standards of conduct that a registered MPF intermediary should adopt include: acting honestly, fairly, in the best interests of the client and with integrity; acting with care, skill and diligence; advising on matters within competence; having regard to clients particulars as is necessary; disclosing necessary information to the client; disclosing conflict of interest; prompt and proper accounting for client assets; keeping records of regulated activities; establishing, maintaining and observing proper controls and procedures for securing compliance by the principal intermediary; and appointing a responsible officer to use his or her best endeavors to carry out specified responsibilities in relation to the principal intermediary. \n### Regulation Related to Business Registration \nThe Business Registration Ordinance (Chapter 310 of the Laws of Hong Kong) requires every person carrying on any business in Hong Kong to make an application to the Commissioner of Inland Revenue in the prescribed manner for the registration of that business, unless it is exempt under the Business Registration Ordinance. The Commissioner of Inland Revenue must register each business for which a business registration application is made and as soon as practicable after the prescribed business registration fee and levy are paid and issue a business registration certificate or branch registration certificate for the relevant business or the relevant branch, as the case may be. \nRegulation Related to Employment and Labor Protection \nEmployment Ordinance (Chapter 57 of the Laws of Hong Kong) \nThe Employment Ordinance (Chapter 57 of the Laws of Hong Kong), or the EO, is an ordinance enacted for, amongst other things, the protection of the wages of employees and the regulation of the general conditions of employment and employment agencies. Under the EO, an employee is generally entitled to, amongst other things, notice of termination of his or her employment contract; payment in lieu of notice; maternity protection in the case of a pregnant employee; not less than one rest day in every period of seven days; severance payments or long service payments; sickness allowance; statutory holidays or alternative holidays; and paid annual leave of up to 14 days depending on the period of employment. \nEmployees Compensation Ordinance (Chapter 282 of the Laws of Hong Kong) \nThe Employees Compensation Ordinance (Chapter 282 of the Laws of Hong Kong), or the ECO, is an ordinance enacted for the purpose of providing for the payment of compensation to employees injured in the course of employment. As stipulated by the ECO, no employer shall employ any employee in any employment unless there is in force in relation to such employee a policy of insurance issued by an insurer for an amount not less than the applicable amount specified in the Fourth Schedule of the ECO in respect of the liability of the employer. According to the Fourth Schedule of the ECO, the insured amount shall be not less than HK$100,000,000 (approximately $12,900,000) per event if a company has no more than 200 employees. Any employer who contravenes this requirement commits a criminal offence and is liable on conviction to a fine of HK$100,000 (approximately $12,900) and imprisonment for two years. An employer who has taken out an insurance policy under the ECO is required to display a prescribed notice of insurance in a conspicuous place on each of its premises where any employee is employed. Any employer who, without reasonable cause, contravenes this requirement commits a criminal offence and is liable on conviction to a fine of HK$10,000 (approximately $1,290). We believe that we have taken sufficient employee compensation insurance for our employees required under the ECO. \nMandatory Provident Fund Schemes Ordinance (Chapter 485 of the Laws of Hong Kong) \nThe MPFSO is an ordinance enacted for the purposes of providing for the establishment of non-governmental mandatory provident fund schemes, or the MPF Schemes. The MPFSO requires every employer of an employee (other than exempt persons) of 18 years of age or above but under 65 years of age to take all practical steps to ensure the employee becomes a member of a registered MPF Scheme. Subject to the minimum and maximum relevant income levels, it is mandatory for both employers and their employees to contribute 5% of the employees relevant income to the MPF Scheme. For a monthly-paid employee, the maximum relevant income level is HK$30,000 (approximately $3,870) per month and the maximum amount of contribution payable by the employer to the MPF Scheme is HK$1,500 (approximately $193). Any employer who, without reasonable cause, contravenes this requirement commits a criminal offence and is liable on conviction to a fine of HK$350,000 (approximately $45,200) and imprisonment for three years, and to a daily penalty of HK$500 (approximately $65) for each day on which the offence is continued. As of the date of this Report, the Company believe it has made all contributions required of PAM under the MPFSO. We believe that we have made all contributions required under the MPFSO. \n### Regulations Related to Hong Kong Taxation \nInland Revenue Ordinance (Chapter 112 of the Laws of Hong Kong) \nUnder the Inland Revenue Ordinance (Chapter 112 of the Laws of Hong Kong), where an employer commences to employ in Hong Kong an individual who is or is likely to be chargeable to tax, or any married person, the employer shall give a written notice to the Commissioner of Inland Revenue not later than three months after the date of commencement of such employment. Where an employer ceases or is about to cease to employ in Hong Kong an individual who is or is likely to be chargeable to tax, or any married person, the employer shall give a written notice to the Commissioner of Inland Revenue not later than one month before such individual ceases to be employed in Hong Kong. \n### Tax on Dividends \nUnder the current practice of the Inland Revenue Department of Hong Kong, no tax is payable in Hong Kong in respect of dividends paid by the Company. \nCapital Gains and Profit Tax \nNo tax is imposed in Hong Kong in respect of capital gains from the sale of shares. However, trading gains from the sale of shares by persons carrying on a trade, profession or business in Hong Kong, where such gains are derived from or arise in Hong Kong, will be subject to Hong Kong profits tax which is imposed at the rates of 8.25% on assessable profits up to HK$2,000,000 (approximately US$258,000) and 16.5% on any part of assessable profits over HK$2,000,000 (approximately US$258,000) on corporations from the year of assessment of 2018/2019 onwards. Certain categories of taxpayers (for example, financial institutions, insurance companies and securities dealers) are likely to be regarded as deriving trading gains rather than capital gains unless these taxpayers can prove that the investment securities are held for long-term investment purposes. \n### Stamp Duty \nHong Kong stamp duty, currently charged at the ad valorem rate of 0.1% on the higher of the consideration for or the market value of the shares, will be payable by the purchaser on every purchase and by the seller on every sale of Hong Kong shares (in other words, a total of 0.2% is currently payable on a typical sale and purchase transaction of Hong Kong shares). In addition, a fixed duty of HK$5 is currently payable on any instrument of transfer of Hong Kong shares. Where one of the parties is a resident outside Hong Kong and does not pay the ad valorem duty due by it, the duty not paid will be assessed on the instrument of transfer (if any) and will be payable by the transferee. If no stamp duty is paid on or before the due date, a penalty of up to ten times the duty payable may be imposed. \nRegulations Related to Anti-Money Laundering and Counter-Terrorist Financing \nAnti-Money Laundering and Counter-Terrorist Financing Ordinance (Chapter 615 of the Laws of Hong Kong) \nThe AMLO imposes requirements relating to client due diligence and record-keeping and provides regulatory authorities with the powers to supervise compliance with the requirements under the AMLO. In addition, the regulatory authorities are empowered to (i) ensure that proper safeguards exist to prevent contravention of specified provisions in the AMLO; and (ii) mitigate money laundering and terrorist financing risks. \nDrug Trafficking (Recovery of Proceeds) Ordinance (Chapter 405 of the Laws of Hong Kong) \nThe Drug Trafficking (Recovery of Proceeds) Ordinance (Chapter 405 of the Laws of Hong Kong), or the DTROP, contains provisions for the investigation of assets suspected to be derived from drug trafficking activities, the freezing of assets on arrest and the confiscation of the proceeds from drug trafficking activities. It is an offence under the DTROP if a person deals with any property knowing, or having reasonable grounds to believe, it to be the proceeds from drug trafficking. The DTROP requires a person to report to an authorized officer if he/she knows or suspects that any property (directly or indirectly) is the proceeds from drug trafficking or is intended to be used or was used in connection with drug trafficking, and failure to make such disclosure constitutes an offence under the DTROP. \nOrganized and Serious Crimes Ordinance (Chapter 455 of the Laws of Hong Kong) \nThe Organized and Serious Crimes Ordinance (Chapter 455 of the Laws of Hong Kong), or the OSCO, empowers officers of the Hong Kong Police Force and the Hong Kong Customs and Excise Department to investigate organized crime and triad activities, and it gives the Hong Kong courts jurisdiction to confiscate the proceeds from organized and serious crimes, to issue restraint orders and charging orders in relation to the property of defendants of specified offences. The OSCO extends the money laundering offence to cover the proceeds of all indictable offences in addition to drug trafficking. \nUnited Nations (Anti-Terrorism Measures) Ordinance (Chapter 575 of the Laws of Hong Kong) \nThe United Nations (Anti-Terrorism Measures) Ordinance (Chapter 575 of the Laws of Hong Kong), or the UNATMO, provides that<|endoftext|>Our selection criteria should make our target companies attractive to a broad range of potential investors, including ESG- and Impact-focused investors. Our management team and our board have significant experience managing, advising and serving as officers and directors of public companies and therefore will be judicious in considering the market appetite for and public viability of our potential targets. \nIn the event that we decide to enter into our initial business combination with a target business that does not meet any or all of the above criteria and guidelines, we will disclose that the target business does not meet the above criteria in our shareholder communications related to our initial business combination, which, as discussed in this Annual Report on Form 10-K, would be in the form of proxy solicitation or tender offer materials that we would file with the SEC. \n\nWe will either (1) seek shareholder approval of our initial business combination at a meeting called for such purpose at which shareholders may seek to redeem their shares without voting and, if they do vote, regardless of whether they vote for or against the proposed business combination, into their pro rata share of the aggregate amount then on deposit in the trust account (net of taxes payable as of two business days prior to the consummation of the initial business combination), or (2) provide our shareholders with the opportunity to sell their shares to us by means of a tender offer (and thereby avoid the need for a shareholder vote) for an amount equal to their pro rata share of the aggregate amount then on deposit in the trust account (net of taxes payable as of two business days prior to the consummation of the initial business combination), in each case subject to the limitations described herein. The decision as to whether we will seek shareholder approval of our proposed business combination or allow shareholders to sell their shares to us in a tender offer will be made by us, solely in our discretion, and will be based on a variety of factors such as the timing of the transaction and whether the terms of the transaction would otherwise require us to seek shareholder approval. Unlike other blank check companies which require shareholder votes and conduct proxy solicitations in conjunction with their initial business combinations and related redemptions of public shares for cash upon consummation of such initial business combinations even when a vote is not required by law, we will have the flexibility to avoid such shareholder vote. We will consummate our initial business combination only if we have net tangible assets of at least $5,000,000 upon such consummation and, if we seek shareholder approval, the affirmative vote of the holders of a majority of the shares of the ordinary shares that are voted at a shareholder meeting held to consider such initial business combination. \nWe may, at our option, pursue an acquisition opportunity jointly with one or more parties affiliated with PIMCO, including, without limitation, officers and partners of PIMCO, investment funds, accounts, co- investment vehicles and other entities managed by affiliates of PIMCO, and/or investors in funds, accounts, co-investment vehicles and other entities managed by affiliates PIMCO. \nWe have until 24 months from the Initial Public Offering to consummate an initial business combination. If we are unable to consummate an initial business combination within such time period, we will, as promptly as reasonably possible but not more than ten business days thereafter, redeem 100% of the outstanding public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including any interest earned on the funds held in the trust account, less up to $100,000 of interest to pay dissolution expenses and net of interest that may be used by us to pay our franchise and income taxes payable, divided by the number of then outstanding public shares, which redemption will completely extinguish public shareholders rights as shareholders (including the right to receive further liquidation distributions, if any), subject to applicable law and as further described herein, and then seek to dissolve and liquidate. We expect the pro rata redemption price to be approximately $10.00 per ordinary share, without taking into account any interest earned on such funds. \n\nWe currently anticipate structuring our initial business combination to acquire 100% of the equity interests or assets of the target business or businesses. We may, however, structure our initial business combination where we merge directly with the target business or where we acquire less than 100% of such interests or assets of the target business in order to meet certain objectives of the target management team or shareholders or for other reasons, but we will only complete such business combination if the post- transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target business sufficient for it not to be required to register as an investment company under the Investment Company Act of 1940, as amended (the Investment Company Act). \nAs more fully discussed in Conflicts of Interest, if any of our officers or directors becomes aware of a business combination opportunity that falls within the line of business of any entity to which he or she has fiduciary or contractual obligations, he or she may be required to present such business combination opportunity to such entity prior to presenting such business combination opportunity to us. Certain of our directors currently have, and any of our officers or directors may in the future have, certain relevant fiduciary duties or contractual obligations. However, any of our directors or the PIMCO private funds, or any of their respective affiliates, may sponsor or form, or in the case of individuals, serve as a director or officer of, other blank check companies similar to ours during the period in which we are seeking an initial business combination. \n\n\nIn a business combination transaction with us, the owners of the partner business may, for example, exchange their capital stock, shares or other equity interests in the partner business for our Class A ordinary shares (or shares of a new holding company) or for a combination of our Class A ordinary shares and cash, allowing us to tailor the consideration to the specific needs of the sellers. \n\n\n\n### Financial Position \nAs of December 31, 2020, we had approximately $379.6 million held in the trust account, not taking into account $13.3 million of deferred underwriting fees to be paid. \nEffecting Our Initial Business Combination General \nWe intend to effectuate our initial business combination using the proceeds held in the trust account from our Initial Public Offering, the sale of the private placements warrants, our equity, debt or a combination of these as the consideration. \nIf our initial business combination is paid for using equity or debt, or not all of the funds released from the trust account are used for payment of the consideration in connection with our initial business combination or used for redemptions of our Class A ordinary shares, we may apply the balance of the cash released to us from the trust account for general corporate purposes, including for maintenance or expansion of operations of the post-business combination company, the payment of principal or interest due on indebtedness incurred in completing our initial business combination, to fund the purchase of other companies or for working capital. \n\nAccordingly, there is no current basis for investors to evaluate the possible merits or risks of the partner business with which we may ultimately complete our initial business combination. \n\n\n\nThese sources may also introduce us to partner businesses in which they think we may be interested on an unsolicited basis, since many of these sources will have read our filings and know what types of businesses we are pursuing. \nWe have agreed to pay an affiliate of our sponsor up to a total of $50,000 per month for office space, secretarial and administrative support and to reimburse our sponsor for any out-of-pocket expenses related to identifying, investigating and completing an initial business combination. \n\nPIMCO and their respective affiliates manage multiple funds and investment vehicles, including the PIMCO private funds, and may raise additional funds and/or accounts in the future, which may be during the period in which we are seeking our initial business combination. Moreover, our officers and directors have and will have in the future time and attention requirements for current and future investment funds, accounts, co- investment vehicles and other entities managed by PIMCO or one of their respective affiliated entities. To the extent any conflict of interest arises between, on the one hand, us and, on the other hand, investment funds, accounts, co-investment vehicles and other entities managed by PIMCO or one of their respective affiliated entities (including, without limitation, arising as a result of certain of our officers and directors being required to offer acquisition opportunities to such investment funds, accounts, co-investment vehicles or other entities), PIMCO and their respective applicable affiliate entities, including the PIMCO private funds, will resolve such conflicts of interest in their sole discretion in accordance with their then existing fiduciary, contractual and other duties, and there can be no assurance that such conflict of interest will be resolved in our favor. \nSee Conflicts of Interest. \n\nIf we determine to move forward with a particular partner business, we will proceed to structure and negotiate the terms of the business combination transaction. \n\n\n\n\nAlthough we will closely scrutinize the management of a prospective partner business when evaluating the desirability of effecting our initial business combination with that business, our assessment of the partner businesss management may not prove to be correct. \n\n\n\n\nUnder the rules of Nasdaq and our amended and restated memorandum and articles of association, shareholder approval would be required for our initial business combination if, for example: we issue (other than in a public offering for cash) ordinary shares that will either (a) be equal to or in excess of 20% of the number of ordinary shares then issued and outstanding or (b) have voting power equal to or in excess of 20% of the voting power then issued and outstanding; any of our directors, officers or substantial security holders (as defined by the rules of Nasdaq) has a 5% or greater interest, directly or indirectly, in the partner business or assets to be acquired and if the number of ordinary shares to be issued, or if the number of ordinary shares into which the securities may be convertible or exercisable, exceeds either (a) 1% of the number of ordinary shares or 1% of the voting power outstanding before the issuance in the case of any of our directors and officers or \n(b) 5% of the number of ordinary shares or 5% of the voting power outstanding before the issuance in the case of any substantial security holders; \n\n\n\n\n\n\nThe purpose of any such transactions could be to (i) vote such shares in favor of the business combination and thereby increase the likelihood of obtaining shareholder approval of the business combination, (ii) to satisfy a closing condition in an agreement with a partner that requires us to have a minimum net worth or a certain amount of cash at the closing of our initial business combination, where it appears that such requirement would otherwise not be met or (iii) reduce the number of public warrants outstanding or vote such warrants or any matter submitted to the warrant holders for approval in connection with our initial business combination. \n\nOur sponsor, officers, directors and/or their affiliates may identify the shareholders with whom our sponsor, officers, directors or their affiliates may pursue privately negotiated transactions by either the shareholders contacting us directly or by our receipt of redemption requests submitted by shareholders (in the case of Class A ordinary shares) following our mailing of tender offer or proxy materials in connection with our initial business combination. Our sponsor, executive officers, directors, advisors or any of their affiliates will select<|endoftext|>Redemption rights or liquidating distributions with respect to our warrants, which will expire worthless if we fail to complete our business combination within the prescribed time period. \nOur sponsor, directors and each member of our management have entered into a letter agreement with us, pursuant to which they have waived their rights to liquidating distributions from the trust account with respect to their founder shares if we do not complete an initial business combination by October 29, 2022. However, our sponsor, directors or members of our management team will be entitled to liquidating distributions from the trust account with respect to our public shares if we do not complete an initial business combination within the prescribed time period. \nOur sponsor, executive officers and directors have agreed, pursuant to a written agreement with us, that they will not propose any amendment to our amended and restated certificate of incorporation that would affect the substance or timing of our obligation to allow redemption in connection with our initial business combination or to redeem 100% of our public shares if we do not complete an initial business combination by October 29, 2022, unless we provide our public stockholders with the opportunity to redeem their public shares upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account and not previously released to us to pay our taxes as well as expenses relating to the administration of the trust account (less up to $100,000 of interest to pay dissolution expenses) divided by the number of the then outstanding public shares. \n\nIf we were to expend all of the net proceeds of our initial public offering, the sale of the private placement warrants and the sale of the forward purchase securities, other than the proceeds deposited in the trust account, and without taking into account interest, if any, earned on the trust account, the per-share redemption amount received by stockholders upon our dissolution would be approximately $10.00. \n\n\nIn the event that the proceeds in the trust account are reduced below the lesser of (i) $10.00 per public share and (ii) the actual amount per public share held in the trust account as of the date of the liquidation of the trust account if less than $10.00 per share, due to reductions in the value of the trust assets, in each case net of the interest which may be withdrawn to pay our taxes, if any, and our sponsor asserts that they are unable to satisfy its indemnification obligations or that it has no indemnification obligations related to a particular claim, our independent directors would determine whether to take legal action against our sponsor to enforce its indemnification obligations. \n\n\nFurthermore, if the prorata portion of our trust account distributed to our public stockholders upon the redemption of our public shares in the event we do not complete our initial business combination by October 29, \n2022, is not considered a liquidating distribution under Delaware law and such redemption distribution is deemed to be unlawful (potentially due to the imposition of legal proceedings that a party may bring or due to other circumstances that are currently unknown), then pursuant to Section 174 of the DGCL, the statute of limitations for claims of creditors could then be six years after the unlawful redemption distribution, instead of three years, as in the case of a liquidating distribution. If we do not complete our initial business combination by October 29, 2022, we will: (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account including interest earned on the funds held in the trust account that may be released to us to pay our taxes as well as expenses relating to the administration of the trust account (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders rights as stockholders (including the right to receive further liquidating distributions, if any) and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our Board, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. Accordingly, it is our intention to redeem our public shares as soon as reasonably possible following October 29, 2022 and,therefore, we do not intend to comply with those procedures. \n\n\nOur public stockholders will be entitled to receive funds from the trust account only (i) in the event of the redemption of our public shares if we do not complete an initial business combination by October 29, 2022, subject to applicable law, (ii) in connection with a stockholder vote to amend our amended and restated certificate of incorporation (A) to modify the substance or timing of our obligation to allow redemption in connection with our initial business combination or to redeem 100% of our public shares if we do not complete an initial business \n16 combination by October 29, 2022 or (iii) if they redeem their respective shares for cash upon the completion of the initial business combination. Public stockholders who redeem their shares of our Class A common stock in connection with a stockholder vote described in clause (ii) in the preceding sentence shall not be entitled to funds from the trust account upon the subsequent completion of an initial business combination or liquidation if we have not completed an initial business combination by October 29, 2022, with respect to such shares of our Class A common stock so redeemed. \n### Competition \n\nEmployees \n\n\nOur annual, quarterly and current reports, and any amendments to any of those reports, that we file with the Securities and Exchange Commission are available free of charge as soon as reasonably practicable through our corporate website address at www.luxhealth.tech. \nThese financial statement requirements may \n17 limit the pool of potential target businesses we may acquire because some targets may be unable to provide such statements in time for us to disclose such statements in accordance with federal proxy rules and complete our initial business combination within the prescribed time frame. \nWe are required to evaluate our internal control procedures for the fiscal year ending December 31, 2020. \nIf any of the following risks occur, our business, financial condition or operating results may be materially and adversely affected. \n\nWe are a recently incorporated company incorporated under the laws of the State of Delaware with no operating results. \nPast performance by Lux or its affiliates (including our sponsor and our management team), including the businesses referred to herein, may not be indicative of future performance of an investment in us or in the future performance of any business that we may acquire. \nInformation regarding past performance of Lux, its affiliates or our management team is presented for informational purposes only. Any past experience and performance of Lux, its affiliates, our sponsor, our management team or the other companies referred to herein is not a guarantee either: (1) that we will be able to successfully identify a suitable candidate for our initial business combination or (2)of any results with respect to any initial business combination we may complete. You should not rely on the historical record of Lux, its affiliates, our sponsor, our management teams performance or the performance of the other companies referred to herein as indicative of the future performance of an investment in us or the returns we will, or are likely to, generate going forward. An investment in us is not an investment in Lux or its affiliates, nor the other companies referred to herein. \n\nWe may choose not to hold a stockholder vote before we complete our initial business combination if the initial business combination would not require stockholder approval under applicable law or stock exchange listing requirement. Accordingly, we may complete our initial business combination even if a majority of our public stockholders do not approve of the initial business combination we complete. \n\nSince our Board may complete a business combination without seeking stockholder approval, public stockholders may not have the right or opportunity to vote on the initial business combination, unless we seek such stockholder vote. \n\nOur initial stockholders own, on an as-converted basis, 20% of our outstanding shares of our ClassA common stock. Our amended and restated certificate of incorporation will provide that, if we seek stockholder approval of an initial business combination, such initial business combination will be approved if we receive the affirmative vote of a majority of the shares voted at such meeting, including the founder shares. If we submit our initial business combination to our public stockholders for a vote, pursuant to the terms of a letter agreement entered into with us, our sponsor and members of our management team have agreed to vote their founder shares and any shares purchased during or after the offering, in favor of our initial business combination.As a result, in addition to our sponsors founder shares, we would need 12,937,501, or 37.5% (assuming all issued and outstanding shares are voted), or 2,156,251, or 6.25% (assuming only the minimum number of shares representing a quorum are voted), of the 34,500,000 public shares to be voted in favor of an initial business combination in order to have our initial business combination approved. Our sponsor owns shares representing 20% of our outstanding shares of common stock. Accordingly, if we seek stockholder approval of our initial business combination, it is more likely that the necessary stockholder approval will be received than would be the case if our sponsor agreed to vote its founder shares in accordance with the majority of the votes cast by our public stockholders. \nIn evaluating a prospective target business for our initial business combination, our management may consider the availability of funds from the sale of the forward purchase securities, which may be used as part of the consideration to the sellers in the initial business combination. If Lux Ventures VI, L.P. decide not to exercise their right to purchase all or some of the forward purchase securities, we may lack sufficient funds to consummate our initial business combination. \nWe have entered into a forward purchase agreement pursuant to which the \nLux Ventures VI, L.P. (together, the Lux Ventures VI Entities) have agreed to purchase an aggregate of up to 1,500,000 forward purchase units, consisting of the forward purchase shares and the forward purchase warrants, for $10.00 per unit, or an aggregate maximum amount of $15,000,000, in a private placement that will close simultaneously with the closing of our initial business combination. The funds from the sale of the forward purchase securities are expected to be used as part of the consideration to the sellers in our initial business combination, and to pay expenses in connection with our initial business combination and may be used for working capital in the post-transaction company. If the Lux Ventures VI Entities do not agree to fund more than the amount necessary to complete the initial business combination, the post-transaction company may not have enough cash available for working capital. The obligations under the forward purchase agreement do not depend on whether any public stockholders elect to redeem their shares in connection with our initial business combination. However, if the sale of the forward purchase securities does not close, for example, by reason of the failure of the Lux Ventures VI Entities or any forward transferee to fund the purchase price for their forward purchase securities, we may lack sufficient funds to consummate our initial business combination. The Lux Ventures VI Entities obligation to purchase forward purchase units will, among other things, be conditioned on the business combination (including the target<|endoftext|>Provide for the payment of dividends until the shares are earned. Dividends accrue during the performance period. \nFor the purpose of calculating the number of shares subject to the performance-based stock options to be granted, the dollars allocated to stock options were divided by $8.15, which price was calculated by a third party financial firm with particular expertise in the valuation of options \nThe stock options as granted ha d an exercise price of $53.26, which was the closing price of Aimcos stock on the grant date and equal to the fair market value of Aimcos Common Stock on the grant date. \nAs provided in the Employee Matters Agreement between Aimco and AIR, at the Separation each outstanding time or performance-vesting Aimco equity award was converted into awards of both shares of Aimco Common Stock and shares of AIR Common Stock. The number of shares of Aimco Common Stock and AIR Common Stock subject to each converted award (and the applicable exercise price with respect to converted stock option awards) was determined in a manner intended to preserve the aggregate value of the original Aimco equity award as measured immediately before the Separation. A similar adjustment was provided for with respect to LTIPs. \nMs. Johnsons 2020 LTI was granted on January 27, 2021, according to the backward looking LTI plan that governs LTI awards for officers below the executive officer level, and was the plan that applied to Ms. Johnson prior to her promotion to CAO in December 2020. Under the plan that governs LTI awards for officers below the executive officer level, at the start of 2020, Mr. Considine determined that LTI for 2020 would be based in part on TSR. Specifically, 50% of the LTI target would be awarded for the purpose of attracting and retaining key talent integral to the success of Aimco. The remaining fifty percent of the LTI target would be awarded based on TSR, with half (25% of the total LTI target) based on Aimcos one-year TSR as compared to the REIT Index, and half (another 25% of the total LTI target) based on Aimcos three-year TSR as compared to the REIT Index.Aimco TSR at greater than 110% of the REIT Index would result in a 125% payout of the LTI target attributable to TSR, and Aimco TSR at less than 90% of the REIT Index would result in a 75% payout of the LTI target attributable to TSR.Aimco TSR between 90% and 110% of the REIT Index would result in 100% payout of the LTI target attributable to TSR. Aimcos one-year TSR was between 90% and 110% of the REIT Index, resulting in a payout of 100% of the portion of the LTI target attributable to one-year TSR, and Aimcos three-year TSR was greater than 110% of the REIT Index, resulting in a payout of 125% of the portion of the LTI target attributable to three-year TSR.Accordingly, Ms. Johnson was awarded 106.25% of her target LTI (i.e., 50% of the LTI target was for the purpose of retention and paid at 100%; 25% of the LTI target was paid at 100% based on relative performance on one-year TSR; and 25% of the LTI target was paid at 125% based on relative performance on three-year TSR; and the net effect of these three components resulted in an overall award of 106.25% of target LTI). \n### NEO Compensation for 2020 \nCEO Compensation. \nThe Committee determined Mr.Considines STI for 2020 would be based entirely on Aimcos performance against corporate goals, described above. The Committee calculated Mr.Considines STI by multiplying his STI target of $1.8million by 100%, which was the Committees payout determination having reviewed Aimcos overall performance against corporate goals, as described in detail above. The Committee granted Mr.Considines LTI in the form of LTIP Units on January28, 2020, for the three-year performance period from January1, 2020, through December31, 2022; the LTI grant is entirely at risk, based on relative returns over the performance period. Mr.Considines 2020 target compensation and incentive compensation is summarized as follows: \n(1) \nAmount shown reflects the amount of 2020 STI paid to Mr.Considine. \n(2) \nAmount shown reflects a 100% payout that would result from achieving target performance. Actual payout may range from 0% to 200% of this amount depending on performance results over the forward looking, three-year performance period ending December31, 2022. The number of LTIP Units that are earned, if any, will vest with respect to 50% following the end of the three-year performance period and 50% one year later, for a four-year vesting period. \n### Other NEO Compensation. \nFor Messrs. Stanfield andCohn, an allocation of the target STI was made as follows: 75% of the target STI was calculated based on Aimcos performance against KPI and 25% of the target STI was calculated based on each executives achievement of his or her individual MAP goals.Ms. Johnsons target STI was allocated 50% to KPI and 50% to achievement of her individual MAP goals. As described above, Aimcos KPI performance was 100.00%. Accordingly, each was awarded 100.00% of the portion of his or her STI attributable to KPI ( i.e. \n, 75% of the target STI amount shown below for Messrs. Stanfield andCohn, and 50% of the target STI amount shown below for Ms. Johnson \n). \nIn determining the MAP achievement component of 2020 STI, Mr.Considine determined that: Mr. Powells MAP achievement would be paid at 150% of target for his leadership over redevelopment activities and acquisitions in 2020; Ms. Stanfields MAP achievement would be paid at 200% of target for her contributions to finance, capital allocation, and tax, including the closing of a joint venture transaction in 2020; Ms. Johnsons MAP achievement would be paid at 125% of target for her leadership over human resources, facilities, and communications, and specifically for her leadership in connection with the Companys response to the COVID-19 pandemic;Beldins MAP achievement would be paid at 100% of target for his contributions to finance and accounting and to Aimcos balance sheet; Ms.Cohns MAP achievement would be paid at 200% for her leadership over legal matters, insurance, risk management, property dispositions, and asset quality and service, and specifically for her leadership in connection with the Companys response to the COVID-19 pandemic; and Mr.Kimmels MAP achievement would be paid at 100% for his contributions to Aimcos operating results, particularly in the wake of the COVD-19 pandemic. The Committee reviewed Mr.Considines determinations with respect to Mr. Powell and Mses. Stanfield and Johnson, and the AIR Compensation and Human Resources Committee reviewed Mr. Considines determinations with respect to Messrs. Beldin and Kimmel and Ms. Cohn. As described above, LTI for the NEOs other than Ms. Johnson was granted on January28, 2020, in the form of LTIP Units, restricted stock, and/or stock options. As described above, Ms. Johnsons LTI for 2020 was granted in January 2021. Target compensation and incentive compensation for 2020 for the other NEOs is summarized as follows: \n(1) \nAmounts shown reflect the 2020 STI paid to each of Messrs. Stanfield, Johnson, andCohn. \n(2) \nFor Messrs. Stanfield andCohn, comprises one-third of the LTI target, vesting ratably over four years, and is for the purpose of attracting and retaining key talent integral to the success of Aimco. For Ms. Johnson, comprises actual 2020 LTI as described in detail above, vesting ratably over four years.For Messrs. Cohn, time-based LTI was in the form of restricted stock.For Ms. Stanfield, time-based LTI was in the form of LTIP Units, and for Ms. Johnson, time-based LTI was in the form of deferred cash. \n(3) \nAmounts shown reflect a 100% payout of the performance-based shares resulting from achieving target performance. Actual payouts will be in a range of 0% to 200% of these amounts, depending on performance results for the three-year performance period from January1, 2020, through December31, 2022. \nDetermination Regarding 2018 Performance Share Awards. \nAs part of the 2018 LTI program, the Company granted performance-share awards that might be earned based on relative TSR as compared to the NAREIT Apartment Index (60% weighting) and the REIT Index (40% weighting) over a three-year performance period ending on December31, 2020, with awards vesting 50% following the end of the three-year performance period (based on attainment of TSR targets) and 50% one year later, for a four-year plan from start to finish. On January27, 2021, the Committee determined that Aimcos three-year TSR (combined with AIRs TSR for the period from December 15, 2020, through December 31, 2020) was 330 basis points higher than the NAREIT Apartment Index and 300 basis points higher than the REIT Index for the three-year performance period ending on December31, 2020, resulting in the number of shares being earned at 170% of target for Messrs. Considine, Cohn (Mses. Stanfield and Johnson did not hold executive officer positions at the time the awards were made in 2018 and, accordingly, did not receive grants under the 2018 LTI program). \nThe chart below summarizes the results for the 2018, 2017, and 2016 performance share awards, and provides performance as of December 31, 2020, for the in progress 2020 and 2019 and performance share awards. \n### Other Compensation \nFrom time to time, Aimco determines to provide executive officers with additional compensation in the form of discretionary cash or equity awards. \nMr. Considine awarded discretionary cash awards to the following executive officers for their significant contributions in connection with the Separation: Mr. Powell $175,000; Ms. Stanfield $350,000; Ms. Johnson $250,000; Mr. Beldin $250,000; Ms. Cohn $550,000; and Mr. Kimmel $125,000.Mr. Considine determined the amounts with reference to each individuals STI target amount, meaning that each award would not be more than the executive officers STI target amount. These awards were in addition to, and not in lieu of, other compensation. \nThe Committee recognized Mr. Considines tremendous leadership in conceiving, structuring, guiding, and executing the Separation. The Committee evaluated whether and what type of additional compensation to award Mr. Considine to recognize his work.After consideration, Mr. Considine proposed that he forego any financial compensation tied directly to the value creation of the Separation in order to make clear that the purpose and result of the Separation was its creation of stockholder value. The Committee agreed, and accepted this proposal. \nOn April 15, 2021, Aimco awarded each of Mr. Powell and Mses. Stanfield and Johnson restricted stock awards as follows:Mr. Powell 371,901 shares, with an approximate fair market value at the grant date of $2.36 million; Ms. Stanfield 247,934 shares, with an approximate fair market value at the grant date of $1.57 million; and Ms. Johnson 175,984 shares, with an approximate fair market value at the grant date of $1.12 million.These grants, which vest 50% at the end of four years from the date of grant and 50% at the end of five years from the date of grant, were provided in connection with the executive officers new positions following the Separation, for the purpose of retention, and to align the long-term interests of the executive officers with those of the Companys stockholders. \nPost-Employment Compensation and Employment and Severance Arrangements \n401(k) Plan \nAimco provides a 401(k) plan that is offered to all Aimco teammates. In 2020, Aimco matched 25% of participant contributions to the extent of the first 4% of the participants eligible compensation. For 2020, the maximum match by Aimco was $2,850, which was the amount that Aimco matched for each of Messrs. Considine, es.Stanfield, Johnson, and Cohns 2020 401(k) contributions. Aimco did not provide an additional discretionary match in 2021 because Aimco did not achieve greater than 105% performance of its 2020 corporate goals. Aimcos prior year discretionary match to all teammates, reflecting Aimcos achievement of greater than 125% performance of its 2019 corporate goals, was $1,200. \nOther than the 401(k) plan, Aimco does not provide post-employment benefits. Aimco does not maintain a defined benefit pension plan, a supplemental executive retirement plan, or any other similar arrangements. \n### Executive Employment Arrangements \n2017 Employment Agreement \nOn December21, 2017, Aimco Properties, L.P., the operating partnership in AIRs structure following the Separation (the AIR Operating Partnership), entered into an employment agreement<|endoftext|>Our ClassA ordinary shares the right to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24months from the closing of our initial public offering or (B)with respect to any other provision relating to the rights of holders of our ClassA ordinary shares. \n\n\nOur amended and restated memorandum and articles of association will provide that any of its provisions related to pre-business combination activity (including the requirement to deposit proceeds of our initial public offering and the private placement of warrants into the trust account and not release such amounts except in specified circumstances, and to provide redemption rights to public shareholders as described herein) may be amended if approved by special resolution, meaning holders of at least two-thirds of our ordinary shares who attend and vote at a general meeting of the company, and corresponding provisions of the trust agreement governing the release of funds from our trust account may be amended if approved by holders of at least 65% of our ordinary shares; Our sponsor and its permitted transferees, if any, who will collectively beneficially own, on an as-converted basis, approximately 20% of our ordinary shares upon the closing of our initial public offering, will participate in any vote to amend our amended and restated memorandum and articles of association and/or trust agreement and will have the discretion to vote in any manner they choose. \nOur sponsor, executive officers and directors have agreed, pursuant to agreements with us, that they will not propose any amendment to our amended and restated memorandum and articles of association (A)that would modify the substance or timing of our obligation to provide holders of our ClassA ordinary shares the right to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24months from the closing of our initial public offering or (B)with respect to any other provision relating to the rights of holders of our ClassA ordinary shares, unless we provide our public shareholders with the opportunity to redeem their ClassA ordinary shares upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account and not previously released to us to pay our taxes, if any, divided by the number of the then-outstanding public shares. \n\n\n\n\n\n\n\n\n\n\nThe net proceeds from our initial public offering and the sale of the private placement warrants will provide us with up to $333,925,000 that we may use to complete our initial business combination (after taking into account the $12,075,000, of deferred underwriting commissions being held in the trust account and the estimated expenses of our initial public offering). \n\n\n\n\n\n\n\n\nWhile short-term U.S. \n\nOur ClassA ordinary shares are listed on the NYSE. Although after giving effect to our initial public offering we expect to meet, on a proforma basis, the minimum initial listing standards set forth in the NYSE listing standards, we cannot assure you that our securities will be, or will continue to be, listed on the NYSE in the future or prior to our initial business combination. \nAdditionally, ourunits will not be traded after completion of our initial business combination and, in connection with our initial business combination, we will be required to demonstrate compliance with the NYSE initial listing requirements, which are more rigorous than the NYSE continued listing requirements, in order to continue to maintain the listing of our securities on the NYSE. \n\n\nBecause ourunits ClassA ordinary shares and warrants are listed on the NYSE, ourunits, ClassA ordinary shares and warrants qualify as covered securities under the statute. \n\n\n\nThere are 165,500,000 and 11,375,000 authorized but unissued ClassA ordinary shares and ClassB ordinary shares, respectively, available for issuance which amount does not take into account shares reserved for issuance upon exercise of outstanding warrants or shares issuable upon conversion of the ClassB ordinary shares, if any. \nWe may also issue ClassA ordinary shares in connection with our redeeming the warrants or upon conversion of the ClassB ordinary shares at a ratio greater than one-to-one at the time of our initial business combination as a result of the anti-dilution provisions as set forth herein. \n\n\n\n\n(ii)the redemption of any public shares properly tendered in connection with a shareholder vote to amend our amended and restated memorandum and articles of association (A)to modify the substance or timing of our obligation to provide holders of our ClassA ordinary shares the right to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24months from the closing of our initial public offering or (B)with respect to any other provision relating to the rights of holders of our ClassA ordinary shares ; or (iii)absent our completing an initial business combination within 24months from the closing of our initial public offering, our return of the funds held in the trust account to our public shareholders as part of our redemption of the public shares. \n\nThe founder shares will automatically convert into our ClassA ordinary shares at the time of our initial business combination at a ratio such that the number of ClassA ordinary shares issuable upon conversion of all founder shares will equal, in the aggregate, on an as-converted basis, 20% of the sum of (i)the total number of ordinary shares issued and outstanding upon completion of our initial public offering, plus (ii)the total number of ClassA ordinary shares issued or deemed issued or issuable upon conversion or exercise of any equity-linked securities or rights issued or deemed issued, by the Company in connection with or in relation to the consummation of the initial business combination, excluding any ClassA ordinary shares or equity-linked securities exercisable for or convertible into ClassA ordinary shares issued, deemed issued, or to be issued, to any seller in the initial business combination and any private placement warrants issued to our sponsor, any of its affiliates or any members of our management team upon conversion of working capital loans. \n\nThere may be a circumstance where an exemption from registration exists for holders of our private placement warrants to exercise their warrants while a corresponding exemption does not exist for holders of the public warrants included as part ofunits sold in our initial public offering. \n\n\n\n\n\n\n\nWe have the ability to redeem the outstanding public warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01 per warrant, provided that the closing price of our ClassA ordinary shares 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 warrant as described under the heading Description of SecuritiesWarrantsPublic Shareholders WarrantsAnti-Dilution Adjustments) for any 20 trading days within a 30 trading-day period ending on the third trading day prior to proper notice of such redemption and provided that certain other conditions are met. \nIn addition, we have the ability to redeem the outstanding public warrants at any time after they become exercisable and prior to their expiration, at a price of $0.10 per warrant upon a minimum of 30days prior written notice of redemption provided that the closing price of our ClassA ordinary shares equals or exceeds $10.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described under the heading Description of SecuritiesWarrantsPublic Shareholders WarrantsAnti-Dilution Adjustments) for any 20 trading days within a 30 trading-day period ending on the third trading day prior to proper notice of such redemption and provided that certain other conditions are met, including that holders will be able to exercise their warrants prior to redemption for a number of ClassA ordinary shares determined based on the redemption date and the fair market value of our ClassA ordinary shares. \nNone of the private placement warrants will be redeemable by us as (except as set forth under Description of SecuritiesWarrantsPublic Shareholders WarrantsRedemption of warrants when the price per ClassA ordinary share equals or exceeds $10.00) so long as they are held by our sponsor or its permitted transferees. \n\nWe issued warrants to purchase 8,625,000 ClassA ordinary shares as part of the units offered in our initial public offering and, simultaneously with the closing of our initial public offering, we issued in a private placement an aggregate of 4,450,000 private placement warrants, each exercisable to purchase one ClassA ordinary share at $11.50 per share, subject to adjustment. In addition, if the sponsor, its affiliates or a member of our management team makes any working capital loans, it may convert up to $1,500,000 of such loans into up to an additional 750,000 private placement warrants, at the price of $2.00 per warrant. \n\nBecause each unit contains one-fourth of one redeemable warrant and only a whole warrant may be exercised, theunits may be worth less thanunits of other blank check companies. \nEach unit contains one-fourth of one redeemable warrant. This is different from other offerings similar to ours whoseunits include one ordinary share and one whole warrant to purchase one whole share. We have established the components of theunits in this way in order to reduce the dilutive effect of the warrants upon completion of a business combination since the warrants will be exercisable in the aggregate for one-fourth of the number of shares compared tounits that each contain a whole warrant to purchase one whole share, thus making us, we believe, a more attractive merger partner for target businesses. Nevertheless, this unit structure may cause ourunits to be worth less than if a unit included a warrant to purchase one whole share. \n\nIf (x)we issue additional ClassA ordinary shares or equity-linked securities for capital raising purposes in connection with the closing of our initial business combination at an issue price or effective issue price of less than $9.20 per ClassA ordinary share (with such issue price or effective issue price to be determined in good faith by us and, (i)in the case of any such issuance to our sponsor or its affiliates, without taking into account any founder shares held by our sponsor or such affiliates, as applicable, prior to such issuance, and (ii)to the extent that such issuance is made to JAWS Spitfire Acquisition Corporation or its affiliates, without taking into account the transfer of founder shares or private placement warrants (including if such transfer is effectuated as a surrender to us and subsequent reissuance by us) by our sponsor in connection with such issuance (the Newly Issued Price), (y)the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of our initial business combination on the date of the consummation of our initial business combination (net of redemptions), and (z)the volume weighted average trading price of our ClassA ordinary shares during the 20 trading day period starting on the trading day prior to the day on which we consummate our initial business combination (such price, the Market Value) of our ClassA ordinary shares is below $9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value and the Newly Issued Price, the $18.00 per share redemption trigger price will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price (See Redemption of warrants when the price per ClassA ordinary share equals or exceeds $18.00 and Redemption of warrants when the price per ClassA ordinary share equals or exceeds $10.00), and the $10.00 per share redemption trigger price will be adjusted (to the nearest cent) to be equal to the higher of<|endoftext|>Implemented at the Sunday Mine Complex to identify high-grade vanadium ore, followed by bulk sampling and development drilling. Active mining was conducted and the extracted ore was stock piled underground in the mine. Each of the five associated mining permits are in Temporary Cessation status. \nGMG, Sunshine, andPatsunclaims (totaling twenty claims in the northeast portion of the property) carry a 12.5% royalty on all ore produced. \n### Accessibility \nThe property is best accessed from Colorado. Access from Colorado is via State Highway 141 east out of Naturita, CO for about 3.7 mi (6 km) until the 141/145 Highway junction, then about 22.4 mi (36 km) south on Hwy 141, then about 6.2 mi (10 km) northwest on County Road 20R (Gypsum Valley Road). The State Highway 141 is a paved all-weather road and the County Road 20R is a gravel road passable in all but the worst weather. \nHistory \nThe Sunday Mine Complex consists of six different mines. These are the Topaz, West Sunday, Sunday, St. Jude, Carnation, and the GMG. The mines have had a number of owners and operators. Maps and documents made available to the author show that the following companies have been involved in the all or parts of the property prior to WUC acquisition of the SMC in April 2014: Matterhorn Mining (1950s-1960s, Climax Uranium 1960s, Union Carbide Corporation (UCC) 1970s-1980s, Atlas Minerals (1980s), Energy Fuels Nuclear (early 1990s), International Uranium Corp. (1990s-2000s), Denison Mines (USA) (2000s), and Energy Fuels (2010s). The documents are incomplete as so this list may be as well. Since UCC days, the ownership has been clear. In 1983 Union Carbide transferred its mineral interests to UMETCO, a wholly-owned subsidiary. For the sake of consistency, the name Union Carbide will be used even if technically the ownership was UMETCO at the time. \nRecords made available by the Company and a search of public documents on-line indicates exploration drilling starting on the property in the early 1950s. Two Defense Minerals Exploration Administration (DMEA) reports, one on the Sunday area and the other on the Topaz area, indicated some drilling and minor surface extraction had occurred by the mid 1950s (DMEA, 1953& 1956). Additionally, historic maps of the area show the Sunday mines in operation in the 1950s (Denison Mines, 2008). \nThe records& anecdotal evidence indicate that from the mid-1960s until the early 1980s, the SMC produced material from relatively steady ongoing mining operations. These ceased in 1984 when Union Carbide closed their Uravan mill. Since then, the property has been idle, with the exception of brief periods in the late 1980s when UCC mined for a short time during a spike in vanadium prices, in the mid-1990s with International Uranium Corporation and another one in 2006-2009 when Denison Mines extracted ore from the mine. During all three periods, the ore was processed at the White Mesa Mill located just south of Blanding, UT. \nExploration and development drilling on the property was contemporaneous with the mining. The available database records show that at least 1,419 holes have been drilled on the property. This is an incomplete list, as an examination of the available maps and cross-sections show a number of holes that are not in the database. A best estimate for total distance drilled is about 850,100 ft (259,175 m). Anecdotal evidence and some maps also give evidence that underground long holes (test holes drilled from the mine workings anywhere from 50 ft (15 m) to 300 ft (91 m) long) were used extensively throughout the mined areas. \nThe 2-D digitized mine workings, done by Denison Mines show extensive stopping and drifting within parts of the SMC. Generational mine maps indicate that more mine workings exist than are shown in the digital database. A very conservative rough estimate of the linear mine workings based on the digital database is in excess of 50,000 ft (15,244 m) with many stopes. Figure 6.2.1 shows the known drill hole and mine working locations. \nBased on the records and on field inspection, it is evident that the Property has a significant history of drill exploration and mine development. \nAnthony R. Adkins, P. Geol., LLC was commissioned by Western Uranium& Vanadium to prepare an Independent Technical Report compliant with the Canadian National Instrument 43-101 on the Sunday Mine Complex Uranium (SMC) Project, an advanced-stage uranium property. The report was finalized on July 7, 2015 and filed on sedar.com on July 16, 2015. \nThe report states that the Sunday Mine Complex has Measured and Indicated Resources of 203,217 tons grading at 0.25% U3O8 containing 1,007,803 lbs U3O8 and Inferred Resources of 264,604 tons grading at 0.36% containing 1,906,081 lbs U3O8. The historic mineral resource estimate was calculated by the area of influence method, which is a common way for resources in the Uravan Mineral Belt to be estimated. \nThe Sunday Mine Complex Technical Report filed by Western Uranium& Vanadium estimates mineral resources and not reserves. That report does not use categories other than mineral resources and mineral reserves, and the Sunday Mine Complex property was reported as having no reserve quality mineralization. There is no more recent or available data on the Sunday Mine Complex project resource than that of the Western Uranium& Vanadium Technical Report from 2015. In order to upgrade or verify the historical estimate provided by the Western Uranium& Vanadium Technical Report, the Company would have to engage a qualified person to, among other things, take account of any exploration or other work on the Sunday Mine Complex since the date of the historical estimate and otherwise produce a report under NI 43-101. \n### Project Geology \nGeologically, the main hosts for uranium-vanadium mineralization in the Sunday Mine Complex are fluvial sandstone beds assigned to the upper part of the Salt Wash Member of the Jurassic Morrison Formation, with minor production coming from conglomeratic sandstones assigned to the lower portion of the Brushy Basin Member of the Morrison Formation. Mineralization from both members is present at the property, with the mine production coming from the Salt Wash Member. Beds generally strike NW-SE and dip SW, with some exceptions within fault bounded blocks adjacent to Big Gypsum Valley. \nRestoration and Reclamation \nEachof the mines are permitted separately with the DRMS and are considered to be in temporary cessation status. The mines and their permitted acres and financial warranties are, from east to west, theSunday(60 acres, $330,242), Carnation (9.8 acres, $40,245), Saint Jude (9.8 acres, $69,828\t), WestSunday(12.1 acres, $85,036), and Topaz (30 acres, $99,893). \n### Permitting Status \nThe air permits for the site are currently being renewed with APCD. AStormwaterpermit is in place with the WQCD and aStormwaterManagement Plan is in effect. However, a mine water treatment plant will need to be permitted for treating mine water, as there is currently 55 million gallons of water in the lower portion of the mine where most of the remaining resource is located. This will require a discharge permit with the DWQC and revisions to the Plan of Operations, EPP, and one of the DRMS mine permits. Special Use Permits are also in place with San Miguel County, which mainly address road maintenance and transportation issues with some limitations in effect on when and how many trucks may be used for ore haulage to the mill. On February 4, 2020, the Colorado DRMS sent a Notice of Hearing to Declare Termination of Mining Operations to Western for the Sunday Mine Complex. At issue is the application of an unchallenged Colorado Court of Appeals Opinion for a separate mine, with very different facts that is retroactively modifying DRMS rules and regulations. A permit hearing was scheduled for October 21, 2020 to determine temporary cessation status. Jude, Carnation, and Topaz). The Company anticipates joining with the MLRB in defense of their July 22, 2020 decision. \nMajor permits currently in place at theSundayComplexinclude: \n2. \n### San Rafael \nThe Property \nThe San Rafael Uranium Project land position is comprised of a contiguous claim block covered by 136 BM unpatented federal lode mining claims and 10 Hollie unpatented federal lode mining claims. \nThe San Rafael Project is located in the historic Tidwell District about 10 miles west of Green River, Utah. Most of the property is north of Interstate Highway 70 at the Hanksville exit. \nEnergy Fuels became operator of the San Rafael Project when it acquired Magnum Minerals in June 2009. It consisted of two core uranium deposits, the Deep Gold and the Down Yonder. In January 2011, EFR acquired the 10 Hollie claims from Titan Uranium. These claims covered the eastern portion of the Deep Gold deposit, greatly increasing resources. WUC acquired the property from Energy Fuels and currently holds the 146 claims in the project area. \nThe San Rafael Uranium Project is currently being held as a property that is exploratory in nature with no identified reserves. \nMagnums acquisition of the claims and some of the data Magnum purchased encumbers the claims. This includes a 2% Net Smelter Return royalty to Uranium One, successor to Energy Metals for claims acquired by Magnum as earn-in to a JV, and a 2% net sales price royalty to Kelly Dearth on the BM claims. There is no royalty on the Hollie claims. \nThe unpatented claims are located on approximately 2,900 acres of land administered by the U.S. Bureau of Land Management in sections 13, 14, 23, 24, 25, 26, and 35, T21S, R14E, SLPM, Emery County, Utah. Holding cost $22,630 due to BLM for claim maintenance fees prior to September 1 each year. \n### Accessibility \nThe property is located on the eastern side of the San Rafael Swell in east-central Utah, approximately 140 air miles southeast of Salt Lake City. The little desert community of Green River, Utah is located about ten miles to the east. In a general sense the San Rafael Uranium Project property position lies within a wedge shaped area, roughly bound along its northeast edge by US Highway 6-50 and along its southeast edge by Interstate 70. \nConcerning additional local access features, U.S. Highway 6-50 crosses just north of the greater San Rafael Uranium Project area in a northwesterly direction and is roughly paralleled by the regional railroad line. Access to the property is generally good year around, except for periods of heavy snowstorms during December through February and increased monsoon rains and summer cloudburst storms during August through October. Access for drilling and other exploration activity is excellent, except during occasional heavy rainy periods which can create heavy flash flooding and roads mudding-up and becoming impassable. \n### History \nThe Deep Gold deposit was originally discovered by Continental Oil Company (Conoco) and Pioneer Uravan geologists in the late 1960s and 1970s to early 1980s, respectively. Exploration drilling was conducted just east of the core of the Tidwell Mineral Belt and north-northeast of the Acerson Mineral Belt. The area containing the deposits was considered to contain highly prospective paleo trunk stream channel trends. Some of the larger historic producing mines in the area were Atlas Minerals Snow, Probe, and Lucky Mines. The deposit in the San Rafael Project is an open concordant, channel-controlled, sandstone-hosted, trend type, with mineralization hosted in the upper sandstone sequence of the Salt Wash Member of the Upper Jurassic Morrison Formation. \nIn addition to Conoco, Pioneer Uravan, and Atlas Minerals, the US Atomic Energy Commission (AEC) and other companies (Union Carbide, Energy Fuels Nuclear, and others) conducted exploration drilling and mining in the area. Some of these companies performed historic resource estimates on the Deep Gold deposits, but, they are not considered compliant with NI 43-101 standards. These resource estimates are of historical importance, were generated by senior mining companies with significant uranium exploration and production experience and are considered as relevant checks to this updated Technical Report. \nDepth to mineralization at the Deep Gold deposit in Section 23 averages 800 feet, with hole depths averaging approximately 1,000 feet. Magnum purchased and otherwise acquired most of the available historic exploration data produced by the previous operators. A 100 hole, 100,000 foot drilling program is warranted to discover and define<|endoftext|>Debt agreements, including amortization of deferred financing costs and payments made under the Companys interest rate swap agreements, for the years ended December 31, 2020 and 2019 was $42.0 million and $27.8 million, respectively. \nIn July 2020, the Company refinanced its then existing debt borrowings and entered into a new credit agreement with a new bank group (the 2020 Credit Agreement). The 2020 Credit Agreement consisted of a $250 million term loan (the 2020 Term Loan) and $200 million in commitments for revolving credit loans with a $15 million letter of \n### ADAPTHEALTH CORP. AND SUBSIDIARIES \n\nDecember 31, 2020 and 2019 credit sublimit (the 2020 Revolver), both with maturities in July 2025. The 2020 Revolver carried a commitment fee during the term of the 2020 Credit Agreement ranging from 0.25% to 0.50% per annum of the average daily undrawn portion of the 2020 Revolver based on the Consolidated Total Leverage Ratio. In connection with the 2020 Credit Agreement, the Company paid deferred financing costs of $2.7 million; such costs were being amortized over the term of the related debt, which is included in interest expense, net in the accompanying consolidated statements of operations. A portion of the net proceeds from such refinancing was used to repay existing amounts outstanding under the 2020 Credit Agreement. See Note 21, \n### Subsequent Events \n\nUnder the 2020 Credit Agreement, the Company was subject to several restrictive covenants that, among other things, imposed operating and financial restrictions on the Company. Financial covenants included a Consolidated Total Leverage Ratio and a Consolidated Fixed Charge Coverage Ratio, as defined in the 2020 Credit Agreement. The 2020 Credit Agreement also contained certain customary events of default, including, among other things, failure to make payments when due thereunder, failure to observe or perform certain covenants, and non-compliance with healthcare laws. \nIn March 2019, the Company entered into several agreements, amendments and new credit facilities (herein after referred to as the March 2019 Recapitalization Transactions). The March 2019 Recapitalization Transactions included $425 million in new credit facilities, which consisted of a $300 million Initial Term Loan, $50 million Delayed Draw Term Loan, and $75 million Revolving Credit Facility, collectively referred to herein as the 2019 Credit Facility. Amounts borrowed under the 2019 Credit Facility bore interest quarterly at variable rates based upon the sum of (a) the LIBOR Rate for such interest period, plus (b) an applicable margin based upon the Companys Consolidated Total Leverage Ratio (as defined in the 2019 Credit Facility). In November 2019, the Company repaid $50 million under the Initial Term Loan using the proceeds received from the transactions completed as part of the Business Combination. In July 2020, the Company amended the 2019 Credit Facility and borrowed $216.3 million; such proceeds were used to partially fund an acquisition. In connection with this amendment, the Company paid deferred financing costs of $1.9 million. The Company used a portion of the net proceeds from the borrowings under the 2020 Term Loan and the issuance of the 2020 Senior Unsecured Notes (see discussion below) to fully repay the outstanding principal balances under the 2019 Credit Facility totaling $523.9 million, and to pay the related accrued interest, fees and expenses. Further, in connection with executing the 2020 Credit Agreement, the Company wrote off unamortized deferred financing costs of $5.3 million related to the 2019 Credit Facility, which is included in loss on extinguishment of debt in the accompanying consolidated statements of operations for the year ended December 31, 2020. \nThe proceeds from the March 2019 Recapitalization Transactions were used to (1) repay existing amounts outstanding under the Companys then existing credit facility of $151.9 million, (2) pay transaction costs, fees and expenses related to the consummation of the transactions contemplated under the agreement (see Note and Unit Purchase Agreement discussed below), (3) pay a $250 million distribution to AdaptHealth Holdings members, and (4) redeem certain members interests, including the cumulative preferred dividends, for $3.7 million. In addition, the Company paid deferred financing costs of $9.0 million. Further, the Company wrote off unamortized deferred financing costs of $2.1 million, which is included in loss on extinguishment of debt in the accompanying consolidated statements of operations for the year ended December 31, 2019. \n### Secured Term Loans \nThe borrowing under the 2020 Term Loan required quarterly principal repayments of $1.6 million beginning September 30, 2020 through June 30, 2022, increasing to $3.1 million beginning September 30, 2022 through June 30, \nADAPTHEALTH CORP. AND SUBSIDIARIES \n\nDecember 31, 2020 and 2019 \n2025, and the unpaid principal balance was due at maturity in July 2025. At December 31, 2020, there was $248.4 million outstanding under the 2020 Term Loan. The interest rate under the 2020 Term Loan was 3.44% at December 31, 2020. A portion of the net proceeds from such refinancing was used to repay existing amounts outstanding under the 2020 Term Loan of $246.9 million plus accrued interest. See Note 21, \n### Subsequent Events \n\nRevolving Credit Facility \nDuring 2020, the Company borrowed $55.0 million under the 2020 Revolver which was outstanding at December 31, 2020. Borrowings under the 2020 Revolver could be used for working capital and other general corporate purposes, including for capital expenditures and acquisitions permitted under the 2020 Credit Agreement. The interest rate under the 2020 Revolver was 3.44% at December 31, 2020. After consideration of stand-by letters of credit outstanding of $4.3 million, the remaining maximum borrowings available pursuant to the 2020 Revolver were $140.7 million at December 31, 2020. A portion of the net proceeds from such refinancing was used to repay existing amounts outstanding under the 2020 Revolver of $55.0 million plus accrued interest. See Note 21, \n### Subsequent Events \n\nSenior Unsecured Notes \nIn July 2020, the Company issued $350.0 million aggregate principal amount of 6.125% senior unsecured notes due 2028 (the 6.125% Senior Notes). The 6.125% \nSenior Notes will be redeemable at the Companys option, in whole or in part, at any time on or after August 1, 2023, and the redemption price for the \n6.125% \nSenior Notes if redeemed during the 12 months beginning (i) August 1, 2023 is \n103.063%, (ii) August 1, 2024 is 102.042%, (iii) August 1, 2025 is 101.021% and (iv) August 1, 2026 and thereafter is 100.000%, in each case together with accrued and unpaid interest. The Company may also redeem some or all of the 6.125% \nSenior Notes before August 1, 2023 at a redemption price of \n100% of the principal amount of the 6.125% Senior Notes , plus a make-whole premium, together with accrued and unpaid interest. In addition, the Company may redeem up to 40% of the original aggregate principal amount of the 6.125% \nSenior Notes before August 1, 2023 with the proceeds from certain equity offerings at a redemption price equal to \n106.125% of the principal amount of the 6.125% Senior Notes , together with accrued and unpaid interest. Furthermore, the Company may be required to make an offer to purchase the 6.125% Senior Notes upon the sale of certain assets or upon specific kinds of changes of control. In connection with the 6.125% Senior Notes, the Company paid deferred financing costs of $8.4 million; such costs are being amortized over the term of the related debt and is included in interest expense, net in the accompanying consolidated statements of operations. \n### Note Payable \nIn connection with the March 2019 Recapitalization Transactions, the Company signed a Note and Unit Purchase Agreement with an investor. Pursuant to the agreement, the Company issued a promissory note with a principal amount of $100 million (the Promissory Note) and the Company also received proceeds of $20 million for the purchase of members interests. In connection with the transactions completed as part of the Business Combination, the Promissory Note was replaced with a new amended and restated promissory note with a principal amount of $100 million, and the investor converted certain of its members interests to a $43.5 million promissory note. The new $100 million promissory note, together with the $43.5 million promissory note, are collectively referred to herein as the New Promissory Note. The outstanding principal balance under the New Promissory Note is due on November 8, 2029, and bears interest at the following rates (a) for the period starting on the closing date and ending on the seventh anniversary, a rate of 12% per annum, and (b) for the period starting on the day after the seventh anniversary of the closing date and \nADAPTHEALTH CORP. AND SUBSIDIARIES \n\nDecember 31, 2020 and 2019 ending on the maturity date, a rate equal to the greater of (i) 15% per annum or (ii) the twelve-month LIBOR plus 12% per annum. Under the New Promissory Note, the Company had the option to pay 6% of the interest in cash and 6% Payment in Kind (PIK). The Company elected to pay the PIK interest in cash during all periods. At any time following September 20, 2021, the Company may prepay, in whole (but not in part), the outstanding principal amount, together with all accrued and unpaid interest thereon. If the Company elects to prepay the New Promissory Note prior to September 21, 2023, then the amount due and payable shall be subject to a make-whole premium equal to a percentage of the total amount of outstanding principal and accrued interest through the date of such prepayment. In addition, if the Company desires to consummate any Qualified Acquisition (as defined in the New Promissory Note) without the consent of the investor, the Company may proceed with such acquisition if the New Promissory Note is prepaid at the closing of such acquisition. \nIn connection with the Business Combination, the investor generated taxable income and a current federal and state income tax liability of $5.9 million on the exchange of its members interests. Under the terms of the Merger Agreement, all investors indemnified the Company for all taxes attributable to periods prior to or on the closing date of the Business Combination. Accordingly, the Company recorded an indemnification asset of such amount, included in Prepaid and other current assets, and a corresponding current liability included in Other liabilities, in the accompanying consolidated balance sheets as of and December 31, 2019. This amount is no longer outstanding as of December 31, 2020. \nIn May 2020, the Company and the investor entered into a Put/Call Option and Consent Agreement (the Put/Call Agreement), pursuant to which certain put and call rights were granted to the parties with respect to shares of Class A Common Stock, shares of Class B Common Stock, and common units of AdaptHealth Holdings (each such common unit, together with one share of Class B Common Stock, a Consideration Unit) held by the investor. Pursuant to the Put/Call Agreement, during the period from the closing of the Companys acquisition of Solara to October 31, 2020, which was subsequently extended to December 31, 2020 pursuant to an amendment to the Put/Call Agreement executed by the parties in October 2020 (the Option Period), the investor could require the Company to purchase up to 1,898,967 shares of Class A Common Stock and/or Consideration Units held by the investor (such shares of Class A Common Stock and Consideration Units, collectively, Interests) at a price per share of Class A Common Stock or per Consideration Unit equal to the greater of (x) $14.50 and (y) 85% of the 30-day volume-weighted average price per share of the Companys Class A Common Stock on the date the exercise notice is delivered. During the Option Period, the Company could also require the investor to sell up to 1,898,967 of the Interests held by the investor to the Company at a price per share of Class A Common Stock or per Consideration Unit of $15.76. In addition, under the Put/Call Agreement, the investor waived certain consent rights under the New Promissory Note, and the Company irrevocably agreed to pay all PIK interest payable under the New Promissory Note following the closing of the acquisition of Solara in cash rather than through an increase in the principal<|endoftext|>(3) \nRepresents the contractual payment for life insurance reimbursement for Dr. Rabbani and Mr. Weiner. \n(4) \nRepresents supplemental medical and disability benefits costs. \n(5) \nRepresents the personal use of Company-provided auto or car allowance. \n### Employment Agreements \nMr. Barry Weiner and Dr. \nMr. David Bench, Dr. Dieter Schapfel and Ms. \n### Benefits and All Other Compensation \nWe maintain broad-based benefits that are provided to all employees, including health and dental insurance, group life insurance and a 401(k) plan. Named Executive Officers and Key Employees are eligible to participate in our employee benefit plans. The annual Company match for our Named Executive Officers and other employees is up to $13,000 if over 50 years old, or limited to 50% of the maximum contribution made. \nCertain of our Named Executive Officers may be entitled to benefits that are not otherwise available to all of our employees, including supplemental health, life insurance and disability benefits. We do not provide post-retirement health coverage to our Named Executive Officers or our employees. Our health and insurance plans are substantially the same among all management levels at the Company. Dr. Rabbani and Mr. Weiner are provided life insurance benefits in connection with their total compensation arrangements. \nIn particular circumstances, we may provide relocation allowances when executives first join us. The purpose of this program is to attract talented executives outside our geographic area. Certain Named Executives Officers and Key Employees are provided use of a Company-owned vehicle for business and personal use or provided a car allowance. \n\nMr. Barry Weiner and Dr. \nMr. David Bench, Dr. Dieter Schapfel and Ms. \nOutstanding Equity Awards at Fiscal Year EndJuly 31, 2021 \nThe following table sets forth summary information regarding the outstanding equity awards made to the Named Executive Officers and Key Employees at July 31, 2021. \n(3) \nCalculated using the closing market price of the Common Stock on July 31, 2021 of $3.26 per share after applying the maximum relative total shareholder return (TSR) modifier. \nITEM 12. \nBeneficial Ownership of Principal Shareholders and Management \nSet forth below is information, as of November 22, 2021 concerning stock ownership of all persons known by the Company to own beneficially 5% or more of the shares of Common Stock of the Company, the executive officers named in the Summary Compensation Table as Named Executive Officers, all current directors, and all current directors, executive officers and key employees of the Company as a group, based upon the number of outstanding shares of Common Stock as of the close of business on November 22, 2021. \nThe percentages in the Percent of Class column are calculated in accordance with the rules of the SEC, under which a person may be deemed to be the beneficial owner of shares if that person has or shares the power to vote or dispose of those shares or has the right to acquire beneficial ownership of those shares within 60 days (for example, through the exercise of an option or warrant). The shares shown in the table as beneficially owned by certain individuals may include shares owned by certain members of their respective families. Because of these rules, more than one person may be deemed to be the beneficial owner of the same shares. The inclusion of the shares shown in the table is not necessarily an admission of beneficial ownership of those shares by the person indicated. Except as otherwise indicated, each of the persons named has sole voting and investment power with respect to the shares shown. \n* \n\n(1) \nExcept as otherwise noted in the footnotes to the table, all shares of Common Stock are beneficially owned and the sole investment and voting power is held by the persons named, and such persons address is c/o Enzo Biochem, Inc., 527 Madison Avenue, New York, New York 10022. \n(2) \nFor directors, executive officers and key employees, based upon 48,471,771 shares of Common Stock of the Company considered outstanding as of the close of business on November 22, 2021. Common Stock not outstanding but deemed beneficially owned by virtue of the right of an individual to acquire shares within 60 days from the date hereof is treated as outstanding when determining the amount and percentage of Common Stock owned by directors and executive officers individually and as a group. \n(3) \nIncludes (i) 358,050 shares of Common Stock issuable upon the exercise of options which are exercisable within 60 days from the date hereof, (ii) 5,308 shares of Common Stock held in the name of Dr. Rabbani as custodian for certain of his children, (iii) 18,794 shares of Common Stock held in the name of Dr. Rabbanis wife as custodian for certain of their children, and (iv) 46,664 shares of Common Stock held in the Companys 401(k) plan. \n(4) \nIncludes (i) 318,450 shares of Common Stock issuable upon the exercise of options which are exercisable within 60 days from the date hereof, (ii) 6,638 shares of Common Stock that Mr. Weiner holds as custodian for certain of his children, and (iii) 46,671 shares of Common Stock held in the Companys 401(k) plan. \n(5) \nIncludes (i) 116,266 shares of Common Stock issuable upon the exercise of options which are exercisable within 60 days from the date hereof, and (ii) 22,124 shares of Common Stock held in the Companys 401(k) plan. This individual is considered a key employee. \n(6) \nIncludes 80,217 shares of Common Stock issuable upon the exercise of options which are exercisable within 60 days from the date hereof. \n(7) \nIncludes 38,551 shares of Common Stock issuable upon the exercise of options which are exercisable within 60 days from the date hereof. \n(8) \n\n(9) \nThe address of Harbert Management Corp. is 2100 Third Avenue North, Suite 600, Birmingham, AL 35203. This information is based solely on a Schedule 13D filed on October 28, 2021. \n(10) \nThe address of Bradley L. Radoff is 2727 Kirby Drive Unit 29L Houston, Texas 77098. This information is based solely on aSchedule 13D filed on October 22, 2021. \n(11) \nThe address of Renaissance Technologies, LLC is 800 Third Avenue, New York, NY 10022. This information is based solely on aSchedule 13F filed on September 30, 2019. \n(12) \nThe address of James G. Wolf is 105, Flyway Drive, Kiawah Island, SC 29455. This information is based solely on a Schedule 13D filed on November 15, 2021. \n(13) \nThe address of Roumell Asset Management, LLC is 2 Wisconsin Circle, Suite 700 Chevy Chase, MD 20815.This information is based solely on a Schedule 13D filed on September 30, 2021. \n(14) \nIncludes 1,130,951 shares of Common Stock issuable upon the exercise of options which are exercisable within 60 days from the date hereof. \nITEM 13. \n\nIt is the responsibility of the Nominating/Governance Committee to consider questions of possible conflicts of interest of directors and of the Companys senior executives, which includes the consideration of all transactions required to be disclosed pursuant to the SECs related person disclosure requirements. In addition, the Board has a Related Persons Policy which states that all related person transactions shall be in the best interests of the Company and, unless different terms are specifically approved or ratified by disinterested members of the Board, must be on terms that are (i) no less favorable to the Company than would be obtained in a similar transaction with an unaffiliated third party under the same or similar circumstances, or (ii) generally available to substantially all employees of the Company. In addition, if any non-material or material related person transaction relates to any executive officer or director, it must be reviewed by the Nominating/Governance Committee who shall determine whether the transaction is in compliance with the Companys Related Person Policy. \nEnzo Clinical Labs, Inc., a subsidiary of the Company (Enzo Lab), leases a facility located in Farmingdale, New York from Pari Management Corporation (Pari). Pari is owned equally by Elazar Rabbani, Ph.D., the Chairman of the Company; Shahram K. Rabbani, a former officer and former director of the Company; and Barry Weiner, the President of the Company, and his wife. The lease originally commenced on December 20, 1989, was amended and extended in October 2015 and now terminates on March 31, 2027. During the fiscal year ended July 31, 2021, Enzo Labs paid approximately $1,815,000 to Pari with respect to such facility and future payments are subject to cost of living adjustments. \nThe non-interested members of the Board, at the time of the execution of the lease and each extension, reviewed and approved the transaction in accordance with the Companys procedures for reviewing related party transactions. The Nominating/Governance Committee obtained a third-party appraisal to determine the value of the lease. Based on that appraisal, the Company, which has guaranteed Enzo Labs obligations to Pari under the lease, believes that the existing lease terms are as favorable to the Company as it would be to an unaffiliated party.: \n### Director Independence \nRequirements \n\nA director is not independent if, within the preceding three years: \n### The director was an employee of the Company; \n\nA director was affiliated with or employed by a present or former internal or external auditor of the Company; \nAn immediate family member of a director was affiliated with or employed in a professional capacity by a present or former internal or external auditor of the Company; \nA director, or an immediate family member of the director, received more than $120,000 per year in direct compensation from the Company, other than director and committee fees and pension or other forms of deferred compensation for prior services (provided such compensation is not contingent in any way on continued service); \n\n\nor \nThe director, or an immediate family member of the director, was an officer, director or trustee of a charitable organization where the Companys annual discretionary charitable contributions to the charitable organization exceeded the greater of $1 million or two percent (2%) of that organizations consolidated gross revenues. \nThe Board has determined that each member of the Compensation and Nominating Committees is independent, as defined in the NYSE listing standards. \nITEM 14. \n\nEisnerAmper billed the Company for services for fiscal 2021 and 2020, as set forth in the table below. The fees listed are aggregate fees for services performed for the yearregardless of when the fee was actually billed. \nAudit Fees \nConsists of fees for professional services necessary to perform an audit or review in accordance with the Public Company Accounting Oversight Board, including services rendered for the audit of our annual financial statements (including services incurred with rendering an opinion under Section 404 of the Sarbanes-Oxley Act of 2002) and quarterly reviews of the Companys interim financial statement. \n### Audit-Related Fees \nEisnerAmper performed certain Audit services for an employee benefit plan for the years ended December 31, 2021 and 2020, for which the Company is the plan sponsor; these fees were $41,600 and $40,040, respectively. EisnerAmper performed other Audit-Related services during the fiscal year ended July 31, 2021; the fees for these services were $54,000. \nTax Fees \nThere were no tax fees for fiscal years 2021 and 2020. \n### All Other Fees \nThere were no other fees for fiscal years 2021 and 2020. \n\nThe Audit Committee has adopted a policy that requires advance approval of all audit, audit-related, tax services and other services performed by the independent registered public accounting firm. The policy provides for pre-approval by the Audit Committee of specifically defined audit and non-audit services. \nUnless the specific service has been previously pre-approved with respect to that year, the Audit Committee must approve the permitted service before the independent auditor is engaged to perform it. The Audit Committee has delegated to the Chair of the Audit Committee authority to approve permitted services, provided that the Chair reports any decisions to the Audit Committee at its next scheduled meeting. \n### Part IV \nExhibit 15. Exhibit, Financial Statement Schedules \n\n3. \n### Exhibits: \nThe exhibits listed in the exhibit index of the original Form 10-K filing which was filed with the SEC on October 12, 2021, and the exhibits listed in the exhibit index of this Amendment are<|endoftext|>By non-affiliates does not equal or exceed $250.0 million as of the prior June 30 th in addition to certain other requirements, or (2) our annual revenues did not equal or exceed $100.0 million during such completed fiscal year and the market value of our common stock held by non-affiliates did not equal or exceed $700.0 million as of the prior June 30 th \n\n### Financial Position \nWith $525,000,000 in gross proceeds from the Public Offering available for a Business Combination, assuming no redemptions and after payment of up to $18,375,000 of deferred underwriting fees, we offer a target business a variety of options such as creating a liquidity event for its owners, providing capital for the potential growth and expansion of its operations or strengthening its balance sheet by reducing its debt or leverage ratio. \n\nWe intend to effectuate our initial business combination using cash from the proceeds held in the Trust Account from our Public Offering and the sale of the Private Placement Warrants, our capital stock, debt or a combination of these as the consideration to be paid in our initial business combination. \nIf our initial business combination is paid for using equity or debt securities, or not all of the funds released from the trust account are used for payment of the consideration in connection with our business combination or used for redemptions of purchases of our Class A common stock, we may apply the balance of the cash released to us from the trust account for general corporate purposes, including for maintenance or expansion of operations of the post-transaction company, the payment of principal or interest due on indebtedness incurred in completing our initial business combination, to fund the purchase of other companies or for working capital. \nWe currently do not have any specific business combination under consideration. Our officers and directors have neither individual identified nor considered a target business, nor have they had any discussions regarding possible target businesses among themselves or with our underwriters or other advisors. All of the members of our management team are employed by certain affiliates of The Gores Group. The Gores Group is continuously made aware of potential business opportunities, one or more of which we may desire to pursue for a business combination, but we have not (nor has anyone on our behalf) contacted any prospective target business or had any discussions, formal or otherwise, with respect to a business combination transaction. We have not (nor have any of our agents or affiliates) been approached by any candidates (or representative of any candidates) with respect to a possible acquisition transaction with us and we will not consider a business combination with any company that has already been identified to The Gores Group as a suitable acquisition candidate for it. Additionally, we have not, nor has anyone on our behalf, taken any measure, directly or indirectly, to identify or locate any suitable acquisition candidate for us, nor have we engaged or retained any agent or other representative to identify or locate any such acquisition candidate. \nAt this time, we are not a party to any arrangement or understanding with any third-party with respect to raising any additional funds through the sale of securities or otherwise. \nOur Initial Stockholders hold 13,125,000 Founder Shares, which automatically convert into shares of Common Stock at the time of our Business Combination on a one-for-one basis, subject to adjustment. In the case that additional shares ofCommon Stock, or equity-linked securities, are issued or deemed issued in excess of the amounts offered in our Public Offering and related to the closing of the Business Combination, the ratio at which the Founder Shares shall convert into shares ofCommon Stock will be adjusted so that the number of shares of Common Stock issuable upon conversion of all Founder Shares will equal, in the aggregate, on an as-converted basis, 20% of the total number of all shares of Capital Stock outstanding upon the completion of the Public Offering plus all shares of Common Stock and equity-linked securities issued or deemed issued in connection with the Business Combination, excluding any shares or equity-linked securities issued, or to be issued, to any seller in the Business Combination or pursuant to the Private Placement Warrants issued to our Sponsor. Holders of the Founder Shares and holders of our Common Stock will vote together as a single class on all matters submitted to a vote of our stockholders, except as required by law. \nIn the case of a Business Combination funded with assets other than the Trust Account assets, our tender offer documents or proxy materials disclosing the Business Combination would disclose the terms of the financing and, only if required by law or applicable stock exchange rules, we would seek stockholder approval of such financing. There are no prohibitions on our ability to raise funds privately or through loans in connection with a Business Combination. At this time, we are not a party to any arrangement or understanding with any third-party with respect to raising any additional funds through the sale of securities or otherwise in connection with a Business Combination. \n\nThese sources may also introduce us to target businesses in which they think we may be interested on an unsolicited basis, since many of these sources will have read this Annual Report and know what types of businesses we are targeting. In addition, we may pay our Sponsor or any of our existing officers or directors, or any entity with which they are affiliated, a finders fee, consulting fee or other compensation in connection with identifying, investigating and completing our initial business combination (regardless of the type of transaction that it is). We have agreed to pay an affiliate of our Sponsor a total of $20,000 per month for office space, utilities and secretarial and administrative support and to reimburse our Sponsor for any out-of-pocket expenses related to identifying, investigating and completing an initial business combination. \n\nIf any of our officers or directors becomes aware of a business combination opportunity which is suitable for one of these entities to which he has a fiduciary or contractual obligation, he will honor such obligation to present such opportunity to such entity rather than to us. Our directors and officers will only have an obligation to present an opportunity to us if such opportunity is expressly offered to such person solely in his capacity as a director or officer of our company and such opportunity is one we are legally and contractually permitted to undertake and would otherwise be reasonable for us to pursue, and only to the extent the director or officer is permitted to refer the opportunity to us without violating another legal obligation. \n\nOur initial business combination must occur with one or more target businesses that together have an aggregate fair market value of at least 80% of our assets held in the trust account (excluding the deferred underwriting commissions and taxes payable on the income earned on the trust account) at the time of the agreement to enter into the initial business combination. \nThere is no basis for investors in the Public Offering to evaluate the possible merits or risks of any target business with which we may ultimately complete our business combination. \nTo the extent we effect our business combination with a company or business that may be financially unstable or in its early stages of development or growth we may be affected by numerous risks inherent in such company or business. \nIn evaluating a prospective target business, we expect to conduct a thorough due diligence review which will encompass, among other things, meetings with incumbent management and employees, document reviews, interviews of customers and suppliers, inspection of facilities, as well as a review of financial, operational, legal and other information that will be made available to us. \n\n\n\n\n\n\n\n\nPresented in the table below is a graphic explanation of the types of initial business combinations we may consider and whether stockholder approval is currently required under Delaware law for each type of transaction. \n\n\nIn the event we seek stockholder approval of our business combination and we do not conduct redemptions in connection with our business combination pursuant to the tender offer rules, our Sponsor, directors, officers, advisors or their affiliates may purchase shares in privately negotiated transactions or in the open market either prior to or following the completion of our initial business combination where otherwise permissible under applicable laws, rules and regulations. They will not make any such purchases when they are in possession of any material non-public information not disclosed or if such purchases are prohibited by Regulation M under the Exchange Act. \n### In the event that our Sponsor \n, directors, officers, advisors or their affiliates purchase shares in privately negotiated transactions from public stockholders who have already elected to exercise their redemption rights, such selling stockholders would be required to revoke their prior elections to redeem their shares. \n\n\n\nAny purchases by our Sponsor, officers, directors and/or their affiliates who are affiliated purchasers under Rule 10b-18 under the Exchange Act will only be made to the extent such purchases are able to be made in compliance with Rule 10b-18, which is a safe harbor from liability for manipulation under Section9(a)(2) and Rule 10b-5 of the Exchange Act. Our Sponsor, officers, directors and/or their affiliates will not make purchases of common stock if the purchases would violate Section9(a)(2) or Rule 10b-5 of the Exchange Act. \n\nWe will provide our public stockholders with the opportunity to redeem all or a portion of their shares of ClassA common stock upon the completion of our initial business combination at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account as of two business days prior to the consummation of the initial business combination including interest earned on the funds held in the trust account and not previously released to us to fund our Regulatory Withdrawals, plus additional amounts released to us to pay our franchise and income taxes, if any, divided by the number of then outstanding public shares, subject to the limitations described herein. Our Sponsor, officers and directors have entered into letter agreements with us, pursuant to which they have agreed to waive their redemption rights with respect to any founder shares and any public shares held by them in connection with the completion of our business combination. \n\nAsset acquisitions and stock purchases would not typically require stockholder approval while direct mergers with our company where we do not survive and any transactions where we issue more than 20% of our outstanding common stock or seek to amend our second amended and restated certificate of incorporation would require stockholder approval. \nIf a stockholder vote is not required and we do not decide to hold a stockholder vote for business or other legal reasons, we will, pursuant to our second amended and restated certificate of incorporation: conduct the redemptions pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, which regulate issuer tender offers, and file tender offer documents with the SEC prior to completing our initial business combination which contain substantially the same financial and other information about the initial business combination and the redemption rights as is required under Regulation 14A of the Exchange Act, which regulates the solicitation of proxies. \n\nIn addition, the tender offer will be conditioned on public stockholders not tendering more than a specified number of public shares which are not purchased by our Sponsor, which number will be based on the requirement that we may not redeem public shares in an amount that would cause our net tangible assets to be less than $5,000,001 (so that we are not subject to the SECs penny stock rules) or any greater net tangible asset or cash requirement which may be contained in the agreement relating to our initial business combination. \nIf, however, stockholder approval of the transaction is required by law or stock exchange listing requirement, or we decide to obtain stockholder approval<|endoftext|>Basis arising from, payments it makes under the Tax Receivable Agreement. \nAs noncontrolling interest holders exercise their right to exchange or cause Purple LLC to redeem all or a portion of its Class B Units, a liability under the Tax Receivable Agreement may be recorded based on 80% of the estimated future cash tax savings that the Company may realize as a result of increases in the basis of the assets of Purple LLC attributed to the Company as a result of such exchange or redemption. The amount of the increase in asset basis, the related estimated cash tax savings and the attendant Tax Receivable Agreement liability to be recorded will depend on the price of the Companys Class A Stock at the time of the relevant redemption or exchange. \nAny additional changes to the existing TRA liability will be recorded through the statement of operations. As of December 31, 2020, approximately 99% of the Class B Units have been exchanged for Class A Stock. Any changes as a result of the remaining exchanges of Class B Units would be recorded through equity. \nAdditionally, we estimated the amount of TRA Payments expected to be paid within the next 12 months to be $6.5 million and classified this amount as a current liability in our 2020 Consolidated Balance Sheet. To the extent our estimate differs from actual results, we may be required to reclassify portions of our liabilities under the Tax Receivable Agreement between current and non-current. \nOperating Results for the Year Ended December 31, 2020 and 2019 \nThe following table sets forth for the periods indicated, our results of operations and the percentage of total revenue represented in our statements of operations: \n### Revenues, net \nTotal net revenues increased $220.1 million, or 51.4%, to $648.5 million for the year ended December 31, 2020 compared to $428.4 million for the year ended December 31, 2019. Despite the ongoing challenges related to the COVID-19 pandemic, the Company was able to capitalize on the shift in customer demand and grew DTC net revenues by $220.1 million, or 83.0%, in 2020. Net revenues from our wholesale business totaled $163.2 million in both 2020 and 2019. The sales growth we experienced from our wholesale business during the first, third and fourth quarters of 2020 was offset by a sharp decline in net revenues during the second quarter as temporary shutdowns of non-essential businesses and shelter-at-home directives that occurred in most U.S. states negatively impacted sales from our wholesale channel. The increase in net revenues from a product perspective in 2020 consisted of a $145.7 million increase in mattress sales, a $50.9 million increase in other bedding products and a $23.5 million increase in sales of other products. \nCost of Revenues \nThe cost of revenues increased $104.0 million, or 43.4%, to $343.4 million for the year ended December 31, 2020 from $239.4 million for the year ended December 31, 2019. The increase was primarily due to a $47.7 million increase in direct material costs, a $23.4 million increase in labor and overhead, a $16.5 million increase in freight charges, a $10.5 million increase in merchant processing fees, and a $5.9 million increase in other costs, all associated with increased sales. The gross profit percentage increased to 47.0% of net revenues for the year ended December 31, 2020 compared to 44.1% for the year ended December 31, 2019. The improvement in 2020 gross profit was primarily driven by a higher proportion of DTC channel revenue, which carries a higher gross margin than revenue from the wholesale channel. \n### Marketing and Sales \nMarketing and sales expenses increased $46.0 million, or 32.4%, to $188.0 million for the year ended December 31, 2020 from $142.0 million for the year ended December 31, 2019. The increase was due to a $26.1 million increase in advertising costs, a $12.2 million increase in marketing salaries related to an increase in personnel and a $7.7 million increase in other marketing and sales expenses. Marketing and sales expense as a percentage of net revenues was 29.0% for the year ended December 31, 2020 compared to 33.1% for the prior year. This decrease was due to efficiencies realized in our advertising spending created from enhanced marketing strategies, lower advertising costs in the second and third quarters of 2020 and a temporary reduction in advertising spending as part of our COVID-19 related cash preservation initiatives in the second quarter of this year. \nGeneral and Administrative \nGeneral and administrative expenses increased $13.0 million, or 48.3%, to $39.9 million for the year ended December 31, 2020 from $26.9 million for the year ended December 31, 2019. This increase was primarily due to a $4.1 million increase in salaries related to an increase in personnel, a $4.0 million increase in software subscriptions, a $2.7 million increase in legal fees related to InnoHolds two secondary public offerings that concluded in May 2020 and September 2020, a $1.9 million increase related to a new corporate building lease, and $0.3 million in all other expenses. \n### Research and Development \nResearch and development costs increased $2.1 million, or 54.1%, to $6.0 million for the year ended December 31, 2020 from $3.9 million for the year ended December 31, 2019. The increase was primarily due to $1.6 million in amortization of a one-year license agreement for innovative technology and a $0.5 million increase in other research and development expenses as we added resources for new product innovation. \nOperating Income \nOperating income increased $55.0 million, or 339.3%, to $71.2 million for the year ended December 31, 2020 from operating income of $16.2 million for the year ended December 31, 2019. The increase was primarily due to an increase in higher margin DTC sales coupled with lower marketing and sales costs as a percentage of net revenues. \n### Interest Expense \nInterest expense totaled $4.7 million for the year ended December 31, 2020 as compared to $5.2 million for the year ended December 31, 2019. The $0.5 million decrease was primarily due to the $35.0 million Related Party Loan, which carried an interest rate of 12.00%, being refinanced in the third quarter of 2020 with the $45.0 million Term Loan at an initial interest rate of 3.50%. \n\n\nIn February 2019, the Incremental Lenders from the Related Party Loan funded a $10.0 million increase in the Related Party Loan. The Company concluded there were separate lenders for purposes of determining if there was an extinguishment or modification. Accordingly, the Company recognized a loss on the extinguishment of its existing debt of $6.3 million in its 2019 consolidated statement of operations. This was a non-cash expense primarily associated with the recognition of related unamortized debt discount and debt issuance costs and the $4.9 million fair value of the Incremental Loan Warrants at the time of issuance. \n### Change in Fair Value Warrant Liabilities \nThere were 15.5 million public warrants issued in connection with GPACs formation and IPO and 12.8 million sponsor warrants issued pursuant to a simultaneous private placement with the IPO. The Company has accounted for these warrants as liabilities and recorded them at fair value on the date of the transaction and subsequently re-measured to fair value at each reporting date with changes in fair value included in earnings. \nOn February 26, 2019, the Incremental Lenders from the 2018 credit arrangement funded a $10.0 million increase in the Related Party Loan and received 2.6 million warrants to purchase 2.6 million shares of the Companys Class A Stock at a price of $5.74 per share, subject to certain adjustments. During the years ended December 31, 2020 and 2019, the Company recorded losses related to increases in the fair value of the warrants of $59.4 million and $16.8 million, respectively. \n### Tax Receivable Agreement Expense \nIn connection with the Business Combination, we entered into an agreement which generally provides for the payment by us to InnoHold of 80% of certain tax benefits, if any, that we realize as a result of increases in our allocable share of the tax basis of the tangible and intangible assets of Purple LLC. As a result of the Business Combination, subsequent exchanges of 43.5 million Class B Units for Class A Stock and changes in estimates relating to the expected tax benefits associated with the Tax Receivable Agreement, we increased the Tax Receivable Agreement liability from $0.5 million at December 31, 2019 to $172.0 million at December 31, 2020. Of this $171.5 million increase, $137.3 million relates to current year exchanges and was recorded as a decrease to additional paid-in capital in the 2020 consolidated statement of stockholders equity and $34.2 million was recorded as tax receivable agreement expense to re-establish the liability related to prior year exchanges in the 2020 consolidated statement of operations. The Tax Receivable Agreement expense incurred in 2019 was $0.5 million. \nBenefit from Income Taxes \nOur income tax benefit was $43.7 million for the year ended December 31, 2020, compared to no income tax benefit for the year ended December 31, 2019. Our income tax benefit is primarily due to the release of federal and state valuation allowances and the recognition of deferred tax assets as of December 31, 2020. No income tax benefit was recorded during the year ended December 31, 2019 as the Company had a full valuation allowance on its deferred tax assets. \n### Noncontrolling Interest \nWe attribute net income or loss to the Class B Units in Purple LLC, owned by InnoHold and other parties, as a noncontrolling interest at their aggregate ownership percentage. The Company calculates net income or loss attributable to noncontrolling interests on a quarterly basis using their weighted average ownership percentage. Net loss for the Company was $229.8 million in 2020 whereas net income attributed to noncontrolling interests was $7.1 million. The high net income level attributed to noncontrolling interests resulted from the noncontrolling ownership interest in 2020 being at its highest level during the first quarter of 2020 when the Company generated $28.0 million of net income and $11.2 million was attributed to noncontrolling interests. For the remainder of 2020, the Company had a net loss of $257.8 million of which only $4.1 million of the net loss was attributed to noncontrolling interests because the noncontrolling ownership interest declined from 56.2% at March 31, 2020 to 1.0% at December 31, 2020. \n\nOur primary cash needs have historically consisted of working capital, capital expenditures and debt service. Our working capital needs depend upon the timing of cash receipts from sales, payments to vendors and others, changes in inventories, and operating lease payment obligations. Our cash and working capital positions have grown to $123.0 million and $96.9 million, respectively, as of December 31, 2020 compared to $33.5 million and $27.3 million, respectively, as of December 31, 2019. While net revenues increased 51.4% during 2020, our accounts receivable balance stayed relatively consistent compared to the prior year. Cash used for purchases of property and equipment increased from $10.5 million in 2019 to $27.9 million in 2020. This increase primarily resulted from enhancing our manufacturing capabilities in Utah, scaling our infrastructure to support the doubling of our workforce, opening several new Company showrooms across the country, and expanding our manufacturing capacity by establishing a new manufacturing facility in Georgia that began operations on March 3, 2021 and for the remainder of 2021 will ramp up to capacity of four Mattress Max machines. \nIn response to the COVID-19 pandemic, we took a number of precautionary measures to manage our resources and mitigate its adverse impact. Given the initial difficultly in predicting how long the pandemic would persist and its full impact, we managed our business and opportunities to preserve liquidity. We temporarily reduced our capital spend by delaying all non-maintenance related projects and investments in non-essential initiatives and headcount additions. Other proactive steps were taken to carefully manage cash and quickly and prudently respond to the rapidly changing circumstances including temporarily furloughing a portion of our permanent workforce, temporarily deferring a portion of the cash compensation of Senior Executives and all the cash compensation of<|endoftext|>"},"task":{"kind":"string","value":"{\"file\": \"/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz\"}"}}},{"rowIdx":77,"cells":{"text":{"kind":"string","value":"<|endoftext|>Years, reporting directly to the then Secretary of Health and Human Services. Ms. Mahon is also a director nominee of TPG Pace Beneficial II Corp. \n### Ms. Mahon graduated from Yale University with a \nBachelors degree, magna cum laude with a distinction in History, and holds a J.D. from the NYU School of Law, where she was a Root-Tilden Scholar. We believe that Ms. Mahons prior experience, including her ESG and sustainability related work, make her well qualified to serve as a member of our board of directors. \nKathleen Philips has served as a member of our board of directors since October 6, 2020. Ms. Philips has served as a member of the board of directors of Pace-II from June 2017 through its business combination with Accel in November 2018, and is currently a member of the board of directors of Accel. Ms. Philips has served as an advisor at Zillow Group, Inc., since January 2019. During her tenure with Zillow Group, Ms. Philips has held many leadership positions, including chief legal officer from September 2014 until December 2018, chief financial officer and treasurer from August 2015 until May 2018, chief operating officer from August 2013 to August 2015 and general counsel from July 2010 to September 2014. Ms. Philips also serves as a member of the board of directors of TPG Pace Tech Opportunities Corp. since October 2020; and a director nominee of TPG Pace Tech Opportunities II Corp. and TPG Pace Solutions Corp. \nPrior to joining Zillow Group, Ms. Philips served as general counsel at FanSnap, Inc., a search engine for live event tickets, from June 2008 to June 2010, as general counsel at Pure Digital Technologies, Inc., the producer of Flip Video camcorders, from September 2007 to June 2008, and as general counsel at StubHub, Inc., an online live event ticket marketplace, from May 2005 to April 2006. Ms. Philips served as general counsel at Hotwire, Inc. from 2001 to 2004 and as its corporate counsel from 2000 to 2001. Ms. Philips was an attorney in private practice at Cooley Godward LLP from 1998 to 2000 and at Stoel Rives LLP from 1997 to 1998. \nMs. Philips holds a B.A. in Political Science from the University of California, Berkeley, and a J.D. Ms. Philips is well-qualified to serve as a director because of her senior management experience at a growth-oriented, publicly-traded company. We believe that Ms. Philips wide range of legal experience with rapidly growing companies makes her well qualified to serve as a member of our board of directors. \nKneeland Youngblood has served as a member of our board of directors since October 6, 2020. Mr. Youngblood has served as a founding partner of Pharos Capital Group, LLC since 1998, a private equity firm that focuses on providing growth and expansion capital/buyouts in the health care service sector. Mr. Youngblood is a director of Mallinckrodt Pharmaceuticals, a director of Scientific Games Corporation and Chairman of the Finance Committee of the Presidents Advisory Board of the UT Southwestern Medical Center. Previously, Mr. Youngblood served as a member of the board of directors of Pace-I from September 2015 through its business combination with Playa in March 2017. Mr. Youngblood has also served as a member of the board of directors of Pace-II from June 2017 through its business combination with Accel. Mr. Youngblood is also a former director of Burger King Corporation, Starwood Hotels and Lodging, Gap Inc. and Energy Future Holdings (formerly TXU). He also serves on several private company and not-for-profit boards. Mr. Youngblood also serves as a member of the board of directors of and TPG Pace Tech Opportunities Corp. since October 2020; and a director nominee of TPG Pace Beneficial II Corp. and TPG Pace Solutions Corp. \nMr. Youngblood graduated from Princeton University in 1978 with an A.B in Politics/Science in Human Affairs and earned an M.D. degree from the University of Texas, Southwestern Medical School. He is a member of the Council on Foreign Relations. We believe that Mr. Youngbloods prior experience with high growth companies and significant directorship experience makes him well qualified to serve as a member of our board of directors. \nMichael MacDougall has been our President since August 2020. Mr. MacDougall has 21 years of private equity investing experience across a broad range of sectors and since 2017 has played a leadership role in the TPG Pace Group, which manages TPGs permanent capital and SPAC investing efforts. Mr. MacDougall currently serves as President of TPG Pace Beneficial II Corp. since March 2021. He recently served as the Managing Partner for Pace Energy, which was one of TPG Pace Groups three successful SPACs. Since 2019, Mr. MacDougall has also advised TPGs impact investing platform, The Rise Fund, on potential energy and energy efficiency investments. He joined TPG in 2002 and has served as a Partner of TPG for 16 years. Mr. MacDougall established TPGs Industrial investing and Energy investing efforts, and he served on the firms Investment Committee. He has represented TPG on the board of directors of 13 companies, including the board of directors of five publicly traded companies. During his time at TPG, Mr. MacDougall has specialized in corporate carve-out transactions, having completed seven successful carve-out related investments, and in repositioning companies for initial public offerings or sales to publicly traded companies. As an active board member and equity investor, Mr. MacDougall has helped drive operational and strategic change and improved ESG practices in many of these companies. He has played a leadership role in four initial public offerings and the sale of six companies to publicly traded buyers. \nPrior to joining TPG, Mr. MacDougall was a vice president in the Principal Investment Area of the Merchant Banking Division of Goldman, Sachs & Co., where he focused on private equity and mezzanine investments. Prior to attending Harvard Business School, Mr. MacDougall was an assistant brand manager for The Procter & Gamble Co., where he focused on new product development, marketing and advertising for large scale consumer brands. He is a member of the Baylor College of Medicine Board of Trustees and The University of Texas Development Board. Mr. MacDougall received his BBA, with highest honors, from The University of Texas at Austin and received his MBA, with distinction, from Harvard Business School. \n### Martin \nDavidson has been our Chief Financial Officer since July 2020. \nMr. Davidson is a Partner and Chief Accounting Officer of TPG. Mr. Davidson is responsible for all financial operations and reporting related to TPG Holdings, TPGs parent company, and accounting and operations for TPGs private equity and real estate funds, as well as TPGs firm-wide accounting policies. Currently, Mr. Davidson serves as the Chief Financial Officer of TPG Pace Tech Opportunities Corp. since July 2020; and as Chief Financial Officer of TPG Pace Beneficial II Corp., TPG Pace Tech Opportunities II Corp. and TPG Pace Solutions Corp. since March 2021. Previously, Mr. Davidson has served as the Chief Financial Officer of Pace-II from its inception in February 2017 until its business combination with Accel in November 2019. Mr. Davidson has also served as the Chief Financial Officer of Pace Energy from its inception in February 2017 until its business combination with Magnolia in July 2018. In addition, he has held the position of Chief Financial Officer and Financial Operations Principal of TPGs broker/dealers and served on the board of multiple special purpose investment vehicles of TPGs investment funds. \nPrior to joining TPG in 2005, Mr. Davidson was an audit manager at KPMG where he primarily served clients in the financial services industry including private equity funds and hedge funds. Mr. Davidson received a BBA in Accounting from Texas Christian University and a Masters of Professional Accounting from The University of Texas at Austin. Mr. Davidson is a Certified Public Accountant. \nEduardo Tamraz has been our Executive Vice President of Corporate Development and Secretary since July 2020. Mr.Tamraz is a senior executive on the investment team for TPG Pace Group, TPGs dedicated initiative to provide permanent capital solutions for companies. Previously, he was a Vice President of TPG Capital in Europe from 2014 to early 2017. Currently, Mr. Tamraz serves as the Secretary and Executive Vice President of Corporate Development for TPG Pace Tech Opportunities Corp. since July 2020 since March 2021. He also serves as the Secretary of TPG Pace Beneficial II Corp. and President of TPG Pace Solutions Corp. since March 2021. Mr. Tamraz has served as Secretary and Executive Vice President of Corporate Development of Pace-II from its inception in February 2017 until its business combination with Accel in November 2019. Mr. Tamraz has also served as Secretary and Executive Vice President of Corporate Development of Pace Energy from its inception in February 2017 until its business combination with Magnolia in July 2018. Mr. Tamraz is responsible for leading the evaluation of opportunities for TPG Pace Group. \nFrom 2008 until 2014, Mr. Tamraz was a senior member of the private equity team at Eton Park, a global alternative investment firm. He previously worked at BC Partners and Merrill Lynch. Mr. Tamraz received an MA in Economics from the University of Cambridge. He is a Co-Chair of Lincoln Center YP Education and Co-Chair of Young Glimmerglass Opera. \n\nHolders of our Founder Shares have the right to elect all of our directors prior to consummation of our Business Combination and holders of our Public Shares do not have the right to vote on the election of directors during such time. \nThe term of office of the first class of directors, consisting of Chad Leat and Nancy Mahon, will expire at our first annual general meeting. The term of office of the second class of directors, consisting of Maryanne Hancock, Kathleen Philips and Kneeland Youngblood, will expire at our second annual general meeting. The term of office of the third class of directors, consisting of David Bonderman and Karl Peterson, will expire at our third annual general meeting. \n\n### Director Independence \nOur board of directors has determined that each of \n### Chad \nLeat \n, Nancy Mahon, Kathleen \nPhilips and Kneeland Youngblood is independent under applicable SEC and NYSE rules. \n\n\nSubject tophase-inrules and a limited exception, the rules of the NYSE and Rule 10A of the Exchange Act require that the audit committee of a listed company be comprised solely of independent directors. Subject tophase-inrules and a limited exception, the rules of the NYSE require that the compensation committee and the nominating and corporate governance committee of a listed company be comprised solely of independent directors. \n\n### Audit Committee \nThe members of our audit committee are Chad Leat, Kathleen Philips and Kneeland Youngblood. Chad Leat serves as the chair of the audit committee. \nEach member of the audit committee meets the financial literacy requirements of the NYSE and our board of directors has determined that ChadLeat qualifies as an audit committee financial expert as defined in applicable SEC rules. \nThe primary purposes of our audit committee are to assist the boards oversight of: audits of our consolidated financial statements; the integrity of our consolidated financial statements; the qualifications, engagement, compensation, independence and performance of our independent auditor; \n\n### Compensation Committee \nThe members of our compensation committee are Nancy Mahon, Kathleen Philips, and Kneeland Youngblood. Kathleen Philips serves as the chair of the compensation committee. \n\n\n\nThe members of our nominating and corporate governance are Chad Leat, Nancy Mahon and Kneeland Youngblood. Kneeland Youngblood serves as chair of the nominating and corporate governance committee. \n\n\n### Director Nominations \nPrior to our Business Combination, the board of directors will also consider director candidates recommended for nomination by holders of our Founder Shares during such times as they are seeking proposed nominees to stand for election at an annual meeting of shareholders (or, if applicable, a special meeting of shareholders). Prior to our Business Combination, holders of our Public Shares will not have the right to recommend director candidates for nomination to our board. \n\n\n\n\nWe have previously filed copies of our form of Code of Ethics, our form of Audit Committee<|endoftext|>### EXPLANATORY NOTE \nThis Form 10-K/A (this Amendment) amends Earthstone Energy, Inc.s (Earthstone and together with our consolidated subsidiaries, the Company, our, we, us, or similar terms) Annual Report on Form 10-K for the year ended December 31, 2020 (the Original 10-K), which was filed with the Securities and Exchange Commission (the SEC) on March 10, 2021. The Company is filing this Amendment for the sole purpose of providing the information required by Items 10 through 14 of Part III of Form 10-K. This information was previously omitted from the Original 10-K in reliance on General Instruction G.(3) to Form 10-K. The reference on the cover page of the Original 10-K to the incorporation by reference to portions of our definitive proxy statement into Part III of the Original 10-K is hereby deleted. \nIn accordance with Rule 12b-15 under the Securities Exchange Act of 1934, as amended (the Exchange Act), Part III, Items 10 through 14, of the Original 10-K are hereby amended and restated in their entirety. In addition, in connection with the filing of this Amendment and pursuant to the rules of the SEC, we are including with this Amendment new certifications of our principal executive officer and principal financial officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. Accordingly, Item 15 of Part IV has also been amended and restated to reflect the filings of these new certifications. \nExcept as otherwise noted, this Amendment speaks as of the filing date of the Original 10-K and reflects only the changes to the cover page, Items 10 through 14 of Part III and Item 15 of Part IV. No other information included in the Original 10-K, including the information set forth in Part I and Part II, has been modified or updated in any way, and we have not updated the disclosures contained herein to reflect any events which occurred subsequent to the filing of the Original 10-K or to modify the disclosure contained in the Original 10-K other than to reflect the changes described above. \n### PART III \nItem 10. \n\nItem 11. \n### Executive Compensation \nItem 12. \n\n### Item 13. \n\nItem 14. \n\nPART IV \nItem 15. \n### Exhibit and Financial Statements Schedules \nSignatures \n### PART III \nItem10. \n\nSee list of executive officers in Information about our Executive Officers under Item 1 of the Original 10-K, which is incorporated herein by reference. \n### Board of Directors of the Company \n(1) Member of the Audit Committee. \n(2) Member of the Compensation Committee. \n(3) Member of the Nominating and Corporate Governance Committee. \nFrank A. Lodzinski has over 48 years of oil and gas industry experience and served as our Chairman since December 2014 and as Executive Chairman since April 1, 2020. He served as our Chief Executive Officer from December 2014 through March 2020. He also served as our President from December 2014 through April 2018. Previously, he served as President and Chief Executive Officer of Oak Valley Resources, LLC (Oak Valley) from its formation in December 2012 until the closing of its strategic combination with Earthstone in December 2014. Prior to his service with Oak Valley, Mr. Lodzinski was Chairman, President and Chief Executive Officer of GeoResources, Inc. from April 2007 until its merger with Halcn Resources Corporation (Halcn) in August 2012 and from September 2012 until December 2012 he conducted pre-formation activities for Oak Valley. From 1984 to 2004, he formed, acquired and/or managed several entities that were ultimately sold or merged into larger companies or were otherwise monetized for the benefit of shareholders. In 2004, Mr. Lodzinski formed Southern Bay Energy, LLC (Southern Bay) and served as its President. Through an affiliated Limited Partnership Southern Bay acquired oil and gas assets. The Southern Bay entities were merged into GeoResources in April 2007. Mr. Lodzinski has served as a director and member of various Board Committees of Yuma Energy, Inc. (Yuma) from September 2014 to October 2020. Yuma, together with its subsidiaries, filed voluntary Chapter 11 petitions for relief under the United States Bankruptcy Code in the U.S. Bankruptcy Court for the Northern District of Texas on April 15, 2020 and on October 19, 2020 the cases were converted to a Chapter 7 liquidation. In connection therewith Mr. Lodzinski resigned from Yumas Board. Mr. Lodzinski holds a BSBA degree in Accounting and Finance from Wayne State University in Detroit, Michigan. \nThe Board of Directors (the Board), in reviewing and assessing the contributions of Mr. Lodzinski to the Board, determined that hisleadership and intimate knowledge of the oil and gas industry, our structure, and our operations, provide the Board with company-specific experience and expertise. \nDavid S. Habachy has served as a director since January 2021. He has been a Managing Director on the Energy team of Warburg Pincus, LLC since 2017. Previously, Mr. Habachy served as Managing Director and member of the Investment Committee of the Kayne Anderson Energy Funds.Additionally, while at Kayne Anderson, Mr. Habachy served on numerous boards of oil and gas upstream E&P and midstream companies in the U.S. and Canada from 2008 to 2017. Prior to entering into Private Equity in 2008, Mr. Habachy spent 10 years in asset management, operations and consulting in the upstream E&P business. He started his Petroleum Engineering career at Arco/Vastar in 1998. Mr. Habachy serves as a Director of Ridge Runner Resources, LLC, Stronghold Energy II Holdings, LLC, Tall City Exploration III LLC, and Trident Energy GP, Ltd. Meanwhile, Mr. Habachy currently serves on the Investment Committee Board for Memorial Hermann Health System and is a Board member of the HoustonProducersForum. Mr. Habachy holds a B.S. in Chemical Engineering and an M.B.A degree with George Kozmetsky highest honors distinction from The University of Texas at Austin. \nHabachy to the Board, determined that his extensive experience in the oil and gas industry, including serving on the boards of private oil and gas exploration and production companies provides significant contributions to the Board. As a managing director at Warburg Pincus, LLC, Mr. Habachy is uniquely positioned to provide the Board with insight and advice on a full range of strategic, financial and governance matters. \nJay F. Joliat has served as a director since December 2014. For more than the past 35 years, Mr. Joliat has been an independent investor and developer in commercial, industrial and apartment real estate, residential home building, restaurant ownership and management. He has had direct and extensive experience in placement of venture private equity in generic pharmaceuticals, medical devices or procedures, and for over 30 years, oil and gas E&P in particular. He has been the CEO and CIO of Joliat & Company, Inc. since October 1988. He has been the CEO of Joliat Ventures, LLC since January 1998. Since January 1981, Mr. Joliat has served as Treasurer of Beefcarver Restaurants, Inc., and has been its CEO since 1989. He formed and managed his own registered investment management company early in his career after having held VP and/or SVP positions at E.F. Hutton, Dean Witter Reynolds, and LPL Financial. He holds a Bachelors Degree in Management and Finance from Oakland University (1982) and became a Certified Investment Management Analyst (CIMA) in 1983 after completing the requisite IMCA curriculum from the Wharton School of Business at the University of Pennsylvania. From 1996 through 2003, Mr. Joliat served on the Board of Directors of Caraco Pharmaceutical Laboratories Ltd., and served in various capacities on its audit, executive and compensation committees. From 2007 through August 2012, Mr. Joliat served on the Board of Directors of GeoResources, Inc., and served in various capacities on the audit, nominating and compensation committees until its merger with Halcn in August 2012. \nJoliat to the Board, determined that his business experience in management and investments, as well as previously serving on the boards of directors of SEC-reporting companies, brings a unique perspective as an outside investor in oil and gas entities. His management skills, understanding of public and private capital markets, and financial acumen provide the Board with a valuable resource for planning corporate strategy. \nPhil D. Kramer has served as a director since October 2016. He served as an Executive Vice President of Plains All American Pipeline, L.P. (PAA), an energy infrastructure and logistics company based in Houston, Texas, from November 2008 until February 2017. He also served as Executive Vice President and Chief Financial Officer of PAA from 1998 until 2008. He was a director and chairman of the audit committee of PetroLogistics GP, the general partner of PetroLogistics LP, from July 2012 until its sale in July 2014. Mr. Kramer has served on the board of directors of Oasis Midstream Partners since their initial public offering in September 2017. He graduated from the University of Oklahoma in 1978 with a degree in accounting and was previously a Certified Public Accountant. He is currently on the board of advisors of Price College of Business at the University of Oklahoma. \nKramer to the Board, determined that his management experience, understanding of public and private capital markets, and financial background provide the Board with a valuable resource for planning corporate strategy. \nRay Singleton has been one of our directors since July 1989. From December 2014 through June 2018, he served as our Executive Vice President - Northern Region. Previously, he served as our President and Chief Executive Officer from March 1993 until the closing of our strategic combination with Oak Valley Resources, LLC in December 2014. Mr. Singleton joined us in 1988 as a Production Manager/Petroleum Engineer. From 1983 until 1988, he owned and operated an engineering consulting firm serving the needs of 40 small oil and gas clients. During this period, he was engaged by the Company on various projects in south Texas and the Rocky Mountain region. Mr. Singleton began his career with Amoco Production Company in 1973 as a production engineer. He was subsequently employed by Champlin Petroleum as a drilling, completion, and production engineer from 1980 to 1983. Mr. Singleton is a petroleum engineer with over 40 years of experience in the oil and gas industry. His professional experience includes acquisition evaluation and economics, along with drilling, completion and production engineering in both Texas and the Rocky Mountain region. In addition, he possesses over 25 years of C-suite experience. Mr. Singleton received a B.S. degree in Petroleum Engineering from Texas A&M University in 1973 and received an MBA from Colorado State Universitys Executive MBA Program in 1992. He is a member of the Society of Petroleum Engineers and was recently recognized by the National Association of Corporate Directors (NACD) as a Board Leadership Fellow, NACDs Gold Standard Director Credential. Mr. Singleton is of Hispanic origin. \nThe Board of Directors, in reviewing and assessing Mr. Singletons qualifications to serve on the Board, considered, among other things, his experience and expertise in the oil and gas industry, including the operating, management or executive positions he has held with the Company and other oil and gas companies, and his extensive knowledge of the Companys business, all of which has proven to be beneficial to us. \nWynne M. Snoots, Jr. has served as a director since May 2017. Mr. Snoots was previously a Partner at EnCap and was employed at EnCap from January 2001 through December 2020. Prior to joining EnCap, he was one of three partners of Paradigm Development & Trade, Inc., a private company focused on generating and monetizing exploration prospects located along the Gulf Coast of Louisiana. For the two years prior to his involvement in Paradigm, Mr. Snoots served as President of Magellan Exploration, LLC, a private portfolio company. He previously spent seven years with Enron Capital & Trade Resources in the Producer Finance Group, most recently as a Vice President. Mr. Snoots began his career as a petroleum engineer with Texas Oil and Gas Corporation. He received a Master of Business Administration from the University of Texas at Austin and holds a B.S. in Petroleum Engineering from the University of Oklahoma. Mr. Snoots is a member of the Independent Petroleum Association of America and the Houston Producers' Forum. \nSnoots<|endoftext|>Named Executive Officer. In determining the compensation of the Named Executive Officer, the Personnel and Compensation Committee of the Board of Directors considers the financial condition and operational performance of the Cooperative during the prior year. \nThe Personnel and Compensation Committee may review the compensation practices of other companies, based in part on market survey data and other statistical data relating to executive compensation obtained through industry publications and other sources. The Personnel and Compensation Committee does not intend to benchmark executive compensation directly with other publicly traded companies or other companies with which we may compete for potential executives since some of these competitors are privately held companies for which executive compensation information may not be available. However, the Personnel and Compensation Committee may compare executive compensation as a whole with the compensation packages of other companies for which survey data is available, and may also compare the pay of individual executives if the jobs are sufficiently similar to make the comparison meaningful. \n\n401(k) Plan \nThe Cooperative makes available a 401(k) plan for its Named Executive Officer. The Cooperative pays four percent (4%) of employees annual salary into the plan, and the employee may make additional contributions up to the lawful limits. \n### Employment Agreements \nMr. Stofferahn is not party to an employment agreement with the Cooperative. \nDeferred Compensation Agreement \nThe Cooperative has not adopted any bonus, profit sharing, or deferred compensation plans other than a pension plan for which accruals were frozen as of January 1, 2013 and under which one former employee receives benefits. \nCompensation Policies and Practices and Risk Management \nMr. Stofferahns compensation is set by the Board. In the event it is modified, such a modification is based on a performance evaluation conducted by our Personnel and Compensation Committee that consists solely of members of the Board. As discussed throughout this report, the revenue and expenses of the Cooperative directly relate to the price of corn as well as the rental income received by ProGold and capital improvement expenditures made by ProGold for the facility. Mr. Stofferahn has no control over these factors. Based on this reality, no risks arise from the Cooperatives compensation policies and practices that are reasonably likely to have a material adverse effect on its business operations. \n### Summary Executive Compensation Table \nThe following table sets forth, for the last three calendar years, the dollar value of all compensation awarded to, earned by or paid to Mr. Stofferahn. \n______________________ \n** Mr. Stofferahn commenced his employment on October 15, 2012. \n(1) All Other Compensation is comprised of premiums paid for life and disability insurance, company contributions to the 401(k) plan and reimbursements from the health reimbursement account. \n### Director Compensation \nThe Cooperative reimburses our directors for expenses incurred in connection with board service. The Cooperatives directors are paid $150 per month and the Chairperson is paid $375 per month. In addition, directors and the Chairperson receive a per diem of: \n$300 per meeting they attend when the meeting plus their travel time exceeds 4 hours; \n$150 per meeting they attend when the meeting plus their travel time is more than 2 but less than 4 hours; \n$100 per meeting they attend when the meeting plus their travel time is more than 1 but less than 2 hours. \nThe following table sets forth for the year ending December 31, 2020 the dollar value of all cash and non-cash compensation paid to individuals serving as directors of the Cooperative during fiscal year 2020. \n** Shaun Beauclair, Chris Johnson, and Glenn Johnson retired effective after the 2020 Annual Member Meeting. \nItem 12. \nThe following table sets forth, as of March 4, 2021 the number of Units beneficially owned and the percent so owned by (1) each of our directors as of such date, (2) Scott Stofferahn, our Executive Vice President (our Named Executive Officer) and (3) all of our Directors and the Named Executive Officer as a group. The number of Units owned by each person are those beneficially owned, as determined under the rules of the SEC, and such information is not necessarily indicative of beneficial ownership for any other purpose. Under such rules, beneficial ownership includes any Units as to which a person has sole or shared voting power or investment power and any Units which the person has the right to acquire within 60 days through the exercise of any option, warrant or right, through conversion of any security or pursuant to the automatic termination of a power of attorney or revocation of a trust, discretionary account or similar arrangement. The applicable percentage ownership is based on 15,490,480 Units outstanding held by 1,511 members. Each member of the Cooperative is allowed to cast one vote at any meeting of the members, regardless of the number of Units actually held by that member. Some of our directors hold their Units through more than one entity which allows those directors to cast a vote for each one of those members. The address of each director and our Named Executive Officer is 1002 Main Avenue W, Suite 5, West Fargo, ND 58078. \n________________________ \n(1) \nMembership interests are measured Units which equal the holders proportionate financial right but not a governance right. \n(2) \nVoting rights are based on one member one vote. Each person or entity that holds units is a member for voting purposes. Some officers and directors own their units through multiple entities resulting in multiple membership votes. \n(3) \nIncludes 102,350 Units owned directly by Mr. Bots Revocable Living Trust and 102,350 Units owned by Mr. Bots spouses Revocable Living Trust. \n(4) \nIncluded 8,000 Units owned by Matthew Hasbargen Farm LLC of which Mr. Hasbargen is President. \n(5) \nIncludes 30,000 Units owned by Jirak Brothers Farming Partnership of which Mr. Jirak is a partner and 10,000 Units owned by Triple J. Ranch, Inc. of which Mr. Jirak is a shareholder. \n(6) \nIncludes 4,000 Units as of C R Koehl & Sons, Inc. of which Mr. Koehl is a 9.4% owner. \n(7) \nIncludes 40,000 Units held by McIntyre Farms of which Mr. Pyle is a 25% owner and 10,000 Units held by HarMar LLC of which Mr. Pyle is a 33% owner. \n(8) \nIncludes 69,000 Units owned by Vipond Farms of which Mr. Vipond is a 20% owner. \n(9) \nIncludes indirect interest in 16,667 Units owned by Mr. Stofferahns spouse. \nItem 13. \nIn accordance with the Cooperatives Bylaws, only people who are members of the Cooperative or representatives of members can serve on our Board of Directors. As members of the Cooperative (or representatives of members), all of our directors have a contractual patronage relationship with the Cooperative that obligates them to deliver or contract to deliver corn to the Cooperative for processing. As a result of this patronage relationship, the Cooperatives directors, like all other member of the Cooperative, receive allocations of profit/loss and cash distributions. \nThe Cooperative has developed its own definition of Independent Director that takes into account the patronage relationship that exists between the Cooperative and each director. Under the Cooperatives definition, the patronage relationship is not considered for purposes of determining independence. However, other relevant relationships between the Cooperative and the directors, and certain family members, are considered in assessing independence. Except with respect to the patronage relationship that exists, the Cooperatives definition is consistent with the definition of an independent director found in Section 303A.02 of the New York Stock Exchange Listed Company Manual. Below please find the Cooperatives definition of an independent director: \nA director of the Cooperative shall be considered an Independent Director unless: \nThe director has a material financial relationship with the Cooperative (either directly or as a partner, shareholder or officer of an organization that has a relationship with a company) other than the patronage relationship that exists between the Cooperative and each of its members. \nThe director is, or has been within the last 3 years, an employee of the Cooperative; or immediate family member is, or has been within the last 3 years, an employee, of the Cooperative. \nThe director has received, or an immediate family member has received, during any 12-month period within the last 3 years, more than $120,000 in direct compensation from the Cooperative, other than director or committee fees and pension or other forms of deferred compensation for prior service (provided such compensation is not contingent in any way on continued service). \n(i) the director is a current partner or employee of a firm that is the Cooperatives internal or external auditor; (ii) the director has an immediate family member who is a current partner of such firm; (iii) the director has an immediate family member who is a current employee of such a firm and personally works on the Cooperatives audits; or (iv) the director or an immediate family member was, within the last 3 years, a partner or employee of such a firm and personally worked on the Cooperatives audit within that timeframe. \nThe director or an immediate family member is, or has been within the last 3 years, employed as an executive officer of another company, or any of the Cooperatives present executive officers, at the same time serves or served on that companys compensation committee. \nThe director is a current employee, or an immediate family member is a current executive officer, of a company that has made payments to, or received payments from, the Cooperative for property or services in an amount which, in any of the last 3 fiscal years, exceeds the greater of $1,000,000 or 2% of such companys consolidated gross revenues, other than as a result of such persons patronage relationship with the Cooperative. \nBased on the above definition, all of our directors are independent of management and of the Cooperative. \n### Item 14. \nThe following table presents fees for professional audit services rendered by Widmer Roel for the audits of the Cooperatives annual financial statements for the years ended December 31, 2020 and 2019 and fees, if any, for other services rendered by Widmer Roel during those periods. \nAudit Fees. \nThe Audit Fees set forth above include the aggregate fees billed by Widmer Roel to the Cooperative for audit services related to the audit of the Cooperatives annual financial statements and review of the statements included in the Cooperatives quarterly reports on Form 10-Q for fiscal 2020 and 2019. \n### Audit-Related Fees. \nNo additional Audit-Related Fees were billed by Widmer Roel to the Cooperative for assurance and related services provided by Widmer Roel related to the performance of the audit or review of the Cooperatives financial statements for fiscal 2020 and 2019. \nTax Fees. \nNo Tax Fees were billed by Widmer Roel to the Cooperative for professional services rendered by Widmer Roel for tax compliance, tax advice and tax planning for fiscal 2020 and 2019. \n### All Other Fees. \nNo Other Fees were billed by Widmer Roel to the Cooperative for professional services provided by Widmer Roel to the Cooperative for fiscal 2020 and 2019. \nThe Cooperatives Audit Committee would pre-approve all professional services provided by Widmer Roel to the Cooperative. The Audit Committee approved all of the services and the fees billed for such services to the Cooperative. The Audit Committee makes its decisions on the approval of services with due consideration given to maintaining the independence of the principal accountant. None of the hours expended on the audit of the 2020 financial statements were attributed to work performed by persons who were not employed full time on a permanent basis by Widmer Roel. \n### PART IV \nItem 15. \n(a) \n\n1. \n### Financial Statements \n\nBalance Sheets as of December 31, 2020 and 2019. \nStatements of Operations and Comprehensive Income for the Years Ended December 31, 2020, 2019 and 2018. \nStatements of Changes in Members Equity for the Years Ended December 31, 2020, 2019 and 2018. \nStatements of Cash Flows for the Years Ended December 31, 2020, 2019 and 2018. \n\n2. \n\nNot applicable. \n3. \nExhibits. \n### Item 16. FORM 10-K SUMMARY \nNone<|endoftext|>### Explanatory Note \nGores Holdings VI, Inc. (the Company) is filing this Form 10-K/A (Form 10-K/A) to amend our Annual Report on Form 10-K for the year ended December 31, 2020, originally filed with the Securities and Exchange Commission (the SEC) on March 12, 2021 (Original Report), to restate our financial statements and related footnote disclosures for the period from June 29, 2020 (date of inception) through December 31, 2020 (the Affected Period). \nRestatement Background \nOn April 12, 2021, the staff of the SEC issued the Staff Statement on Accounting and Reporting Considerations for Warrants Issued by Special Purpose Acquisition Companies (SPACs) (the SEC Staff Statement). \nIn accordance with SEC and its staffs guidance on redeemable equity instruments, which has been codified in Accounting Standards Codification 480-10-S99, Distinguishing Liabilities from Equity SEC Materials (ASC 480-10-S99), redemption provisions not solely within the control of the Company require common stock subject to redemption to be classified outside of permanent equity. \nWe evaluated the impact of the above and concluded that it was potentially material from a quantitative standpoint to the following financial statements previously filed with the SEC: (1) the financial statements included in the Original Report and (2) the Balance Sheet as of December 15, 2020 included in the Current Report on Form 8-K. \nThe Company has not amended its previously filed Current Reports on Form 8-K. \n\n\n\n\n\nPart I, Item 1A. Risk Factors \nPart II, Item 7. \n### Part II, Item 8. Financial Statements \nPart II, Item 9A. Controls and Procedures \n\nii \nGORES HOLDINGS VI, INC. \niii \n### CERTAIN TERMS \nReferences to the Company, our, us or we refer to Gores Holdings VI, Inc., a blank check company incorporated in Delaware on June 29, 2020. References to our Sponsor refer to Gores Sponsor VI, LLC, an affiliate of Mr. Alec E. Gores, our Chairman. References to our Public Offering refer to the initial public offering of Gores Holdings VI, Inc., which closed on December 15, 2020 (the IPO Closing Date). \n\nRisk Factors. \n\n### PART I \nItem 1.Business \nIntroduction \nWe are a blank check company incorporated on June 29, 2020, as a Delaware corporation and formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses (a Business Combination). \n\nOn December 15, 2020 (IPO Closing Date), we consummated our Public Offering of 34,500,000 units (the Units) of the Company, including 4,500,000 Units issued pursuant to the full exercise of the underwriters over-allotment option. The Units were sold at a price of $10.00 per share, generating gross proceeds to us of $345,000,000. Simultaneously with the IPO Closing Date, we completed the private sale of an aggregate of 4,450,000 warrants to our Sponsor (the Private Placement Warrants) at a price of $2.00 per Private Placement Warrant, each exercisable to purchase one share of Common Stock at $11.50 per share, generating gross proceeds to us of $8,900,000. The Private Placement Warrants have terms and provisions that are identical to those of the Warrants sold as part of the Units in the Public Offering, except that the Sponsor has agreed not to transfer, assign or sell any of the Private Placement Warrants (except to certain permitted transferees) until 30 days after the completion of the Companys initial business combination. The Private Placement Warrants may also be net cash settled and are not redeemable so long as they are held by the Sponsor or its permitted transferees. \nOn the IPO Closing Date, a total of $345,000,000, comprised of $338,100,000 of the proceeds from the IPO, including approximately $12,075,000 of the underwriters deferred discount, and $6,900,000 of the proceeds of the sale of the Private Placement Warrants, were placed in a Trust Account maintained by Continental Stock Transfer& Trust Company, acting as trustee. Except with respect to up to $900,000 per year of interest earned on the funds in the Trust Account that may be released to the Company to fund its regulatory compliance requirements and other costs related thereto, plus additional amounts necessary to pay its franchise and income taxes, if any, the proceeds from the IPO will not be released from the Trust Account until the earliest of (i)the completion of the Companys initial business combination, (ii)the redemption of any public shares properly tendered in connection with a stockholder vote to amend the Companys amended and restated certificate of incorporation (A)to modify the substance or timing of its obligation to redeem 100% of its public shares if the Company does not complete its initial business combination within 24 months from the closing of the IPO or (B)with respect to any other provisions relating to stockholders rights or pre-initial business combination activity and (iii)the redemption of the Companys public shares if it is unable to complete its business combination within 24 months from the IPO Closing Date, subject to applicable law. \nOn January 29, 2021, we announced that the holders of our Units may elect to separately trade the Class A common stock and warrants included in the Units commencing on February 1, 2021, on the Nasdaq Capital Market (Nasdaq) under the symbols GHVI and GHVIW, respectively. \n\nH \nV \nI \nU and each of the Class A common stock and warrants that are separated will trade on Nasdaq under the symbols \nGHVI and \n### GHVIW \n, respectively. \nOn February 7, 2021, the Company entered into an Agreement and Plan of Merger (the Merger Agreement), by and among the Company, Maker Merger Sub, Inc. (First Merger Sub), Maker Merger Sub II, LLC (Second Merger Sub), and Matterport, Inc. (Matterport), which provides for, among other things: (a) the merger of First Merger Sub with and into Matterport, with Matterport continuing as the surviving corporation (the First Merger); and (b) immediately following the First Merger and as part of the same overall transaction as the First Merger, the merger of Matterport with and into Second Merger Sub, with Second Merger Sub continuing as the surviving entity (the Second Merger and, together with the First Merger, the Mergers). \nThe Merger Agreement and the transactions contemplated thereby were unanimously approved by the Board of Directors of the Company on February 7, 2021 and the Board of Directors of Matterport (the Matterport Board) on February 7, 2021. \n### Business Strategy \nIf the Mergers do not become effective, our plan is to continue to acquire a target company or business. \n\n### Acquisition Criteria \nThe pending Mergers with Matterport are not guaranteed to occur, and in such event, we cannot assure you that we will be able to locate an appropriate target business or that we will be able to engage in a business combination with target businesses on favorable terms. \n\n\nOur initial business combination must occur with one or more target businesses that together have an aggregate fair market value of at least 80% of the balance in the Trust Account (excluding the deferred underwriting commissions and taxes payable on the income earned on the Trust Account) at the time of the agreement to enter into the initial business combination. \nWe anticipate structuring our initial business combination, whether effectuated through the Mergers with Matterport as set forth above or another business combination if the Mergers do not occur so that the post-transaction company in which our public stockholders own shares will own or acquire 100% of the equity interests or assets of the target business or businesses. \n### Our Acquisition Process \n\n\n\nOur amended and restated certificate of incorporation contains a waiver of the corporate opportunity doctrine, which will provide that we renounce our interest in any corporate opportunity offered to any director or officer unless \n\n\nWe believe we substantially benefit from having representatives who bring significant, relevant and valuable experience to our management, and, as a result, the inclusion of the corporate opportunity waiver in our amended and restated certificate of incorporation provides us with greater flexibility to attract and retain the officers and directors that we feel are the best candidates. \n\nFurther, Mr. Mr. Ted Fike and Mr. \nTechnology II, two of the four directors on our board are not directors of Gores Metropoulos II, Gores Holdings V \n, \nGores Holdings VII or Gores Guggenheim and (d) our management team has significant experience in identifying and executing multiple acquisition opportunities simultaneously, and we are not limited by industry or geography in terms of the acquisition opportunities we can pursue. \nFurther, our Initial Stockholders have agreed to waive their redemption rights with respect to any founder shares held by them if we fail to consummate our initial business combination within 24 months after the IPO Closing Date. Since our Sponsor and officers and directors directly or indirectly own common stock and warrants, our officers and directors may have a conflict of interest in determining whether a particular target business is an appropriate business with which to effectuate our initial business combination because of their financial interest in completing an initial business combination within 24 months after the IPO Closing Date. \n### Corporate Information \n\n\n\n\n\n### Financial Position \nWith $345,000,000 in gross proceeds from the Public Offering available for a Business Combination, assuming no redemptions and after payment of up to $12,075,000 of deferred underwriting fees, we offer a target business a variety of options such as creating a liquidity event for its owners, providing capital for the potential growth and expansion of its operations or strengthening its balance sheet by reducing its debt or leverage ratio. \n\n\nIf our initial business combination is paid for using equity or debt securities, or not all of the funds released from the Trust Account are used for payment of the consideration in connection with our business combination or used for redemptions of purchases of our Class A common stock, we may apply the balance of the cash released to us from the Trust Account for general corporate purposes, including for maintenance or expansion of operations of the post-transaction company, the payment of principal or interest due on indebtedness incurred in completing our initial business combination, or to fund the purchase of other companies or for working capital. \n\nOur Initial Stockholders hold 8,625,000 Founder Shares, which automatically convert into shares of Common Stock at the time of our Business Combination on a one-for-one basis, subject to adjustment. \nin connection with a Business Combination. \n### Sources of \nTarget Businesses \n\n\nIf any of our officers or directors becomes aware of a business combination opportunity which is suitable for one of these entities to which he has a fiduciary or contractual obligation, he or she will honor such obligation to present such opportunity to such entity rather than to us. Our directors and officers will only have an obligation to present an opportunity to us if such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of our company and such opportunity is one we are legally and contractually permitted to undertake and would otherwise be reasonable for us to pursue, and only to the extent the director or officer is permitted to refer the opportunity to us without violating another legal obligation. \n\n\n\n\n\n\n\n\n\n\nThe determination as to whether any of our key personnel will remain with the combined company will be made at the time of our initial b usiness c ombination. \n\n\n\n\n\n\nThe purpose of such purchases would be to (i) vote such shares in favor of the b usiness c ombination and thereby increase the likelihood of obtaining stockholder approval of the b usiness c ombination or (ii) to satisfy a closing condition in an agreement with a target that requires us to have a minimum net worth or a certain amount of cash at the closing of our b usiness c ombination, where it appears that such requirement would otherwise not be met. This may result in the completion of our b usiness c ombination that may not otherwise have been possible. \n\n\n\n\n\n\n\n\n\n\n\n\n\nOur amended and restated certificate of incorporation provides that in no event will we redeem our public shares in an amount that would cause our net<|endoftext|>NYSE Americans initial listing requirements, which are more rigorous than the NYSE Americans continued listing requirements, in order to continue to maintain the listing of our securities on the NYSE American. \nIf the NYSE American delists our securities from trading on its exchange and we are not able to list our securities on another national securities exchange, we expect our securities could be quoted on an over-the-countermarket. \nBecause our Units, common stock, and warrants are listed on the NYSE American, our Units, common stock, and warrants will qualify as covered securities under the statute. Further, if we were no longer listed on the NYSE American, our securities would not qualify as covered securities under the statute, and we would be subject to regulation in each state in which we offer our securities. \n\n\nIf third parties bring claims against us, the proceeds held in the Trust Account could be reduced and the per-share redemption amount received by stockholders may be less than $10.10 per share. \nOur placement of funds in the Trust Account may not protect those funds from third-party claims against us. Marcum LLP, our independent registered public accounting firm, and the underwriters of our IPO, will not execute agreements with us waiving such claims to the monies held in the Trust Account. \nAccordingly, the per-share redemption amount received by public stockholders could be less than the $10.10 per share initially held in the Trust Account, due to claims of such creditors. Pursuant to the letter agreement, our Sponsor has agreed that it will be liable to us if and to the extent any claims by a third party for services rendered or products sold to us, or a prospective target business with which we have entered into a written letter of intent, confidentiality or similar agreement or business combination agreement, reduce the amount of funds in the Trust Account to below the lesser of (i) $10.10 per public share and (ii)the actual amount per public share held in the Trust Account as of the date of the liquidation of the Trust Account, if less than $10.10 per share due to reductions in the value of the trust assets, less taxes payable, provided that such liability will not apply to any claims by a third party or prospective target business who executed a waiver of any and all rights to the monies held in the Trust Account (whether or not such waiver is enforceable) nor will it apply to any claims under our indemnity of the underwriters of our IPO against certain liabilities, including liabilities under the Securities Act. Therefore, we believe it is unlikely that our Sponsor would be able to satisfy those obligations. \n\n\nThe securities in which we invest the funds held in the Trust Account could bear a negative rate of interest, which could reduce the value of the assets held in trust such that the per-share redemption amount received by public stockholders may be less than $10.10 per share. \nWhile short-term U.S. Negative interest rates could reduce the value of the assets held in trust such that the per-share redemption amount received by public stockholders may be less than $10.10 per share. \n\nWe could be an emerging growth company for up to five years, although circumstances could cause us to lose that status earlier, including if the market value of our common stock held by non-affiliates equals or exceeds $700 million as of the prior June 30 before that time, in which case we would no longer be an emerging growth company as of the following December 31. \n\nWe will remain a smaller reporting company until the last day of the fiscal year in which (1)the market value of our common stock held by non-affiliates exceeds $250 million as of the end of the prior June 30, or (2)our annual revenues exceeded $100 million during such completed fiscal year and the market value of our common stock held by non-affiliates equals or exceeds $700 million as of the prior June 30. \n\nWe identified a material weakness in our internal control over financial reporting, the disclosure of which may have an adverse impact on the price of our common stock (please refer to Part II, Item 9A for further discussion). \n\n\nOur amended and restated certificate of incorporation will provide that the exclusive forum provision will be applicable to the fullest extent permitted by applicable law, subject to certain exceptions. In addition, our amended and restated certificate of incorporation provides that, unless we consent in writing to the selection of an alternative forum, the federal district courts of the UnitedStates of America shall, to the fullest extent permitted by law, be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act of 1933, as amended, or the rules and regulations promulgated thereunder. \n\n\n### Item 1B. Unresolved Staff Comments \nNot applicable. \nItem 2. Properties \nWe currently maintain our executive offices at 800 1 st \n\n### Item 3. Legal Proceedings \n\nItem 4. Mine Safety Disclosures \nNot applicable. \n### PART II \nItem5. \nEach of our Units consists of one Public Share and one-half of one Public Warrant and, commencing on October 20, 2020, trades on the NYSE under the symbol NBA.U. The Public Shares and Public Warrants underlying our Units began trading separately on the NYSE under the symbols NBA and NBA WS, respectively, on November 30, 2020. \n### Holders of Record \nOn March 5, 2020, there was one holder of record of our Units, five holders of record of our Public Shares and one holder of record of our Public Warrants. \nDividends \n\n\nSimultaneously with the consummation of the IPO and the full exercise of the over-allotment, we consummated a private placement of an aggregate of 500,000 Placement Units at a price of $10.00 per Placement Unit in a private placement to our Sponsor, generating total proceeds of $5,000,000. \nThe Placement Units are identical to the public units sold in the IPO (the Units), except the placement units and their component securities will not be transferable, assignable or salable until 30 days after the consummation of our initial business combination (subject to limited exceptions) and the Public Warrants included in the Placement Units will be non-redeemable so long as they are held by our Sponsor or its permitted transferees. \nOn November 9, 2020, simultaneously with the closing of the first exercise in part of the underwriters over-allotment option, the Company completed the private sale of an aggregate of 30,000 Placement Units to our Sponsor, at a purchase price of $10.00 per Private Unit, generating gross proceeds of $300,000. On November 12, 2020, simultaneously with the closing of the second exercise in part of the underwriters over-allotment option, the Company completed the private sale of an aggregate of 15,000 Placement Units to our Sponsor, at a purchase price of $10.00 per Private Unit, generating gross proceeds of $150,000. \n\nOn November 3, 2020, we consummated our IPO of 10,000,000 Units, at an offering price of $10.00 per Unit, generating total gross proceeds of $100,000,000. Ladenburg Thalmann & Co. Inc. and EarlyBirdCapital, Inc. served as joint book-running managers. 333-248944). The SEC declared the registration statement effective on October 29, 2020. \n\nOf the gross proceeds received from the IPO (including the Over-Allotment Units) and the private placements of Placement Units, $116,150,000 was placed in the Trust Account, with Continental Stock Transfer & Trust Company acting as trustee. \nWe paid a total of $2,300,000 in underwriting discounts and approximately $406,655 for other offering costs and expenses related to the IPO. In addition, the underwriters agreed to defer $4,025,000 in underwriting discounts and commissions. \n### Item 6. Selected Financial Data \nNot applicable. \nItem 7. \nThe following discussion and analysis of our financial condition and results of operations should be read in conjunction with the financial statements and the notes thereto contained elsewhere in this amended Annual Report on Form 10-K. Risk Factors and elsewhere in this amended Annual Report on Form 10-K. \n### Overview \nWe are a blank check company formed under the laws of the State of Delaware on August 20, 2020 for the purpose of effecting a merger, share exchange, asset acquisition, stock purchase, recapitalization, reorganization or similar business combination with one or more businesses. We intend to effectuate our initial business combination using cash from the proceeds of the Initial Public Offering and the sale of the Placement Units, our securities, debt or a combination of cash, securities and debt. \nThe issuance of additional shares in connection with an initial business combination to the owners of the target or other investors: may significantly dilute the equity interest of investors; and may adversely affect prevailing market prices for our common stock and/or Public Warrants. \nand other purposes \nWe expect to continue to incur significant costs in the pursuit of our initial business combination plans. \n### Recent Developments \nOn March 8, 2021, we entered into the Business Combination Agreement by and among the company, Airspan, and Merger Sub, pursuant to which Merger Sub will merge with and into Airspan, with Airspan surviving the Merger as a wholly-owned direct subsidiary of the company. The Business Combination Agreement contains customary representations and warranties, covenants, closing conditions and termination fee provisions. \nThe consideration to be paid to the pre-closing equityholders of Airspan at the closing of the Business Combination (the Closing) will be equity consideration, pursuant to which each issued and outstanding share of Airspans capital stock shall automatically be converted into and become the right to receive, in accordance with the Payment Spreadsheet (as defined in the Business Combination Agreement), the number of shares of our common stock and newly issued warrants set forth in the Payment Spreadsheet. We shall assume the Company Equity Plan (as defined in the Business Combination Agreement), and all outstanding options and shares of restricted stock shall be converted into a right to receive our securities as set forth on the Payment Spreadsheet. The participants in Airspans Management Incentive Plan will be entitled to receive a mix of cash consideration and restricted stock units as set forth on the Payment Spreadsheet. \nThe Business Combination will be consummated subject to the deliverables and provisions as further described in the Business Combination Agreement. \n### Results of Operations \nOur only activities from August 20, 2020 (inception) through December 31, 2020 were organizational activities and those necessary to prepare for the Initial Public Offering, described below, and, after our Initial Public Offering, identifying a target company for an initial business combination. \nFor the period ended December 31, 2020, we had net income of $4,092,424, which consisted of interest income earned on marketable securities held in our Trust Account of $12,473 and unrealized gain of change in fair value of warrants of $5,268,200, offset by operating costs of $215,159 and warrant issuance costs of $973,090. \n\nOn November 3, 2020, we consummated the Initial Public Offering of 10,000,000 Units, which includes the sale of 500,000 Placement Units, at $10.00 per Unit, generating gross proceeds of $105 million. On November 9, 2020, simultaneously with the closing of the first exercise in part of the underwriters over-allotment option for 1,000,000 Units, the Company completed the private sale of an aggregate of 30,000 Placement Units to our Sponsor, at a purchase price of $10.00 per Placement Unit, generating gross proceeds of $10,300,000. On November 12, 2020, simultaneously with the closing of the second exercise in part of the underwriters over-allotment option for 500,000 Units, the Company completed the private sale of an aggregate of 15,000 Placement Units to our Sponsor, at a purchase price of $10.00 per Placement Unit, generating gross proceeds of $5,150,000. \n\nFor the period ended December 31, 2020, cash used in operating activities was $434,130. Net income of $ \n4,092,424 was affected by interest earned on marketable securities held in the Trust Account of $ \n12,473, unrealized gain of change in fair value of warrants of $5,268,200, and warrant issuance costs of $973,090. \nChanges in operating assets and liabilities used $218,971 of cash. \nAs of December 31, 2020, we had<|endoftext|>In which such person has a 10% or greater beneficial ownership interest. \nWe have policies and procedures designed to minimize potential conflicts of interest arising from any dealings we may have with our affiliates and to provide appropriate procedures for the disclosure of any real or potential conflicts of interest that may exist from time to time. Specifically, pursuant to its charter, the audit committee has the responsibility to review related party transactions. \n### Item 14. Principal Accountants Fees and Services \n\nKPMG, which served as our independent registered public accounting firm for the fiscal years ended December 31, 2020 and 2019, provided audit, audit-related and tax services to us during those fiscal years. The following table presents fees for professional services rendered by our independent registered public accounting firm: \n### Audit Fees \nThis category includes fees associated with our annual audit and the review of our quarterly reports on Form 10-Q. This category also includes advice on accounting matters that arose during, or as a result of, the audit or the review of our interim financial statements, and the review of our SEC regulatory filings as well as audits of acquired entities. \n### Audit-Related Fees \nThis category includes fees for assurance and related services that are reasonably related to the performance of the audit or review of financial statements and are not reported as audit fees. The audit-related fees in 2020 include due diligence services relating to mergers and acquisitions. No audit-related fees were billed to us in 2019. \nTax Fees \nThis category includes fees for services provided for tax compliance, tax planning and advice on mergers and acquisitions. \n### All Other Fees \nThere were no other fees billed to us for 2020 or 2019. \nAudit Committee Pre-Approval Policies and Procedures \nOur policy is that all audit and non-audit services must be pre-approved by the audit committee. The authority to grant pre approvals of services may be delegated to one or more of the audit committees members, but the decision must be reported to the full audit committee at its next scheduled meeting. All of such services and fees were pre-approved during the fiscal year ended December 31, 2020. \n### PART IV \nItem 15. \n(a) \nConsolidated Financial Statements and Supplementary Data: \n### Financial Statements. \nThe following is a list of the Consolidated Financial Statements of AdaptHealth Corp. and its subsidiaries included in Item 8 of Part II of this report. \n(s) \n### Page \nNumber(s) \n\n\nConsolidated Statements of OperationsFor the years ended December31, 2020 and 2019 \n\n\n\n\n(b) \nExhibits. \nThe exhibits filed as a part of this report as required by Item 601 of Regulation S-K are listed in the Index to Exhibits located on page 147 of this report. \n### Item 16. Form 10-K Summary \nNone \nEXHIBIT INDEX \n### Exhibit \nNumber \nDescription \n2.1 \nMerger Agreement, dated as of July 8, 2019, by and among the Company, Merger Sub, AdaptHealth Holdings, the Blocker Companies, the AdaptHealth Holdings Unitholders Representative and, solely for the purposes specified therein, the Blocker Sellers (incorporated by reference to Exhibit 2.1 of the Companys Current Report on Form 8-K, filed with the SEC on November 14, 2019). \n2.2 \nAmendment No. 1 to Merger Agreement, dated as of October 15, 2019, by and among the Company, Merger Sub, AdaptHealth Holdings, the Blocker Companies, the AdaptHealth Holdings Unitholders Representative and, solely for the purposes specified therein, the Blocker Sellers (incorporated by reference to Exhibit 2.2 of the Companys Current Report on Form 8-K, filed with the SEC on November 14, 2019). \n3.1 \nSecond Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 of the Companys Current Report on Form 8-K, filed with the SEC on November 14, 2019). \n3.2 \nAmended and Restated Bylaws (incorporated by reference to Exhibit 3.2 of the Companys Current Report on Form 8-K, filed with the SEC on November 14, 2019). \n3.3 \nCertificate of Correction to Second Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.3 of the Companys Annual Report on Form 10-K filed with the SEC on March 6, 2020). \n3.4* \nCertificate of Correction to Second Amended and Restated Certificate of Incorporation. \n3.5 \nCertificate of Designations of Preferences, Rights and Limitations of Series A Convertible Preferred Stock (incorporated by reference to Exhibit 3.1 to the Companys Current Report on Form 8-K filed with the SEC on July 2, 2020). \n3.6 \nCertificate of Designations of Preferences, Rights and Limitations of Series B-1 Convertible Preferred Stock (incorporated by reference to Exhibit 3.1 to the Companys Current Report on Form 8-K filed with the SEC on June 26, 2020). \n3.7 \nCertificate of Designations of Preferences, Rights and Limitations of Series B-2 Convertible Preferred Stock (incorporated by reference to Exhibit 3.2 to the Companys Current Report on Form 8-K filed with the SEC on July 2, 2020). \n3.8 \nCertificate of Designation, Preferences and Rights of Series C Convertible Preferred Stock, par value $0.0001 per share, of the Company (incorporated by reference to Annex B to the Schedule 14A filed with the SEC on January 20, 2021) \n4.1 \nSpecimen Common Stock Certificate (incorporated by reference to Exhibit 4.2 of the Companys Registration Statement on Form S-1, filed with the SEC on February 13, 2018). \n4.2 \nSpecimen Warrant Certificate (incorporated by reference to Exhibit 4.3 of the Companys Registration Statement on Form S-1, filed with the SEC on February 13, 2018). \n4.3 \nWarrant Agreement, dated as of February 15, 2018, by and between the Company and Continental Stock Transfer & Trust Company (incorporated by reference to Exhibit 4.1 of the Companys Current Report on Form 8-K, filed with the SEC on February 22, 2018). \n4.4 \nDescription of Common Stock (incorporated by reference to Exhibit 4.5 of the Companys Annual Report on Form 10-K filed with the SEC on March 6, 2020). \n4.5 \nAmended and Restated Registration Rights Agreement, dated as of July 1, 2020, by and among the Company, OEP AHCO Investment Holdings, LLC, Deerfield Partners, L.P., Deerfield Private Design Fund IV, L.P. and the other persons listed on the signature pages thereto (incorporated by reference to Exhibit 4.1 to the Companys Current Report on Form 8-K filed with the SEC on July 2, 2020). \n4.6 \nAmendment to Amended and Restated Registration Rights Agreement, dated as of December 1, 2020, by and among the Company, AdaptHealth Holdings LLC and the other persons listed on the signature pages thereto (incorporated by reference to Exhibit 4.1 of the Companys Current Report on Form 8-K, filed with the SEC on December 7, 2020). \n4.7 \nIndenture, dated as of July 29, 2020, by and among AdaptHealth LLC, the guarantors party thereto and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by reference to Exhibit 4.1 to the Companys Current Report on Form 8-K filed with the SEC on August 4, 2020). \n4.8 \nIndenture, dated as of January 4, 2021, by and among AdaptHealth LLC, the guarantors party thereto and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by reference to Exhibit 4.1 to the Companys Current Report on Form 8-K filed with the SEC on January 8, 2021). \n10.1 \nExchange Agreement, dated November 8, 2019, by and among AdaptHealth Holdings, the Company and the other persons listed therein (incorporated by reference to Exhibit 10.1 of the Companys Current Report on Form 8-K, filed with the SEC on November 14, 2019). \n10.2 \nTax Receivable Agreement, dated November 8, 2019, by and among AdaptHealth Holdings, the Company and the Non-Blocker AdaptHealth Members and the Blocker Sellers (incorporated by reference to Exhibit 10.2 of the Companys Current Report on Form 8-K, filed with the SEC on November 14, 2019). \n10.3 \nFifth Amended and Restated Limited Liability Company Agreement of AdaptHealth Holdings, dated as of November 8, 2019, by and between the Company and the Members named therein (incorporated by reference to Exhibit 10.3 of the Companys Current Report on Form 8-K, filed with the SEC on November 14, 2019). \n10.4 \nForm of Indemnification Agreement (incorporated by reference to Exhibit 10.4 of the Companys Current Report on Form 8-K, filed with the SEC on November 14, 2019). \n10.5 \nBoard Designee Rights Letter Agreement, dated as of November 8, 2019, by and between the Company, AdaptHealth Holdings, BM AH Holdings, LLC, BlueMountain Foinaven Master Fund L.P., BMSB L.P., BlueMountain Fursan Fund L.P. (incorporated by reference to Exhibit 10.5 of the Companys Current Report on Form 8-K, filed with the SEC on November 14, 2019). \n10.6 \nCredit Agreement, dated January 20, 2021, by and between AdaptHealth LLC, the lenders party thereto and Regions Bank, as administrative agent (incorporated by reference to Exhibit 10.1 of the Companys Current Report on Form 8-K filed with the SEC on February 2, 2021). \n10.7 \nFirst Incremental Facility Amendment dated as of April 23, 2021 to the Credit Agreement, dated as of January 20, 2021, among AdaptHealth LLC, the guarantors named therein, Regions Bank as administrative agent and collateral agent and the lenders party thereto (incorporated by reference to Exhibit 10.1 of the Companys Current Report on Form 8-K filed with the SEC on April 29, 2021). \n10.8 \nEmployment Agreement, dated as of March 20, 2019, by and between AdaptHealth Holdings and Luke McGee (incorporated by reference to Exhibit 10.9 of the Companys Current Report on Form 8-K, filed with the SEC on November 14, 2019). \n10.9 \nEmployment Agreement, dated as of March 20, 2019, by and between AdaptHealth Holdings and Joshua Parnes (incorporated by reference to Exhibit 10.10 of the Companys Current Report on Form 8-K, filed with the SEC on November 14, 2019). \n10.10 \nEmployment Agreement, dated as of November 10, 2014, by and between AdaptHealth Holdings and Gregg Holst (incorporated by reference to Exhibit 10.11 of the Companys Current Report on Form 8-K, filed with the SEC on November 14, 2019). \n10.11 \nTransition, Separation and Release Agreement, dated August 10, 2020, by and between the Company and Gregg Holst (incorporated by reference to Exhibit 10.1 to the Companys Current Report on Form 8-K filed with the SEC on August 21, 2020). \n10.12 \nEmployment Agreement, dated as of May 1, 2020, by and between the Company and Jason Clemens (incorporated by reference to Exhibit 10.1 to the Companys Current Report on Form 8-K filed with the SEC on May 22, 2020). \n10.13 \nEmployment Agreement, dated February 2, 2021, by and between Stephen Griggs and AdaptHealth Corp. (incorporated by reference to Exhibit 10.2 of the Companys Current Report on Form 8-K filed with the SEC on February 2, 2021). \n10.14* \nEmployment Agreement, dated August 3, 2020, by and between the Company and Shaw Rietkerk. \n10.15 \nAdaptHealth Corp. 2019 Stock Incentive Plan (incorporated by reference to Exhibit 10.12 of the Companys Current Report on Form 8-K, filed with the SEC on November 14, 2019). \n10.16 \nForm of Restricted Stock Grant Notice and Agreement under the AdaptHealth Corp. 2019 Stock Incentive Plan (incorporated by reference to Exhibit 10.13 of the Companys Current Report on Form 8-K, filed with the SEC on November 14, 2019). \n10.17 \nForm of Option Grant Notice and Agreement under the AdaptHealth Corp. 2019 Stock Incentive Plan (incorporated by reference to Exhibit 10.14 of the Companys Current Report on Form 8-K, filed with the SEC on November 14, 2019). \n10.18 \nLetter Agreement, dated as of February 15, 2018, among the Company, Deerfield/RAB Ventures, LLC, Richard Barasch, Christopher Wolfe, Steven Hochberg, Dr. Mohit Kaushal, Dr. Gregory Sorensen and Dr. Susan Weaver (incorporated by reference to Exhibit 10.1 to the Companys Current Report on Form 8-K filed with the SEC on February 22, 2018). \n10.19 \nWarrant Purchase Agreement, dated February 15, 2018, between the Registrant and Deerfield/RAB Ventures, LLC (incorporated by reference to Exhibit 10.4 to the Companys Current Report on Form 8-K filed with the SEC on February 22, 2018). \n10.20 \nAdaptHealth Corp. 2019 Employee Stock Purchase Plan (incorporated by reference to Exhibit 4.7 to the Companys Registration Statement on Form S-8 filed with the SEC on January 22, 2020). \n10.21+ \nSecurities Purchase Agreement, dated as of November 21, 2019, by and among AdaptHealth LLC, McKesson Medical-Surgical, Inc., NRE Holding<|endoftext|>Per public share. In such event, we may not be able to complete the Business Combination, and you would receive such lesser amount per public share in connection with any redemption of your public shares. \n\nOur Sponsor has agreed that it will be liable to us if and to the extent any claims by a third party for services rendered or products sold to us, or a prospective target business with which we have discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account to below (i)$10.00 per public share and (ii)such lesser amount per public share held in the Trust Account as of the date of the liquidation of the Trust Account due to reductions in the value of the trust assets, in each case net of the interest which may be withdrawn to pay franchise and income taxes (less up to $100,000 of interest to pay dissolution expenses), except as to any claims by a third party who executed a waiver of any and all rights to seek access to the Trust Account and except as to any claims under our indemnity of the underwriters of our initial public offering against certain liabilities, including liabilities under the Securities Act. While we currently expect that our independent directors would take legal action on our behalf against the Sponsor to enforce its indemnification obligations to us, it is possible that our independent directors in exercising their business judgment and subject to their fiduciary duties may choose not to do so in certain instances. \n\nTo the extent any bankruptcy claims deplete the Trust Account, the per share amount that would otherwise be received by our stockholders in connection with our liquidation would be reduced. \nIf, after we distribute the proceeds in the Trust Account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, a bankruptcy court may seek to recover such proceeds, and the members of the HighCape Board may be viewed as having breached their fiduciary duties to our creditors, thereby exposing members of the HighCape Board and us to claims of punitive damages. \nThe Current Charter states that we must complete our initial business combination by September9, 2022. If we have not completed an initial business combination by then (or such later date as our stockholders may approve in accordance with the Current Charter), we will: (i)cease all operations except for the purpose of winding up; (ii)as promptly as reasonably possible but not more than 10 business days thereafter, redeem 100% of the public shares, at a per share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account and not previously released to us to pay our franchise and income taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders rights as stockholders (including the right to receive further liquidating distributions, if any); and (iii)as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and the HighCape Board, liquidate and dissolve, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. In such case, our public stockholders may only receive approximately $10.00 per share and our warrants will expire worthless. \nIn addition, the HighCape Board may be viewed as having breached its fiduciary duty to our creditors and/or having acted in bad faith by paying public stockholders from the Trust Account prior to addressing the claims of creditors, thereby exposing itself and us to claims of punitive damages. \n\nIf a corporation complies with certain procedures set forth in Section280 of the DGCL intended to ensure that it makes reasonable provision for all claims against it, including a 60-day notice period during which any third-party claims can be brought against the corporation, a 90-day period during which the corporation may reject any claims brought, and an additional 150-day waiting period before any liquidating distributions are made to stockholders, any liability of stockholders with respect to a liquidating distribution is limited to the lesser of such stockholders prorata share of the claim or the amount distributed to the stockholder, and any liability of the stockholder would be barred after the third anniversary of the dissolution. However, it is our intention to redeem our public shares as soon as reasonably possible following the 24thmonth from the closing of our initial public offering in the event we do not complete our initial business combination and, therefore, we do not intend to comply with those procedures. \nHowever, because we are a blank check company, rather than an operating company, and our operations are limited to searching for prospective target businesses to acquire, the only likely claims to arise would be from our vendors (such as lawyers, investment bankers, consultants, etc.) or prospective target businesses. \nFurthermore, if the prorata portion of our Trust Account distributed to our public stockholders upon the redemption of our public shares in the event we do not complete our initial business combination within 24months from the closing of our initial public offering is not considered a liquidating distribution under Delaware law and such redemption distribution is deemed to be unlawful, then pursuant to Section174 of the DGCL, the statute of limitations for claims of creditors could then be sixyears after the unlawful redemption distribution, instead of threeyears, as in the case of a liquidating distribution. \nIf our stockholders fail to comply with the redemption requirements specified in the Companys Form S-4, they will not be entitled to redeem their shares of HighCape ClassA common stock for a prorata portion of the Trust Account. \nHolders of public shares are not required to affirmatively vote against the Business Combination Proposal in order to exercise their rights to redeem their shares for a prorata portion of the Trust Account. In order to exercise their redemption rights, they are required to submit a request in writing and deliver their stock (either physically or electronically) to the Transfer Agent. Stockholders electing to redeem their shares will receive their prorata portion of the funds held in the Trust Account, including interest earned on the funds held in the Trust Account and not previously released to us to pay our franchise and income taxes, calculated as of two business days prior to the anticipated consummation of the Business Combination. \nThe ability of HighCape stockholders to exercise redemption rights with respect to a large number of shares could increase the probability that the Business Combination would be unsuccessful and that stockholders would have to wait for liquidation in order to redeem their stock. \nAt the time we entered into the Business Combination Agreement and related agreements for the Business Combination, we did not know how many stockholders would exercise their redemption rights, and therefore we structured the Business Combination based on our expectations as to the number of shares that will be submitted for redemption. The Business Combination Agreement requires us to have at least $160.0million of aggregate cash proceeds comprising (i)the aggregate cash proceeds available for release to any HighCape Party from the Trust Account in connection with the transactions contemplated by the Business Combination Agreement (after giving effect to any redemptions of public shares, if any) and (ii)the aggregate cash proceeds actually received by HighCape with respect to the PIPE Financing. The above considerations may limit our ability to complete the Business Combination or optimize our capital structure. \nIf you or a group of stockholders of which you are a part are deemed to hold in excess of 20% of the HighCape ClassA common stock, you (or, if a member of such a group, all of the members of such group in the aggregate) will lose the ability to redeem all such shares in excess of 20% of HighCape ClassA common stock. \nA public stockholder, together with any of his, her or its affiliates or any other person with whom such stockholder is acting in concert or as a group (as defined under Section13 of the Exchange Act), will be restricted from redeeming its shares with respect to more than an aggregate of 20% of the HighCape ClassA common stock, or the Excess Shares, without HighCapes prior consent. However, the stockholders ability to vote all of their shares (including Excess Shares) for or against the Business Combination will not be restricted. Your inability to redeem the Excess Shares will reduce your influence over HighCapes ability to consummate the Business Combination and you could suffer a material loss on your investment in HighCape if you sell such Excess Shares in open market transactions. Additionally, you will not receive redemption distributions with respect to such Excess Shares if HighCape consummates the Business Combination. As a result, you will continue to hold that number of shares exceeding 20% of the ClassA common stock and, in order to dispose of such Excess Shares, would be required to sell your stock in open market transactions, potentially at a loss. \nHighCape does not have a specified maximum redemption threshold. The absence of such a redemption threshold may make it possible for us to complete the Business Combination even if a substantial majority of HighCapes stockholders do not agree. \nHighCapes existing governance documents do not provide a specified maximum redemption threshold, except that HighCape will only redeem public shares so long as, after payment of the deferred underwriting commissions and after such redemptions, HighCapes net tangible assets will be at least $5,000,001 after giving effect to the Transactions (as determined in accordance with Rule3a51-1(g)(1) of the Exchange Act). \nAs a result, HighCape may be able to complete the Business Combination even though a substantial majority of public stockholders do not agree with the transaction and have redeemed their shares or have entered into privately negotiated agreements to sell their shares to the Sponsor, officers, directors, advisors or any of their affiliates. HighCape will file or submit a Current Report on Form 8-K to disclose any material arrangements entered into or significant purchases made by any of the aforementioned persons that would affect the vote on the proposals to be put to the Special Meeting or the redemption threshold. Any such report will include descriptions of any arrangements entered into or significant purchases by any of the aforementioned persons. In the event the aggregate cash consideration we would be required to pay for all shares of HighCape common stock that are validly submitted for redemption plus any amount required to satisfy the Aggregate Transaction Proceeds Condition pursuant to the terms of the Business Combination Agreement exceeds the aggregate amount of cash available to us, we will not complete the Business Combination or redeem any shares, all shares of common stock submitted for redemption will be returned to the holders thereof, and we instead may search for an alternate business combination. \nThe Business Combination is subject to conditions, including certain conditions that may not be satisfied on a timely basis, if at all. \nThe completion of the Business Combination is subject to a number of conditions. The completion of the Business Combination is not assured and is subject to risks, including the risk that approval of the Business Combination by HighCape stockholders is not obtained or that there are not sufficient funds in the Trust Account, in each case subject to certain terms specified in the Business Combination Agreement (as described under \nThe Business Combination AgreementConditions to Closing \n), or that other Closing conditions are not satisfied. If HighCape does not complete the Business Combination, HighCape could be subject to several risks, including: the parties may be liable for damages to one another under the terms and conditions of the Business Combination Agreement; negative reactions from the financial markets, including declines in the price of HighCape ClassA common stock due to the fact<|endoftext|>Of contract. \n### Settlement and Release of All Claims Agreement \nOn February 3, 2020, the Company and NPE entered into a settlement and release of all claims agreement. In exchange for a complete release of all claims, the Company and NPE (1) agreed to reduce our interest in NPE from 20% to 5%; (2) we agreed to pay NPE a total of $85,000 as follows: $35,000 concurrent with the execution of the Settlement and Release of All Claims Agreement, and $25,000 no later than the 5th calendar day for each of the two months following execution of Settlement and Release of All Claims Agreement; and, (3) to retire the balance of our original valuation obligation from the material definitive agreement, representing a shortfall of $56,085, in a convertible promissory note, with terms allowing NPE to convert the note into common stock of MCOA at a 50% discount to the closing price of MCOAs common stock as of the maturity date. \n\n### Summary: \nThe Company has identified the embedded derivatives related to the above described notes and warrants. These embedded derivatives included certain conversion and reset features. The accounting treatment of derivative financial instruments requires that the Company record fair value of the derivatives as of the inception date of the note and to fair value as of each subsequent reporting date. \nFor the year ended December 31, 2020 and 2019, the Company recorded a loss on the change in fair value of derivative liabilities of $4,698,072 and $2,123,570, respectively. For the years ended December 31, 2020 and 2019, the Company recorded amortization of debt discounts of $1,658,395 and $2,906,843, respectively, as a charge to interest expense, respectively. \nAt December 31, 2020, the Company determined the aggregate fair values of $4,426,057 of embedded derivatives. The fair values were determined using a binomial model based on the following assumptions: (1) dividend yield of 0%; (2) expected volatility of 164.49% to 278.82%, (3) weighted average risk-free interest rate of 0.09% to 0.17%, (4) expected life of 0.5 years to 2.6 years, and (5) estimated fair value of the Company's common stock from $0.0041 per share. \n\nAs described in Notes 4 and 7, the Company issued convertible notes and warrants that contained conversion features and a reset provisions. The accounting treatment of derivative financial instruments requires that the Company record fair value of the derivatives as of the inception date and to fair value as of each subsequent reporting date. \nIf an embedded conversion option in a convertible debt instrument no longer meets the bifurcation criteria in this Subtopic, an issuer shall account for the previously bifurcated conversion option by reclassifying the carrying amount of the liability for the conversion option (that is, its fair value on the date of reclassification) to shareholders' equity. Any debt discount recognized when the conversion option was bifurcated from the convertible debt instrument shall continue to be amortized. \n### NOTE 7 STOCKHOLDERS DEFICIT \nPreferred stock \nThe Company is authorized to issue 10,000,000 shares of $0.001 par value preferred stock as of December 31, 2020 and December 31, 2019. As of December 31, 2020, and 2019, the Company has designated and issued 10,000,000 shares of Class A Preferred Stock. \nEach share of Class A Preferred Stock is entitled to 100 votes on all matters submitted to a vote to the stockholders of the Company, does not have conversion, dividend or distribution upon liquidation rights. On November 9, 2020, the Company issued 2,000,000 shares of its Class B Preferred Common Stock to Jesus Quintero. The Class B Preferred Stock carries a voting preference of One Thousand (1,000) times that number of votes on all matters submitted to the shareholders that is equal to the number of shares of Common Stock (rounded to the nearest whole number), at the record date for the determination of the shareholders entitled to vote on such matters or, if no such record date is established, at the date such vote is taken or any written consent of such shareholders is affected. The issuance constitutes a change of control of the Company, as the voting preference of the issued Class B Preferred Stock provides Mr. Quintero with the right to control a majority of the votes of shareholders eligible to cast votes on any matter brought before the stockholders. The Class B shares were valued at $2,229,027 and recognized as stock-based compensation expense during the year ended December 31, 2020. As of December 31, 2020 and 2019, there were 2,000,000 shares of Class B Preferred Stock outstanding. The Class B Preferred Stock is not convertible into common shares. \n### Common stock \nThe Company is authorized to issue 15,000,000,000 shares of $0.001 par value common stock as of December 31, 2020 and 2019. As of December 31, 2020, and 2019, the Company had 3,136,774,861 and 77,958,081, respectively, common shares issued and outstanding. \nIn 2020, the Company issued an aggregate of 217,396,427 of its common stock for services rendered with an estimated fair value of $785,861. \nIn 2020, the Company issued an aggregate of 2,291,141,317 shares of its common stock in settlement of convertible notes payable and accrued interest with an estimated fair value of $3,916,940. \nIn 2020, the Company issued an aggregate of 21,276,596 shares of its common stock in conversion of related party notes payable with an estimated fair value of $50,000. \nIn 2020, the Company issued an aggregate of 51,054,211 common shares of its common stock in exchange for exercise of warrants on a cashless basis. \nIn 2020, the Company sold shares 268,679,513 shares of its common stock with an estimated value of $478,685. \nIn 2020, the Company issued 205,582,494 shares of its common stock with an estimated value of $762,723 to settle liabilities. \nIn 2020, the Company issued an aggregate of 3,677,889 common shares in settlement of a legal cases with an estimated fair value of $956,251. \nIn 2020, the Company issued an aggregate of 8,333 common shares to settle amounts previously accrued with an estimated value of $6,700. \nOn September 3, 2019, the Company completed a 1 for 60 reverse stock-split of its common stock. \nIn 2019, the Company issued an aggregate of 141,669 shares of its common stock in settled amounts previously accrued with an estimated fair value of $193,800. \nIn 2019, the Company issued an aggregate of 18,510,381 shares of its common stock for services rendered with an estimated fair value of $3,293,688. \nIn 2019, the Company issued an aggregate of 9,251,217 shares of its common stock in settlement of convertible notes payable and accrued interest with an estimated fair value of $3,388,774. \nIn 2019, the Company issued an aggregate of 1,000,000 shares of its common stock in issuance of warrants and BCF with convertible debt with an estimated fair value of $856,717. \nIn 2019, the Company issued an aggregate of 1,220,856 shares of its common stock in conversion of related party notes payable with an estimated fair value of $1,182,415. \nIn 2019, the Company issued an aggregate of 1,653,175 common shares of its common stock in exchange for exercise of warrants on a cashless basis. \nIn 2019, the Company sold shares 222,221 shares of its common stock with an estimated value of $65,000. \nIn 2019, the Company issued an aggregate of 2,082,398 common shares in settlement of a legal cases with an estimated fair value of $541,424. \nIn 2019, the Company issued an aggregate of 2,222,047 common shares in settlement of a for investments in joint ventures with an estimated fair value of $1,219,040. \n### Options \nOption valuation models require the input of highly subjective assumptions. The fair value of stock-based payment awards was estimated using the Binomial Option Pricing Model with a volatility figure derived from using the Companys historical stock prices. Management determined this assumption to be a more accurate indicator of value. The Company accounts for the expected life of options based on the contractual life of options for non-employees. For employees, the Company accounts for the expected life of options in accordance with the simplified method, which is used for plain-vanilla\" options, as defined in the accounting standards codification. \nThe risk-free interest rate was determined from the implied yields of U.S. Treasury zero-coupon bonds with a remaining life consistent with the expected term of the options. \nIn estimating the Companys forfeiture rate, the Company analyzed its historical forfeiture rate, the remaining lives of unvested options, and the number of vested options as a percentage of total options outstanding. If the Companys actual forfeiture rate is materially different from its estimate, or if the Company reevaluates the forfeiture rate in the future, the stock-based compensation expense could be significantly different from what the Company has recorded in the current period. \nThe following table summarizes the stock option activity for the years ended December 31, 2020 and 2019: \n(1) On February 27, 2019, Donald Steinberg and Charles Larsen cancelled previously issued options to purchase an aggregate of 16,666,667 shares at an average exercise price of $0.30 per share, representing 100% of all previously issued option. \nThe aggregate intrinsic value in the preceding tables represents the total pretax intrinsic value, based on options with an exercise price less than the Companys stock price of $0 and $0 as of December 31, 2020 and 2019, respectively, which would have been received by the option holders had those option holders exercised their options as of that date. \nThe following table presents information related to stock options at December 31, 2020 \n(1) \n: \nThe stock-based compensation expense related to option grants was $0 and $0 during the years ended December 31, 2020 and 2019, respectively. \n(1) \nOn February 27, 2019, Donald Steinberg and Charles Larsen cancelled previously issued options to purchase an aggregate of 16,666,667 shares at an average exercise price of $0.30 per share, representing 100% of all previously issued options. \n### Warrants \nThe following table summarizes the stock warrant activity for the two years ended December 31, 2020: \nCertain warrants issued to debt holders have reset provisions whereby upon subsequent issuances of common stock at a price below the current exercise price, the number of warrants increase and the exercise price is reduced to the new price. The aggregate intrinsic value in the preceding tables represents the total pretax intrinsic value, based on warrants with an exercise price less than the Companys stock price of $0.004 and $0.07 as of December 31, 2020 and 2019, respectively, which would have been received by the warrant holders had those option holders exercised their warrants as of that date. \n\nThe Company adopted the provisions of Accounting Standards Codification subtopic 825-10, Financial Instruments (ASC 825-10) on January 1, 2008. ASC 825-10 defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of nonperformance. ASC 825-10 establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 825-10 establishes three levels of inputs that may be used to measure fair value: \n\n\n\nAll items required to be recorded or measured on a recurring basis are based upon level 3 inputs. \nIn such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement is disclosed and is determined based on the lowest level input that is significant to the fair value measurement. \nUpon adoption of ASC 825-10, there was no cumulative effect adjustment to beginning retained earnings and no impact on the financial statements. \nThe carrying value of the Companys cash and cash equivalents, accounts receivable, accounts payable, short-term borrowings (including convertible notes payable), and other current<|endoftext|>2016, the FASB issued guidance that affects loans, trade receivables and any other financial assets that have the contractual right to receive cash. Under the new guidance, an entity is required to recognize expected credit losses rather than incurred losses for financial assets. The new guidance is effective for fiscal years beginning after December 15, 2019 and interim periods within those fiscal years. The Company adopted the new guidance effective January 1, 2020, with no material impact to the Companys consolidated financial position, results of operations or cash flows. \nIn August 2018, the FASB issued guidance which modifies certain disclosure requirements over fair value measurements. The guidance is effective for fiscal years beginning after December 15, 2019, including all interim periods within that fiscal year. The Company adopted the new guidance effective January 1, 2020. The Company does not currently classify any of its derivative contracts or restoration plan assets as Level 3 assets or liabilities, nor did the Company have any transfers amongst fair value levels during the year ended December 31, 2020. As a result, the guidance did not have an impact on Companys the fair value measurement disclosures upon adoption. \nIn January 2017, the FASB issued guidance which eliminates the second step from the traditional two-step goodwill impairment test. Under current guidance, an entity performed the first step of the goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount; if an impairment loss was indicated, the entity computed the implied fair value of goodwill to determine whether an impairment loss existed, and if so, the amount to recognize. Under the new guidance, an impairment loss is recognized for the amount by which the carrying amount exceeds the reporting units fair value (the Step 1 test), with no further testing required. Any impairment loss recognized is limited to the amount of goodwill allocated to the reporting unit. The new guidance is effective for public companies that are Securities and Exchange Commission (SEC) registrants for fiscal years beginning after December15, 2019. The Company adopted the new guidance on January 1, 2020, and applied the guidance prospectively to its goodwill impairment tests. \nAccounting Standards Not Yet Adopted as of December 31, 2020 \nIn December 2019, the FASB issued new guidance to simplify the accounting for income taxes by removing certain exceptions to the general principles and also simplification of areas such as franchise taxes, step-up in tax basis goodwill, separate entity financial statements and interim recognition of enactment of tax laws or rate changes. The new guidance is effective for fiscal years beginning after December 15, 2020 and interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the impact of this new guidance on its consolidated financial statements. \nIn March 2020, the FASB issued guidance to address certain accounting consequences from the anticipated transition from the use of the London Interbank Offered Rate (LIBOR) and other interbank offered rates to alternative reference rates. The new guidance contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance is optional and may be elected over time as reference rate reform activities occur. During the year ended December 31, 2020, the Company elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based on matches the index of the corresponding derivatives. Application of these expedients preserves the presentation of derivatives consistent with past presentation. The Company continues to evaluate the impact of the guidance and may apply other elections as applicable as additional changes in the market occur. \nLUDUSON G INC. \n\n\n\n3. \n### BUSINESS SEGMENT \nThe Company considers its business activities to constitute two reportable segments. The segment analysis of the Companys revenues is as follows: \n4. \n### ACCOUNTS RECEIVABLE \nThe majority of the Companys sales are on open credit terms and in accordance with terms specified in the contracts governing the relevant transactions. The Company evaluates the need of an allowance for doubtful accounts based on specifically identified amounts that management believes to be uncollectible. If actual collections experience changes, revisions to the allowance may be required. Based upon the aforementioned criteria, the Company has not provided the allowance for the years ended December 31, 2020 and 2019. \nThe Company expects these balances to be recovered in the next 12 months. \n5. \n### PLANT AND EQUIPMENT \nPlant and equipment consisted of the following: \nDepreciation expense for the years ended December 31, 2020 and 2019 were $48,889 and $5,946, respectively. \nLUDUSON G INC. \n\n\n\n6. \n### DEPOSITS, PREPAYMENTS AND OTHER RECEIVABLES \nDeposits, prepayments and other receivables consisted of the following, \nPrepayment for business project represents the security deposit to the project under the collaboration agreement, which is unsecured and non-refundable. The deposit will be charged to the project cost upon the commencement of its project in the next six months. \nPrepayment for vending machine represents the deposit of purchasing vending machines. The deposit will be charged to the project cost upon the use of the machine in the next twelve months. \n7. \n### LEASE \nAs of December 31, 2020, the Company entered into one workshop space operating lease with a lease term of 2 years, commencing from January 1, 2019. \nRight of use assets and lease liability right of use are as follows: \n### The lease liability right of use is as follows: \nThe lease was renewed on December 28, 2020 and extended for one additional year to December 31, 2021. \nLUDUSON G INC. \n\n\n\n8. \n### AMOUNT DUE TO A RELATED PARTY \nAs of December 31, 2020, the amount due to a related party represented temporary advances made by the Companys director, Mr Wong Ka Leung, which was unsecured, interest-free with no fixed repayment term. Imputed interest on this amount is considered insignificant. \n9. \n### SHAREHOLDERS EQUITY \nAuthorized shares \nAs of December 31, 2020 and 2019, the authorized share capital of the Company consisted of 100,000,000 shares of common stock with $0.0001 par value, and 20,000,000 shares of preferred stock also with $0.0001 par value. No other classes of stock are authorized. \nThe Company's first issuance of common stock, totaling 580,000 shares, took place on March 6, 2014 pursuant to the Chapter 11 Plan of Reorganization confirmed by the U.S. Bankruptcy Court in the matter of Pacific Shores Development, Inc. (\"PSD\"). The Court ordered the distribution of shares in the Company to all general unsecured creditors of PSD, with these creditors to receive their Pro Rata share (according to amount of debt held) of a pool of 80,000 shares in the Company. The Court also ordered the distribution of shares in the Company to all administrative creditors of PSD, with these creditors to receive one share of common stock in the Company for each $0.10 of PSD's administrative debt which they held. A total of 500,000 shares were issued to PSDs administrative creditors. \nThe Court also ordered the distribution of 2,500,000 warrants in the Company to all administrative creditors of PSD, with these creditors to receive five warrants in the Company for each $0.10 of PSD's administrative debt which they held. These creditors received 2,500,000 warrants consisting of 500,000 \"A Warrants\" each convertible into one share of common stock at an exercise price of $4.00; 500,000 \"B Warrants\" each convertible into one share of common stock at an exercise price of $5.00; 500,000 \"C Warrants\" each convertible into one share of common stock at an exercise price of $6.00; 500,000 \"D Warrants\" each convertible into one share of common stock at an exercise price of $7.00; and 500,000 \"E Warrants\" each convertible into one share of common stock at an exercise price of $8.00. The exercise price of the warrants was reduced to $0.10 per share on April 7, 2020, and on April 15, 2020, the warrant expiration date was extended to August 30, 2025. As of the date of this report, no warrants have been exercised. \nOn May 22, 2020, the Company consummated the acquisition of LHCL and agreed to issue to the shareholders of LHCL Ten Million (10,000,000) shares of its common stock, at a value of $0.10 per share, for an aggregate value of $1,000,000. \n### Issued and outstanding shares \nOn January 2, 2020, the Company declared and paid a dividend of $184,919 to its former shareholders. \nOn May 8, 2020, the Company executed a Share Exchange Agreement (the Share Exchange Agreement) with Luduson Holding Company Limited, a limited company organized under the laws of the British Virgin Islands (LHCL), and the shareholders of LHCL. Pursuant to the Share Exchange Agreement, the Company agreed to purchase Ten Thousand (10,000) ordinary shares representing 100% of the issued and outstanding ordinary shares of the LHCL (the LHCL Shares). \nLUDUSON G INC. \n\n\n\nOn September 9, 2020, the Company issued 2,500,000 shares of its common stock to five individuals of consultants and service providers for the IT programming and marketing services rendered to the Company, at the fair value of $0.13 per shares, totally $325,000. \nAs of December 31, 2020, 28,110,000 common shares issued and outstanding and 2,500,000 warrants to acquire common shares issued and outstanding. \n10. \n### INCOME TAX \nIncome (loss) before income taxes within or outside the United States are shown below: \nThe provision for income taxes as shown in the accompanying consolidated statements of income consists of the following: \nThe effective tax rate in the years presented is the result of the mix of income earned in various tax jurisdictions that apply a broad range of income tax rate. The Company operates in various countries: United States of America and Hong Kong that are subject to taxes in the jurisdictions in which they operate, as follows: \n### United States of America \nLDSN is registered in the State of Delaware and is subject to US federal corporate income tax. The U.S. Tax Cuts and Jobs Act (the Tax Reform Act) was signed into law. The Tax Reform Act significantly revised the U.S. corporate income tax regime by, among other things, lowering the U.S. corporate tax rate from 35% to 21% effective January 1, 2018. The Companys policy is to recognize accrued interest and penalties related to unrecognized tax benefits in its income tax provision. The Company has not accrued or paid interest or penalties which were not material to its results of operations for the periods presented. Deferred tax asset is not provided for as the tax losses may not be able to carry forward after a change in substantial ownership of the Company in May 2020. \nAs of December 31, 2020, the operations in the United States of America incurred $343,616 of cumulative net operating losses which can be carried forward to offset future taxable income. The net operating loss carryforwards begin to expire in 2040, if unutilized. The Company has provided for a full valuation allowance against the deferred tax assets of $72,159 on the expected future tax benefits from the net operating loss carryforwards as the management believes it is more likely than not that these assets will not be realized in the future. \nLUDUSON G INC. \n\n\n\nASC 740, \n\n, which requires an assessment of both positive and negative evidence when determining whether it is more likely than not that deferred tax assets are recoverable. Such assessment is required on a jurisdiction by jurisdiction basis. losses required that a full valuation allowance be recorded against all net deferred tax assets. The Company intends to maintain a full valuation allowance on net deferred tax assets until sufficient positive evidence exists to support reversal of the valuation allowance. \nBVI \nUnder the current BVI law, the Company is not subject to tax on income. \n### Hong Kong \nThe Companys subsidiary operating in Hong Kong is subject to the Hong Kong Profits Tax at the two-tiered profits tax rates from 8.25% to 16.5% on the estimated assessable profits arising in Hong Kong during the current year, after deducting a tax<|endoftext|>The Predecessor with a weighted average grant date fair value of $180.87 were automatically vested, upon the closing of the Business Combination. A summary of the changes in non-vested units outstanding for the period from January 1, 2019 to July 10, 2019 is presented below: \nDuring the period from January 1, 2019 to July 10, 2019 and the year ended December 31, 2018, the Predecessor incurred $0.9 million and $0.8 million of share-based compensation expense, respectively, included in selling, general and administrative costs in the consolidated statements of operations. \n15. Taxation (As Restated) \nRepay Holdings Corporation is taxed as a corporation and is subject to paying corporate federal, state and local taxes on the income allocated to it from Hawk Parent, based upon Repay Holding Corporations economic interest held in Hawk Parent, as well as any stand-alone income or loss it generates. As a partnership, Hawk Parent is not subject to U.S. Hawk Parents members, including Repay Holdings Corporation, are liable for federal, state and local income taxes based on their allocable share of Hawk Parents pass-through taxable income. \nThe components of income before income taxes are as follows: \nThe Company recorded a provision for income tax as follows: \nA reconciliation of the United States statutory income tax rate to the Companys effective income tax rate is as follows for the years indicated: \nThe Companys effective tax rate was 9.5% and 9.6% for the year ended December 31, 2020 and theperiod from July 11, 2019 toDecember 31, 2019, respectively. The comparison of the Companys effective tax rate to the U.S. statutory tax rate of 24% was primarily influenced by the fact that the Company is not liable for the income taxes on the portion of Hawk Parents earnings that are attributable to noncontrolling interests. The results for the Predecessordo not reflect income tax expense because, prior to the closing of the Business Combination, the consolidated Hawk Parent was treated as a partnership for U.S. and was not subject to corporate tax. \nDetails of the Company's deferred tax assets and liabilities are as follows: \nAs a result of the Follow-on Offerings, Warrant exercises and Post-Merger Repay Unit exchanges during the year ended December 31, 2020, the Company recognized an additional deferred tax asset (DTA) and offsetting deferred tax liability (DTL) in the amount of $27.5 million, compared to $5.8 million as a result of the Merger during the year ended December 31, 2019, to account for the portion of the Companys outside basis in the partnership interest that it will not recover through tax deductions, a ceiling rule limitation arising under Internal Revenue Code (the Code) sec. 704(c). As the ceiling rule causes taxable income allocations to be in excess of 704(b) book allocations the DTL will unwind, leaving only the DTA, which may only be recovered through the sale of the partnership interest in Hawk Parent. The Company has concluded, based on the weight of all positive and negative evidence, that all of the DTA associated with the ceiling rule limitation is not likely to be realized as of December 31, 2020. As such, a 100% valuation allowance was recognized. \nAs of December 31, 2020, the Company has a tax effected federal net operating loss carryforward of approximately $8.8 million, state net operating loss carryforwards of approximately $1.3 million, and a tax effected foreign net operating loss carryforwards of approximately $0.2 million, which will be available to offset future income taxes. The federal and foreign net operating loss carryforwards have an indefinite life. The state net operating loss carryforwards will begin to expire between \n2031 and \nBased on the weight of all positive and negative evidence, the \nCompany expects that it its more likely than not going to utilize the net operating loss against earnings in future years. \nOn December 27, 2020, Congress passed, and President Trump signed into law, the Consolidated Appropriations Act, 2021 (the Act), which includes certain business tax provisions. The Company does not expect the Act to have a material impact on the Companys effective tax rate or income tax expense for the year ending December 31, 2021. \nNo uncertain tax positions existed as of December 31, 2020. \n### Tax receivable agreement liability \nPursuant to our election under Section 754 of the Code, we expect to obtain an increase in our share of the tax basis in the net assets of Hawk Parent when Post-Merger Repay Units are redeemed or exchanged for Class A common stock of Repay Holdings Corporation. The Company intends to treat any redemptions and exchanges of Post-Merger Repay Units as direct purchases for U.S. federal income tax purposes. These increases in tax basis may reduce the amounts that the Company would otherwise pay in the future to various tax authorities. They may also decrease gains (or increase losses) on future dispositions of certain capital assets to the extent tax basis is allocated to those capital assets. \nOn July 11, 2019, the Company entered into a TRA that provides for the payment by the Company of 100% of the amount of any tax benefits realized, or in some cases are deemed to realize, as a result of (i) increases in our share of the tax basis in the net assets of Hawk Parent resulting from any redemptions or exchanges of Post-Merger Repay Units and from our acquisition of the equity of the selling Hawk Parent members, (ii) tax basis increases attributable to payments made under the TRA, and (iii) deductions attributable to imputed interest pursuant to the TRA (the \"TRA Payments\"). The TRA Payments are not conditioned upon any continued ownership interest in Hawk Parent or Repay. The rights of each party under the TRA other than the Company are assignable. The timing and amount of aggregate payments due under the TRA may vary based on a number of factors, including the timing and amount of taxable income generated by the Company each year, as well as the tax rate then applicable, among other factors. \nAs ofDecember 31, 2020, the Company had a liability of$229.2 million related to its projected obligations under the TRA, which is captioned as the tax receivable agreement liability in the Companys consolidated balance sheet. \nThe increase in the TRA liability for the year ended December 31, 2020, was primarily a result of the Unit Purchase Agreements entered into with CC Payment Holdings, L.L.C., an entity controlled by Corsair, pursuant to which the Company acquired 19,564,816 Post-Merger Repay Units held by Corsair. Additionally, other selling members of Hawk Parent exchanged 1,606,647 Post-Merger Repay Units during the year ended December 31, 2020. This resulted in an increase to the Companys share of the tax basis in the net assets of Hawk Parent. \n16. Segment Reporting \nThe Company conducts its operations through a single operating segment and, therefore,onereportable segment. Operating segments are revenue-generating components of a company for which separate financial information is internally produced for regular use by the Chief Operating Decision Maker (CODM) to allocate resources and assess the performance of the business. Our CODM uses a variety of measures to assess the performance of the business; however, detailed profitability information of the nature that could be used to allocate resources and assess the performance of the business are managed and reviewed for the Company as a whole. \nThere are no significant concentrations by state or geographical location, nor are there any significant individual customer concentrations by balance. \n17. Quarterly Financial Information (Unaudited and As Restated) \nThe following tables set forth certain unaudited quarterly results of operations for the indicated periods: \n\nIn lieu of filing amended quarterly reports on Form 10-Q, the following tables represent the Companys restated unaudited condensed consolidated financial statements for each of the quarters during the year ended December 31, 2020.See Note 1 for additional information. \nThe following tables represent the reconciliation of the restatement of our unaudited interim condensed consolidated financial statements for the periods indicated. \n18. Subsequent events \nManagement has evaluated subsequent events and their potential effects on these consolidated financial statements through the date the consolidated financial statements were available to be issued. \nOn January 19, 2021, the Company completed the previously announced underwritten public offering (the Equity Offering) of 6,244,500 shares of its Class A common stock at a public offering price of $24.00 per share. 814,500 shares of such Class A common stock were sold in the Equity Offering in connection with the full exercise of the underwriters option to purchase additional shares of Class A common stock pursuant to the underwriting agreement. \nOn January 19, 2021, the Company also completed the previously announced offering of $440.0 million in aggregate principal amount of 0.00% Convertible Senior Notes due 2026 (the 2026 Notes) in a private placement (the Notes Offering) to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended.$40.0 million in aggregate principal amount of such 2026 Notes were sold in the Notes Offering in connection with the full exercise of the initial purchasers option to purchase such additional 2026 Notes pursuant to the purchase agreement. The Notes will mature on February 1, 2026, unless earlier converted, repurchased or redeemed. \nOn January 20, 2021, the Company used a portion of the proceeds from the Notes Offering to prepay in full the entire amount of the outstanding term loans under the Successor Credit Agreement. The Company also terminated in full all outstanding delayed draw term loan commitments under the Successor Credit Agreement. \nOn February 3, 2021, the Company announced the closing of a new undrawn $125 million senior secured revolving credit facility through Truist Bank. The Amended Credit Agreement replaces the Companys Successor Credit Agreement, which included an undrawn$30 millionrevolving credit facility. \nITEM 9A. CONTROLS AND PROCEDURES. \n\nBased upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective, solely as a result of the material weakness in internal controls related to the restatement described below. \n\nGAAP. \nDuring the year ended December 31, 2020, the Company identified inappropriate system access controls over the contract maintenance process. These controls were not designed to prevent or detect unauthorized changes to contract information, which ultimately led the Company to conclude that this was a material weakness. The Company remediated this control matter in the fourth quarter of 2020 through the implementation of additional detective, compensating controls over all entries to contract information, and we have tested these enhancements to our internal controls for operating effectiveness. As of December 31, 2020, the aforementioned material weakness was considered to be remediated and did not lead to any adjustments to previously reported or current financial information. \n\n\nNotwithstanding this material weakness, management has concluded that our audited financial statements included in this Amendment No. 2 are fairly stated in all material respects in accordance with GAAP for each of the periods presented therein. \nThe effectiveness of our internal control over financial reporting as of December 31, 2020 has been audited by Grant Thornton LLP, an independent registered public accounting firm, as stated in their Report of Independent Registered Certified Public Accounting Firm on Internal Control Over Financial Reporting which is included with the Financial Statements in Part II, Item 8 of this Amendment No. 2 and is incorporated herein by reference. \n\n\nAs the circumstances that led to the restatement described in this Amendment No. 2 had not yet been identified at December 31, 2020, remediation actions relating to the restatement material weakness were not started until after the quarter ended December 31, 2020. \nPART IV \nITEM 15. \n(1) \n### Financial Statements \nThe following Consolidated Financial Statements of Repay Holdings Corporation and the Report of the Independent Registered Public Accounting Firm are included in Part II, Item 8 of this report. \n(2) \n\n\n(3) \nExhibits \n* \n### Filed herewith. \n\n+<|endoftext|>The Company in consideration of 6,325,000 shares of the Companys ClassB common stock (the Founder Shares). On November 16, 2020, the Sponsor forfeited 1,293,750 Founder Shares to the Company for no consideration, resulting in an aggregate of 5,031,250 Founder Shares outstanding. All share and per-share amounts have been retroactively restated to reflect the share cancellation. The Founder Shares include an aggregate of up to 656,250 shares subject to forfeiture by the Sponsor to the extent that the underwriters over-allotment is not exercised in full or in part, so that the number of Founder Shares will collectively represent approximately 20% of the Companys issued and outstanding shares after the Initial Public Offering. As a result of the underwriters election to fully exercise their over-allotment option on December 18, 2020, the 656,250 Founder Shares are no longer subject to forfeiture. \nThe Sponsor has agreed, subject to certain limited exceptions, not to transfer, assign or sell any of the Founder Shares until the until the earlier to occur of: (i) (w)with respect to 25% of such shares, until consummation of the Companys initial Business Combination, (x)with respect to 25% of such shares, until the closing price of the Companys ClassA common stock exceeds $12.00 for any 20 trading days within a 30-trading day period following the consummation of the Companys initial Business Combination, (y)with respect to 25% of such shares, until the closing price of the Companys ClassA common stock exceeds $13.50 for any 20 trading days within a 30-trading day period following the consummation of the Companys initial Business Combination and (z)with respect to 25% of such shares, until the closing price of the Companys ClassA common stock exceeds $17.00 for any 20 trading days within a 30-trading day period following the consummation of the Companys initial Business Combination and (ii)the date on which we complete a liquidation. \n### Administrative Support Agreement \nThe Company entered into an agreement, commencing on November 24, 2020 through the earlier of the Companys consummation of a Business Combination and its liquidation, to pay the Sponsor a total of $20,000 per month for office space, secretarial, and administrative services. For period from August 10, 2020 (inception) through December31, 2020, the Company incurred and paid $20,000 in fees for these services. \nDue from Sponsor \nAs of November 27, 2020, the Company advanced the Sponsor an aggregate of $192,690. The outstanding amount was repaid on December 1, 2020. \n### Promissory Note Related Party \nOn August 10, 2020, the Sponsor issued an unsecured promissory note to the Company (the Promissory Note), pursuant to which the Company may borrow up to an aggregate principal amount of $300,000. The Promissory Note is non-interest bearing and payable on the earlier of December 31, 2020 or the consummation of the Initial Public Offering. The outstanding balance under the Promissory Note of $107,310 was repaid at the closing of the Initial Public Offering on November 27, 2020. \nRelated Party Loans \nIn order to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor, or certain of the Companys officers and directors may, but are not obligated to, loan the Company funds as may be required (Working Capital Loans). Such Working Capital Loans would be evidenced by promissory notes. The notes may be repaid upon completion of a Business Combination, without interest, or, at the lenders discretion, up to $1,500,000 of notes may be converted upon completion of a Business Combination into warrants at a price of $1.00 per warrant. Such warrants would be identical to the Private Placement Warrants. In the event that a Business Combination does not close, the Company may use a portion of proceeds held outside the Trust Account to repay the Working Capital Loans but no proceeds held in the Trust Account would be used to repay the Working Capital Loans. As of December 31, 2020, the Company had no outstanding borrowings under the Working Capital Loans. \n### NOTE 6 COMMITMENTS \nRisks and Uncertainties \nManagement continues to evaluate the impact of the COVID-19 pandemic and has concluded that while it is reasonably possible that the virus could have a negative effect on the Companys financial position and/or search for a target company, the specific impact is not readily determinable as of the date of the financial statements. \n### Registration Rights \nPursuant to a registration rights agreement entered into on November 24, 2020, the holders of the Founder Shares, Private Placement Warrants, and warrants that may be issued upon conversion of Working Capital Loans (and any shares of common stock issuable upon the exercise of the Private Placement Warrants or warrants issued upon conversion of the Working Capital Loans and upon conversion of the Founder Shares) will be entitled to registration rights requiring the Company to register a sale of any of Company securities held by them. The holders of these securities will be entitled to make up to three demands, excluding short form registration demands, that the Company register such securities. In addition, the holders will have certain piggy-back registration rights with respect to registration statements filed subsequent to the completion of a Business Combination. The registration rights agreement does not contain liquidating damages or other cash settlement provisions resulting from delays in registering the Companys securities. The Company will bear the expenses incurred in connection with the filing of any such registration statements. \nUnderwriting Agreement \nThe deferred fee will become payable to the underwriters from the amounts held in the Trust Account solely in the event that the Company completes a Business Combination, subject to the terms of the underwriting agreement. \n### NOTE 7 STOCKHOLDERS EQUITY \nPreferred Stock \nThe Company is authorized to issue 1,000,000 shares of preferred stock with a par value of $0.0001 per share with such designation, rights and preferences as may be determined from time to time by the Companys board of directors. At December 31, 2020, there were no shares of preferred stock issued or outstanding. \n### ClassA Common Stock \nThe Company is authorized to issue 280,000,000 shares of ClassA common stock with a par value of $0.0001 per share. Holders of ClassA common stock are entitled to one vote for each share. At December 31, 2020, there were 1,120,381 shares of ClassA common stock issued and outstanding, excluding 19,004,619 shares of Class A common stock subject to possible redemption. \nClassB Common Stock \nThe Company is authorized to issue 20,000,000 shares of ClassB common stock with a par value of $0.0001 per share. At December 31, 2020, there were 5,031,250 shares of ClassB common stock issued and outstanding. \nHolders of ClassA common stock and ClassB common stock will vote together as a single class on all matters submitted to a vote of stockholders except as required by law. \nThe shares of ClassB common stock will automatically convert into shares of ClassA common stock concurrently with or immediately following the consummation of a Business Combination on a one-for-one basis, subject to adjustment for stock splits, stock dividends, reorganizations, recapitalizations and the like, and subject to further adjustment. In the case that additional shares of ClassA common stock or equity-linked securities are issued or deemed issued in connection with a Business Combination, the number of shares of ClassA common stock issuable upon conversion of all Founder Shares will equal, in the aggregate, on an as-converted basis, 20% of the total number of shares of ClassA common stock outstanding after such conversion (after giving effect to any redemptions of shares of ClassA common stock by Public Stockholders), including the total number of shares of ClassA common stock issued, or deemed issued or issuable upon conversion or exercise of any equity-linked securities or rights issued or deemed issued, by the Company in connection with or in relation to the consummation of al Business Combination, excluding any shares of ClassA common stock or equity-linked securities or rights exercisable for or convertible into shares of ClassA common stock issued, or to be issued, to any seller in a Business Combination and any Private Placement Warrants issued upon conversion of Working Capital Loans, provided that such conversion of Founder Shares will never occur on a less than one-for-one basis. \n### Warrants \nPublic Warrants may only be exercised for a whole number of shares. No fractional warrants will be issued upon separation of the Units and only whole warrants will trade. The Public Warrants will become exercisable on the later of (a) 12 months from the closing of the Initial Public Offering and (b) 30days after the completion of a Business Combination. \nThe Company will not be obligated to deliver any shares of ClassA common stock pursuant to the exercise of a warrant and will have no obligation to settle such warrant exercise unless a registration statement under the Securities Act with respect to the ClassA common stock underlying the warrants is then effective and a prospectus relating thereto is current, subject to the Company satisfying its obligations with respect to registration. No warrant will be exercisable and the Company will not be obligated to issue any shares of ClassA common stock upon exercise of a warrant unless the share of ClassA common stock issuable upon such warrant exercise has been registered, qualified or deemed to be exempt under the securities laws of the state of residence of the registered holder of the warrants. \nThe Company has agreed that as soon as practicable, but in no event later than 15 business days after the closing of a Business Combination, it will use its best efforts to file with the SEC a registration statement registering the registration, under the Securities Act, of the ClassA common stock issuable upon exercise of the warrants. The Company will use its best efforts to cause the same to become effective and to maintain the effectiveness of such registration statement, and a current prospectus relating thereto, until the expiration of the warrants in accordance with the provisions of the warrant agreement. If a registration statement covering the shares of ClassA common stock issuable upon exercise of the warrants is not effective by the sixtieth (60 th \n) business day after the closing of a Business Combination, warrant holders may, until such time as there is an effective registration statement and during any period when the Company will have failed to maintain an effective registration statement, exercise warrants on a cashless basis in accordance with Section3(a)(9) of the Securities Act or another exemption. Notwithstanding the above, if the ClassA common stock is at the time of any exercise of a warrant not listed on a national securities exchange such that it satisfies the definition of a covered security under Section18(b)(1) of the Securities Act, the Company may, at its option, require holders of public warrants who exercise their warrants to do so on a cashless basis in accordance with Section3(a)(9) of the Securities Act and, in the event the Company so elects, the Company will not be required to file or maintain in effect a registration statement, but will use its best efforts to qualify the shares under applicable blue sky laws to the extent an exemption is not available. \nOnce the warrants become exercisable, the Company may call the warrants for redemption: in whole and not in part; at a price of $0.01 per warrant; upon not less than 30days prior written notice of redemption to each warrant holder; and if, and only if, the closing price of the common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock capitalizations, reorganizations, recapitalizations and the like and for certain issuances of ClassA common stock and equity-linked securities for capital raising purposes in connection with the closing of the Companys initial business combination as described elsewhere in this prospectus) for any 20 trading days within a 30-trading day period ending three business days before we send to the notice of redemption to the warrant holders. \nIf and when the warrants become redeemable by the Company, it may exercise its redemption right even if the Company is unable to register or<|endoftext|>Third parties to do so; our environmental impact, including our mining operations and their impact on the environment; the practices of our employees, agents, customers, suppliers, or other third parties (including others in our industry) with respect to any of the foregoing, actual or perceived; the failure to be perceived as appropriately addressing matters of social responsibility; consumer perception of statements made by us, our employees and executives, agents, customers, suppliers, or other third parties (including others in our industry); or our responses to any of the foregoing. \n\nNone. \nITEM 2 PROPERTIES \n### Real Property Holdings and Mineral Reserves \nWith the exception of our research and development center in Illinois, all properties contain clay reserves or are used in the processing of our clay. We mine sorbent minerals primarily consisting of calcium bentonite, attapulgite and diatomaceous shale which we refer to in the aggregate as clay, minerals, or Fullers Earth. We use certified professional geologists and mineral specialists who prepared the estimated reserves of these minerals in the table above. See also Item 1 Business above for further information about our reserves. Apart from certain mines in Georgia, all of the properties in Mississippi, Georgia, California and Illinois are currently in active production and collectively produced approximately 781,000 tons of finished product in fiscal year 2021 and 756,000 in fiscal year 2020. Certain of our mines in Georgia are currently in development. Parcels of such land are also sites of manufacturing facilities operated by us. In addition, we own approximately one acre of land in Laval, Quebec, Canada, which is the site of the processing, packaging and distribution facility for our Canadian subsidiary. While we have reserves in Nevada, Oregon and Tennessee we are not actively mining these properties. \nM \nINING \nP \n### ROPERTIES \nOur mining operations are conducted on both owned and leased land. The Georgia, Illinois and Mississippi mining leases generally require that we pay a minimum monthly rent to continue the lease term. The rental payments are typically applied against a stated royalty related to the number of unprocessed, or in some cases processed, tons of minerals extracted from the leased property. Many of our mining leases have no stated expiration dates. Some of our leases, however, do have expiration dates ranging from 2026 to 2097. We would not experience a material adverse effect from the expiration or termination of any of these leases. We have a variety of access arrangements, some of which are styled as leases, for manufacturing at facilities that are not contiguous with the related mines. We would not experience a material adverse effect from the expiration or termination of any of these arrangements. \nCertain of our land holdings in California are represented by unpatented mining claims we lease from the Bureau of Land Management. These leases generally give us the contractual right to conduct mining or processing activities on the land covered by the claims. The validity of title to unpatented claims, however, is dependent upon numerous factual matters. We believe the unpatented claims we lease are in compliance with all applicable federal, state and local mining laws, rules and regulations. Future amendments to existing federal mining laws, however, could have a prospective effect on mining operations on federal lands and include, among other changes, the imposition of royalty fees on the mining of unpatented claims, the elimination or restructuring of the patent system and an increase in fees for the maintenance of unpatented claims. To the extent that future proposals may result in the imposition of royalty fees on unpatented lands, the mining of our unpatented claims may become economically unfavorable. We cannot predict the form that any such amendments might take or whether or when such amendments might be adopted. In addition, the construction and operation of processing facilities on these sites would require the approval of federal, state and local regulatory authorities. See Item 1A Risk Factors above for a discussion of other risks to our business related to our mining properties. \nM \nINING AND \nM \nANUFACTURING \nM \n### ETHODS \nMining and Hauling \nWe mine clay in open-pit mines in Georgia, Mississippi, Illinois and California. The mining and hauling operations are similar throughout the Oil-Dri locations, with the exception of California. The land to be mined is first stripped. The stripping process involves removing the overburden and preparing the site to allow the excavators to reach the desired clay. When stripping is completed, the excavators dig out and load the clay onto dump trucks. The trucks haul the clay directly to our processing plants where it is dumped in a clay yard and segregated by clay type if necessary. Generally, the mine sites are in close proximity to the processing plants; however, the maximum distance the clay is currently hauled to a plant is approximately 13 miles. \nAt our California mines, the clay is excavated and hauled to a hopper. An initial crushing and screening operation is performed at the mine site before the trucks are loaded for delivery to the processing plant. \n### Processing \nThe processing of our clay varies depending on the level of moisture desired in the clay after the drying process. The moisture level is referred to as regular volatile moisture (RVM) or low volatile moisture (LVM). \nRVM Clay: A front end loader is used to load the clay from the clay yard into the primary crusher. The primary crusher reduces the clay chunks to 2.0 inches in diameter or smaller. From the crusher, the clay is transported via a belt conveyor into the clay shed. A clay shed loader feeds the clay into a disintegrator which reduces the clay to particles 0.5 inches in diameter or smaller. The clay then feeds directly into the RVM kiln. The RVM kiln reduces the clays moisture content. From the RVM kiln, the clay moves through a series of mills and screens which further size and separate the clay into the desired particle sizes. The sized clay is then conveyed into storage tanks. The RVM processed clay can then be packaged or processed into LVM material. \nLVM Clay: RVM clay is fed from storage tanks into the LVM kiln where the moisture content is further reduced. The clay then proceeds to a screening circuit which separates the clay into the desired particle sizes. \nIn addition, certain other products may go through further processing or the application of fragrances and additives. For example, certain fluid purification and animal health products are processed into a powder form. We also use a proprietary process for our engineered granules to create spherical, uniform-sized granules. \n### Packaging \nOnce the clay has been dried to the desired level it will be sized and packaged. Our products have various package sizes and types ranging from bags, boxes and jugs of cat litter to railcars of agricultural products. We also package some of our products into bulk (approximately one ton) bags or into bulk trucks. The size and delivery configuration of our finished products is determined by customer requirements. \nF \n### ACILITIES \nWe operate clay manufacturing and non-clay production facilities on property owned or leased by us as shown on the map below: \nOil-Dri Plant Site Locations \nWe have no mortgages on the real property we own. The leases for the locations listed above expire as follows: Shenzhen, China in 2025; Vernon Hills, Illinois in 2026; Wisbech, United Kingdom in 2032 and Chicago, Illinois in 2033. The leases for the Coppet, Switzerland; Jakarta, Indonesia; and Jalisco, Mexico offices are on a year-to-year basis. We consider that our properties are generally in good condition, well maintained and suitable and adequate to carry on our business. \n### ITEM 3 LEGAL PROCEEDINGS \nFor a discussion of contingencies related to legal proceedings, see Note 11 of the Notes to the Consolidated Financial Statements, which is hereby incorporated by reference. \nITEM 4 MINE SAFETY DISCLOSURE \nOur mining operations are subject to regulation by the Mine Safety and Health Administration under authority of the Federal Mine Safety and Health Act of 1977, as amended.Information concerning mine safety violations or other regulatory matters required by section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K is included in Exhibit 95 to this Annual Report on Form 10-K. \nPART II \nITEM 5 MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES \nOur Common Stock is traded on the NYSE under the symbol ODC. There is no established trading market for our Class B Stock. There are no shares of Class A Common Stock currently outstanding. See Exhibit 4.1 to this Annual Report on Form 10-K for a description of our Common Stock, Class B Stock and Class A Common Stock. The number of holders of record of Common Stock and Class B Stock on September 30, 2021 were 696 and 23, respectively, as reported by our transfer agent. In the last three years, we have not sold any securities which were not registered under the Securities Act of 1933. \n### Dividends \nOur Board of Directors determines the timing and amount of any dividends. Our Board of Directors may change its dividend practice at any time. The declaration and payment of future dividends, if any, will depend upon, among other things, our future earnings, capital requirements, financial condition, legal requirements, contractual restrictions and other factors that our Board of Directors deems relevant. Our Credit Agreement with BMO Harris Bank N.A. (BMO Harris) and our Amended Note Agreement with Prudential requires that certain minimum net worth and tangible net worth levels are to be maintained. To the extent that these balances are not attained, our ability to pay dividends may be impaired. See Note 3 of the Notes to the Consolidated Financial Statements for further information about our note agreements. \nIssuer Repurchase of Equity Securities \nDuring the three months ended July31, 2021, we did not sell any securities which were not registered under the Securities Act of 1933. The following chart summarizes our Common Stock purchases during this period. \nThe table summarizes repurchases of (and remaining authority to repurchase) shares of our Common Stock.Our Board of Directors authorized the repurchase of 300,000 shares of Class B Stock on March 21, 2018, however there have been no repurchases of Class B Stock for the three months ended July31, 2021, and the authorized Class B Stock is not included in the table above. No shares of our Class A Common Stock are currently outstanding.Descriptions of our Common Stock, Class B Stock and Class A Common Stock are contained in Exhibit 4.1 of this Annual Report on Form 10-K for the fiscal year ended July31, 2021. \nThe \n88 shares of Common Stock in July 2021 represent shares surrendered by employees to pay taxes related to restricted stock awards. \nOur Board of Directors authorized repurchase of 250,000 shares on June 14, 2012 and an additional 750,000 shares on March 11, 2019. These authorizations do not have a stated expiration date.The share numbers in this column indicate the number of shares of Common Stock that may yet be repurchased under these authorizations. The timing and number of shares repurchased will be determined by our management. \n\nThe following discussion and analysis of our financial condition and results of operations should be read together with the Consolidated Financial Statements and the related notes included elsewhere herein. Factors that might cause a difference include those discussed under Forward-Looking Statements and in Item 1A Risk Factors in this Annual Report on Form 10-K. \nO \n### VERVIEW \nWe develop, mine, manufacture and market sorbent products principally produced from clay minerals, primarily consisting of calcium bentonite, attapulgite and diatomaceous shale. Our principal products include agricultural and horticultural chemical carriers, animal health and nutrition products, cat litter, fluid purification and filtration bleaching clays, industrial and automotive floor absorbents and sports field products. Our products are sold to two primary customer groups, including customers who resell our products as originally produced to the end consumer and other customers who use our products as part of their<|endoftext|>"},"task":{"kind":"string","value":"{\"file\": \"/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz\"}"}}},{"rowIdx":78,"cells":{"text":{"kind":"string","value":"<|endoftext|>Filed as Exhibit 99.2 to the Companys Annual Report on Form 10-K for the year ended March 31, 2013, filed with the Commission on June 28, 2013. \n### Director Nominations Process \nAs described above, the Nominating and Governance Committee will consider qualified director candidates recommended in good faith by stockholders, provided those nominees meet the requirements of NYSE American and applicable federal securities law. The Nominating and Governance Committees evaluation of candidates recommended by stockholders does not differ materially from its evaluation of candidates recommended from other sources. Any stockholder wishing to recommend a nominee should submit the candidates name, credentials, contact information and his or her written consent to be considered as a candidate. These recommendations should be submitted in writing to the Company, Attn: Secretary, Camber Energy, Inc., 1415 Louisiana, Suite 3500, Houston, Texas 77002. The proposing stockholder should also include his or her contact information and a statement of his or her share ownership. The Committee may request further information about stockholder recommended nominees in order to comply with any applicable laws, rules, the Companys Bylaws or regulations or to the extent such information is required to be provided by such stockholder pursuant to any applicable laws, rules or regulations. \n\nNone. \n### CODE OF BUSINESS AND ETHICAL CONDUCT \nOn November 29, 2016, the Board of Directors approved and adopted an amended and restated Code of Business and Ethical Conduct (the \nRevised Code \n), which applies to all officers, directors and employees. The Revised Code replaced the Companys prior Code of Ethics adopted in June 2009 and reflects, among other matters, clarifications and revisions relating to conflicts of interest, confidentiality, compliance with laws, reporting and enforcement, and other matters intended to update the Companys Code of Ethics. \nYou can access our Revised Code on our website at www.camber.energy \n, and any stockholder who so requests may obtain a free copy of our Code of Ethics by submitting a written request to our Secretary. Additionally, the Code of Ethics was filed as an exhibit to the Companys Form 8-K dated November 29, 2016, filed with the SEC on December 5, 2016, as \n### Exhibit 14.1 thereto. \nWe intend to disclose any amendments or future amendments to our Revised Code and any waivers with respect to our Revised Code granted to our principal executive officer, our principal financial officer, or any of our other employees performing similar functions on our website at www.camber.energy within four business days after the amendment or waiver. In such case, the disclosure regarding the amendment or waiver will remain available on our website for at least 12 months after the initial disclosure. There have been no waivers granted with respect to our Revised Code to any such officers or employees. \nThe Revised Code includes a policy on reporting illegal or unethical business or workplace conduct by employees, officers or members of the Board, which replaced our prior Whistleblower Protection Policy adopted in 2009. \n\n\nPolicy Against Hedging \nThe Company does not currently have a policy against hedging. \n### Compensation Recovery \n\nSarbanes-Oxley Act \n), in the event of misconduct that results in a financial restatement that would have reduced a previously paid incentive amount, we can recoup those improper payments from our Chief Executive Officer and Chief Financial Officer. We plan to implement a clawback policy in the future, although we have not yet implemented such policy. \n### ITEM 11. EXECUTIVE COMPENSATION \nSummary Compensation Table \nThe following table sets forth information concerning the compensation of our Chief Executive Officer ( \nCEO \n), Chief Financial Officer ( \nCFO \n) and the most highly compensated executive officer other than the CEO and CFO who was serving as an executive officer of the Company at the end of March 31, 2020 and 2019 (the Company did not have any executive officers other than its CEO and CFO as of March 31, 2020), and up to two additional individuals for whom disclosure would have been required had they been serving as an executive officer at the end of the last completed fiscal year (collectively, the \nNamed Executive Officers \n). \n\nThe value of the Stock Awards in the table above was calculated based on the fair value of such securities calculated in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718. \n(1) Mr. Schott has served as the Interim Chief Executive Officer of Camber since May 25, 2018. \n(2) Mr. Schleizer has served as Chief Financial Officer (beginning as Interim Chief Financial Officer) since June 2, 2017, as a member of the Board of Directors since October 6, 2017, and as Treasurer of Camber since January 9, 2018. \n(3) From June 2, 2017 to May 25, 2018, Mr. Richard N. Azar II served as the Interim Chief Executive Officer (through January 9, 2018) and then Chief Executive Officer of Camber. On December 28, 2017, the Board approved compensation of $10,000 per month to Mr. Azar for services which he rendered over the last seven months of calendar 2017, and compensation of $35,000 per month beginning in January 2018, for future services as CEO, which services as CEO were terminated in May 2018. Effective on June 21, 2018, Mr. Azar resigned as a member of the Board of Directors. \n(4) Mr. Schott works on a consulting basis through Fides Energy LLC. \n(5) Represents amounts paid to Mr. Schott in connection with reimbursement for health insurance premiums. \n(6) Mr. Schleizer is the Managing Partner of BlackBriar Advisors LLC ( \n### BlackBriar \n). In addition to financial management, BlackBriar provides accounting, treasury, administrative and financial reporting services to Camber. Total fees paid by Camber to BlackBriar during the years ended March 31, 2020 and 2019 were $485,000 and $713,000, respectively, of which Mr. Schleizer attributed $200,000 to his services as Chief Financial Officer for each of 2020 and 2019. Mr. Schleizer also received directors fees from Camber for the years ended March 31, 2020 and March 31, 2019 of $53,333 and $26,666, respectively. \n(7) Includes $90,000 paid to McClowd Dynamics, Ltd. (an entity which Mr. Azar owns and controls) in fiscal 2019. \n### Compensation Agreements \nSeverance Agreement \nAnthony C. Schnur \nEffective on June 2, 2017, Mr. Anthony C. Schnurs employment as Chief Executive Officer of the Company was terminated. In connection with such termination, the Company entered into a severance agreement with Mr. Schnur, which provided (as amended), for Mr. Schnur to be issued 1 share of common stock and the payment of $168,000 in total compensation (payable over time). The payments owed as of March 31, 2018 of $79,025 were accrued and included in Accrued Expenses on the balance sheet. The Settlement Shares were issued in February 2018. During the year ended March 31, 2019 the Company paid all remaining amounts to Mr. Schnur pursuant to the original settlement. The Company and Mr. Schnur entered into an amendment to the severance agreement on April 8, 2019, pursuant to which the Company paid Mr. Schnur $10,000 in lieu of the payment of payroll taxes on amounts previously paid to Mr. Schnur under the original settlement. \n### Separation and Release Agreement \nEffective on May 25, 2018, Richard N. Azar II resigned as Chief Executive Officer of the Company. Pursuant to a Separation Agreement entered into with Mr. Azar, he released the Company from claims in connection with various employment related statutes and laws and the Company agreed to pay him a severance payment of $150,000 and to grant him warrants to purchase 32 shares of our common stock at an exercise price of $12,187.50 per share. \nEngagement Agreement \nEffective upon Mr. Azars resignation, the Board of Directors of the Company appointed Mr. Louis G. Schott as Interim Chief Executive Officer of the Company. In connection with Mr. Schotts appointment as Interim Chief Executive Officer of the Company, the Company entered into an engagement letter with Fides Energy LLC ( \n### Fides \n). Pursuant to the letter, Fides agreed to supply Mr. Schotts services to the Company as Interim Chief Executive Officer and we agreed to pay Fides $25,000 per month for the use of Mr. Schotts services. The agreement can be terminated by either party with 90 days notice and terminates automatically upon the death of Mr. Schott. Pursuant to the agreement, Mr. Schott is also eligible to receive bonus compensation at the discretion of the Board of Directors. \nLetter Agreement \nEffective on December 1, 2017, the Company entered into a letter agreement with BlackBriar Advisors LLC ( \n### BlackBriar \n), pursuant to which BlackBriar agreed to provide advisory and accounting services to the Company and to make Mr. Robert Schleizer available to the Company as the Companys Chief Financial Officer. In consideration for such services, the Company agreed to pay BlackBriar a fee of $40,000 per month, and to reimburse BlackBriar for reasonable customary and necessary expenses including for travel and related costs. BlackBriar is also eligible for bonuses in the discretion of the Compensation Committee of the Company. The letter agreement includes customary indemnification obligations and can be terminated at any time upon written notice of either party. \n\nNone of our Named Executive Officers had any stock options or stock awards outstanding as of March 31, 2020. \n### DIRECTOR COMPENSATION \nThe following table sets forth compensation information with respect to our non-executive directors during our fiscal year ended March 31, 2020. \nNo directors received any Stock Awards, Non-Equity Incentive Plan Compensation, or Nonqualified Deferred Compensation Earnings during the period presented. \nThe Company pays each member of the Board of Directors their pro rata portion of a $40,000 quarterly Board fee in cash, payable in arrears and based on the number of members of the Board at the end of each calendar quarter (for example if there are three (3) members of the board at the end of a calendar quarter, each member would receive $13,333 in total compensation for such applicable calendar quarter). \nITEM 12. \nThe following table presents certain information as of June 24, 2020, as to: each stockholder known by us to be the beneficial owner of more than five percent of our outstanding shares of common stock, each director, each Named Executive Officer, and all directors and executive officers as a group. \nThe percentages shown in the table under the column \nPercent are based on 12,455,929 shares of common stock outstanding as of June 24, 2020. \nThese rules generally provide that shares of common stock subject to options, warrants or other convertible securities that are currently exercisable or convertible, or exercisable or convertible within 60 days of the applicable date of determination, are deemed to be outstanding and to be beneficially owned by the person or group holding such options, warrants or other convertible securities for the purpose of computing the percentage ownership of such person or group, but are not treated as outstanding for the purpose of computing the percentage ownership of any other person or group. \nTo our knowledge, except as indicated in the footnotes to this table and pursuant to applicable community property laws, the persons named in the table have sole voting and investment power with respect to all shares of common stock shown as beneficially owned by them, subject to applicable community property laws. Unless otherwise indicated, the address for each of the officers or directors listed in the table below is 1415 Louisiana, Suite 3500, Houston, Texas 77002. \n* Indicates beneficial ownership of less than 1% of the outstanding common stock. \n(+) Named Executive Officer who no longer has any affiliation or contact with the Company. Information disclosed is based solely on our review of our record stockholders list, without independent verification, and including for purposes of the table above, ownership only in the name of the applicable holder and those entities which the holder is listed as a contact person for. The applicable stockholder may actually beneficially own more or less shares than as disclosed above. \n(1) Address: P.O. Box 6172 San Antonio, Texas 78209. \n(2) 103 South Church Street, 4 th \nFloor, Grand Cayman KYI-002, Cayman Islands. The holder holds 2,951<|endoftext|>For such showing. \nOur directors who are also directors or officers of any BGC Partners Company, any Cantor Company or any of their respective representatives may be counted in determining the presence of a quorum at a meeting of our Board of Directors or of a committee that authorizes such contract, agreement, arrangement or transaction. Shares of our common stock owned by any BGC Partners Company, any Cantor Company or any of their respective representatives may be counted in determining the presence of a quorum at a meeting of stockholders called to authorize such contract, agreement, arrangement or transaction. Our directors who are also directors or officers of any BGC Partners Company, any Cantor Company or any of their respective representatives shall not owe or be liable for breach of any fiduciary duty to us or any of our stockholders for any action taken by any BGC Partners Company, any Cantor Company or their respective representatives, in their capacity as our stockholder or affiliate. \n### For purposes of the above: \nBGC Partners Company means BGC Partners or any of its affiliates (other than us and our subsidiaries); \nCantor Company means Cantor or any of its affiliates (other than us and our subsidiaries); and corporate opportunity means any business opportunity that we are financially able to undertake, that is, from its nature, in our lines of business, is of practical advantage to us and is one in which we have an interest or a reasonable expectancy, and in which, by embracing the opportunities, the self-interest of a BGC Partners Company or a Cantor Company or any of their respective representatives, as the case may be, will be brought into conflict with our self-interest. \nTransactions by Cantor with Newmark in Equity Securities \nOur Board of Directors has determined that Cantor is a deputized director of the Company for purposes of Rule 16b-3 under the Exchange Act with respect to the transactions contemplated by the Separation and the Spin-Off. Our Board of Directors intent in determining that Cantor is a deputized director is that acquisitions or dispositions by Cantor of shares of our common stock or interests in our common stock from or to us or its majority- owned subsidiaries will be eligible for the Rule 16b-3 exemption from the short-swing profits liability provisions of Section16(b) of the Exchange Act. \nTransactions with Cantor Commercial Real Estate Company, L.P. \nWe have a referral agreement in place with CCRE, in which our brokers are incentivized to refer business to CCRE through a revenue-share agreement. In connection with this revenue-share agreement, Newmark recognized $0.6 million and $0.8 million for the years ended December31, 2020 and 2019, respectively. \nWe have an additional revenue-share agreement with CCRE, in which we pay CCRE for referrals for leasing or other services. In connection with this agreement, we did not make any payments under this agreement to CCRE for the years ended December31, 2020 and 2019. \nWe also have a loan referral agreement in place with CCRE, in which either party can refer a loan to the other. Revenue from these referrals were $0 and $2.6 million for the years ended December31, 2020 and 2019, respectively. These referrals fees are net of the broker fees and commissions to CCRE of $0 and $1.4 million for the years ended December31, 2020 and 2019, respectively. \nFor the years ended December31, 2020 and 2019, we purchased the primary servicing rights for $227.0million and $1.2billion of loans originated by CCRE for $0.2million and $1.5million, respectively. We also service loans for CCRE on a fee for service basis, generally prior to a loans sale or securitization, and for which no MSR is recognized. We recognized servicing revenues (excluding interest and placement fees) from servicing rights purchased from CCRE on a fee for service basis of $3.8million for the years ended December31, 2020 and 2019, respectively, which are included as part of Management services, servicing fee and other on the accompanying consolidated statements of operations. \n### Berkeley Point and Real Estate LP \nOn September8, 2017, pursuant to a transaction agreement (which we refer to as the BP transaction agreement) with Cantor, CCRE, the general partner of CCRE, Real Estate LP and CF Real Estate Holdings GP, LLC, the general partner of Real Estate LP (which we refer to as the Real Estate LP general partner), BGC Partners purchased from CCRE all of the outstanding membership interests of Berkeley Point Financial (Berkeley Point or BPF). The total consideration for the acquisition of Berkeley Point was $875 million, subject to certain adjustments. Concurrently with the acquisition of Berkeley Point, (i)BGC Partners invested $100 million of cash in Real Estate LP for approximately 27% of the capital of Real Estate LP, and (ii) Cantor contributed approximately $267 million of cash for approximately 73% of the capital of Real Estate LP. We refer to these transactions, collectively, as the BP Transaction. As part of the Separation prior to the completion of the IPO, the BGC group contributed its interests in Berkeley Point and Real Estate LP to Newmark. Newmark accounted for its minority interest in Real Estate LP as an equity investment, and it is not consolidated in Newmarks financial statements. \nInvestment in Real Estate LP \nConcurrently with the Berkeley Point Acquisition, (i)BGC Partners invested $100million of cash in Real Estate LP for approximately 27% of the capital of Real Estate LP, and (ii)Cantor contributed approximately $267million of cash for approximately 73% of the capital of Real Estate LP. As part of the Separation prior to the completion of the IPO, the BGC group contributed its interests in Real Estate LP to Newmark. Real Estate LP may conduct activities in any real estate-related business or asset-backed securities-related business or any extensions thereof and ancillary activities thereto. Real Estate LP is operated and managed by Real Estate LP General Partner, which is controlled by Cantor. \nPursuant to the Amended and Restated Agreement of Limited Partnership of Real Estate LP (which we refer to as the Real Estate LP limited partnership agreement), Newmark is entitled to a cumulative annual preferred return of five percent of its capital account balance (which we refer to as the Preferred Return). After the Preferred Return is allocated, Cantor is then entitled to a cumulative annual preferred return of five percent of its capital account balance. Thereafter, Newmark is entitled to 60% of the gross percentage return on capital of Real Estate LP, multiplied by Newmarks capital account balance in Real Estate LP (less any amounts previously allocated to Newmark pursuant to the Preferred Return), with the remainder of the net income of Real Estate LP allocated to Cantor. Cantor will bear initial net losses of Real Estate LP, if any, up to an aggregate amount of approximately $37 million per year. These allocations of net income and net loss are subject to certain adjustments. \nAt the option of Newmark, and upon one-years written notice to Real Estate LP delivered any time on or after the fourth anniversary of the closing of the BP Transaction, Real Estate LP will redeem in full Newmarks investment in Real Estate LP in exchange for Newmarks capital account balance in Real Estate LP as of such time. At the option of Cantor, at any time on or after the fifth anniversary of the closing of the BP Transaction, Real Estate LP will redeem in full Newmarks investment in Real Estate LP in exchange for Newmarks capital account balance in Real Estate LP as of such time. At the option of Cantor, at any time prior to the fifth anniversary of the closing of the BP Transaction, Real Estate LP will redeem in full Newmarks investment in Real Estate LP in exchange for (i)Newmarks capital account balance in Real Estate LP as of such time plus (ii)the sum of the Preferred Return amounts for any prior taxable periods, less (iii)any net income allocated to Newmark in any prior taxable periods. \nOn July22, 2019, Cantor Commercial Real Estate Lending, L.P. (CCRE Lending), a wholly-owned subsidiary of Real Estate LP, made a $146.6 million commercial real estate loan (the Loan) to a single-purpose company (the Borrower) in which Barry Gosin, owns a 19% interest. The Loan is secured by the Borrowers interest in property in Pennsylvania that is subject to a ground lease. While CCRE Lending initially provided the full loan amount, on August16, 2019, a third-party bank purchased approximately 80% of the Loan value from CCRE Lending, with CCRE Lending retaining approximately 20%. The Loan matures on August6, 2029 and is payable monthly at a fixed interest rate of 4.38%per annum. Newmark provided certain commercial loan brokerage services to the Borrower in the ordinary course of its business, and the Borrower paid Newmark a fee, as the broker of the Loan, of $0.7 million. The Audit Committee approved the commercial loan brokerage services and the related fee amount received. \n### Additional Terms of the BP Transaction Agreement \nThe BP transaction agreement includes customary representations, warranties and covenants, including covenants related to intercompany referral arrangements among Cantor, Newmark and their respective subsidiaries. These referral arrangements provide for profit-sharing and fee-sharing arrangements at various rates depending on the nature of a particular referral. The parties have further agreed that, subject to limited exceptions, for so long as a member of the Newmark group maintains an investment in Real Estate LP, Real Estate LP and the Cantor group will seek certain government- sponsored and government-funded loan financing exclusively through Berkeley Point. \nGrubb& Ellis Transaction \nOn April13, 2012, we completed the acquisition of substantially all of the assets of Grubb& Ellis (which we refer to as Grubb). Grubb filed for protection under the U.S. Bankruptcy Code in February 2012 and sold most of its assets to us for a total consideration of approximately $47.1 million. This amount included the extinguishment of approximately $30.0 million (principal amount) pre-bankruptcy senior secured debt, which was purchased at a discount, and which had a fair value of approximately $25.6 million as of the acquisition date. The consideration transferred also included approximately $5.5 million under debtor-in-possession loans and $16.0 million in cash to the bankruptcy estate for the benefit of Grubbs unsecured creditors. Our Chief Financial Officer, Michael Rispoli, was the Chief Financial Officer of Grubb during this period and joined us in April 2012. \n\nAs of December31, 2020, the current portion of payables to related parties was $4.4 million. \nNotes Payable, Other and Short-term Borrowings \n6.125% Senior Notes due 2023 \nOn November6, 2018, we issued an aggregate of $550.0 million principal amount of 6.125% Senior Notes due 2023 (the 6.125% Senior Notes). In connection with this issuance of 6.125% Senior Notes, we recorded approximately $0.8 million in underwriting fees payable to Cantor Fitzgerald& Co. (CF&Co) and $0.1million to CastleOak Securities, L.P. \n\nOn March28, 2019, we filed a registration statement on Form S-3 pursuant to which CF&Co may make offers and sales of our 6.125% Senior Notes in connection with ongoing market-making transactions which may occur from time to time. BGC does not receive any proceeds from market making activities in these securities by CF&Co. (or any of its affiliates). \nCantor Credit Agreement \nOn November30, 2018 Newmark entered into an unsecured credit agreement with Cantor (the Cantor Credit Agreement). The Cantor Credit Agreement provides for each party to issue loans to the other party in the lenders discretion. Pursuant to the Cantor Credit Agreement, the parties and their respective subsidiaries (with respect to CFLP, other than BGC and its subsidiaries) may borrow up to an aggregate principal amount of $250.0 million from each other from time to time at an interest rate which is the higher of CFLPs or Newmarks short-term borrowing rate then in effect, plus 1.0%. As of December31, 2020, there were no borrowings outstanding under the Cantor Credit Agreement. \n### Debt Repurchase Program \nOn June16, 2020, the Board of Directors and the Audit Committee authorized a debtrepurchaseprogramfor the repurchase by the Company of up to $50.0million of the Companys6.125% Senior Notesand any future debt securities issued by the Company hereafter<|endoftext|>Which we ultimately consummate a business combination, may be materially adversely affected by the recent \n\nOn January30, 2020, the World Health Organization declared the outbreak of the \nCOVID-19 disease a Public Health Emergency of International Concern. On January31, 2020, U.S. \nThe \nCOVID-19 outbreak has resulted in, and a significant outbreak of other infectious diseases could result in, a widespread health crisis that could materially and adversely affect the economies and financial markets worldwide, and the operations and financial position of any potential target business with which we consummate a business combination could be materially and adversely affected. \nCOVID-19 restrict travel, limit the ability to have meetings with potential investors, if the target companys personnel, vendors and service providers are unavailable to negotiate and consummate a transaction in a timely manner, or if \nThe extent to which \n\n\nIf the disruptions posed by \n\nIn addition, our ability to consummate a business combination may be dependent on the ability to raise equity and debt financing which may be impacted by \n\nThe requirement that the target business or businesses that we acquire must collectively have a fair market value equal to at least 80% of the balance of the funds in the trust account (excluding any taxes payable) at the time of the execution of a definitive agreement for our initial business combination may limit the type and number of companies with which we may complete such a business combination. \nNasdaq rules and our amended and restated certificate of incorporation require that the target business or businesses that we acquire must collectively have a fair market value equal to at least 80% of the balance of the funds in the trust account (excluding any taxes payable) at the time of the execution of a definitive agreement for our initial business combination. If we are unable to locate a target business or businesses that satisfy this fair market value test, we may be forced to liquidate and you will only be entitled to receive your pro rata portion of the funds in the trust account, which may be less than $10.20 per share. \n\n\nIf a stockholder vote is not required, we may conduct redemptions via a tender offer. Accordingly, we may consummate our initial business combination even if holders of a majority of our public shares do not approve the business combination. \n\nBecause our board of directors may consummate our initial business combination without seeking stockholder approval, public stockholders may not have the right or opportunity to vote on the business combination. \n\nAs of December31, 2020, our initial stockholders own, on an as-converted basis, 20% of our outstanding common stock. Our initial stockholders also may from time to time purchase public shares prior to our initial business combination. As a result, in addition to our initial stockholders founder shares, we would need 6,468,751, or 37.5%, (assuming all outstanding shares are voted), of the 17,250,000 public shares to be voted in favor of an initial business combination in order to have our initial business combination approved. In addition, if the anchor investors vote the shares of ClassA common stock included in the units in favor of our initial business combination, a smaller proportion of affirmative votes from other public stockholders (approximately 11.4%) would be required to approve our initial business combination. \n\n\n\nThe ability of a large number of our stockholders to exercise redemption rights may not allow us to consummate the most desirable business combination or optimize our capital structure. \nIn connection with the successful consummation of our initial business combination, we may redeem up to that number of shares of common stock that would permit us to maintain net tangible assets of $5,000,001. If our initial business combination requires us to use substantially all of our cash to pay the purchase price, the redemption threshold may be further limited. Alternatively, we may need to arrange third party financing to help fund our initial business combination in case a larger percentage of stockholders exercise their redemption rights than we expect. If the acquisition involves the issuance of our shares as consideration, we may be required to issue a higher percentage of our shares to the target or its stockholders to make up for the failure to satisfy a minimum cash requirement. \nThe requirement that we maintain a minimum net worth or retain a certain amount of cash could increase the probability that we cannot consummate our initial business combination and that you would have to wait for liquidation in order to redeem your shares. \nIf, pursuant to the terms of our proposed business combination, we are required to maintain a minimum net worth or retain a certain amount of cash in trust in order to consummate the business combination and regardless of whether we proceed with redemptions under the tender offer or proxy rules, the probability that we cannot consummate our initial business combination is increased. If we do not consummate our initial business combination, you would not receive your pro rata portion of the trust account until we liquidate. however, at such time our shares may trade at a discount to the pro rata amount in our trust account. \nThe requirement that we complete our initial business combination within 18months from the closing of our IPO may give potential target businesses leverage over us in negotiating our initial business combination. \nAny potential target business with which we enter into negotiations concerning our initial business combination will be aware that we must consummate our initial business combination within 18months from the closing of our IPO. Consequently, such target businesses may obtain leverage over us in negotiating our initial business combination, knowing that if we do not complete our initial business combination with that particular target business, we may be unable to complete our initial business combination with any target business. \n\nWe may not be able to find a suitable target business and consummate an initial business combination within 18months after the closing of our IPO. (ii)as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (less up to $100,000 of interest to pay dissolution expenses and net of taxes payable), divided by the number of then outstanding public \nshares, which redemption will completely extinguish public stockholders rights as stockholders (including the right to receive further liquidating distributions, if any); and (iii)as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, liquidate and dissolve, subject in the case of clauses(ii) and (iii), to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. \nIf we seek stockholder approval of our initial business combination, our sponsor, directors, officers, advisors and their affiliates may elect to purchase public shares from stockholders, in which case they may influence a vote in favor of a proposed business combination that you do not support. \nIf we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our sponsor, directors, officers, advisors or their affiliates may purchase public shares or equity-linked securities in privately negotiated transactions or in the open market either prior to or following the consummation of our initial business combination. Such purchases will not be made if our sponsor, directors, officers, advisors or their affiliates are in possession of any material non-public information that has not been disclosed to the selling stockholder, although they are under no obligation to do so. It is intended that, if \nRule10b-18 would apply to purchases by our sponsor, directors, officers, advisors or their affiliates, then such purchases will comply with \nRule10b-18 under the Exchange Act, to the extent it applies, which provides a safe harbor for purchases made under certain conditions, including with respect to timing, pricing and volume of purchases. \n\nPurchases of shares of common stock in the open market or in privately negotiated transactions by our sponsor, directors, officers, advisors or their affiliates may make it difficult for us to maintain the listing of our shares on a national securities exchange following the consummation of an initial business combination. \nIf our sponsor, directors, officers, advisors or their affiliates purchase public shares in the open market or in privately negotiated transactions, the public float of our shares of common stock and the number of beneficial holders of our securities would both be reduced, possibly making it difficult to maintain the listing or trading of our securities on a national securities exchange following consummation of the business combination. \n\n\n\n\nOur public stockholders shall be entitled to receive funds from the trust account only in the event of a redemption to public stockholders prior to any winding up in the event we do not consummate our initial business combination or our liquidation, if they redeem their shares in connection with an initial business combination that we consummate or if we seek to amend our amended and restated certificate of incorporation to modify the substance or timing of our obligation to allow redemption in connection with our initial business combination or to redeem all public shares if we cannot complete an initial business combination within 18months of the closing of our IPO or with respect to any other provisions relating to stockholders rights or pre-initial business combination activity. In no other circumstances will a stockholder have any right or interest of any kind to the funds in the trust account. \n\nBecause the net proceeds of our IPO are intended to be used to complete our initial business combination with a target business that has not been identified, we may be deemed to be a blank check company under the United States securities laws. However, because we will have net tangible assets in excess of $5,000,000 upon the successful consummation of our IPO and filed a Current Report on \nMoreover, offerings subject to Rule419 would prohibit the release of any interest earned on funds held in the trust account to us. \nIf we seek stockholder approval of our initial business combination and we do not conduct redemptions pursuant to the tender offer rules, and if you or a group of stockholders are deemed to hold in excess of 15% of our shares of common stock, you will lose the ability to redeem all such shares in excess of 15% of our shares of common stock. \nIf we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our amended and restated certificate of incorporation provides that a public stockholder, individually or together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a group (as defined under Section13 of the Exchange Act), will be restricted from seeking redemption rights with respect to more than an aggregate of 15% of our public shares. Your inability to redeem more than an aggregate of 15% of our public shares will reduce your influence over our ability to consummate our initial business combination and you could suffer a material loss on your investment in us if you sell such excess shares in open market transactions. As a result, you will continue to hold that number of shares exceeding 15% and, in order to dispose of such shares, you would be required to sell your shares in open market transaction, potentially at a loss. \nIf our available cash resources are insufficient to allow us to operate for at least the next 18months, we may be unable to complete our initial business combination. \nThe funds available to us outside of the trust account may not be sufficient to allow us to operate for at least the next 18months, assuming that our initial business combination is not consummated during that time. We could also<|endoftext|>4, 2021, the Company entered into a new employment agreement (the Anthony Agreement) with Mr. Anthony on substantially the same terms and conditions as Mr. Anthonys prior employment agreement, which was replaced and superseded by the new agreement. Anthony will have the duties and responsibilities as are commensurate with the positions of Secretary, Treasurer and Chief Financial Officer, as reasonably and lawfully directed by the Companys Chief Executive Officer and Board of Directors (the Board). The initial term of the Anthony Agreement is 36 months from the Effective Date and the Anthony Agreement will automatically renew for subsequent 12-month terms unless either party provides written notice to the other party of a desire not to renew employment. \nAnthonys base salary remains the same for 2021 at $310,000 and increases in 2022 based on two times the average percentage salary increase of the Companys active employees during 2021. Subsequent increases to base salary will be subject to the discretion of the Compensation Committee of the Board (the Compensation Committee). Mr. Anthony is entitled to the same incentive bonus compensation of up to 67.5% of his base salary, and equity compensation may be granted from time to time based on the discretion and recommendation of the Compensation Committee and Board. Mr. Anthony is entitled to one-time, lump-sum amounts equal to the employee tax portion required to be paid plus the amount necessary to put Mr. Anthony in the same after-tax position (taking into account any and all applicable federal, state, and local income, employment and excise taxes, including any income and employment taxes imposed on the payment itself) that he would have been in if he had not incurred any tax liability on settlement of the restricted stock units, as a result of the settlement of the 90,000 restricted stock units that were granted on each of October 8, 2018 and November 13, 2019. Each such payment shall be paid within 30 days of settlement of the applicable restricted stock units. The Company has the right to terminate Mr. Anthonys employment without cause at any time on thirty (30) days advance written notice. If we terminate Mr. Anthonys employment without cause, or if Mr. Anthony is terminated without cause following a change of control, Mr. Anthony is entitled to receive (a) his annual base salary then in effect, and full target annual bonus, each prorated to the date of termination, (b) payment of base salary compensation for an additional twelve months, payable as a lump sum or in accordance with the Companys regular payroll cycle, at Mr. Anthonys discretion, and (c) the acceleration of all unvested stock options, warrants and restricted stock units then held by Mr. Anthony, subject to certain conditions set forth in the Anthony Agreement and related equity award agreements. \nThe foregoing is a summary only of the Anthony Agreement, and is qualified in its entirety by the detailed terms and conditions of the Anthony Agreement, are included as Exhibit 10.8 to our Annual Report on Form 10-K filed with the SEC on March 25, 2021. \nOUTSTANDING EQUITY AWARDS AT 2020 FISCAL YEAR-END (1) \n(1) \nUnless otherwise indicated, all options vest in cumulative annual installments of one-third of the shares commencing one year from the date of grant. \n(2) \nThese Restricted Stock Units (RSU) were granted on November 13, 2019 and had a grant date per share value of $2.92 and vest after three years of employment. \n(3) \nThese RSUs were granted on November 13, 2019 and had a grant date per share value of $2.92 and vest November 2020. \n(4) These RSUs were granted on October 8, 2018 and had a grant date per share value of $3.98 and cliff vest after three years of employment and board service. Mr. \n(5) \nThese RSUs were granted on October 26, 2017 and had a grant date per share value of $2.76 and vested October 2020. The shares were issued in March 2021. \n(6) \nThese warrants were granted on January 16, 2013 and vested according to financial performance measures. This compensation is further described in Note 7 to the Annual Report on Form 10-K filed with the SEC on March 28, 2017. \n\nThe following table shows compensation information for the individuals who served as non-employee directors during the year ended December 31, 2020. \n(1) \nA discussion of the methods used in the calculation of these values may be found in Note 14 to the consolidated financial statements of our 2020 Annual Report on Form 10-K. \n(2) \nA discussion of the methods used in the calculation of these values may be found in Note 13 to the consolidated financial statements of our 2020 Annual Report on Form10-K. \n(3) \nMr. Abouchar resigned from the Board in June 2020. \n(4) \nMs. Krandel resigned from the Board in April 2020. \n\nDuring fiscal year 2020, non-employee directors were compensated as follows: \nThe director compensation is ordinarily paid in two payments with the first payment made in January and the second payment made at the beginning of July (assuming confirmation of board members election by the stockholders in the annual stockholder meeting). The Company intends to compensate directors in 2021 at the same levels as 2020; any additional compensation for special committees or other items will be determined on a case by case basis by the Compensation Committee. \nThe Compensation Committee evaluates and expects to grant RSUs to each board member. The RSUs granted to the board members in 2019 is reflective of expected grants in future years. \n\n\n\n\nThe Compensation Committee of the Board reviews and establishes compensation strategies and programs to ensure that the Company attracts, retains, properly compensates, and motivates qualified executives and other key associates. The Committee consists of Dana Sellers, who is the Chairperson, Mark Roberson, Robert McCashin, Michael Loria and Theresa Meadows. No member of the Compensation Committee is an employee or officer. \nThe philosophy of the Compensation Committee is (i)to provide competitive levels of compensation that integrate pay with the individual executives performance and the Companys annual and long-term performance goals; (ii)to motivate key executives to achieve strategic business goals and reward them for their achievement; (iii)to provide compensation opportunities and benefits that are comparable to those offered by other companies in the healthcare services industry, thereby allowing the Company to compete for and retain talented executives who are critical to the Company long-term success; and (iv)to align the interests of key executives with the long-term interests of stockholders and the enhancement of stockholder value through the granting of equity compensation. The compensation of our executive officers is currently comprised of annual base salary, a bonus plan pursuant to certain performance criteria being achieved, and long-term performance incentives in the form of stock option or restricted stock unit (RSU) grants under the stock incentive plans. \n### Chief Executive Officer Compensation. \nIn October 2017 the Board of Directors appointed Michael McMillan as CEO. McMillans annual base salary at $325,000 starting October 2, 2017. In February 2018, the Compensation Committee extended the term Mr. McMillans employment agreement through December 31, 2020 and increased his base salary to $334,700 for 2018, and $359,700 for 2019. He was paid a bonus of $421,241 for calendar year 2018 and $0 for 2019. \nIn October 2018, Mr. McMillan was granted 50,000 restricted stock units of Company stock. These restricted stock units vest after three years of continuous service. Mr. McMillan retired from the Company in December of 2019 and remains a member of the Board of Directors. \nIn August of 2019 the Board of Directors appointed Caleb Barlow to serve as President and Chief Executive Officer. Barlows base salary at $350,000. For 2020, his discretionary bonus could have totaled a maximum of $350,000 of which he received $0 for 2020, largely due to the impact of the COVID-19 pandemic. For 2019, his discretionary bonus could have totaled a maximum of $85,000 of which he received $0 for 2019. The incentive bonus plan is based on a number of factors established by the Board. In addition, he received a retention bonus totaling $500,000, with $200,000 paid on August 1, 2019, $150,000 paid on January 1, 2020 and $150,000 paid in January 2021. \nMr. The options are nonqualified, and the grant was made outside of the Companys 2011 Stock Incentive Plan. \n### By the Compensation Committee, \nDana Sellers, Chair \nMark Roberson \n### Theresa Meadows \nRobert McCashin \nMichael Loria \nApril 29, 2021 \nITEM 12. \n\n\nThe following table and the notes thereto set forth certain information regarding the beneficial ownership of our Common Stock as of March31, 2021, by (i)each current director; (ii)each named executive officer named in the summary compensation table included herein who was serving as an executive officer at the end of the 2020 fiscal year; (iii)all of our current directors and executive officers as a group; and (iv)each person who is known by us to be a beneficial owner of five percent or more of our Common Stock, which is our only class of stock outstanding. \nUnless otherwise noted, each of the following disclaims any beneficial ownership of the shares, except to the extent of his, her or its pecuniary interest, if any, in such shares. \n* Less than 1% of the outstanding shares of Common Stock. \n(1) \nThe address for all officers and directors is c/o CynergisTek, Inc., 11940 Jollyville Road, Austin, TX 78759. \n(2) \nUnless otherwise indicated, the named persons possess sole voting and investment power with respect to the shares listed (except to the extent such authority is shared with spouses under applicable law). The percentages are based upon 12,120,698 shares outstanding as of March31, 2021, except for certain parties who hold stock options and warrants that are presently exercisable or exercisable within 60 days and shares of Common Stock potentially issuable upon the vesting of restricted stock units within 60 days, whose percentages are based upon the sum of shares outstanding as of March31, 2021 plus the number of shares subject to stock options and warrants that are presently exercisable or exercisable within 60 days held by them, or shares of Common Stock potentially issuable upon the vesting of restricted stock units within 60 days. \n(3) \n119,446 shares issuable upon exercise of stock options and warrants with a weighted average exercise price of $2.92. \n(4) \n8,334 shares issuable upon exercise of stock options with a weighted average exercise price of $2.55. \n(5) Includes 166,667 shares issuable upon exercise of stock options with a weighted average exercise price of 4.86. \n(6) Based solely on our review of a Non-Objecting Beneficial Owners (NOBO) list obtained by the Company on March 21, 2021. The address for Horton is 1717 Arch Street, Suite 3920, Philadelphia, PA 19103. \n\nThe following table provides certain information as of December31, 2020, with respect to the Companys equity compensation plans under which equity securities of the Company are authorized for issuance. \n(1) \nThese plans consist of the 2011 Stock Incentive Plan, and the 2020 Equity Incentive Plan, each as amended. \n(2) \nRepresents restricted stock units issued under the 2011 Stock Incentive Plan and the 2020 Equity Incentive Plan. Since this plan includes option grants, number of securities remaining available for future issuances is combined. \n(3) \nFrom time to time and at the discretion of the Board, we may issue options or warrants to our key individuals or officers as compensation. \n(4) \nIncludes warrants to purchase 500,000 shares of common stock in consideration of a Securities Purchase Agreement with an existing investor. \nITEM 13. \n\nReview and Approval of Transactions with Related Parties \nIn accordance with our Audit Committee procedures, the Audit Committee of our Board reviews and approves all transactions that are required to be reported under Item404(a) of Regulation S-K. \n### Director Independence \nThe Board, in the exercise of its reasonable business judgment, has determined that the following directors meet the definition of independent pursuant to the applicable NYSE American and SEC rules and regulations: Michael Loria, Robert McCashin, Dana Sellers, Theresa Meadows and Mark Roberson. In making these independence determinations, the Board considered all of the factors that automatically compromise director<|endoftext|>Disclosure obligations regarding executive compensation in our periodic reports and proxy statements and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. \n\nWe will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following December 7, 2025, (b) in which we have total annual gross revenue of at least $1.07 billion or (c) in which we are deemed to be a large accelerated filer, which means the market value of our Class A common stock that is held by non-affiliates exceeds $700 million as of the prior June 30 th and (2) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period. \n### Financial Position \nWith funds available for an initial business combination in the amount of $244,950,741, assuming no redemptions and after payment of up to $8,067,500 of deferred underwriting fees, we offer a target business a variety of options such as creating a liquidity event for its owners, providing capital for the potential growth and expansion of its operations or strengthening its balance sheet by reducing its debt or leverage ratio. \n\nWe are not presently engaged in, and we will not engage in, any operations, other than the pursuit of our business combination, until we consummate our initial business combination. We intend to effectuate our initial business combination using cash from the proceeds of our initial public offering and the private placement of the private placement warrants, the proceeds of the sale of our shares in connection with our initial business combination (pursuant to forward purchase agreements or backstop agreements we may enter into), shares issued to the owners of the target, debt issued to bank or other lenders or the owners of the target, or a combination of the foregoing. \nIf our initial business combination is paid for using equity or debt securities, or not all of the funds released from the trust account are used for payment of the consideration in connection with our initial business combination or used for redemption of our public shares, we may use the balance of the cash released to us from the trust account following the closing for general corporate purposes, including for maintenance or expansion of operations of the post-transaction company, the payment of principal or interest due on indebtedness incurred in completing our initial business combination, to fund the purchase of other companies or for working capital. \nIn addition, we are targeting businesses with enterprise values that are greater than we could acquire with the net proceeds of our initial public offering and the sale of the private placement warrants, and, as a result, if the cash portion of the purchase price exceeds the amount available from the trust account, net of amounts needed to satisfy any redemptions by public stockholders, we may be required to seek additional financing to complete such proposed initial business combination. Our amended and restated certificate of incorporation provides that, prior to the consummation of our initial business combination, we are prohibited from issuing additional securities that would entitle the holders thereof to (i) receive funds from the trust account or (ii) vote as a class with our public shares (a) on any initial business combination or (b) to approve an amendment to our amended and restated certificate of incorporation to (x) extend the time we have to consummate a business combination beyond December 7, 2022 or (y) amend the foregoing provisions, unless (in connection with any such amendment to our amended and restated certificate of incorporation) we offer our public stockholders the opportunity to redeem their public shares. \n\nThese sources introduce us to target businesses in which they think we may be interested on an unsolicited basis, since many of these sources will have read our SEC filings, including this annual report, and know what types of businesses we are targeting. \nPotential target companies with whom we may engage in discussions after the closing of the offering may have had prior discussions with other blank check companies, bankers in the industry and/or other professional advisors including blank check companies with which our executive officers or board of directors were affiliated. We have not contacted any of the prospective target businesses that Live Oak Acquisition Corp. has considered and rejected while it was a blank check company searching for target businesses with which to consummate an initial business combination. \nIf any of our officers or directors becomes aware of an initial business combination opportunity that falls within the line of business of any entity to which he or she has then-existing fiduciary or contractual obligations, he or she may be required to present such business combination opportunity to such entity prior to presenting such business combination opportunity to us. \n\n\nIf we own or acquire less than 100% of the equity interests or assets of a target business or businesses, the portion of such business or businesses that are owned or acquired by the post-transaction company is what will be taken into account for purposes of the NYSEs 80% of net assets test. There is no basis for investors in our initial public offering to evaluate the possible merits or risks of any target business with which we may complete our initial business combination. \n\n\n\n\n\n\n\n\n\n\n\nUnder the NYSEs listing rules, stockholder approval would be required for our initial business combination if, for example: we issue shares of Class A common stock that will be equal to or in excess of 20% of the number of shares of our Class A common stock then outstanding; \n\nIf we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our sponsor, initial stockholders, directors, officers, advisors or their affiliates may purchase public shares or public warrants in privately-negotiated transactions or in the open market either prior to or following the completion of our initial business combination. There is no limit on the number of shares or warrants our initial stockholders, directors, officers, advisors or their affiliates may purchase in such transactions, subject to compliance with applicable law and NYSE rules. \n\nOur sponsor, officers, directors and/or any of their affiliates anticipate that they may identify the stockholders with whom our sponsor, officers, directors or their affiliates may pursue privately-negotiated purchases by either the stockholders contacting us directly or by our receipt of redemption requests tendered by stockholders following our mailing of proxy materials in connection with our initial business combination. \nAny purchases by our sponsor, officers, directors and/or their affiliates who are affiliated purchasers under Rule 10b-18 under the Exchange Act will be made only to the extent such purchases are able to be made in compliance with Rule 10b-18, which is a safe harbor from liability for manipulation under Section 9(a)(2) and Rule 10b-5 of the Exchange Act. \n\nThe amount in the trust account, as of December 31, 2020, was $10.00 per public share. The per-share amount we will distribute to investors who properly redeem their shares will not be reduced by deferred underwriting commissions we will pay to the underwriters. \n\n\nSo long as we obtain and maintain a listing for our securities on the NYSE, we will be required to comply with the NYSEs stockholder approval rules. \nThe requirement that we provide our public stockholders with the opportunity to redeem their public shares by one of the two methods listed above is contained in provisions of our amended and restated certificate of incorporation and will apply whether or not we maintain our registration under the Exchange Act or our listing on the NYSE. \n\nOur initial stockholders will count towards this quorum and, pursuant to the letter agreement, our sponsor, officers and directors have agreed to vote their founder shares and any public shares purchased during or after our initial public offering (including in open market and privately-negotiated transactions) in favor of our initial business combination. As a result, in addition to our initial stockholders founder shares, we would need only 9,487,5001, or 37.5%, of the 25,300,000 public shares sold in our initial public offering to be voted in favor of an initial business combination in order to have our initial business combination approved. We intend to give not less than 10 days nor more than 60 days prior written notice of any such meeting, if required, at which a vote shall be taken to approve our initial business combination. \n\nIn addition, the tender offer will be conditioned on public stockholders not tendering more than a specified number of public shares, which number will be based on the requirement that we will only redeem our public shares so long as (after such redemption) our net tangible assets will be at least $5,000,001 either immediately prior to or upon consummation of our initial business combination and after payment of deferred underwriters fees and commissions (so that we are not subject to the SECs penny stock rules) or any greater net tangible asset or cash requirement that may be contained in the agreement relating to our initial business combination. \nUpon the public announcement of our initial business combination, if we elect to conduct redemptions pursuant to the tender offer rules, we or our sponsor will terminate any plan established in accordance with Rule 10b5-1 to purchase shares of our Class A common stock in the open market, in order to comply with Rule 14e-5 under the Exchange Act. \n\nOur amended and restated certificate of incorporation provides that we will only redeem our public shares so long as (after such redemption) our net tangible assets will be at least $5,000,001 either immediately prior to or upon consummation of our initial business combination and after payment of deferred underwriters fees and commissions (so that we are not subject to the SECs penny stock rules) or any greater net tangible asset or cash requirement which may be contained in the agreement relating to our initial business combination. \n\n\n\n\n\n\n\nIf our initial proposed initial business combination is not completed, we may continue to try to complete an initial business combination with a different target by December 7, 2022. \n\nOur amended and restated certificate of incorporation provides that we will have until December 7, 2022 to complete our initial business combination. If we are unable to complete our initial business combination by December 7, 2022 or within such time provided, we will: (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than 10 business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account including interest earned on the funds held in the trust account and not previously released to us to pay our taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders rights as stockholders (including the right to receive further liquidating distributions, if any), and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, liquidate and dissolve, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect to our warrants, which will expire worthless if we fail to complete our initial business combination by December 7, 2022. \nOur sponsor, officers and directors have entered into a letter agreement with us, pursuant to which they have waived their rights to liquidating distributions from the trust account with respect to any founder shares held by them if we fail to complete our initial business combination prior to December 7, 2022. \nOur sponsor, officers and directors have agreed, pursuant to a written agreement with us,<|endoftext|>ALASKA COMMUNICATIONS SYSTEMS GROUP, INC. \nAMENDED ANNUAL REPORT ON FORM \n10-K/A \nFOR THE YEAR ENDED DECEMBER \n31, 2020 \n### EXPLANATORY NOTE \nand its consolidated subsidiaries (we, our, us, the Company and Alaska Communications) is filing this Amendment No. 1 on Form 10-K/A for the year ended December 31, 2020 (Amendment) to amend our Form 10-K for the year ended December 31, 2020, filed with the Securities and Exchange Commission (the SEC) on March 16, 2021 (the Original Form 10-K). We are filing this Amendment to (i) present in Part I, Item 1A, a revised risk factor, as described in Item 503(c) of Regulation S-K, that is applicable to the Company [required if there are changes from the original 10-K]; and (ii) present the information required by Part III of Form 10-K that was previously omitted from the Original Form 10-K in reliance on General Instruction G(3) to Form 10-K. The Company is hereby amending the Original Form 10-K as follows: \nOn the cover page, to (i) delete the reference in the Original Form 10-K to the incorporation by reference of the Companys proxy statement for its 2021 annual stockholdersmeeting and (ii) update the date as of which the number of outstanding shares of the Companys common stock is being provided; \nTo present in Part I, Item 1A, a revised risk factor, as described in Item 503(c) of Regulation S-K, that is applicable to the Company; \nTo present the information required by Part III of Form 10-K, which information was originally expected to be incorporated by reference to our definitive proxy statement to be delivered to our stockholders in connection with our 2021 annual meeting of stockholders; and \nIn Part IV, to amend and restate Item 15(b) and Exhibits 31.3 and 31.4 in their entirety to contain the currently dated certifications from the Companys principal executive officer and principal financial officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. The certifications of the Companys principal executive officer and principal financial officer are attached to this Amendment as Exhibits 31.3 and 31.4. Because no financial statements have been included in this Amendment and this Amendment does not contain or amend any disclosure with respect to Items 307 and 308 of Regulation S-K, paragraphs 3, 4 and 5 of the certifications have been omitted. The Exhibit Index has also been amended and restated in its entirety to include the certifications as exhibits. \nExcept as described above, no other changes have been made to the Original Form 10-K. This Amendment does not otherwise update information in the Original Form 10-K to reflect facts or events occurring subsequent to the filing date of the Original Form 10-K. This Amendment should be read in conjunction with the Original Form 10-K and with any of our filings made with the SEC subsequent to filing of the Original Form 10-K. \nPART I \nITEM 1A. \n### RISK FACTORS \nThe following is an update to the referenced risk factor provided in Part I, Item 1A of the Companys Annual Report on Form 10-K for the year ended December 31, 2020. \nRisks Relating to the Merger Agreement with ATN International, Inc. and Freedom 3 Capital, LLC \n### Shareholder Litigation \nAs previously disclosed, between January 27, 2021 and February 17, 2021, twelve lawsuits were filed by stockholders of the Company in connection with the Merger Agreement. These shareholder lawsuits, and any additional litigation that could be filed, may prevent or delay the closing of the Merger, and/or result in significant costs to the Company in connection with defense, indemnification, and liability. \nAs described below, between March 8 and March 24, eleven of these lawsuits were voluntarily dismissed by the plaintiff to those suits. \nOn January 27, 2021, the first such lawsuit was filed in the United States District Court for the Southern District of New York, captioned Stein v. , et al., Case No. 1:21-cv-00760, against the Company, members of the Board, ATN, F3C IV, F3C, Parent and Merger Sub (this case was voluntarily dismissed by the plaintiff on March 15, 2021). On February 1, 2021, three additional such lawsuits were filed against the Company and members of the Board: (i) Zilch v. , et al., Case No. 1:21-cv-00890, filed in the United States District Court for the Southern District of New York (this case was voluntarily dismissed by the plaintiff on March 15, 2021); (ii) Coraci v. , et al., Case No. 1:21-cv-00887, filed in the United States District Court for the Southern District of New York (this case was voluntarily dismissed by the plaintiff on March 15, 2021); and (iii) Coulibaly v. , et al., Case No. 1:21-cv-00131, filed in the United States District Court for the District of Delaware (this case was voluntarily dismissed by the plaintiff on March 15, 2021). On February 2, 2021, the fifth such lawsuit against the Company and members of Board was filed in the United States District Court for the Eastern District of Pennsylvania, captioned Palkon v. (this case was voluntarily dismissed on March 16, 2021). On February 4, 2021, the sixth such lawsuit was filed against the Company and members of the Board in the United States District Court for the Southern District of New York, captioned Raul v. , et al., Case No. 1:21-cv-00988 (this case was voluntarily dismissed on March 16, 2021). On February 6, 2021, the seventh such lawsuit was filed against the Company and members of the Board in the United States District Court for the Eastern District of New York, captioned Holodnak v. , et al., Case No. 1:21-cv-00656 (this case was voluntarily dismissed by the plaintiff on March 8, 2021). On February 8, 2021, the eighth such lawsuit was filed against the Company and members of the Board in the United States District Court for the Southern District of New York, captioned Cazort v. , et al., Case No. 1:21-cv-1139 (this case was voluntarily dismissed on March 16, 2021). On February 11, 2021, the ninth such lawsuit was filed against the Company and members of the Board in the United States District Court for the Southern District of New York, captioned Bergquist v. , et al., Case No. 1:21-cv-01226 (this case was voluntarily dismissed by the plaintiff on March 15, 2021). On February 17, 2021, three additional such lawsuits were filed against the Company and members of the Board: (i) Ryan v. , et al., Case No. 1:21-cv-00222, filed in the United States District Court for the District of Delaware (this case was voluntarily dismissed on March 24, 2021); (ii) Flood v. , et al., Case No. 1:21-cv-00224, filed in the United States District Court for the District of Delaware (this case was voluntarily dismissed by the plaintiff on March 15, 2021); and (iii) Jenkins v. , et al., Case No. 1:21-cv-01409, filed in the United States District Court for the Southern District of New York. On February 19, 2021, the Company and members of its Board filed a Motion for Transfer of Actions with the United States Judicial Panel on Multidistrict Litigation, requesting to centralize the twelve then-pending actions before one court, which was subsequently closed on March 25, 2021. \nIn general, these lawsuits assert that the defendants failed to make adequate disclosures in the Companys preliminary and/or definitive proxy statement, filed with the SEC on January 25, 2021 and February 9, 2021, respectively, regarding the Merger Agreement. The Company believes that these allegations are without merit. \nPART III \nITEM 10. \n\n### Director Compensation \nThe compensation of directors is determined by the Board with the advice of the Compensation and Personnel Committee (Compensation Committee). Under its charter (available on our website at www.alsk.com \n), the Compensation Committee periodically reviews the compensation provided to non-employee directors for their service and makes recommendations to the Board regarding any changes. The Compensation Committees charter authorizes it to employ independent compensation and other consultants to assist in fulfilling its duties. From time to time the Compensation Committee engages a compensation consultant to advise and provide information regarding director compensation paid by other public companies, which may be used by the Compensation Committee to make compensation recommendations to the Board. \nThe following table contains information regarding compensation provided to each person who served as a director during 2020 (excluding Mr. Bishop, whose compensation is included in the Summary Compensation Table and related tables and disclosure). \n(1)In 2020, Messrs. Ross and Ley served through the date of the annual meeting, at which time Mr. Duster and Ms. Lombard were appointed to the Board. \n(2)Includes amounts that were deferred pursuant to the director's election that will be paid upon retirement. \n(3)Under the Non-Employee Director Compensation Plan effective June 16, 2020, Board members were granted $50,000 of restricted stock units. The number of shares granted was based on the 10-day average closing price on June 15, 2020. These shares will vest at the earlier of the one-year grant date or the date of the next annual meeting. In the event of a change of control prior to those dates, the shares would vest immediately. \nWe provided compensation to our independent directors under our Board-approved Director Compensation Policy. The Director Compensation Policy was amended in June 2020 effective for the second half of 2020. Compensation under both the original policy and as amended for the second half of 2020 consisted of annual retainers that were payable in equal quarterly installments. Except for deferred amounts, amounts were paid for each quarter or partial quarter of service, without proration, within 30 days of the close of the calendar quarter. \nDirector compensation through June 16, 2020 was paid under the 2019 Non-employee director compensation plan \nDirection compensation after June 16, 2020 was paid under the 2020 Non-employee director compensation plan \nAdditionally, the Transaction Committee was formed as a special committee of the Board of Directors in September of 2020. Each member of the Transaction Committee earns a monthly retainer of $5,000 for their service on this committee. \nOur independent directors are also reimbursed for reasonable out-of-pocket expenses incurred for serving as directors. \nOur Board has adopted minimum share ownership requirements for directors because we believe the Board will more effectively pursue the long-term interests of stockholders if the directors are stockholders themselves. Our Director Compensation Policy requires each non-employee director to accumulate and hold common stock or common stock equivalents issued by the Company equal to at least three times his or her annual cash retainer. Each non-employee director must comply with the policy by the fifth anniversary of the directors continuous service to our Board. All of our directors who have met their fifth anniversary have met the holding requirement. \n### Board of Directors \nDavid W. Karp \n\n### Director \nServes as leader of a service-based firm operating across Alaska, the contiguous United States, Canada and Mexico; \nAge: 54 background in the Alaska tourism business and as a business buyer of the services that are key to the Company s growth; and \nDirector since 2011 reputation as a motivational leader, manager and respected member of the Alaska community. \n### Elected Chair: 2019 \n\n\n-Transaction Committee \nDavid W. Karp is the senior vice president and managing director of Alaska for Saltchuk, a Seattle-based company with multiple operating companies in Alaska, including Northern Air Cargo, Tote Maritime, Carlile Transportation, Delta Western, Inlet Energy and Cook Inlet Tug and Barge. The company provides transportation and energy solutions throughout Alaska and the region. Mr. Karp resides in Anchorage, Alaska, with his family and is involved in supporting many nonprofit organizations in the community. Mr. Karp also serves as a member of the board of directors for Anchorage based Northrim BanCorp, Inc. (Nasdaq: NRIM). He holds a B.A. from the University of Oregon and has completed the Owner President Manager Program at the Harvard School of Business. \n### Peter D. Aquino \n\nDirector \nChairman, CEO and Director of a technology company; \nAge: 60 long history of leadership experience in the telecommunications industry; \nDirector since 2019 previous public company board experience, including serving on audit committees; and \n\nMBA from George Washington University. \n-Audit<|endoftext|>Shall be exercisable, however, more than ten years after the date of the grant. The Plans require the Committee to grant qualified options with an exercise price per share not less than the fair market price of a share of common stock on the date of grant of the option. Awards granted under the Plans are generally not transferable by the Optionee otherwise than by will or the laws of descent and distribution and generally exercisable during the lifetime of the Optionee only by the Optionee. \nAll awards granted under the 2000 Plan which were not previously exercisable and vested shall become fully exercisable and vested upon a change of control of the Company, which includes the consummation of a merger or consolidation of the Company with or into any other entity, sale of all or substantially all of our assets, replacement of a majority of our board of directors, acquisition by any person of securities representing 20% or more of the voting power of our then outstanding securities (other than securities issued by us) or any other event which the board of directors determines would materially alter our structure or ownership. \nUnder the 2015 Plan, awards which were not previously exercisable and vested may not be accelerated due to a change of control unless the Optionees employment is involuntarily terminated because of the change of control. A change of control shall be deemed to occur upon the consummation of a merger or consolidation of the Company with or into any other entity that results in the transfer of 50% of the combined voting power to the new party, sale of all or substantially all of our assets, replacement of a majority of our board of directors, acquisition by any person of securities representing 50% or more of the voting power of our then outstanding securities (other than securities issued by us) or any other event which the board of directors determines would materially alter our structure or ownership. \nNon-employee directors of the Company are usually granted options each year, which generally become exercisable upon the date of grant, and generally expire on the earlier of ten years from the date of grant or up to three years after the date that the Optionee ceases to serve as a director. Our board of directors may grant common share purchase options or warrants to selected directors, officers, employees, consultants, and advisors in payment of goods or services provided by such persons on a stand-alone basis outside of any of our Plans. The terms of these grants may be individually negotiated. \n\nFor unregistered sales of securities through December 31, 2019, see our 10-K annual report for the period ending December 31, 2019, which is hereby incorporated by reference. \nOn April 3, 2020, the parties amended the Loan and Security Agreement (Twenty Third Amendment) whereby the Maturity Date of the Note was extended to the earlier of (i) the date upon which the Company secures funds, regardless of source, equal to or exceeding, in the aggregate, $1,922,600 or (ii) April 15, 2020.The Parties entered into a Consent and Waiver to authorize the Company to issue a promissory note and security agreement to Brian Kelly (see 2020 Note). \nOn June 2, 2020, the parties amended the Loan and Security Agreement (Twenty Fourth Amendment) whereby the Maturity Date of the Note was extended to the earlier of (i) the date upon which the Company secures funds, regardless of source, equal to or exceeding, in the aggregate, $1,957,600 or (ii) July 15, 2020. \nOn July 15, 2020, the parties amended the Loan and Security Agreement (Twenty Fifth Amendment) whereby the Maturity Date of the Note was extended to the earlier of (i) the date upon which the Company secures funds, regardless of source, equal to or exceeding, in the aggregate, $1,957,600 or (ii) August 20, 2020. \nOn October 8, 2020, the parties amended the Loan and Security Agreement (Twenty Sixth Amendment) whereby the Maturity Date of the Note was extended to the earlier of (i) the date upon which the Company secures funds, regardless of source, equal to or exceeding, in the aggregate, $1,957,600 or (ii) October 15, 2020. The Parties entered into a Consent and Waiver to authorize the Company to issue a promissory note and security agreement to Brian Kelly (see October 2020 Note) \nOn October 28, 2020, the parties amended the Loan and Security Agreement (Twenty Seventh Amendment) whereby the Maturity Date of the Note was extended to the earlier of (i) the date upon which the Company secures funds, regardless of source, equal to or exceeding, in the aggregate, $2,025,600 or (ii) November 5, 2020. \nOn November 24, 2020, the parties amended the Loan and Security Agreement (Twenty Eighth Amendment) whereby the Maturity Date of the Note was extended to the earlier of (i) the date upon which the Company secures funds, regardless of source, equal to or exceeding, in the aggregate, $2,080,600 or (ii) November 30, 2020 \nOn December 15, 2020, the parties amended the Loan and Security Agreement (Twenty Seventh Amendment) whereby the Maturity Date of the Note was extended to the earlier of (i) the date upon which the Company secures funds, regardless of source, equal to or exceeding, in the aggregate, $2,115,600 or (ii) December 23, 2020. The Parties entered into a Consent and Waiver to authorize the Company to issue a promissory note and security agreement to Brian Kelly (see Kelly December 2020 Note) \n### Recent Repurchases of Common Stock \nThere were no repurchases of our common stock during 2020. \nITEM 6. SELECTED FINANCIAL DATA. \nNot Applicable. \nITEM 7. \nThe following discussion and analysis of our financial condition and results of operations should be read in conjunction with our financial statements and related notes appearing elsewhere in this Annual Report. This discussion and analysis contain forward looking statements that involve risks, uncertainties, and assumptions. The actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors, including, but not limited to, those which are not within our control. \n### OVERVIEW \nWe have developed and patented a nanostructured polymer technology, which is being commercialized in products based on the functionality of these materials. We believe the applications of our technology have promise in several diverse market segments and products. We will expand our push to sell ConsERV product largely in North America with Aqualyte nanomaterial sales with OEMs in international markets. \nGrowing emphasis is being actively placed on the Aqualyte OEM material sales in addition to ConsERV system sales to generate another revenue stream in targeted non-ConsERV applications. We believe the targeted Aqualyte OEM applications created when using features and properties of the Aqualyte nanomaterial provide the OEM evolutionary or new products. Products which the Company believes offer greater functionality, and differentiation in growing worldwide water market. \n### RESULTS OF OPERATIONS \nYear Ended December 31, 2020 as compared with December 31, 2019 \nThe following table sets forth, for the periods indicated, certain data derived from our Statements of Operations: \n### Revenue \nWe generate our revenues primarily from the sale of our ConsERV cores and systems, and our Aqualyte membrane. Product sales were $952,845 and $830,625 for the years ended December 31, 2020 and 2019, respectively, an increase of $122,220 or 15%. We had no change in ConsERV sales, a drop of 100% in NanoClear sales, and a 58% increase in Aqualyte Only OEM membrane sales. This decrease in NanoClear sales reflects the Companys decision to focus on acquiring the long-term operational data it believes is needed to rapidly grow its chosen markets. This period will end no later than 1Q 2022 and to date the results of this third-party testing are above average. Company thinking shows the possession of long-term test data eases the ability to market the NanoClear application. The increase in Aqualyte OEM sales was due to the expansion of the significant concentrations of sales belonging to two customers in 2019 and 2020. Other than Aqualyte sales, we are focusing on creating sustainable revenues with the expectation that this will allow for continued growth in 2021. \nRevenues from royalty and license fees were $50,000 and $75,000 for the years ended December 31, 2020 and 2019, respectively a decrease of $25,000 or 33% due to the royalty due per the license agreement with Menred in 2019. \n### Cost of Sales \nOur cost of sales consists primarily of materials (including freight), direct labor, and outsourced manufacturing expenses incurred to produce our ConsERV cores and systems, NanoClear evaporators and Aqualyte membrane. Cost of goods sold were $545,068 and $600,213 for the years ended December 31, 2020 and 2019, respectively, a decrease of $55,145 or 9% resulting from focused efforts to reduce our costs by working with our current suppliers on better pricing and finding alternative suppliers and materials. \nResearch and Development \nWe incurred research and development costs of $221,700 and $293,751 for the years ended December 31, 2020 and 2019, respectively, a decrease of $72,051 or 25%. We recorded proceeds against research and development expenses on the Statements of Operations of $123,055 and $89,994 for the years ended December 31, 2020 and 2019, respectively, an increase of $33,061 or 37%. The fluctuation in expenses and reimbursements are due to the timing of the grant activities. \n\nOur selling, general and administrative expenses consist primarily of payroll and related benefits, share-based compensation, professional fees, marketing and channel support costs, and other infrastructure costs such as insurance, information technology and occupancy expenses. Selling, general and administrative expenses were $1,079,594 and $1,369,037 for the years ended December 31, 2020 and 2019, respectively, a decrease of $289,443 or 21%. \nOur selling, general and administrative expenses may fluctuate due to a variety of factors, including, but not limited to: \nAdditional expenses because of being an SEC reporting company including, but not limited to, director and officer insurance, director fees, SEC compliance expenses, transfer agent fees, additional staffing, professional fees, and similar expenses; \nAdditional infrastructure needed to support the expanded commercialization of our ConsERV and NanoClear products and/or new product applications of our polymer technology for, among other things, administrative personnel, physical space, marketing and channel support and information technology; and \nThe issuance and recognition of expense related to fair value of new share-based awards, which is based on various assumptions including, among other things, the volatility of our stock price. \nThe 21% decrease in selling general and administrative expenses in the year ended December 31, 2020 compared to the same period in 2019 resulted primarily from the decrease in legal and consulting fees. \n### Other Income (Expense) \nInterest expense for the year ended December 31, 2020 was $1,127,807 compared to an expense of $2,126,590 for the year ended December 31, 2019. Loss on change in fair value of derivative increased to $939,464 from $712,952 from 2019 to 2020 and there was a decrease in gain on extinguishing debt from $57,784 in 2019 to $0 in 2020. The gain on extinguishing debt in 2019 was due to conversion of principal and interest of a portion of our notes payable in to shares of common stock. There were no conversions of our notes payable in 2020. \nNet Loss \nNet loss for the year ended December 31, 2020 was $2,787,733 compared to a net loss of $4,049,140 for the year ended December 31, 2019. The decrease in net loss in 2020 was primarily due to the decrease in interest expense and our selling, general, and administrative expenses. \n\nThe accompanying financial statements have been prepared assuming we will continue as a going concern. For the year ended December 31, 2020, we generated a net loss of $2,787,733 and have incurred significant losses since inception. As of December 31, 2020, we have an accumulated deficit of $56,974,063, total stockholders deficit of $12,456,727, negative working capital of $12,324,850 and cash and cash equivalents of $36,516. We used $556,423 and $718,090 of cash from operations during the years ended December 31, 2020 and 2019, respectively, which was funded primarily through proceeds from loans from related<|endoftext|>Technologies that may result in a reduction in demand for our services. This could slow customer growth and even cause customers to reduce or cease using natural gas which could have a material adverse effect on our financial condition, results of operations and cash flows. \nAn impairment of goodwill and long-lived assets could reduce our earnings. \nAt December 31, 2020, we had approximately $158 million of goodwill recorded on our Consolidated Balance Sheet. GAAP requires us to test goodwill for impairment on an annual basis or when events or circumstances occur indicating that goodwill might be impaired. Long-lived assets with finite useful lives are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If we determine that impairment is indicated, we would be required to take an immediate noncash charge to earnings with a correlative effect on our equity and balance sheet leverage as measured by debt to total capitalization, which could adversely impact our financial condition and results of operations. \nWe may be unable to access capital or our cost of capital may increase significantly which may adversely affect our results of operations, cash flows and financial condition. \nOur ability to obtain adequate and cost-effective financing is dependent upon the liquidity of the financial markets, in addition to our financial condition and credit ratings. Disruptions in the capital and credit markets could adversely affect our ability to access short-term and long-term capital. Access to funds under our ONE Gas Credit Agreement, our commercial paper program, our ONE Gas 364-day Credit Agreement and our ONE Gas 2021 Term Loan Facility will be dependent on the ability of the participating banks to meet their funding commitments and any issues with lenders causing them to stop purchasing our commercial paper. Those banks may not be able to meet their funding commitments if they experience shortages of capital and liquidity. Disruptions and volatility in the global credit markets could cause the interest rate we pay on our ONE Gas Credit Agreement, our ONE Gas 2021 Term Loan Facility, our commercial paper program, and our ONE Gas 364-day Credit Agreement, which is based on LIBOR, to increase. This could result in higher interest rates on future financings and could impact the liquidity of the lenders under our ONE Gas Credit Agreement, our ONE Gas 2021 Term Loan Facility and our ONE Gas 364-day Credit Agreement, potentially impairing their ability to meet their funding commitments to us. Disruptions in the capital and credit markets as a result of uncertainty, changing or increased regulation or failures of significant financial institutions could adversely affect our access to capital needed for our business. The inability to access adequate capital or an increase in the cost of capital may require us to conserve cash, prevent or delay us from making capital expenditures, and require us to reduce or eliminate our dividend or other discretionary uses of cash. A significant reduction in our liquidity could cause a negative change in our ratings outlook or even a reduction in our credit ratings. This could in turn further limit our access to credit markets and increase our costs of borrowing. Additionally, as we have recently entered into the ONE Gas 2021 Term Loan Facility in February 2021, our additional indebtedness may limit our ability to borrow additional funds, if needed, or prevent us from raising the funds on commercially reasonable terms, or on terms acceptable to us, or at all. \nAs a result of cross-default provisions in our borrowing arrangements, we may be unable to satisfy all of our outstanding obligations in the event of a default on our part, which may adversely affect our results of operations, cash flows and financial condition. \nThe terms of our debt agreements contain cross-default provisions, which provide that we will be in default under such agreements in the event of certain defaults under other debt agreements. Accordingly, should an event of default occur under any of those agreements, we would face the prospect of being in default under many or all of our debt agreements, obliged in such instance to satisfy all of our outstanding indebtedness under many or all such agreements simultaneously. In such an event, we may not be able to obtain alternative financing or, if we are able to obtain such financing, we may not be able to obtain it on terms acceptable to us, which would adversely affect our ability to implement our business plan, have flexibility in planning for, or reacting to, changes in our business, make capital expenditures and finance our operations. \nThe cost of providing pension and other postemployment health care benefits to eligible employees and qualified retirees is subject to changes in pension fund values, changing demographics and other factors and may increase our costs. In addition, the passage of the Patient Protection and Affordable Care Act in 2010 and the Consolidated Appropriations Act in 2021 and the potential revision, repeal and/or replacement of either of these acts could increase the cost of health care benefits for our employees. Further, the costs to us of providing such benefits and related funding requirements are subject to the continued and timely recovery of such costs through our rates which may adversely affect our cash flows and earnings. \nWe have defined benefit pension plans and other postemployment welfare plans for certain eligible employees. Our defined benefit plans are closed to new participants. Our other postemployment welfare plans subsidize costs for providing postemployment medical benefits and life insurance. The cost of providing these benefits to eligible current and former employees is subject to changes in the market value of our pension and other postemployment benefit plan assets, changing demographics, including longer life expectancy of plan participants and their beneficiaries, current and future legislative changes, changes in health care costs, changes in discount rates used to calculate liability, and various actuarial calculations and assumptions. \nAny sustained declines in equity markets and reductions in bond values may have a material adverse effect on the value of our pension and other postemployment benefit plan assets. In these circumstances, additional cash contributions to our pension and other postemployment benefit plans may be required, which could have a material adverse impact on our financial condition and cash flows. \nIn addition, the costs of providing health care benefits to our employees could increase over the next several years due in large part to the Patient Protection and Affordable Care Act of 2010 and the Consolidated Appropriations Act in 2021, and the potential revision, repeal and/or replacement of either of these acts. The future costs of compliance with the provisions are difficult to measure at this time. Also, our costs of providing such benefits and related funding requirements could also materially increase in the future, depending on the timing of the recovery, if any, of such costs through our rates, which could adversely impact our financial condition and cash flows. \nOur financing arrangements subject us to various restrictions that could limit our operating flexibility, earnings and cash flows. \nThe covenants in the indenture governing our Senior Notes, our ONE Gas Credit Agreement and the ONE Gas 364-day Credit Agreement restrict our ability to create or permit certain liens, to consolidate or merge or to convey, transfer or lease substantially all of our properties and assets. \nThe ONE Gas Credit Agreement and the ONE Gas 364-day Credit Agreement include a requirement that our debt to total capital ratio may not exceed 70 percent as of the end of any calendar quarter. Events beyond our control could impair our ability to satisfy this requirement. As long as our indebtedness remains outstanding, these restrictive covenants could impair our ability to expand or pursue our growth strategy. The ONE Gas 364-day Credit Agreement is scheduled to mature in April 2021. \nIn addition, the breach of any covenants or any payment obligations in any of these debt agreements will result in an event of default under the applicable debt instrument. If there were an event of default under one of our debt agreements, the holders of the defaulted debt may have the ability to cause all amounts outstanding with respect to that debt to be due and payable, subject to applicable grace periods. This could trigger cross-defaults under our other debt agreements, including our Senior Notes. Forced repayment of some or all of our indebtedness would reduce our available cash and have an adverse impact on our financial condition, results of operations and cash flows. \nSome of our debt, including borrowings under our ONE Gas Credit Agreement, our ONE Gas 364-day Credit Agreement and our commercial paper program, is based on variable rates of interest, which could result in higher interest expenses in the event of an increase in interest rates. \nWe are exposed to fluctuations in variable interest rates. This increases our exposure to fluctuations in market interest rates. Amounts borrowed under the ONE Gas Credit Agreement, the ONE Gas 364-day Credit Agreement and commercial paper program are based on variable rates of interest. If these rates rise, the interest rate on this debt will also increase. Therefore, an increase in these rates will increase our interest payment obligations and have a negative effect on our cash flows and financial position. \nConditions in the financial markets and economic conditions generally may materially adversely affect us. \nOur business is capital intensive and we rely significantly on long-term debt to fund a portion of our capital expenditures and repay outstanding debt, and on short-term borrowings to fund a portion of day-to-day business operations. \nLimitations on the availability of credit and increases in interest rates or credit spreads may materially adversely affect our businesses, cash flows, results of operations, financial condition and/or prospects, as well as our ability to meet contractual and other commitments. In difficult credit market environments, we may find it necessary to fund our operations and capital expenditures at a higher cost or we may be unable to raise as much funding as we need to support new or ongoing business activities. This could cause us to reduce non-safety related capital expenditures and could increase our cost of servicing debt, both of which could significantly reduce our short-term and long-term profitability. \nOther factors can affect the availability and cost of credit for our businesses, as well as the terms of equity and debt financing, including: adverse changes to laws and regulations in the states in which we operate; the overall health of the energy industry; volatility in natural gas prices; changes in tax law; credit ratings downgrades; \nWe are dependent on continued access to the credit and capital markets to execute our business strategy. \nOur long-term debt is currently rated as investment grade by the Rating Agencies. We rely upon access to both short-term and long-term credit and capital markets to satisfy our liquidity requirements. If adverse credit conditions or a downgrade in our ratings outlook were to cause a significant limitation on our access to the private credit and public capital markets, we could see a reduction in our liquidity. A significant reduction in our liquidity could in turn trigger a negative change in our ratings outlook or even a reduction in our credit ratings by one or more of the credit rating agencies. Such a downgrade could further limit our access to private credit and/or public capital markets and increase our costs of borrowing. \nWhile we believe we can meet our capital requirements from our operations and the sources of financing available to us, we can provide no assurance that we will continue to be able to do so in the future, especially if the market price of natural gas increases significantly or there are regulatory constraints on our ability to recover gas or financing costs. The future effects on our business, liquidity and financial results of a deterioration of current conditions in the credit and capital markets could be material and adverse to us, both in the ways described above or in other ways that we do not currently anticipate.<|endoftext|>To pay our taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii)as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. \nBecause we will not be complying with Section 280, Section 281(b) of the DGCL requires us to adopt a plan, based on facts known to us at such time that will provide for our payment of all existing and pending claims or claims that may be potentially brought against us within the subsequent 10years. Further, the sponsor may be liable if no waiver against the trust account is executed, only to the extent necessary to ensure that the amounts in the trust account are not reduced below (i) $10.00 per public share or (ii)such lesser amount per public share held in the trust account as of the date of the liquidation of the trust account, due to reductions in value of the trust assets, in each case net of the amount of interest withdrawn to pay taxes and will not be liable as to any claims under our indemnity of the underwriters of the initial public offering against certain liabilities, including liabilities under the Securities Act. \n\nOur public stockholders will be entitled to receive funds from the trust account only upon the earlier to occur of: (i)the completion of our initial business combination, (ii)the redemption of any public shares properly tendered in connection with a stockholder vote to amend any provisions of the Charter (A) to modify the substance or timing of our obligation to allow redemption in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination by December 28, 2022 or (B) with respect to any other provision relating to stockholders rights or pre-initial business combination activity, and (iii)the redemption of all of our public shares if we are unable to complete our business combination by December 28, 2022, subject to applicable law. In the event we seek stockholder approval in connection with our initial business combination, a stockholders voting in connection with the initial business combination alone will not result in such stockholders redemption of its shares for an applicable pro rata share of the trust account. These provisions of the Charter, like all provisions of the Charter, may be amended with a stockholder vote. \n### Competition \nIn identifying, evaluating and selecting a target business for our initial business combination, we have encountered intense competition from other entities having a business objective similar to ours, including other blank check companies, private equity groups and leveraged buyout funds, public companies and operating businesses seeking strategic business combinations, including affiliates of the sponsor. \nFacilities \n\n\n### Employees \nThese individuals are not obligated to devote any specific number of hours to our matters but they devote as much of their time as they deem necessary to our affairs until we have completed our initial business combination. The amount of time our officers devote in any time period varies based on the stage of the initial business combination process we are in. \n\nWe have registered our units, public shares and public warrants under the Exchange Act and have reporting obligations, including the requirement that we file annual, quarterly and current reports with the SEC. \nIn all likelihood, these financial statements will need to be prepared in accordance with, or reconciled to, U.S. GAAP, or the International Financial Reporting Standards, as issued by the International Accounting Standards Board, depending on the circumstances, and the historical financial statements may be required to be audited in accordance with the standards of the PCAOB. These financial statement requirements may limit the pool of potential targets we may conduct an initial business combination with because some targets may be unable to provide such financial statements in time for us to disclose such financial statements in accordance with federal proxy rules and complete our initial business combination within the prescribed time frame. We cannot assure you that any particular target business identified by us as a potential business combination candidate will have financial statements prepared in accordance with U.S. GAAP or that the potential target business will be able to prepare its financial statements in accordance with the requirements outlined above. \nWe have filed a Registration Statement on Form 8-A with the SEC to voluntarily register our securities under Section 12 of the Exchange Act. \nWe will remain an emerging growth company until the earlier of (1)the last day of the fiscal year (a)following December 28, 2025, (b)in which we have total annual gross revenue of at least $1.07billion, or (c)in which we are deemed to be a large accelerated filer, which means the market value of our shares of ClassA common stock that are held by non-affiliates exceeds $700million as of the prior June30, and (2)the date on which we have issued more than $1.0billion in non-convertible debt during the prior three-year period. \nItem 1A. \n### Risk Factors. \nour warrants and FPS are being accounted for as a liability and are being recorded at fair value upon issuance with changes in fair value each period reported in earnings, which may have an adverse effect on the market price of our securities; \n\nIn addition, we may be subject to the following risks in connection with the change in the accounting treatment of our warrants and FPS and the restatement of our financial statements for the year ended December 31, 2020 due to such change: \nRisks Relating to Change in Accounting Treatment of Our Securities and Restatement of Our Previously Issued Financial Statements in Connection Therewith \nOur warrants and the FPS are accounted for as liabilities and the changes in value of our warrants and the FPS could have a material effect on our financial results. \nSpecifically, the SEC Staff Statement focused on certain settlement terms and provisions related to certain tender offers following a business combination, which terms are similar to those contained in the warrant agreement governing our warrants and the warrants to be issued pursuant to the FPA. As a result of the SEC Staff Statement, we reevaluated the accounting treatment of our warrants and the FPS, and pursuant to the guidance in ASC 815, \n### Derivatives and Hedging \n(ASC 815), determined the warrants and the FPS should be classified as derivative liabilities measured at fair value on our balance sheet, with any changes in fair value to be reported each period in earnings on our statement of operations. \nAs a result of the recurring fair value measurement of our warrants and the FPS and any subsequent changes in fair value from a prior period, our results of operations in our financial statements may fluctuate quarterly based on factors which are outside of our control. Due to this recurring fair value measurement, we expect that we will recognize non-cash gains or losses on our warrants and the FPS each reporting period and that the amount of such gains or losses could be material. \n\nFollowing the issuance of the SEC Staff Statement, our management and our audit committee concluded that, in light of the SEC Staff Statement, it was appropriate to restate our previously issued financial statements as of and for the year ended December 31, 2020 (the Restatement). \n\n\n\nItem 1B. \nUnresolved Staff Comments. \nNot applicable. \nItem 2. \nProperties. \n\n\nItem 3. \n### Legal Proceedings. \n\nItem 4. \nMine Safety Disclosures. \nNot applicable. \n### PART II \nItem 5. \n\n(a) \n### Market Information \nOur units, public shares and public warrants are each traded on Nasdaq under the symbols CFIVU, CFIV and CFIVW, respectively. \n(b) \n### Holders \nOn March 31, 2021, there were two (2) holders of record of our units, one (1) holder of record of our Class A common stock, three (3) holders of record of our Class B common stock and one (1) holder of record of our warrants. \n(c) \n### Dividends \n\n(d) \n\nNone. \n(e) \n\nNone. \n(f) \n\nNone. \n(g) \n\nOn \nDecember 28, 2020 \n, the Company consummated its initial public offering of 50,000,000 units, including \n5,000,000 units issued pursuant to the partial exercise of the underwriters over-allotment option. The units were sold at a price of $10.00 per unit, generating gross proceeds to the Company of $ \nA total of $500,000,000 of the proceeds from the initial public offering and the sale of the private placement units (which amount includes $18,500,000 of business combination marketing fees payable to CF&Co. for certain services to be provided in connection with our initial business combination), was placed in a U.S.-based trust account at J.P. Morgan Chase Bank, N.A., maintained by Continental, acting as trustee. \nItem 6. \nReserved. \n### Item 7. \n\nReferences to the Company, us, our or we refer to \n### CF Acquisition Corp. IV \n\n\n\n\n### Restatement \nSince their issuance on December 28, 2020, our warrants were accounted for as equity within our balance sheet and since entering into the FPA on December 22, 2020, the FPS were accounted for as equity within our balance sheet, and after discussion and evaluation, including with our independent auditors, we have concluded that our warrants and the FPS should be presented as liabilities with subsequent fair value remeasurement. \nTherefore, the Company, in consultation with its Audit Committee, concluded that its previously issued financial statements for the year ended December 31, 2020 should be restated because of a misapplication in the guidance around accounting for the warrants and the FPS and should no longer be relied upon. \nHistorically, the warrants and the FPS were reflected as a component of equity as opposed to liabilities on the balance sheet and the statements of operations and did not include the subsequent non-cash changes in estimated fair value of the warrants or the FPS, based on our application of Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 815-40, Derivatives and Hedging, Contracts in Entitys Own Equity (ASC 815-40). The views expressed in the SEC Staff Statement were not consistent with the Companys historical interpretation of the specific provisions within its warrant agreement and the Companys application of ASC 815-40 to the warrant agreement and the FPA. We reassessed our accounting for warrants issued on December 28, 2020 and the FPS in light of the SEC Staffs published views. Based on this reassessment, we determined that the warrants and the FPS should be classified as liabilities measured at fair value upon issuance, with subsequent changes in fair value reported in our statement of operations each reporting period. \n\n### Overview \nWe are a blank check company incorporated in Delaware on January 23, 2020 for the purpose of effecting an initial business combination. Our sponsor is CFAC Holdings IV, LLC. \nAlthough we are not limited to a particular industry or sector for purpose of consummating an initial business combination, we are focusing our search on companies operating in the financial services, healthcare, real estate services, technology and software industries. We are an early stage and emerging growth company and, as such, subject to all of the risks associated with early stage and emerging growth companies. \nOur Registration Statement for our initial public offering became effective on December 22, 2020. On December 28, 2020, we consummated the initial public offering of 50,000,000 units, including 5,000,000 units sold upon the partial exercise of the underwriters overallotment option, at a purchase price of $10.00 per unit, generating gross proceeds of $500,000,000. Each unit consists of one share of Class A common stock and one-third of one redeemable warrant. Each warrant will become exercisable on the later of 30 days after the completion of the initial business combination and December 28, 2021 and will expire 5 years after the completion of the initial business combination,<|endoftext|>Restricted stock to Mr. Vogel, which vest in three substantially equal installments on each of the following dates: (i) January 2, 2020, (ii) January 2, 2021 and (iii) January 2, 2022. On January 4, 2018, the Company granted 58,285 shares of restricted stock to Mr. Vogel, which vest in three equal installments on each of the following dates: (i) January 4, 2019, (ii) January 4, 2020, and (iii) January 4, 2021. Vogels continued employment with the Company on each applicable vesting date. \n(3) \nDe Costanzo, which vest in three substantially equal installments on each of the following dates: (i) January 2, 2021, (ii) January 2, 2022 and (iii) January 2, 2023. On January 2, 2019, the Company granted 8,986 shares of restricted stock to Mr. De Costanzo, which vest in three equal installments on each of the following dates: (i) January 2, 2020, (ii) January 2, 2021 and (iii) January 2, 2022. On January 4, 2018, the Company granted 13,571 shares of restricted stock to Mr. De Costanzo, which vest in three substantially equal installments on each of the following dates: (i) January 4, 2019, (ii) January 4, 2020, and (iii) January 4, 2021. De Costanzos continued employment with the Company on each applicable vesting date. \n(4) \nThe market value of the unvested shares was calculated by multiplying the number of shares outstanding as of December 31, 2020 by the closing price of the Common Stock as of December 31, 2020, which was $19.00 per share (the Closing Price). \n\nThe Compensation Committee believes it is critical to align executives compensation with Company performance and long-term shareholder value creation. Provided below are the elements of compensation provided to the Named Executive Officers and commentary on each element: \n### Element \nDescription \nCommentary \n### Salary \n(i) Fixed level of compensation determined primarily based on the role, job performance and experience \n(i) Intended to compensate NEOs for day-to-day services performed \n### Annual bonus \n(i) Each NEO has a target bonus opportunity set as a percentage of base salary, specifically Mr. Vogels target bonus opportunity is 125% of salary or $843,750 and Mr. De Costanzo has a target bonus opportunity of 50% of salary or $212,500; payouts can range from zero to below/above target opportunity based on performance against pre-established Key Performance Indicators (KPIs) that support the long-term success of the Company and drive shareholder value creation \n(i) The bonus program aligns executives compensation with various financial, operational, and strategic performance measures that are critical for generating long-term, sustainable shareholder value creation. (ii) Based on the Compensation Committees assessment of performance versus the pre-established KPIs, 2020 actual bonuses were as follows: a. \nMr. Vogel: $761,112 (90% of target bonus opportunity) b. Mr. De Costanzo: $172,875 (81% of target bonus opportunity) \n(ii) Payouts are determined by the Compensation Committee based on its holistic assessment of individual performance and Company performance against the KPIs over the course of the year \n(iii) KPIs used to determine 2020 payouts included but were not limited to: fleet commercial performance, cost-control, fleet quality and compliance, financial planning and reporting and individual performance \n(\"LTI\") \n(i) In FY2020, the Compensation Committee set the target LTI opportunity at $1,012,500 (150% of base salary) and $531,250 (125% of base salary) for Mr. Vogel and Mr. De Costanzo, respectively. The Compensation Committee determined these target values after considering each executives role, responsibilities, experience, historical performance, and external market context. Final LTI grant amounts for FY2020 performance (made in early 2021) are based on EPS, and stock price performance, as well as the Compensation Committees assessment of individual performance (during a challenging market environment created by the COVID-19 global pandemic). \n(ii) Long-term incentive awards are typically delivered in restricted stock that vests ratably over 3 years \n(i) Restricted stock grants align executives compensation with our stock price and shareholder value creation while serving to motivate and retain our executives. (ii) Based on the Compensation Committees assessment of performance versus the pre-established KPIs, 2020 LTI grants (made in early 2021) were below target level, specifically: a. \nMr. Vogel: $561,938 or 18,756 shares of restricted common stock (56% of target LTI opportunity in 2020) b. \nMr. De Costanzo: $294,844 or 9,841 shares of restricted common stock (56% of target LTI opportunity in 2020) \nThe following is a narrative summary of the Compensation Committees actions during 2020 and the compensation and benefit arrangements included in the summary compensation table and the outstanding equity awards table. \n2020 Advisory Vote on Executive Compensation and Company Response \nWhile 79.5% support of the Companys 2020 Say-on-Pay proposal indicated robust support for the Companys executive compensation program, the Compensation Committee is keenly interested in understanding shareholders views when making decisions relating to executive compensation. \nAs it related to 2020 compensation, the Compensation Committee took the following actions: \n1. \nPaid out 2020 bonuses below target level, specifically 90% of target opportunity for Mr. Vogel and 81% of target for Mr. De Costanzo. \n2. \nApproved restricted stock grants (in early 2021) below target level, specifically: Delivered 56% of target LTI opportunity to Mr. Vogel ($561,938 or 18,756 shares of restricted common stock) and to Mr. De Costanzo ($294,844 or 9,841 shares of restricted common stock). \n### Agreements with our Chief Executive Officer \nOn July 6, 2015, we entered into an employment agreement with Gary Vogel, pursuant to which Mr. Vogel was appointed as our Chief Executive Officer effective as of September 1, 2015. Vogel receives an annual base salary of $675,000 and is eligible to receive a discretionary cash bonus as determined by the Compensation Committee with a target amount equal to 125% of his annual base salary (actual value can vary above or below target based on the Committees discretion). \nMr. Vogel is subject to non-solicitation and non-competition covenants during the course of his employment and for 12 months following termination of employment for any reason. \n### Agreements with our Chief Financial Officer \nOn September 3, 2016, we entered into an employment agreement with Frank De Costanzo, pursuant to which Mr. De Costanzo was appointed as our Chief Financial Officer and Secretary effective as of September 30, 2016. De Costanzo receives an annual base salary of $425,000 and is eligible to receive a discretionary cash bonus as determined by the Compensation Committee with a target amount equal to 50% of his annual base salary (actual value can vary above or below target based on the Committees discretion). \nMr. De Costanzo is subject to non-solicitation and non-competition covenants during the course of his employment and for 12 months following termination of employment for any reason. \n\nThe Company maintains two long-term equity incentive plans under which the NEOs have been granted awards: (i) the Eagle Bulk Shipping Inc. 2014 Equity Incentive Plan and (ii) the Eagle Bulk Shipping Inc. 2016 Equity Incentive Plan. The Company adopted the 2016 Plan on November 7, 2016. Following shareholder approval of the 2016 Plan on December 15, 2016, the 2016 Plan replaced the 2014 Plan and no other awards will be granted under the 2014 Plan. Outstanding awards under the 2014 Plan will continue to be governed by the terms of the 2014 Plan until exercised, expired or otherwise terminated or cancelled. \nThe Compensation Committee believes that the effective use of stock-based long-term incentive compensation has been integral to the Companys success and is vital to its ability to achieve strong performance in the future and, therefore, delivers a portion of each executives incentive compensation in the form of equity. These awards are intended to align the interests of our executives with those of our shareholders, enhance the personal stake of executive officers in the growth and success of the Company, provide an incentive for the executive officers continued service at the Company, and provide an opportunity for executives to increase their stock ownership levels. \nProvided below, is a summary of the LTI grants made in 2021 for 2020 performance, in 2020 for 2019 performance and 2019 for 2018 performance. \n2021 Awards for 2020 performance \nOn February 19, 2021, the Company granted 18,756 shares of restricted common stock to Mr. Vogel. In the event that Mr. If Mr. \nOn February 19, 2021, the Company granted 9,841 shares of restricted common stock to Mr. De Costanzo. In the event that Mr. \n2020 Awards for 2019 performance \nOn May 14, 2020, the Company granted 21,428 shares of restricted common stock to Mr. Vogel. In the event that Mr. If Mr. \nOn May 14, 2020, the Company granted 5,000 shares of restricted common stock to Mr.De Costanzo. In the event that Mr. \n2019 Awards for 2018 performance \nOn January 2, 2019, the Company granted 32,321 shares of restricted common stock to Mr.Vogel. In the event that Mr. If Mr. \nOn January 2, 2019, the Company granted 8,986 shares of restricted common stock to Mr. De Costanzo. In the event that Mr. \n### Retirement Benefits \nWe provide all qualifying full-time employees, including our NEOs, with the opportunity to participate in our tax-qualified 401(k) savings plan. This plan allows employees to defer receipt of earned salary, up to tax law limits, on a tax-advantaged basis. Accounts may be invested in a wide range of mutual funds. We provide a 100% match for the first 6% of salary. \n\nVogels employment is terminated by the Company without cause or by him for good reason, Mr. Vogel will become entitled to receive the following as severance: (i) an amount equal to one and one half times (1.5x) the sum of his annual base salary plus 75% of his target annual bonus and (ii) if he timely elects COBRA continuation coverage, Mr. Vogel will be reimbursed for the costs of COBRA premiums for 18 months following termination. In addition, on his termination without cause or by him for good reason or by reason of his death or disability, all equity awards held by him will vest as if he remained employed for an additional year beyond the date of termination and any outstanding options held by him will remain exercisable until the later of one year after the date of termination and the original expiration date of such options. \nDe Costanzos employment is terminated by the Company without cause or by him for good reason, Mr. De Costanzo will become entitled to receive the following as severance: (i) an amount equal to the sum of his annual base salary plus 75% of his target annual bonus and (ii) if he timely elects COBRA continuation coverage, Mr. De Costanzo will be reimbursed for the costs of COBRA premiums for 12 months following termination. In addition, on his termination without cause or by him for good reason, all equity awards held by him will vest as if he remained employed for an additional year beyond the date of termination. If Mr. De Costanzos employment is terminated by reason of his death or disability, the Company will pay him or his legal representatives his pro rata annual bonus for the year of termination based on actual results and all equity awards held by him will vest as if Mr. De Costanzo remained employed for an additional year beyond the date of termination and any outstanding options held by him will remain exercisable until the later of one year after the date of termination and the original expiration date of such options. \nThe 2016 Plan and the 2014 Plan each provides that, in the event of a change in control of the Company, the Compensation Committee is authorized to provide for continuation, assumption or substitution of awards, accelerating the exercisability or vesting of awards, or accelerating the termination of awards with either a period for exercise before the occurrence of the change in control or a cash payment in consideration for the cancellation of such awards. \n2020 Directors' compensation \nEach of our non-employee directors are paid a cash retainer of $65,000 per year for serving as our Board of Directors. Additionally, our Chairman of our Board of Directors is paid a cash retainer of $140,000 per year. Each of our directors serving as<|endoftext|>And thinly traded public float, limited operating history and lack of profits which could lead to wide fluctuations in our share price. You may be unable to sell your common stock at or above your conversion price, which may result in substantial losses to you. \nThe volatility in our share price is attributable to a number of factors. First, as noted above, our common stock are sporadically and thinly traded. As a consequence of this lack of liquidity, the trading of relatively small quantities of shares by our shareholders may disproportionately influence the price of those shares in either direction. The price for our shares could, for example, decline, precipitously or otherwise, in the event that a large number of our common stock are sold on the market without commensurate demand, as compared to a seasoned issuer which could better absorb those sales without adverse impact on its share price. Secondly, we are a speculative or risky investment due to our limited operating history and lack of profits to date, and uncertainty of future market acceptance for our potential products and services. As a consequence of this enhanced risk, more risk-adverse investors may, under the fear of losing all or most of their investment in the event of negative news or lack of progress, be more inclined to sell their shares on the market more quickly and at greater discounts than would be the case with the stock of a seasoned issuer. Many of these factors are beyond our control and may decrease the market price of our common stock, regardless of our operating performance. We cannot make any predictions or projections as to what the prevailing market price for our common stock will be at any time, including as to whether our common stock will sustain their current market prices, or as to what effect that the sale of shares or the availability of common stock for sale at any time will have on the prevailing market price. \nThe application of the penny stock rules could adversely affect the market price of our common stock and increase your transaction costs to sell those shares. \nThe SEC has adopted rule 3a51-1 which establishes the definition of a penny stock, for the purposes relevant to us, as any equity security that has a market price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions. For any transaction involving a penny stock, unless exempt, Rule 15g-9 requires: that a broker or dealer approve a persons account for transactions in penny stocks, and the broker or dealer receives from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased. \nIn order to approve a persons account for transactions in penny stocks, the broker or dealer must: obtain financial information and investment experience objectives of the person, and make a reasonable determination that the transactions in penny stocks are suitable for that person and the person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks. \nThe broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prescribed by the SEC relating to the penny stock market, which, in highlight form: sets forth the basis on which the broker or dealer made the suitability determination, and that the broker or dealer received a signed, written agreement from the investor prior to the transaction. \nThis may make it more difficult for investors to dispose of our common stock and cause a decline in the market value of our stock. \nThe application of Rule 144 creates some investment risk to potential investors; for example, existing shareholders may be able to rely on Rule 144 to sell some of their holdings, driving down the price of the shares you purchased. \nThe SEC adopted amendments to Rule 144 which became effective on February 15, 2008 that apply to securities acquired both before and after that date. Under these amendments, a person who has beneficially owned restricted shares of our common stock for at least six months would be entitled to sell their securities provided that: (i) such person is not deemed to have been one of our affiliates at the time of, or at any time during the three months preceding a sale, (ii) we are subject to the Exchange Act periodic reporting requirements for at least 90 days before the sale and (iii) if the sale occurs prior to satisfaction of a one-year holding period, we provide current information at the time of sale. \nPersons who have beneficially owned restricted shares of our common stock for at least six months but who are our affiliates at the time of, or at any time during the three months preceding a sale, would be subject to additional restrictions, by which such person would be entitled to sell within any three-month period only a number of securities that does not exceed the greater of either of the following: \n1% of the total number of securities of the same class then outstanding (shares of common stock as of the date of this Report); or the average weekly trading volume of such securities during the four calendar weeks preceding the filing of a notice on Form 144 with respect to the sale; \nProvided, in each case, that we are subject to the Exchange Act periodic reporting requirements for at least three months before the sale. Such sales by affiliates must also comply with the manner of sale, current public information and notice provisions of Rule 144. \nOur common stock may experience volatility in trading or loss in value as a result of the effects of the coronavirus on the US and global economies. \nUncertainties surrounding the effects of the coronavirus on the US and global economies has resulted in an increase in volatility and violent drops in the value of publicly traded securities. While the price of our common stock has not experienced such volatility or loss in value, we can offer no assurances that the long-term effects on the overall US economy will not negatively affect us in the future. \nFluctuations in our quarterly revenues may cause the price of our common stock to decline. \nOur operating results have varied significantly from quarter to quarter in the past, and we expect our operating results to vary from quarter to quarter in the future due to a variety of factors, many of which are outside of our control. Therefore, if revenues are below our expectations, this shortfall is likely to adversely and disproportionately affect our operating results. Accordingly, we may not attain positive operating margins in future quarters. Any of these factors could cause our operating results to be below the expectations of securities analysts and investors, which likely would negatively affect the price of our common stock. \nOur management and larger stockholders currently exercise significant control over our Company and will continue to have influence over our Company after the offering has concluded, and such influence may be in conflict to your interests. \nAs of September 30, 2020, our executive officers and directors beneficially own approximately 57.32% of our voting power. As a result, these stockholders have been able to exercise significant control over all matters requiring stockholder approval, including the election of directors and approval of significant corporate transactions, including the details of this offering. \nWe do not intend to pay dividends on our common stock. \nWe currently anticipate that we will retain all of our available cash, if any, for use as working capital and for other general corporate purposes. Any payment of future dividends will be at the discretion of our Board of Directors and will depend upon, among other things, our earnings, financial condition, capital requirements, level of indebtedness, statutory and contractual restrictions applying to the payment of dividends and other considerations that the Board of Directors deems relevant. Investors must rely on sales of their common stock after price appreciation, which may never occur, as the only way to realize a return on their investment. \nCompliance with changing regulations concerning corporate governance and public disclosure may result in additional expenses. \nIn recent years, there have been several changes in laws, rules, regulations and standards relating to corporate governance and public disclosure, including the Dodd-Frank Wall Street Reform and Consumer Protection Act (the Dodd-Frank Act), the Sarbanes-Oxley Act of 2002 (Sarbanes-Oxley) and various other new regulations promulgated by the SEC and rules promulgated by the national securities exchanges. The Dodd-Frank Act, enacted in July 2010, expands federal regulation of corporate governance matters and imposes requirements on publicly-held companies, including us, to, among other things, provide stockholders with a periodic advisory vote on executive compensation and also adds compensation committee reforms and enhanced pay-for-performance disclosures. While some provisions of the Dodd-Frank Act were effective upon enactment, others will be implemented upon the SECs adoption of related rules and regulations. The scope and timing of the adoption of such rules and regulations is uncertain and accordingly, the cost of compliance with the Dodd-Frank Act is also uncertain. \nIn addition, Sarbanes-Oxley specifically requires, among other things, that we maintain effective internal control over financial reporting and disclosure of controls and procedures. \nThese and other new or changed laws, rules, regulations and standards are, or will be, subject to varying interpretations in many cases due to their lack of specificity. As a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies, which could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices. Our efforts to comply with evolving laws, regulations and standards are likely to continue to result in increased general and administrative expenses and a diversion of management time and attention from revenue-generating activities to compliance activities. Further, compliance with new and existing laws, rules, regulations and standards may make it more difficult and expensive for us to maintain director and officer liability insurance, and we may be required to accept reduced coverage or incur substantially higher costs to obtain coverage. Members of our board of directors and our principal executive officer and principal financial officer could face an increased risk of personal liability in connection with the performance of their duties. As a result, we may have difficulty attracting and retaining qualified directors and executive officers, which could harm our business. We continually evaluate and monitor regulatory developments and cannot estimate the timing or magnitude of additional costs we may incur as a result. \nRisks Related to Our Business Acquisition Strategy \nWe are dependent upon our ability to successfully complete acquisitions of One-four branch bank or successful execution of a Joint Venture agreement with an One-four branch bank to grow our business. \nWe intend to re-launch our technology focused business model through acquisitions and Joint Ventures (JV) with willing businesses that source, design, develop, manufacture, install and distribute , Power Control, Battery Technology, Wireless Technology, and Residential utility meters and remote, mission-critical devices mostly engineered through Artificial Intelligence, Machine Learning and Robotic technologies. \nWe also intend to pursue and consummate one or more acquisitions using part of the Offering Proceeds from the sale of our Class B Common Stock as well as other funding sources, which have not yet been determined, if any, to fund any cash portion of the consideration we will pay in connection with those acquisitions. However, such acquisitions may also be subject to conditions and other impediments to closing, including some that are beyond our control, and we may not be able to close any of them successfully, in a timely manner. In addition, our future acquisitions will be required to be closed within certain timeframes as negotiated between us and the acquisition target, and if we are unable to meet the closing deadlines for a given transaction, we may be required to forfeit payments<|endoftext|>Mullen Agreement, Mr. Mullen report to anyone other than the Board and, under the 2018 Worman Agreement and 2018 DeSena Agreement, such executive report to anyone other than the CEO; (v) on or before December 31, 2021, a change in the composition of the Board that results in the Continuing Directors (as defined in the applicable agreement) no longer constituting at least a majority of the Board (vi) a material change in the geographic location at which such executive must perform services (which, for purposes of the Amended Mullen Agreement, the 2018 Worman Agreement and the 2018 DeSena Agreement, means a relocation of the Companys principal place of business of such executive outside of the New York City metropolitan area) or (vii) under the 2018 DeSena Agreement, the separation from employment of both Mr. Mullen and Mr. Worman due to their termination without Cause or resignation for Good Reason. Under each of the Amended Mullen Agreement, the 2018 Worman Agreement and the 2018 DeSena Agreement, such executive may terminate his employment for good reason only if (A) he has provided the Company with written notice of the asserted good reason condition within ninety days after its initial existence; (B) the Company fails to cure the condition within thirty days after receiving such notice; and (C) such executive terminates employment within ninety days following his written notice to the Company of the existence of the good reason condition. \nThe Amended Mullen Agreement, the 2018 Worman Agreement and the 2018 DeSena Agreement include post-employment obligations providing a three-month noncompete and a nine-month prohibition on soliciting or hiring employees, independent contractors and financial advisors of the Company and its subsidiaries. \nUnder each of the New Mullen Agreement, New Worman Agreement and New DeSena Agreement, if such executives employment ends for any reason, the Company must pay to him his base salary through the date of his termination, a prorated target bonus with respect to the year employment ends (or, if no target has been set, the target bonus for the prior year, with this prorated target bonus not payable on terminations for Cause (as defined in the Employment Agreements) or resignations without Good Reason (as defined in the Employment Agreements) after December 31, 2021), as well as vacation cash-outs and reasonable expense reimbursement. \nIf Messrs. Mullen, Worman, or DeSena is terminated without Cause, resigns for Good Reason, leaves employment as a result of Disability (as each of those terms is defined in the Employment Agreements) or dies, he or his estate will also, contingent upon the execution and delivery of a release of claims, receive a lump sum severance payment equal to the sum of his base salary and the target bonus for the current year (or prior year if no target has been set) (with the payment to Mr. Worman being twice the sum of base salary and the target bonus component if the termination or resignation occurs within a year after the closing of the Merger) and, if not already payable, a prorated target bonus with respect to the year employment ends (or, if no target has been set, the target bonus for the prior year). He will also be eligible for the Company to reimburse him for COBRA continuation coverage premiums he incurs for 12 months (or if earlier, until he becomes eligible to receive substantially similar coverage) based on the level of premiums paid for active employees. \n### DIRECTOR COMPENSATION \nCash Compensation. \nOur non-employee directors are to receive the following cash compensation: (i) $50,000 annual retainer; and (ii) $10,000 additional retainer for service as Chairman of the Board, Vice-Chairman of the Board, and Chairman of the Audit Committee. Each non-employee director receives reimbursement for reasonable travel expenses incurred in attending meetings of the Board and meetings of committees of the Board. \n### Equity Compensation. \nOur non-employee directors are to receive the following equity compensation under the 2013 Omnibus Incentive Plan. \nInitial Stock Grant \nNon-employee directors receive 50,000 RSUs upon initial election or appointment to the Board. \n### Annual Stock Grant. \nNon-employee directors receive an RSU award of $50,000 worth of restricted stock annually for service on the Board. \n2020 Director Compensation \nIn consideration of the COVID-19 pandemic, our Board agreed to take a 10% reduction in cash compensation during the fiscal quarter ended June 30, 2020. As a result, our non-employee directors each received $48,750 in cash compensation for the fiscal year ended September 30, 2020, and the Vice-Chairman of our Board and Chairman of the Audit Committee each received an additional $9,750 as compensation for their service during the fiscal year ended September 30, 2020. \nDirector Compensation Table for 2020 \n(1) \nGrant date fair value of stock award. \n(2) \nMr. Mullen did not receive any additional compensation in his capacity as a director. See Executive Compensationon page 7of this Annual Report on Form 10-K/A for details on Mr. Mullens compensation for the fiscal year ended September 30, 2020. \n(3) \nMr. Singer received compensation as an employee of the Company in the amount of $317,228 for the fiscal year ended September 30, 2020. This amount includes $22,228 in medical benefits allowance. \n(4) \nMr. Michas resigned as a member of the Board effective as of September 5, 2020 and forfeited his annual stock award for the fiscal year ended September 30, 2020. \n### Item \n\nSTOCK OWNERSHIP OF OUR DIRECTORS, EXECUTIVE OFFICERS \n### AND 5% BENEFICIAL OWNERS \nThe following table shows information, as of January 15, 2021, concerning the beneficial ownership of our common stock by: \nEach person we know to be the beneficial owner of more than 5% of our common stock; \n### Each of our directors; \nEach of our NEOs shown in our Summary Compensation Table; and \nAll directors and executives as a group. \nAs of January 15, 2021, there were 13,765,304 shares of our common stock outstanding. In order to calculate a stockholders percentage of beneficial ownership, we include in the calculation those shares underlying options or warrants beneficially owned by that stockholder that are vested or that will vest within 60 days of January 15, 2021. Shares of restricted stock are deemed to be outstanding. Options or warrants held by other stockholders that are not attributed to the named beneficial owner are disregarded in this calculation. \nBeneficial ownership is determined in accordance with the rules of the SEC and includes voting or investment power with respect to the shares of our common stock. Unless we have indicated otherwise, each person named in the table below has sole voting power and investment power for the shares listed opposite such persons name, except to the extent authority is shared by spouses under community property laws. \n* Less than 1% \n(1) \nInformation is based on Schedule 13D/A filed jointly by B. Riley Financial, Inc., a Delaware corporation, and NHC Holdings, LLC, a Delaware limited liability company and a wholly owned subsidiary of B. Riley Financial, Inc., on January 12, 2021. According to the Schedule 13D/A, the Reporting Persons own 6,159,550 shares. The address of the principal business office of each of the foregoing is 21255 Burbank Boulevard, Suite 400, Woodland Hills, California 91367. \n(2) \nInformation is based on Form 4 filed by Daniel Asher on December 29, 2020. According to the Form 4, (i) Sphinx Trading , LP (Sphinx) beneficially owned 1,298,032 shares of our common stock, (ii) Oakmont Investments, LLC (Oakmont), as the general partner of Sphinx, may be deemed to beneficially own the 1,298,032 shares of our common stock owned by Sphinx, (iii) Equitec Proprietary Markets, LLC (Equitec) beneficially owned 1,729,809 shares of our common stock and (iv) Mr. Asher, as the President of Oakmont and the 50% owner of Equitec, may be deemed to beneficially own the (a) 1,298,032 shares of our common stock owned by Sphinx and (b) 1,729,809 shares of our common stock owned by Equitec. The address of the principal business office of each of the foregoing is 111 W. Jackson Blvd., 20th Floor, Chicago, IL 60604. \n(3) \nIncludes 1,065,808 shares of our common stock issuable upon the conversion of warrants. Information is based on Schedule 13G/A filed on February 14, 2020 by RMB Capital Holdings, LLC, a Delaware limited liability company. RMB Capital Holdings, LLC is manager of RMB Capital Management, LLC (an investment adviser registered under the Investment Advisers Act of 1940). RMB Capital Management, LLC is manager of Iron Road Capital Partners LLC, a Delaware limited liability company, and RMB Mendon Managers, LLC, a Delaware limited liability company. RMB Capital Holdings, LLC, RMB Capital Management, LLC, Iron Road Capital Partners LLC and/or RMB Mendon Managers, LLC, or entities affiliated with such entities, may own additional shares of our common stock of which we are unaware. The address of the principal business office of each of the foregoing is 115 S. LaSalle Street, 34th Floor, Chicago, IL 60603. \n(4) \nIncludes 16,667 shares of our common stock issuable upon the conversion of RSUs that will vest within 60 days of January 15, 2021. \n(5) \nIncludes 8,691 shares of our common stock issuable upon the conversion of RSUs that will vest within 60 days of January 15, 2021. \n(6) \nIncludes 180,000 vested stock options. \n(7) \nIncludes 78,125 RSUs granted in January 2017. These RSUs vested in January 2021. \n(8) \nIncludes 3,531 shares of our common stock issuable upon the conversion of RSUs that will vest within 60 days of January 15, 2021. \n(9) \nConsists of (i) 5,001 shares of our common stock held in a Trust for the benefit of Toby Fagenson, of which Mr. Fagenson is the sole Trustee and has sole voting and investment power over such shares, (ii) 301,463 shares of our common stock held by Fagenson & Co., Inc., of which Mr. Fagenson is the President and majority shareholder, (iii) 67,151 shares of our common stock held directly by Mr. Fagenson, (iv) 33,395 shares of our common stock held by National Securities Growth Partners LLC, of which Mr. Fagenson is the managing Member and has sole voting and investment power and (v) 8,691 shares of our common stock issuable upon the conversion of RSUs that will vest within 60 days of January 15, 2021. \n### Item \n\n### BOARD INDEPENDENCE \nThe Board has affirmatively determined that three of our six directors are independent directors. In making this determination, the Board found that none of the Companys independent directors had a material or other disqualifying relationship with the Company. The Board reached a similar determination with respect to Mr. Michas, who served as a director until September 5, 2020. As a result of Mr. Michass resignation, as of September 5, 2020, the Company no longer complied with the majority independent director requirement for continued listing on The Nasdaq Capital Market, as set forth in Listing Rule 5605(b)(1) (the Majority Independence Rule). See further discussion above under Item 10Directors, Executive Officers and Corporate GovernanceCorporate Governance. \n\n\nArrangements Regarding Robert B. Fagenson \nMr. Fagenson is a party to an Independent Contractor Agreement, dated April 1, 2018, with National Securities Corporation (NSC), our wholly-owned subsidiary, whereby in exchange for establishing and maintaining a branch office of NSC in New York, New York, Mr. Fagenson receives 90% of income accrued at the branch, before expenses associated with the operation of such branch, including commissions owed to its registered representatives. Fagenson earned $593,657 in commissions, under this arrangement. Prior to entry into this agreement, Mr. Fagenson was a party to an Independent Contractor Agreement, dated February 27, 2012, with NSC, whereby in exchange for establishing and maintaining a branch office of NSC in New York, New York, Mr. Fagenson received 50% of income accrued at the branch, which amount was immaterial. \nArrangements Regarding Michael A. \n### Mullen \nMr. Mullen is a party to an Independent Contractor Agreement, dated April 22, 2008, with NSC whereby in exchange for establishing and maintaining a branch, Mr. Mullen receives 100% of income accrued at the branch, before expenses associated with the operation of such branch, including commissions owed to its registered representatives. Mullen earned $892,494 in commissions under this arrangement. Information regarding<|endoftext|>"},"task":{"kind":"string","value":"{\"file\": \"/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz\"}"}}},{"rowIdx":79,"cells":{"text":{"kind":"string","value":"<|endoftext|>Against us and our directors, officers or employees. Alternatively, if a court were to find the choice of forum provision contained in our certificate of incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could have a material adverse effect on our business, financial condition, results of operations and prospects. \nFuture sales of our ClassA Stock by our existing stockholders may cause our stock price to fall. \nThe market price of our ClassA Stock could decline as a result of sales by a few large stockholders, including CCP and Blackwell, in the market, or the perception that these sales could occur. These sales might also make it more difficult for us to sell equity securities at a time and price that we deem appropriate. \nOur stockholders may experience substantial dilution in the value of their investment if we issue additional shares of our capital stock. \nOur charter allows us to issue up to 300 million shares of our Common Stock, including 210 million shares of Class A Stock and 90 million shares of Class B Stock, and up to five million shares of undesignated preferred stock, par value $0.0001 per share. To raise additional capital, we may in the future sell additional shares of our Class A Stock or other securities convertible into or exchangeable for our Class A Stock at prices that are lower than the prices paid by existing stockholders, and investors purchasing shares or other securities in the future could have rights superior to existing stockholders, which could result in substantial dilution to the interests of existing stockholders. \nOur only significant asset is our ownership of Purple LLC and such ownership may not be sufficient to pay dividends or make distributions or loans to enable us to pay any dividends on our ClassA Stock or satisfy our other financial obligations, including our obligations under the Tax Receivable Agreement. \nWe are a holding company and do not directly own any operating assets other than our ownership of interests in Purple LLC. We depend on Purple LLC for distributions, loans and other payments to generate the funds necessary to meet our financial obligations, including our expenses as a publicly traded company, to pay any dividends, and to satisfy our obligations under the Tax Receivable Agreement. The earnings from, or other available assets of, Purple LLC may not be sufficient to make distributions or pay dividends, pay expenses or satisfy our other financial obligations, including our obligations under the Tax Receivable Agreement. \nWe do not anticipate paying any cash dividends in the foreseeable future. \nWe intend to retain future earnings, if any, for use in the business or for other corporate purposes and do not anticipate that cash dividends with respect to our ClassA Stock will be paid in the foreseeable future. Any decision as to the future payment of dividends will depend on our results of operations, financial position and such other factors as our Board, in its discretion, deems relevant. As a result, capital appreciation, if any, of our ClassA Stock will be a stockholders sole source of gain for the foreseeable future. \nOur level of indebtedness and related covenants could limit our operational and financial flexibility and significant adversely affect our business if we breach such covenants and default on such indebtedness. \nAs of December 31, 2020, Purple LLC had total debt of $44.4 million outstanding under the 2020 Credit Agreement. While any amounts are outstanding under the 2020 Credit Agreement, we are subject to a number of affirmative and negative covenants, including covenants regarding dispositions of property, investments, forming or acquiring subsidiaries, business combinations or acquisitions, incurrence of additional indebtedness, and transactions with affiliates, among other customary covenants, subject to certain exceptions. In particular, we are (i) subject to annual capital expenditure limits that can be adjusted based on the Company achieving certain Net Leverage Ratio thresholds as provided in the 2020 Credit Agreement, (ii) restricted from incurring additional debt up to certain amounts, subject to limited exceptions, as set forth in the Credit Agreement, and (iii) maintain minimum Consolidated Net Leverage Ratio and Fixed Charge Coverage Ratio (as those terms are defined in the Credit Agreement) thresholds at certain measurement dates. \nThese restrictions may prevent us from taking actions that we believe would be in the best interests of the business and may make it difficult for us to successfully execute our business strategy or effectively compete with companies that are not similarly restricted. If we determine that we need to take any action that is restricted under the 2020 Credit Agreement, we will need to first obtain a waiver from the Institutional Lenders. Obtaining such waivers, if needed, may impose additional costs on the Company or we may be unable to obtain such waivers. Our ability to comply with these restrictive covenants in future periods will largely depend on our ability to successfully implement our overall business strategy. The breach of any of these covenants or restrictions could result in a default, which could result in the acceleration of our outstanding debt. In the event of an acceleration of such debt, we could be forced to apply all available cash flows to repay such debt, which could also force us into bankruptcy or liquidation. \n\nThe SEC Statement identified certain settlement terms and provisions related to certain tender offers following a business combination, which terms are similar to those contained in the warrant agreement governing our warrants. As a result of the SEC Statement, we reevaluated the accounting treatment of our public warrants and sponsor warrants, and determined to classify the warrants as derivative liabilities measured at fair value, with changes in fair value each period reported in earnings. \nAs a result, included on our consolidated balance sheets as of December 31, 2020 and 2019 contained elsewhere in this Annual Report are derivative liabilities related to embedded features contained within our warrants. \nCertain outstanding warrants could be exercised and result in dilution of all shareholders without any concurrent payment or other benefit to the Company. \nCertain outstanding warrants held by former members of Global Partner Sponsor, LLC (the sponsor for GPAC) and its permitted transferees are not redeemable and may be exercised on a cashless basis. As of March 8, 2021, approximately 1.9 million sponsor warrants remain outstanding, which are exercisable for an aggregate of less than one million shares of Class A Stock. If the holders of the sponsor warrants choose to exercise their warrants on a cashless basis, we would be required to issue shares of Class A Stock without any further consideration paid to us, resulting in dilution to our existing stockholders. \nWe could issue additional preferred stock without stockholder approval with the effect of diluting then current stockholder interests, impairing their voting rights and potentially discouraging a takeover that stockholders may consider favorable. \nPursuant to our Second Amended and Restated Certificate of Incorporation, the Board has the ability to authorize the issuance of up to five million shares of preferred stock at any time and from time to time, with such terms and preferences as the Board determines and without any stockholder approval other than as may be required by NASDAQ Global Market rules. The issuance of such shares of preferred stock could dilute the interest of, or impair the voting power of, our common stockholders. The issuance of such preferred stock could also be used as a method of discouraging, delaying or preventing a change of control. \nWe may issue debt and equity securities or securities convertible into equity securities, any of which may be senior to our ClassA Stock as to distributions and in liquidation, which could negatively affect the value of our ClassA Stock. \nIn the future, we may attempt to increase our capital resources by entering into additional debt or debt-like financing that is unsecured or secured by up to all of our assets, or by issuing additional debt or equity securities, which could include issuances of secured or unsecured notes, preferred stock, hybrid securities or securities convertible into or exchangeable for equity securities. In the event of our liquidation, our lenders and holders of our debt would receive distributions of our available assets before distributions to holders of our ClassA Stock, and holders of preferred securities would receive distributions of our available assets before distributions to the holders of our ClassA Stock. Because our decision to incur debt and issue securities in future offerings may be influenced by market conditions and other factors beyond our control, we cannot predict or estimate the amount, timing or nature of our future offerings or debt financings. \n\nAlthough we may be entitled to tax benefits relating to additional tax depreciation or amortization deductions as a result of the tax basisstep-upwe receive in connection with the exchanges of ClassB Units and shares of ClassB Stock into our ClassA Stock and related transactions, we will be required to pay InnoHold 80% of these tax benefits under the Tax Receivable Agreement. \nOwners of ClassB Units and shares of ClassB Stock may, subject to certain conditions and transfer restrictions, exchange their ClassB Units and shares of ClassB Stock (together with an equal number of Class B Units, the Paired Securities) for shares of ClassA Stock pursuant to an exchange agreement, dated February 2, 2018, with Purple LLC, InnoHold and the Class B Unit holders who became a party thereto (the Exchange Agreement). The deemed exchanges in the Business Combination and any exchanges pursuant to the Exchange Agreement are expected to result in increases in our allocable share of the tax basis of the tangible and intangible assets of Purple LLC. These increases in tax basis may increase (for tax purposes) depreciation and amortization deductions and therefore reduce the amount of income or franchise tax that we would otherwise be required to pay in the future, although the Internal Revenue Service or any applicable foreign, state or local tax authority may challenge all or part of that tax basis increase, and a court could sustain such a challenge. As of December 31, 2020, there have been 43.5million exchanges of ClassB Units and shares of ClassB Stock for shares of ClassA Stock, in addition to the deemed exchanges that occurred in connection with the Business Combination. \nIn connection with the Business Combination, we entered into the Tax Receivable Agreement, which generally provides for the payment by us to InnoHold of 80% of certain tax benefits, if any, that we realize as a result of these increases in tax basis and of certain other tax benefits related to entering into the Tax Receivable Agreement, including income or franchise tax benefits attributable to payments under the Tax Receivable Agreement. These payment obligations pursuant to the Tax Receivable Agreement are the obligation of the Company and not of Purple LLC. The actual increase in our allocable share of the Companys tax basis in its assets, as well as the amount and timing of any payments under the Tax Receivable Agreement, will vary depending upon a number of factors, including the timing of exchanges, the market price of shares of our common stock at the time of the exchange, the extent to which such exchanges are taxable and the amount and timing of our income. As of December 31, 2020, the Companys preliminary estimate of the liability under the Tax Receivable Agreement resulting from the deemed exchanges that occurred in connection with the Business Combination and subsequent exchanges of 43.5 million Paired Securities as of December 31, 2020 was approximately $172.0 million. ($0.5million in 2019 and an incremental $171.5million through December 31, 2020). To the extent the Company realizes tax benefits in future years, or in the event of a change in future tax rates, or if payments under the Tax Receivable Agreement are required to be accelerated, this liability may exceed the estimated liability. \nBecause not all of the relevant factors described above are known at this time with respect to the exchanges that have<|endoftext|>Table \nThe following table sets forth certain information regarding the compensation paid to our named executive officers (NEOs) for the fiscal years ended December 31, 2020 and 2019: \n(1) \nThe amounts reported are the aggregate grant date fair value of the awards computed in accordance with ASC 718. \n### Employment Agreements \nDr. Xiaochun (Chris) Xu. \nDr. Xu has an employment agreement with the Company (the Employment Agreement) that provides that Dr. Xu is entitled to a base salary of $500,000 per annum and that Dr. Xu will devote at least of a majority of his full working time and efforts to the affairs of the Company. Dr. Xu is eligible to receive a performance bonus equal to a percentage of his base salary based on performance against annual objectives at the discretion of the Board (an STI Award). The target percentage is 60%, but the actual percentage as determined by the Board may range from 0% to higher than 100% of his base salary. Either of Dr. Xu or the Company may terminate the employment agreement at any time and for any reason. In the event that Dr. Xus employment is terminated by the Company without Cause or he resigns for Good Reason (each as defined in the Employment Agreement), he will be entitled to receive a sum equal to eighteen months of base salary in effect as of the termination date, a lump sum cash payment equal to one and a half times the most recently established and earned annual STI Award, all options granted to Dr. Xu to acquire Company Common Stock shall become vested as of the termination date, and the Company shall pay up to eighteen months of COBRA premiums. If Dr. Xus employment is terminated by the Company without Cause or he resigns for Good Reason, in each case, within three months prior to or eighteen months following certain changes in control of the Company, he will be entitled to receive a lump sum cash payment equal to thirty-six months of the base salary in effect as of the termination date, a lump sum cash payment equal to three times the most recently established and earned annual STI Award, all options granted to Dr. Xu to acquire Company Common Stock shall become vested as of the termination date, and the Company shall pay up to twenty four months of COBRA premiums. \n### Mr. Jeff Cauble \nCauble. \n\nThe following table provides information about outstanding options held by the NEOs as of December 31, 2020. The grant date fair value of the awards granted during the year ended December 31, 2020, and the year ended December 31, 2019, is disclosed in the Summary Compensation Table. \n__________________ \n(1) \nVests in equal installments on December 31, 2021 and 2022. \n(3) \nVests in equal installments on December 14, 2021 and 2022. \n(4) \nRepresents ThermoGenesis Corp. options. Vests in equal installments on December 29, 2021 and 2022. \n\nDr. Xu has certain change of control rights under the Employment Agreement, as described above. The Compensation Committee considers these rights, on a case by case basis, to provide NEOs with the ability to make appropriate, informed decisions on strategy and direction of the Company that may adversely impact their particular positions, but nevertheless are appropriate for the Company and its stockholders. Our Compensation Committee believes that the Company should provide reasonable severance benefits to certain of its executive officers, recognizing that it may be difficult for such officers to find comparable employment within a short period of time and that severance arrangements may be necessary to attract highly qualified officers in a competitive hiring environment. \nThe following table describes the potential payments upon a hypothetical termination without cause, resignation for good reason or due to a change in control of the Company on December 31, 2020, for the NEOs. The actual amounts that may be paid upon an executives termination of employment can only be determined at the actual time of such termination. \n(1) Payable in a lump-sum payment. \n\nDirector Compensation Table \nThe following table sets forth the compensation received by each of the Companys non-employee directors for the year ended December 31, 2020. \n(1) \nReflects the grant date fair value of the stock option grant of 10,000 shares granted on June 4, 2020. \nThe following table sets forth the aggregate number of option awards held by each non-employee director as of December 31, 2020: \nEach non-employee director receives an annual fee of $35,000. The chairperson of each standing committee receives an additional annual fee of $15,000 for the Audit Committee, $10,000 for the Compensation Committee and $7,000 for the Governance Committee. Each non-chair committee member receives an annual fee of $7,500 for the Audit Committee, $5,000 for the Compensation Committee, and $3,500 for the Governance Committee. \nAll fees are paid quarterly. In addition, we reimburse our directors for their reasonable expenses incurred in attending meetings of the Board and its committees. \nITEM 12. \n\n\nThe following table provides information for all of the Companys equity compensation plans in effect as of December 31, 2020. \nOn December 29, 2017, the Board of Directors of ThermoGenesis Corp., a wholly-owned subsidiary of the Company (ThermoGenesis), adopted the ThermoGenesis Corp. 2017 Equity Incentive Plan (the ThermoGenesis Plan). The ThermoGenesis Plan was unanimously approved by the ThermoGenesis stockholders (including the Company) on December 29, 2017. The ThermoGenesis Plan authorizes the issuance of up to 1,000,000 shares of ThermoGenesis Common Stock, all of which may be issued as incentive stock options under Section 422 of the Code. The ThermoGenesis Plan is administered by the Compensation Committee of the ThermoGenesis Board of Directors, except that if such a committee is not appointed, the plan will be administered by the ThermoGenesis Board of Directors. As of April 6, 2021, Dr. Xu holds 30,000 stock options out of the ThermoGenesis Plan, of which 18,000 are exercisable. \nOn June 4, 2020, the Board of Directors of the Company approved and adopted an amendment (the \n### Plan Amendment \n) to the Companys 2016 Equity Incentive Plan (the 2016 Plan) to increase the aggregate number of shares that may be issued under the 2016 Plan from 392,500 shares to 1,273,000 shares. Also on June 4, 2020, the Companys Board of Directors granted stock options to purchase an aggregate of 571,500 shares of Company common stock to certain employees and executives of the Company. The Plan Amendment and the options granted on June 4, 2020 will be null and void if not approved by the Companys stockholders prior to June 3, 2021. \nSTOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT OF THERMOGENESIS HOLDINGS, INC. \nThe Company has only one class of stock outstanding, our Common Stock. The following table sets forth certain information as of April 6, 2021, with respect to the beneficial ownership of the Companys Common Stock for (i) each director and director nominee, (ii) each named executive officer herein, (iii) all of Companys directors and executive officers as a group, and (iv) each person known to us to own beneficially five percent (5%) or more of the outstanding shares of Companys Common Stock. As of April 6, 2021, there were 11,911,784 shares of Common Stock outstanding. Each share of the Companys Common Stock is entitled to one vote. \nTo the Companys knowledge, except as indicated in the footnotes to this table or pursuant to applicable community property laws, the persons named in the table have sole voting and investment power with respect to the shares of Common Stock indicated. \n*Less than 1%. \n(1) \nBeneficial Ownership is defined pursuant to Rule 13d-3 of the Exchange Act, and generally means any person who directly or indirectly has or shares voting or investment power with respect to a security. A person shall be deemed to be the beneficial owner of a security if that person has the right to acquire beneficial ownership of the security within 60 days, including, but not limited to, any right to acquire the security through the exercise of any option or warrant or through the conversion of a security. Any securities not outstanding that are subject to options or warrants shall be deemed to be outstanding for the purpose of computing the percentage of outstanding securities of the class owned by that person, but shall not be deemed to be outstanding for the purpose of computing the percentage of the class owned by any other person. Some of the information with respect to beneficial ownership has been furnished to us by each director or officer, as the case may be. \n(2) \nDr. Xus beneficial ownership represents (i) 131,250 shares issuable upon the exercise of options, (ii) 5,861,061 shares issuable upon the conversion of the Second Amended and Restated Convertible Promissory Note payable by the Company to Boyalife Asset Holding II, Inc.; and (iii) 1,728,857 shares owned by Boyalife Asset II, Inc. Dr. \n(3) \nRepresents shares issuable upon the exercise of options. \n(4) \nIncludes 825 common shares and 22,525 shares issuable upon the exercise of options. \n(5) \nConsists of 1,728,857 common shares owned and 5,861,061 common shares issuable upon the conversion of the Second Amended and Restated Convertible Promissory Note payable by the Company to Boyalife Asset Holding II, Inc. Dr. The principal business address of Boyalife Asset Holding II, Inc. is 2453 S. Archer Ave., Suite B, Chicago, IL 60616. \nITEM 13. \n\n\nFor the fiscal year ended December 31, 2020, there were the following related party transactions reportable under Item 404 of Regulation S-K. \nHealthbanks Biotech (USA) Inc. \nOn November 26, 2019, the Company entered into a joint venture agreement (the JV Agreement)with HealthBanks Biotech (USA) Inc. (HealthBanks)to form a new company called ImmuneCyte, Inc. (ImmuneCyte) to commercialize the Companys proprietary cell processing platform, CAR-TXpress, for use in immune cell banking as well as for cell-based contract development and manufacturing services (CMO/CDMO). Under the terms of the JV Agreement, ImmuneCyte was initially owned 80% by HealthBanks Biotech and 20% by the Company. ImmuneCyte will be among the first immune cell banks in the U.S. and offer customers the ability to preserve younger, healthier and uncontaminated immune cells for future potential use in dendritic and chimeric antigen receptor (CAR-T) cell therapies in a GMP compliant processing environment. The Companys principal contribution to ImmuneCyte was a supply agreement under which ImmuneCyte will have the exclusive right to purchase the Companys proprietary cell processing equipment in the immune cell banking business and a non-exclusive right to purchase it for other cell-based contract development and manufacturing (CMO/CDMO) services at a price equal to 115% of the Companys cost. The Company also contributed to ImmuneCyte intellectual property and trademarks relating to the Companys clinical development assets, which were fully impaired by the Company in 2018 and had no book value. HealthBanks contributed to ImmuneCyte a paid-up, royalty free license to use its proprietary business management system, customer relationship management software, and laboratory information statement, and has made available a $1,000,000 unsecured, non-convertible line of credit to ImmuneCyte to provide initial operating capital. HealthBanks is a subsidiary of Boyalife Group, Inc. (USA), the owner of Boyalife Asset Holding II, Inc., which is the largest stockholder of the Company, and is owned by Dr. Xiaochun (Chris) Xu, the Companys Chief Executive Officer and Chairman of our Board of Directors. \nBetween November 26, 2019, and September 30, 2020, ImmuneCyte closed $3,700,000 of equity investments with a private institution and qualified investors. ImmuneCyte issued 643,750 shares of Class A common stock at a price between $5.00 to $16.00 per share, representing a total of 6.05% ownership in the joint venture. As a result of these equity investments in ImmuneCyte, the Companys equity in the joint venture is no longer subject to anti-dilution provisions. After these investments, ImmuneCyte is owned 75.16% by HealthBanks, 18.79% by the Company and 6.05% by the private investors. In March 2021, ImmuneCyte entered into acquisition agreements with Boyalife Group and KDWInfo to acquire the entire Boyalife Groups Cellular Therapy Division and KDWInfo Technology Ltd., in a stock transaction. Following the acquisition, the Companys investment in ImmuneCyte<|endoftext|>Price of the Business Combination. The fair value of the 2020 LTIP RSUs at the Closing of the Business Combination in excess of the fair value of the replaced Phantom Units attributable to the pre-combination period was approximately $13.9million and is attributable to the post-combination requisite service period. Unrecognized compensation expense related to the 2020 LTIP RSUs was $8.2million at January3, 2021, which is expected to be recognized as expense over the remaining post-combination service period of approximately 1.0 year. The Company incurred $5.7million of share-based compensation expense from August 29, 2020 through January3, 2021. There were no forfeitures of 2020 LTIP RSUs during the Successor period. \n### Initial Grant RSUs \nUnder the 2020 Plan, the Company has granted certain employees and directors RSUs as a result of their significant contributions. These grants will settle upon vesting into shares of the Companys Class A Common Stock, subject to continued employment. The Initial Grant RSUs for directors will vest on May 6, 2021, while the Initial Grant RSUs for certain employees will vest in equal installments on December 31, 2022 and December 31, 2023. Subject to the vesting of such awards, the Initial Grant RSUs will participate in dividends of the Company beginning with the fiscal 2020 end-of-year dividend declaration, which was paid out in the first quarter of fiscal 2021. \nDuring the period from August 29, 2020 through January3, 2021, the Company granted 128,935 Initial Grant RSUs at a grant date fair value of $18.40 per unit, which is the closing share price of the Companys Class A Common Stock on the grant date (August 31, 2020), provided that the issuance of the Initial Grant RSUs was contingent upon the Company filing a Form S-8 with the SEC, which occurred on November 2, 2020. All such RSUs remained unvested at January3, 2021. Unrecognized compensation expense related to unvested Initial Grant RSUs was $1.9million at January3, 2021, which is expected to be recognized as expense over the weighted-average period of 2.0 years. The Company incurred $0.5million of share-based compensation expense from August 29, 2020 through January3, 2021. There were no forfeitures of Initial Grant RSUs during the Successor period. \n### Performance Share Units \nThe Company issued PSUs as part of the 2020 Plan, which settle into shares of the Companys Class A Common Stock subject to the continued employment of the grantees and achievement of certain performance criteria, provided that the issuance of the PSUs was contingent upon the Company filing a Form S-8 with the SEC, which occurred on November 2, 2020. The number of PSUs that will vest is determined by the Companys Class A Common Stock achieving a certain Total Shareholder Return (TSR) for the Company, relative to the TSR of a specified peer group. Depending on the Companys TSR relative to the peer group TSR, the actual number of shares that will be vested can range from zero and up to 200% of the initial grant. The awards will vest 50% on December 31, 2022 and 50% on December 31, 2023, subject to the market condition described above. Subject to the vesting of such awards, the PSUs will participate in dividends of the Company beginning with the fiscal 2020 end-of-year dividend declaration, which was paid out in the first quarter of fiscal 2021. Since the PSUs vest based on market conditions, a Monte Carlo simulation model was used to determine the grant-date fair value of the PSUs. The assumptions used in the Monte Carlo simulation model included a weighted average expected term of 2.8 years, weighted average expected volatility of 53.6%, and weighted average risk-free rate of 0.2%. \nDuring the period from August 29, 2020 through January3, 2021, the Company granted 140,076 PSUs at a weighted average grant date fair value of $23.67 per unit, all of which remained unvested at January3, 2021. As of January3, 2021, the Company had $2.9million of total unrecognized compensation cost related to PSUs that will be recognized over a weighted average period of 2.3 years. The Company incurred $0.4million in share-based compensation expense from August 29, 2020 through January3, 2021 related to the PSUs. There were no forfeitures of PSUs during the Successor period. \n### Stock Options \nThe Company granted its Executive Leadership Team stock options exercisable for Class A Common Stock of the Company, provided that the exercise of such stock options was contingent upon the Company filing a Form S-8 with the SEC, which occurred on November 2, 2020. Subject to continued employment, 50% of these options will vest on December 31, 2022 and 50% on December 31, 2023. The Company granted 286,268 stock options on August 28, 2020 and the exercise price of the options is the Companys closing share price of $16.34 on August 28, 2020. The stock options have a maximum contractual life of 10 years from the grant date. No options were exercised or forfeited during the Successor period, and no stock options were granted prior to the Business Combination. \nThe fair value of each stock option granted was determined to be $7.38 using the Black-Scholes Option Pricing Model based on an expected volatility of 46.8%, expected option term of approximately 6.4 years, and risk-free rate of return of 0.4%. The expected option term was determined based on the simplified method as allowable under ASC 718 due to a lack of sufficient trading history for the Companys common stock. The use of this method effectively assumes that exercise occurs evenly over the period from vesting until expiration, and therefore the expected term is the midpoint between the service period and the contractual term of the award. \nAs of January3, 2021, the Company had $1.5million of total unrecognized compensation cost related to stock options that will be recognized over a weighted average period of 2.0 years. For the period from August 29, 2020 through January3, 2021, the stock compensation expense related to the stock options was $0.2million. \nUtz Quality Foods, LLC 2018 Long-Term Incentive Plan \nUBH recorded a reserve for the estimated fair value of vested Phantom Units under the 2018 LTIP of $14.4million as of December 29, 2019 and $11.2million as of August 28, 2020, the Closing Date of the Business Combination. The 2018 LTIP liability is included in non-current accrued expenses and other on the consolidated balance sheets of the Predecessor. In connection with the Business Combination, these awards were replaced by the 2020 LTIP, a sub-plan under the 2020 Plan. \n\nOn December 10, 2020, the Board of Directors approved the 2021 Employee Stock Purchase Plan (ESPP), subject to stockholder approval. The ESPP will be effective January 1, 2021, and purchase rights may be granted under the ESPP prior to stockholder approval, but no purchase rights may be exercised unless and until stockholder approval is obtained. \nThe maximum number of shares of the Companys Class A Common Stock available for sale under the ESPP shall not exceed in the aggregate 1,500,000 shares, and may be unissued shares or treasury shares or shares bought on the market for purposes of the ESPP. \nUnder the ESPP, employees are offered the option to purchase discounted shares of Class A Common Stock during offering periods designated by the administrator. Each offering period will be one year, consisting of two six-month purchase periods, commencing on each January 1 and July 1 following the effective date of the ESPP. The initial offering under the ESPP will commence on January 1, 2021 and end on December 31, 2021. Shares are purchased on the applicable exercise dates, which is the last trading day of each purchase period with initial purchase dates of June 30, 2021 and December 31, 2021. \n12. \n### CONTINGENCIES \nLitigation Matters \nThe Company is involved in litigation and other matters incidental to the conduct of its business, the results of which, in the opinion of management, are not likely to be material to the Companys financial condition, results of operations or cash flows. \n### Tax Matters \nThe Company received an assessment from the Commonwealth of Pennsylvania pursuant to a sales and use tax audit for the period from January1, 2014 through December31, 2016. As of January3, 2021 and December29, 2019, the Company had a reserve of $1.3 million to cover the assessment. \nGuarantees \n\nAs discussed in Note 8. \"Long-Term Debt\", the Company also sold notes receivable on its books to Bank of America during fiscal 2019, which the Company partially guarantees. Due to the structure of the transaction, the sale did not qualify for sale accounting treatment, as such the Company records the notes payable obligation owed by the IOs to the financial institution on its balance sheet; the corresponding note receivable also remained on the Companys balance sheet. \n\n### Unclaimed Property \nThe Company was notified in September2016 that several states requested an audit of the Companys unclaimed property practices.The states initiating the audit include Connecticut,Idaho, Maryland, Massachusetts, New Hampshire, New York, South Dakota, and Tennessee but was later expanded to include a total of 22 states. The audit is limited to UQF and does not include any other legal entities.The audit consists of three components including accounts payable, payroll, and accounts receivable customer over-payments.The Company estimates that the potential liability for the accounts payable and payroll components is approximately $0.2 million, which has been included in the other accrued expenses section of the balance sheet as of January3, 2021 and December29, 2019.As of the date of these financial statements, the Company is not able to reasonably estimate the potential liability for the accounts receivable customer over-payments. \n13. \n### ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME \nTotal accumulated other comprehensive income was $0.9 million as of January3, 2021 and $1.4 million as of December29, 2019. Total accumulated other comprehensive (loss) income consists solely of unrealized gains (losses) from the Companys derivative financial instruments accounted for as cash flow hedges. \nChanges to the balance in accumulated other comprehensive (loss) income were as follows: \n14. \n\nCash paid for interest was $9.2 million and $28.8 million for the Successor period from August 29, 2020 to January 3, 2021 and for the Predecessor period from December 30, 2019 to August 28, 2020, respectively, and was $45.7 million and $40.9 million for the years ended December29, 2019 and December30, 2018, respectively. Refunds related to income related taxes were $0.1 million and $0.2 million for the Successor period from August 29, 2020 to January 3, 2021 and for the Predecessor period from December 30, 2019 to August 28, 2020, respectively, and was $0.1 million and $0.0 million for the years ended December29, 2019 and December30, 2018, respectively. Payments made for income-related taxes were $0.5 million and $0.5 million for the Successor period from August 29, 2020 to January 3, 2021 and for the Predecessor period from December 30, 2019 to August 28, 2020, respectively, and was $1.7 million and $0.7 million for the years ended December29, 2019 and December30, 2018, respectively. The following non cash considerations were part of the Business Combination Agreement with CC \nH: Continuing Members' retained restricted units totaling $54.1million, TRA totaling $28.7million, and LTIP RSU awards totaling $11.2million. Dividends declared but not paid were $4.3 million as of \nJanuary3, 2021 and are included within the \"accrued expense and other\" of the Consolidated Balance Sheet. There were no accrued dividends as of December29, 2019. \n15. \n### INCOME TAXES \nThe Company is subject to federal and state income taxes with respect to our allocable share of any taxable income or loss of Utz Brands Holdings, LLC, as well as any standalone income or loss the Company generates. Utz Brands Holdings, LLC is treated as a partnership for federal income tax purposes, and for most applicable state and local income tax purposes, and generally does not pay income taxes in most jurisdictions. Instead, Utz Brands Holdings, LLC taxable income or loss is passed through to its members, including the Company. Despite its partnership treatment, Utz Brands Holdings, LLC is liable for income taxes in those states not recognizing its pass-through status and for certain of its subsidiaries not taxed as pass-through entities. The Company has acquired<|endoftext|>1 to the Annual Report on Form 10-K to we, us, the Company or our company are to FAST Acquisition Corp., unless the context otherwise indicates. \nThis Amendment No. 1 (\"Amendment No. 1\") to the Annual Report on Form 10-K/A amends the Annual Report on Form 10-K of FAST Acquisition Corp. as of and for the period ended December 31, 2020, as filed with the Securities and Exchange Commission (\"SEC\") on March 26, 2021 (the \"Original Filing\"). \n\nAs a result of the foregoing, on May 13, 2021, the Audit Committee of the Company, in consultation with its management, concluded that its previously issued Financial Statements as of and for the period from June 4, 2020 (inception) through December 31, 2020, and the unaudited interim financial statements as of September 30, 2020, and for the three months ended September 30, 2020, and the period from June 4, 2020 (inception) through September 30, 2020 \n\nWe reassessed our accounting for the Warrants issued on August 25, 2020, in light of the SEC Staffs published views. \n\n\n### Part I, Item 1A. Risk Factors \n\nPart II, Item 8. \n\n\n1 and this Amendment No. We have not amended our previously filed Quarterly Report on Form 10-Q for the period affected by the restatement or our previously filed balance sheet, dated August 25, 2020, on Form 8-K.This Amendment No. \ni \n\nthe adverse impacts of the COVID-19outbreak and other events (such as terrorist attacks, natural disasters or a significant outbreak of other infectious diseases) on our ability to consummate an initial business combination or on the restaurant and hospitality related sectors; or our financial performance. \n\nii \n### PART I \nReferences in this report to we, us or the Company refer to FAST Acquisition Corp. References to our management or our management team refer to our officers and directors, and references to the Sponsor refer to FAST Sponsor, LLC, a Delaware limited liability company. \nItem 1. Business. \n### Introduction \n\nOn August 25, 2020, we consummated our initial public offering (the initial public offering) of 20,000,000 units (the units). The units were sold at a price of $10.00 per unit, generating gross proceeds of $200 million. We granted the underwriters for the initial public offering a 45-day option to purchase up to 3,000,000 additional units to cover over-allotments, if any. On October 9, 2020, the underwriters over-allotment option expired unexercised. \nSimultaneously with the consummation of the initial public offering, we completed the private sale (the private placement) of an aggregate of 6,000,000 warrants (the private placement warrants) to the Sponsor at a purchase price of $1.00 per warrant, generating gross proceeds of $6,000,000. \nPrior to the consummation of the initial public offering, on June 4, 2020, we issued an aggregate of 7,187,500 shares (the founder shares) of our Class B common stock to the Sponsor for an aggregate purchase price of $25,000 in cash. \nA total of $200,000,000, comprised of $196,000,000 of the proceeds from the initial public offering (which amount includes $7,000,000 of the underwriters deferred discount) and $4,000,000 of the proceeds of the sale of the private placement warrants, was placed in a U.S.-based trust account (the trust account) at J.P. \ngovernment securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act of 1940, as amended (the Investment Company Act), with a maturity of 185 days or less or in money market funds meeting the conditions of Rule 2a-7 of the Investment Company Act which invest only in direct U.S. , until the earlier of: (i) the consummation of an initial business combination or (ii) the distribution of the trust account, as described below. \nAs of December 31, 2020, there was $200,067,535 in investments and cash held in the trust account, which includes interest income available to us for franchise and income tax obligations of approximately $114,000, and approximately $1.0 million of cash held outside the trust account. \nAs more fully described in Note 1 to the financial statements contained in Item 8 as part of this Annual Report on Form 10-K, on February 1, 2021, we entered into an agreement and plan of merger (the Merger Agreement) with Fertitta Entertainment, Inc., a Texas corporation (FEI), FAST Merger Corp., a Texas corporation and direct subsidiary of the Company (FAST Merger Corp.) and FAST Merger Sub Inc., a Texas corporation and direct subsidiary of FAST Merger Corp. \n\n\n\nGeneral \nWe are not presently engaged in, and we will not engage in, any operations until the consummation of our initial business combination. \n\n\nOur amended and restated certificate of incorporation (as amended on August 20, 2020, our amended and restated certificate of incorporation) prohibits us from effectuating a business combination with another blank check company or similar company with nominal operations. \n\n\n\n\n\n\nThe Sponsor, our officers and directors have entered into a letter agreement with us, pursuant to which they have agreed to waive their redemption rights with respect to any founder shares and shares of Class A common stock underlying the private placement warrants (the private placement shares) and any public shares held by them in connection with the completion of our initial business combination. \n\n\n\n\n\nThere is no limit on the number of our securities our initial stockholders, directors, officers, advisors or their affiliates may purchase in such transactions, subject to compliance with applicable law and NYSE rules. \n\n\n\n\nOur amended and restated certificate of incorporation provides that we will have until twenty-four (24) months from the closing of our initial public offering, or August 25, 2022, to complete our initial business combination. If we are unable to complete our initial business combination by August 25, 2022, we will: (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account (net of permitted withdrawals and up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders rights as stockholders (including the right to receive further liquidating distributions, if any), and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, liquidate and dissolve, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect to our warrants, which will expire worthless if we fail to complete our initial business combination by August 25, 2022. \n### Competition \n\nEmployees \n\n### Recent Developments \nOn November 10, 2020, Doug Jacob resigned his position as Co-Chief Executive Officer and as a Class III member of our board of directors. On November 11, 2020, our board of directors appointed Michael Lastoria as a Class III member of our board of directors, filling the board seat vacated by Mr. Jacob. \nAvailable Information \nIn addition, the Company will provide copies of these documents without charge upon request from us in writing at 109 Old Branchville Rd., Ridgefield, CT or by telephone at (201) 956-1969. \n### Item 1A. Risk Factors. \n\nRisk Factor Summary \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nAs a result, in addition to our initial stockholders founder shares, we would need 7,500,001, or 37.5%, of the 20,000,000 public shares sold in the initial public offering to be voted in favor of an initial business combination in order to have our initial business combination approved (assuming all outstanding shares are voted and the over-allotment option is not exercised). \n\n\n\n\n\n\n\nAny potential target business with which we enter into negotiations concerning a business combination will be aware that we must complete our initial business combination by August 25, 2022. \n\nOn January31, 2020, U.S. \n\n\nWe may not be able to find a suitable target business and complete our initial business combination by August 25, 2022. \n\n\n\n\n\n\n\n\n\n\n\nWe believe that the funds available to us outside of the trust account are sufficient to allow us to operate for at least until August 25, 2022; \n\n\n\nPursuant to the letter agreement the form of which is filed as an exhibit to the registration statement of which this Annual Report on Form 10-K forms a part, our sponsor has agreed that it will be liable to us if and to the extent any claims by a third party for services rendered or products sold to us, or a prospective target business with which we have entered into a written letter of intent, confidentiality or other similar agreement or business combination agreement, reduce the amount of funds in the trust account to below the lesser of (i) $10.00 per public share and (ii)the actual amount per public share held in the trust account as of the date of the liquidation of the trust account, if less than $10.00 per public share due to reductions in the value of the trust assets, less taxes payable, provided that such liability will not apply to any claims by a third party or prospective target business who executed a waiver of any and all rights to the monies held in the trust account (whether or not such waiver is enforceable) nor will it apply to any claims under our indemnity of the underwriters of the initial public offering against certain liabilities, including liabilities under the Securities Act. \n\n\n\n\n\n\n\n\n\n(ii)the redemption of any public shares properly tendered in connection with a stockholder vote to amend our amended and restated certificate of incorporation to modify the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial business combination by August 25, 2022; and (iii)absent an initial business combination by August 25, 2022 or with respect to any other material provisions relating to stockholders rights or pre-initial business combination activity, our return of the funds held in the trust account to our public stockholders as part of our redemption of the public shares. \n\n\n\nThe pro rata portion of our trust account distributed to our public stockholders upon the redemption of our public shares in the event we do not complete our initial business combination by August 25, 2022 may be considered a liquidating distribution under Delaware law. \nFurthermore, if the pro rata portion of our trust account distributed to our public stockholders upon the redemption of our public shares in the event we do not complete our initial business combination by August 25, 2022 is not considered a liquidating distribution under Delaware law and such redemption distribution is deemed to be unlawful (potentially due to the imposition of legal proceedings that a party may bring or due to other circumstances that are currently unknown), then pursuant to Section174 of the DGCL, the statute of limitations for claims of creditors could then be six years after the unlawful redemption distribution, instead of three years, as in the case of a liquidating distribution. \n\n\n\n\n\n\n\n\n\n\n\nImmediately after the initial public offering, there will be 360,000,000 and 15,000,000 authorized but unissued shares of ClassA common stock and ClassB common stock, respectively, available for issuance which amount does not take into account shares reserved for issuance upon exercise of outstanding warrants or shares issuable upon conversion of the ClassB common stock. \n\n\n\n\n\n\n\n\nOn June 19, 2020, our sponsor purchased an aggregate of 7,187,500 founder shares in exchange for a capital contribution of $25,000, or approximately $0.004 per share. In addition, our sponsor purchased an aggregate of 6,000,000 private placement warrants, each exercisable for one share of Class A common stock at $11.50 per share, subject to adjustment as described herein, for an aggregate purchase price of $6,000,000, or $1.00 per warrant, that will also be worthless if we do not complete our initial business combination within the allocated time period. \n\n\n\nThe net proceeds from the initial public offering and the private placement provided us with $193,000,000 that we may use to complete our initial business combination (after taking into account<|endoftext|>Investor Holdings IV, LLC has agreed that it will be liable to us if and to the extent any claims by a vendor (other than our independent registered public accountants) for services rendered or products sold to us, or a prospective target business with which we have discussed entering into a transaction agreement, reduce the amount of funds in the trust account to below (i) $10.00 per public share or (ii)such lesser amount per public share held in the trust account as of the date of the liquidation of the trust account due to reductions in the value of the trust assets, in each case net of the interest which may be withdrawn to pay taxes. This liability will not apply with respect to any claims by a third party who executed a waiver of any and all rights to seek access to the trust account and except as to any claims under our indemnity of the underwriters of the initial public offering against certain liabilities, including liabilities under the Securities Act. Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, then FinTech Investor Holdings IV, LLC will not be responsible to the extent of any liability for such third party claims. We have not independently verified whether FinTech Investor Holdings IV, LLC has sufficient funds to satisfy its indemnity obligations and believe that FinTech Investor Holdings IV, LLCs only assets are securities of our company. \nOur independent directors may decide not to enforce the indemnification obligations of FinTech Investor Holdings IV, LLC, resulting in a reduction in the amount of funds in the trust account available for distribution to our public stockholders. \nIn the event that the proceeds in the trust account are reduced below the lesser of (i) $10.00 per public share or (ii)such lesser amount per public share held in the trust account as of the date of the liquidation of the trust account due to reductions in the value of the trust assets, in each case net of the interest which may be withdrawn to pay taxes, and FinTech Investor Holdings IV, LLC asserts that it is unable to satisfy its obligations or that it has no indemnification obligations related to a particular claim, our independent directors would determine whether to take legal action against FinTech Investor Holdings IV, LLC to enforce its indemnification obligations. \n\n\n\n\n\n\n\nThe pro rata portion of our trust account distributed to our public stockholders upon the redemption of our public shares in the event we do not consummate our initial business combination by September 29, 2022 may be considered a liquidating distribution under Delaware law. However, it is our intention to redeem our public shares as soon as reasonably possible following September 29, 2022 in the event we do not consummate our initial business combination and, therefore, we do not intend to comply with the foregoing procedures. \nFurthermore, if the pro rata portion of our trust account distributed to our public stockholders upon the redemption of our public shares in the event we do not consummate our initial business combination by September 29, 2022 is not considered a liquidating distribution under Delaware law and such redemption distribution is deemed to be unlawful, then pursuant to Section 174 of the DGCL, the statute of limitations for claims of creditors could then be six years after the unlawful redemption distribution, instead of three years, as in the case of a liquidating distribution. \n\n\nBecause we are not limited to a particular industry sector or any specific target businesses with which to pursue our initial business combination, you will be unable to ascertain the merits or risks of any particular target business operations. \nAlthough we expect to focus our search for a target business in the financial technology industry, we may seek to consummate a business combination with an operating company in any industry or sector. However, we will not, under our amended and restated certificate of incorporation, be permitted to consummate our business combination with another blank check company or similar company with nominal operations. \n\n\nAlthough we have identified general criteria and guidelines that we believe are important in evaluating prospective target businesses, we may enter into our initial business combination with a target that does not meet such criteria and guidelines and, as a result, the target business with which we enter into our initial business combination may not have attributes entirely consistent with our general criteria and guidelines. \nIf we consummate a business combination with a target that does not meet some or all of these criteria and guidelines, such combination may not be as successful as a combination with a business that does meet all of our general criteria and guidelines. In addition, if stockholder approval of the transaction is required by law or Nasdaq rules, or we decide to obtain stockholder approval for business or other legal reasons, it may be more difficult for us to obtain stockholder approval of our initial business combination if the target business does not meet our general criteria and guidelines. If we are unable to complete our initial business combination, our public stockholders may receive only $10.00 per share (based on the trust account balance as of December 31, 2020), or less in certain circumstances, on the liquidation of the trust account and our warrants will expire worthless. \n\n\n\nUnless we consummate our initial business combination with an affiliated entity or our board cannot independently determine the fair market value of the target business or businesses, we are not required to obtain an opinion from an independent investment banking firm that is a member of FINRA or from an independent accounting firm that the price we are paying is fair to our company from a financial point of view. Such standards used will be disclosed in our tender offer or proxy solicitation materials, as applicable, related to our initial business combination. \n\nThese financial statement requirements may limit the pool of potential target businesses we may acquire because some targets may be unable to provide such financial statements in time for us to disclose such financial statements in accordance with federal proxy rules and consummate our initial business combination by September 29, 2022. \nCompliance obligations under the Sarbanes-Oxley Act may make it more difficult for us to consummate our initial business combination, require substantial financial and management resources, and increase the time and costs of completing an acquisition. \nSection 404 of the Sarbanes-OxleyAct requires that we evaluate and report on our system of internal controls beginning with our Annual Report on Form 10-Kfor the year ending December31, 2021. Only in the event we are deemed to be a large accelerated filer or an accelerated filer will we be required to comply with the independent registered public accounting firm attestation requirement on our internal controls over financial reporting. Further, for as long as we remain an emerging growth company, we will not be required to comply with the independent registered public accounting firm attestation requirement on our internal controls over financial reporting. \n\nThe SEC Statement regarding the accounting and reporting considerations for warrants issued by SPACs focused on certain settlement terms and provisions related to certain tender offers following a business combination. The terms described in the SEC Statement are common in SPACs and are similar to the terms contained in the warrant agreement governing our warrants. In response to the SEC Statement, we reevaluated the accounting treatment of our public warrants and private placement warrants, and determined to classify the warrants as derivative liabilities measured at fair value, with changes in fair value each period reported in earnings. Due to the recurring fair value measurement, we expect that we will recognize non- cash gains or losses on our warrants each reporting period and that the amount of such gains or losses could be material. \n\n\nThis material weakness resulted in a material misstatement of our warrant liabilities and related financial disclosures for the affected periods. \nFor a discussion of managements consideration of the material weakness identified related to our accounting for a significant and unusual transaction related to the warrants, see Note 2 to the accompanying financial statements, as well as Part II, Item 9A: Controls and Procedures included in this Annual Report. \n\n\nThe absence of such a redemption threshold may make it possible for us to consummate a business combination with which a substantial majority of our stockholders do not agree. \nOur amended and restated certificate of incorporation does not provide a specified maximum redemption threshold, except that in no event will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 upon completion of our initial business combination (such that we are not subject to the SECs penny stock rules). \n\n\nIt may be easier for us, therefore, to amend our amended and restated certificate of incorporation and the trust agreement to facilitate the consummation of an initial business combination that some of our stockholders may not support. \nOur amended and restated certificate of incorporation provides that any of its provisions related to pre-businesscombination activity (including the requirement to deposit proceeds of the initial public offering and the private placement into the trust account and not release such amounts except in specified circumstances, and to provide redemption rights to public stockholders) may be amended if approved by holders of 65% of our common stock entitled to vote thereon, and corresponding provisions of the trust agreement governing the release of funds from our trust account may be amended if approved by holders of 65% of our common stock entitled to vote thereon. Our initial stockholders, who collectively beneficially own 26.9% of our common stock, will participate in any vote to amend our amended and restated certificate of incorporation and/or trust agreement and will have the discretion to vote in any manner they choose. \nOur sponsor, officers and directors have agreed, pursuant to a letter agreement with us, that they will not propose any amendment to our amended and restated certificate of incorporation that would affect the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial business combination by September 29, 2022, unless we provide our public stockholders with the opportunity to redeem their shares of Class A common stock upon approval of any such amendment at a per-shareprice, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (which interest shall be net of taxes payable), divided by the number of then outstanding public shares. Our stockholders are not parties to, or third-partybeneficiaries of, these agreements and, as a result, do not have the ability to pursue remedies against our sponsor, officers or directors for any breach of these agreements. \n\nAlthough we believe that the net proceeds of the initial public offering and the sale of the placement units will be sufficient to allow us to complete our initial business combination, because we have not yet selected any prospective target business we cannot ascertain the capital requirements for any particular transaction. If the net proceeds of the initial public offering and the sale of the placement units prove to be insufficient, either because of the size of our initial business combination, the depletion of the available net proceeds in search of a target business, the obligation to repurchase for cash a significant number of shares from stockholders who elect redemption in connection with our initial business combination or the terms of negotiated transactions to purchase shares in connection with our initial business combination, we may be required to seek additional financing or to abandon the proposed business combination. If we are unable to complete our initial business combination, our public stockholders may receive only $10.00 per share plus any pro rata interest earned on the funds held in the trust account (and not previously released to us to pay our taxes) on the liquidation of our trust account and our warrants will<|endoftext|>Target business has been selected for our initial business combination and the stage of the business combination process we are in. \n\n\n\n\n\n\n\n\n\n\n### Legal Proceedings \n\nYou should consider carefully all of the risks described below, together with the other information contained in this Report, before making a decision to invest in our ClassA ordinary shares. \n\n\n\nWe are a blank check company incorporated under the laws of the Cayman Islands with no operating results, and we will not commence operations until obtaining funding through our initial public offering. \n\n\n\n\nIf we seek shareholder approval of our initial business combination, our sponsor and members of our management team agreed to vote in favor of such initial business combination, regardless of how our public shareholders vote. \n\n\n\n\n\n\n\n\nAny potential target business with which we enter into negotiations concerning a business combination will be aware that we must complete our initial business combination within 24 months from the closing of our initial public offering. \n\nSince it was first reported to have emerged in December2019, a novel strain of coronavirus, which causes COVID-19, has spread across the world, including the United States. On January31, 2020, U.S. The COVID-19 outbreak has adversely affected, and other events (such as terrorist attacks, natural disasters or a significant outbreak of other infectious diseases) could adversely affect, the economies and financial markets worldwide, potentially including the business of any potential target business with which we intend to consummate a business combination. Furthermore, we may be unable to complete a business combination at all if concerns relating to COVID-19 continue to restrict travel, limit the ability to have meetings with potential investors or make it impossible or impractical to negotiate and consummate a transaction with the target companys personnel, vendors and services providers in a timely manner, if at all. \n\n\n\nWe may not be able to find a suitable target business and complete our initial business combination within 24 months after the closing of our initial public offering. Our ability to complete our initial business combination may be negatively impacted by general market conditions, volatility in the capital and debt markets and the other risks described herein , including as a result of terrorist attacks, natural disasters or a significant outbreak of infectious diseases. and globally and, while the extent of the impact of the COVID-19 outbreak on us will depend on future developments, it could limit our ability to complete our initial business combination, including as a result of increased market volatility, decreased market liquidity and third-party financing being unavailable on terms acceptable to us or at all. \nIf we have not completed our initial business combination within such time period, we will: (i)cease all operations except for the purpose of winding up, (ii)as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (which interest shall be net of taxes payable and up to $100,000 of interest to pay dissolution expenses), divided by the number of then issued and outstanding public shares, which redemption will completely extinguish public shareholders rights as shareholders (including the right to receive further liquidation distributions, if any) and (iii)as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders and our board of directors, liquidate and dissolve, subject in the case of clauses (ii)and (iii), to our obligations under Cayman Islands law to provide for claims of creditors and in all cases subject to the other requirements of applicable law. \n\n\nIf we seek shareholder approval of our initial business combination, our sponsor, directors, officers, advisors or their affiliates may elect to purchase shares or warrants from public shareholders, which may influence a vote on a proposed business combination and reduce the public float of our securities. \nAdditionally, at any time at or prior to our initial business combination, subject to applicable securities laws (including with respect to material nonpublic information), our sponsor, directors, officers, advisors or their affiliates may enter into transactions with investors and others to provide them with incentives to acquire public shares, vote their public shares in favor of our initial business combination or not redeem their public shares. \nThe purpose of any such transactions with respect to shares could be to vote such shares in favor of the initial business combination and thereby increase the likelihood of obtaining shareholder approval of the initial business combination or to satisfy a closing condition in an agreement with a target that requires us to have a minimum net worth or a certain amount of cash at the closing of our initial business combination, where it appears that such requirement would otherwise not be met. \n\n\nOur public shareholders are entitled to receive funds from the trust account only upon the earliest to occur of: (i) our completion of an initial business combination, and then only in connection with those Class A ordinary shares that such shareholder properly elected to redeem, subject to the limitations and on the conditions described herein, (ii) the redemption of any public shares properly submitted in connection with a shareholder vote to amend our amended and restated memorandum and articles of association (A) to modify the substance or timing of our obligation to allow redemption in connection with our initial business combination or to redeem 100% of our public shares if we do not consummate an initial business combination within 24 months from the closing of our initial public offering or (B) with respect to any other provisions relating to shareholders rights or pre-initial business combination activity, and (iii) the redemption of our public shares if we do not complete an initial business combination within 24 months from the closing of our initial public offering, subject to applicable law and as further described herein. In no other circumstances will a public shareholder have any right or interest of any kind to or in the trust account. \n\n\n\n\nIf the net proceeds of our initial public offering and the sale of the private placement warrants not being held in the trust account are insufficient to allow us to operate for at least the 24 months following the closing of our initial public offering, it could limit the amount available to fund our search for a target business or businesses and complete our initial business combination, and we will depend on loans from our sponsor or management team to fund our search and to complete our initial business combination. \nAs of December 31, 2020, we had approximately $941,000 in our operating bank account and working capital of approximately $831,000. We believe that, upon closing of our initial public offering, the funds available to us outside of the trust account will be sufficient to allow us to operate for at least the 24 months following the closing of our initial public offering; \nNeither our sponsor, members of our management team nor any of their affiliates is under any obligation to loan funds to, or otherwise invest in, us in such circumstances. If we have not completed our initial business combination within the required time period because we do not have sufficient funds available to us, we will be forced to cease operations and liquidate the trust account. \n\n\nPursuant to the letter agreement our sponsor has agreed that it will be liable to us if and to the extent any claims by a third party for services rendered or products sold to us, or a prospective target business with which we have entered into a written letter of intent, confidentiality or other similar agreement or business combination agreement, reduce the amount of funds in the trust account to below the lesser of (i) $10.00 per public share and (ii) the actual amount per public share held in the trust account as of the date of the liquidation of the trust account, if less than $10.00 per public share due to reductions in the value of the trust assets, less taxes payable, provided that such liability will not apply to any claims by a third party or prospective target business who executed a waiver of any and all rights to the monies held in the trust account (whether or not such waiver is enforceable) nor will it apply to any claims under our indemnity of the underwriters of our initial public offering against certain liabilities, including liabilities under the Securities Act. \n\n\n\nOur board of directors is divided into three classes with only one class of directors being appointed in each year and each class (except for those directors elected prior to our first annual general meeting) serving a three-year term. \n\nWe also cannot assure you that an investment in our securities will not ultimately prove to be less favorable to investors in this our securities than a direct investment, if an opportunity were available, in a business combination candidate. \n\n\n\nIn order to effectuate a business combination, special purpose acquisition companies have, in the recent past, amended various provisions of their charters and other governing instruments, including their warrant agreements. Amending our amended and restated memorandum and articles of association require a special resolution under Cayman Islands law, which (except as described below) requires the affirmative vote of a majority of at least two-thirds of the shareholders who attend and vote at a general meeting of the company, and amending our warrant agreement will require a vote of holders of at least 65% of the public warrants and, solely with respect to any amendment to the terms of the private placement warrants or any provision of the warrant agreement with respect to the private placement warrants, 65% of the then outstanding private placement warrants. Amending the provisions in our amended and restated memorandum and articles of association relating to the sole ability of the holders of Class B ordinary shares to appoint or remove directors prior to the business combination will require a special resolution under Cayman Islands law, which requires the affirmative vote of at least 90% of the shareholders who attend and vote at a general meeting of the company. In addition, our amended and restated memorandum and articles of association requires us to provide our public shareholders with the opportunity to redeem their public shares for cash if we propose an amendment to our amended and restated memorandum and articles of association (A) to modify the substance or timing of our obligation to allow redemption in connection with our initial business combination or to redeem 100% of our public shares if we do not consummate an initial business combination within 24 months from the closing of our initial public offering or (B) with respect to any other provisions relating to shareholders rights or pre-initial business combination activity. \n\nIf there is an annual general meeting, as a consequence of our staggered board of directors, only a minority of the board of directors will be considered for appointment and our initial shareholders, because of their ownership position, will control the outcome, as only holders of our Class B ordinary shares will have the right to vote on the election of directors and to remove directors prior to our initial business combination. \n\n\nYou willnot be entitled to protections normally afforded to investors of many other blank check companies. \nSince the net proceeds of our initial public offering and the sale of the private placement shares are intended to be used to complete an initial business combination with a target business that has not been selected, we may be deemed to be a blank check company under the United States securities laws. However, because we have net tangible assets in excess of $5,000,000 upon the completion of our initial public offering and the sale of the private placement shares and filed a Current Report on Form8-K, including an audited balance sheet demonstrating this fact, we are exempt from rulespromulgated by the SEC to protect investors in blank check companies, such as Rule419. Among other things, this means our units<|endoftext|>Arising from the assessment; evaluating the need for the establishment of effective internal audit functions including the consideration of outsourcing the function to an outside party; See Item 9A. Controls and Procedures. \nUntil we are able to remediate the material weaknesses identified above, such material weaknesses may materially and adversely affect our ability to report accurately our financial condition and results of operations in the future in a timely and reliable manner. In addition, although we review and evaluate our internal control systems to allow management to report on the effectiveness of our disclosure controls and procedures and the sufficiency of our internal control over financial reporting, we cannot assure you that we will not discover additional weaknesses in the future or that any corrective actions taken to remediate issues identified during the course of an assessment will be effective. Any such additional weaknesses or failure to remediate any existing weaknesses could materially adversely affect our financial condition or ability to comply with applicable financial reporting requirements. This could in turn result in the loss of investor confidence in the reliability of our financial statements and negatively impact the trading price of our stock. Furthermore, we have incurred and may need to incur additional costs and use additional management and other resources in an effort to comply with Section 404 of the Sarbanes-Oxley Act and other requirements going forward. \nShareholders may face difficulties in protecting their interests, and their ability to protect their rights through the United States federal courts may be limited because we are incorporated under Cayman Islands law, we conduct substantially all of our operations in China and most of our directors and officers reside outside the United States. \nWe are incorporated in the Cayman Islands and conduct substantially all of our operations in China through our PRC subsidiaries. Most of our directors and officers reside outside the United States and a substantial portion of their assets are located outside of the United States. As a result, it may be difficult or impossible for our shareholders to bring an action against us or these individuals in the Cayman Islands or in China in the event that you believe that your rights have been infringed under the securities laws or otherwise. Even if shareholders are successful in bringing an action of this kind, the laws of the Cayman Islands and of China may render you unable to enforce a judgment against our assets or the assets of our directors and officers. \nCompliance with rules and requirements applicable to public companies will cause us to incur additional costs, and any failure by us to comply with such rules and requirements could negatively affect investor confidence in us and cause the value of our securities to decline. \nAs a public company, we are incurring significant legal, accounting and other expenses that we did not incur as a private company. In addition, the Sarbanes-Oxley Act, as well as rules adopted by the SEC, has required changes in the corporate governance practices of public companies. We expect these rules and regulations to increase our legal, accounting and financial compliance costs and to make certain corporate activities more time-consuming and costly. Complying with these rules and requirements may be especially difficult and costly for us because it may have difficulty locating sufficient personnel in China with experience and expertise relating to U.S. GAAP and United States public company reporting requirements, and such personnel may command high salaries. If we cannot employ sufficient personnel to ensure compliance with these rules and regulations, we may need to rely more on outside legal, accounting and financial experts, which may be very costly. \nThe prices at which our ordinary shares are traded will likely be volatile. \nYou should expect the prices at which our ordinary shares are traded to be highly volatile. Our progress in developing and commercializing our products, the impact of government regulations on our products and industry, the potential sale of a large volume of our ordinary shares by shareholders, our quarterly operating results, changes in general conditions in the economy or the financial markets and other developments affecting us or our competitors could cause the market price of our ordinary shares to fluctuate substantially with significant market losses. As a result, this may make it difficult or impossible for holders of our ordinary shares to sell shares when they want and at prices they find attractive. \nWe may sell equity securities in the future, which would cause dilution. \nWe may sell equity securities in the future to obtain funds for general corporate or other purposes. We may sell these securities at a discount to the market price. Any future sales of equity securities will dilute the holdings of existing holders of our ordinary shares, possibly reducing the value of their investment. \n\nOur ordinary shares are currently listed for trading on the NASDAQ Capital Market under the symbol PME. The NASDAQ Capital Market may delist our ordinary shares from trading on its exchange for failure to meet the continued listing standards. As previously disclosed, the Company received delinquency notification letters from NASDAQ on April 15, 2021, May 25, 2021, and August 23, 2021 indicating that the Company is delinquent in filing its Annual Report on Form 10-K for the fiscal year ended December 31, 2020 and its Quarterly Reports on Form 10-Q for the periods ended March 31, 2021 and June 30, 2021. The Company disclosed the receipt of these notification letters in its Current Reports on Form 8-K filed with the SEC on May 28, 2021, April 19, 2021 and August 26, 2021. \nAdditionally, on June 30, 2021 the Company received a notice from NASDAQ notifying the Company that the bid price for the Companys ordinary shares for the last 30 consecutive business days had closed below the minimum $1.00 per share required for continued listing under Nasdaq Listing Rule 5550(a)(2). The Company disclosed the receipt of this bid price notification letter in its Current Report on Form 8-K filed with the SEC on July 2, 2021. The Company continues to work with NASDAQ to regain compliance with the continued listing standards by December 27, 2021. \nIf our ordinary shares were delisted from the NASDAQ Capital Market, we and our shareholders could face significant material adverse consequences including: a limited availability of market quotations for our ordinary shares; a determination that our ordinary shares are a penny stock would require brokers trading in our ordinary shares to adhere to more stringent rules, possibly resulting in a reduced level of trading activity in the secondary trading market for our ordinary shares; \n\nThe trading markets for our securities will be influenced by the research and reports that industry or securities analysts may publish about us, our business, our market, or our competitors. If no securities or industry analysts commence coverage of us, the market price and trading volume of our securities would likely be negatively impacted. If any of the analysts who may cover us change their recommendation regarding our securities adversely, or provide more favorable relative recommendations about our competitors, the price of our securities would likely decline. If any analyst who may cover us were to cease coverage of us or fail to regularly publish reports on us, we could lose visibility in the financial markets, which in turn could cause the market price or trading volume of our securities to decline. \n### ITEM 1B. UNRESOLVED STAFF COMMENTS \nNone. \nITEM 2. PROPERTIES \nOur principal executive offices are located at 18-19/F, Zhongshan Building A, No. 154 Hudong Road, Fuzhou, PRC. On July 31, 2012, we entered into an office lease agreement with Ping Lin, the wife of Xinrong Zhuo, the Companys Chairman and Chief Executive Officer, for approximately 100 square meters of space. Annual lease payments were approximately US$12,200 in 2020. \nOn January 1, 2015, we entered into a service agreement with Hai Yi Shipping Limited, an affiliate company domiciled in Hong Kong, that provided the Company the use of premises of approximately 194 square meters located at Suites 5201-3, 52/F, The Center, 99 Queens Road Central, Central, Hong Kong as office, and clerical and administrative support and consultation services. On January 1, 2018, the Service Agreement was renewed to February 28, 2018 under the same conditions. On March 1, 2018, the Company entered into a lease agreement directly with the landlord under the same conditions that expires on February 28, 2021.We incurred and paid approximately US$462,000 in 2020. \nWe lease secured several cold storages facilities located in one of the PRCs largest seafood trading centers, the MaWei seafood market. The monthly rent for the cold storage is RMB70 (US$10) to RMB55 (US$8) per square meter and the leases are renewable annually. The following table sets forth information regarding the cold storages we currently rent as of December 31, 2020: \nWe believe that our current offices and facilities are adequate to meet our needs, and that additional facilities will be available for lease, if necessary, to meet our future needs. \n### ITEM 3. LEGAL PROCEEDINGS \nCurrently, we are not a party to any litigation the outcome of which, if determined adversely to us, would individually or in the aggregate be reasonably expected to have a material adverse effect on our business, operating results, cash flows or financial condition. See Note 15 for discussion of commitments and contingencies. \nITEM 4. MINE SAFETY DISCLOSURES \nNot applicable. \nPART II \nITEM 5. \n### Market Information \nOur ordinary shares are listed on the NASDAQ Capital Market under the symbol PME. \nHolders of Record \nOn October 11, 2021, the closing sale price of our shares of ordinary shares was US$0.68 per share and there were 86,928,378 ordinary shares. On that date, our ordinary shares were held by approximately 200 holders of record. The number of record holders was determined from the records of our transfer agent and does not include beneficial owners of our ordinary shares whose shares are held in the names of various security brokers, dealers, and registered clearing agencies. \n### Dividend Policy \nThere were no dividends declared and paid during 2020 and 2019. For the first three quarters during 2018, we declared and paid cash dividends of US$0.01 per ordinary share outstanding. We can pay dividends only out of our profits or other distributable reserves and dividends or distributions will only be paid or made if we are able to pay our debts as they fall due in the ordinary course of business. Payment of future dividends, if any, will be at the discretion of the board of directors after taking into account various factors, including current financial condition, operating results, current and anticipated cash needs and regulations governing dividend distributions by wholly foreign owned enterprises in China. \n\nAs of the date of this annual report, we have no equity compensations plans for any of our employees, directors and consultants. \n\nDuring the quarter ended December 31, 2020, we did not purchase any of our equity securities, nor did any person or entity purchase any of our equity securities on our behalf. \n\nNone. \n### ITEM 6. SELECTED FINANCIAL DATA \nReserved. \nITEM 7. \nThe following discussion and analysis of our financial condition and results of operations should be read in conjunction with the consolidated financial statements and the notes thereto contained elsewhere in this report. \nUnless otherwise indicated, references to the Company, us or we refer to Pingtan Marine Enterprise Ltd. and its subsidiaries. \n### Overview \n\nBy June 2015, we expanded the number of vessels to 135 through the construction of 3 new vessels, the purchase of 72 licensed vessels and the acquisition of 20-year exclusive operation rights to 20 vessels. \n\nIn April 2018, 27 vessels received approval from the MARA to operate in international waters after the completion of modification and rebuilding projects. The 27 fishing vessels were modified and rebuilt into 20 squid jigging vessels and 7 light luring seine vessels and have been deployed to sea for operation in late 2018 and early 2019. \n\n\n\n\nAmong the 143 vessels, 80 were located in international waters, 12 were<|endoftext|>Redeem their public shares, regardless of whether they vote for or against the proposed business combination. A shareholder of public shares may redeem the public shares for cash equal to a pro rata share of the aggregate amount on deposit in the Trust Account which holds the proceeds of our IPO as of two (2) business days prior to the Closing, less taxes payable, upon the Closing. Our Sponsor and Initial Shareholders have agreed to waive their redemption rights with respect to any shares of our capital stock they may hold in connection with the Closing, and the founder shares will be excluded from the pro rata calculation used to determine the per-share redemption price. \nOur capability to consummate the business combination, and any target business with which we ultimately consummate a business combination, may be materially adversely affected by the recent coronavirus (COVID-19) outbreak. \nOn January 31, 2020, U.S. \nSubmission of Our Initial Business Combination to a Shareholder Vote \nIn connection with IPO, each of the Initial Shareholders entered into a letter agreement with Alberton pursuant to which the Initial Shareholders agreed to vote any Alberton ordinary shares owned by them in favor of the proposal to approve the Merger Agreement, by and among Alberton, Merger Sub, and SolarMax, and the transactions contemplated by the Merger Agreement, including the issuance of the merger consideration thereunder (the Alberton Business Combination Proposal). Collectively, Alberton Initial Shareholders own 69.37% of the voting rights of Alberton immediately prior to the Business Combination. In connection with the execution of the Merger Agreement, the Sponsor and an insider shareholder, representing 56.71% of the voting rights of Alberton as of the record date entered into a sponsor voting agreement (the Sponsor Voting Agreements) with Alberton and SolarMax pursuant to which, they agree to vote all of their shares of Alberton ordinary shares in favor of the Merger Agreement and related transactions and to otherwise take certain other actions in support of the Merger Agreement and related transactions and refrain from taking actions that would adversely affect such sponsors ability to perform its obligations under the Sponsor Voting Agreement, and provide a proxy to Alberton to vote such Alberton ordinary shares accordingly. \nPublic shareholders will be able to redeem their public shares in connection with the expected shareholder vote to approve the proposed business combination with SolarMax, which shall be consummated by April 26, 2021 or such earlier date as determined by the board of directors of Alberton, provided, however, that in the event that the redemptions result in Alberton having less than $5,000,001 in net tangible assets as of the Closing, or the Successor not satisfying the applicable listing requirements of Nasdaq, which include a $4.0 million stockholders equity if the market value of the listed securities is at least $50.0 million and $5.0 million if that test is not met, and a $15.0 million market value of unrestricted publicly held shares after giving effect to the consummation of the Merger and any private financing, then either party may terminate the Merger Agreement, and the Business Combination will not be consummated as a result of such termination. \nThe founder shares and private shares will be excluded from the pro rata calculation used to determine the per-share redemption price. \nHolders of outstanding units must separate the underlying public shares and public warrants prior to exercising redemption rights with respect to the public shares. \nWe may require public shareholders, whether they are a record holder or hold their shares in street name, to either (i) tender their certificates (if any) to our transfer agent or (ii) deliver their shares to the transfer agent electronically using Depository Trust Companys DWAC (Deposit/Withdrawal At Custodian) System, at the holders option, in each case prior to a date set forth in the proxy materials sent in connection with the proposal to approve the business combination. \nThere is a nominal cost associated with the above-referenced delivery process and the act of certificating the shares or delivering them through the DWAC System. The transfer agent will typically charge the tendering broker $45.00 and it would be up to the broker whether or not to pass this cost on to the holder. However, this fee would be incurred regardless of whether or not we require holders seeking to exercise conversion rights to deliver their shares. The need to deliver shares is a requirement of exercising conversion rights regardless of the timing of when such delivery must be effectuated. However, in the event we require shareholders seeking to exercise conversion rights prior to the consummation of the proposed business combination and the proposed business combination is not consummated this may result in an increased cost to shareholders. \nAny proxy solicitation materials we furnish to shareholders in connection with a vote for any proposed business combination will indicate whether we are requiring shareholders to satisfy such certification and delivery requirements. Accordingly, a shareholder would have from the time the shareholder received our proxy statement up until the vote on the proposal to approve the business combination to deliver his shares if such shareholder wishes to seek to exercise his conversion rights. This time period varies depending on the specific facts of each transaction. However, as the delivery process can be accomplished by the shareholder, whether or not he is a record holder or his shares are held in street name, in a matter of hours by simply contacting the transfer agent or his broker and requesting delivery of his shares through the DWAC System, we believe this time period is sufficient for an average investor. However, we cannot assure you of this fact. \nAny request to convert such shares once made, may be withdrawn at any time up to the vote on the proposed business combination or the expiration of the tender offer. Furthermore, if a holder of public shares delivered his certificate in connection with an election of their conversion and subsequently decides prior to the applicable date not to elect to exercise such rights, he may simply request that the transfer agent return the certificate (physically or electronically). \nIf the initial business combination is not approved or completed for any reason, then our public shareholders who elected to exercise their conversion rights would not be entitled to convert their shares for the applicable pro rata share of the Trust Account as of two business days prior to the consummation of the initial business combination. In such case, we will promptly return any shares delivered by public holders. \n### Liquidation if No Business Combination \nOur amended and restated memorandum and articles of association provided that we will have until April 26, 2021 (with two three-month extensions) to complete our initial business combination. If we are unable to complete our initial business combination by April 26, 2021 or such longer period that our shareholders may approve, we will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the Trust Account not previously released to us for our tax obligations, divided by the number of then outstanding public shares, which redemption will completely extinguish public shareholders rights as shareholders (including the right to receive further liquidation distributions, if any) and (iii) as promptly as reasonably possible following such redemption, seek to dissolve and liquidate subject to our obligations under British Virgin Islands law to provide for claims of creditors in all cases subject to and the other requirements of applicable law. This redemption of public shares from the Trust Account shall be effected as required by function of our amended and restated memorandum and articles of association and prior to any voluntary winding up, although at all times subject to the Companies Act. \nFollowing the redemption of public shares, we intend to enter voluntary liquidation which is the statutory process for formally closing and dissolving a company under the laws of the British Virgin Islands. Given that we intend to enter voluntary liquidation following the redemption of public shareholders from the Trust Account, we do not expect that the voluntary liquidation process will cause any delay to the payment of redemption proceeds from our Trust Account. In connection with such a voluntary liquidation, the liquidator would give notice to creditors inviting them to submit their claims for payment, by notifying known creditors (if any) who have not submitted claims and by placing a public advertisement in at least one newspaper published in the British Virgin Islands and in at least one newspaper circulating in the location where we have our principal place of business, and taking any other steps the liquidator considers appropriate to identify our creditors, after which our remaining assets would be distributed. As soon as our affairs are fully wound-up, the liquidator must complete his statement of account and make a notice filing with the registrar. We would be dissolved once the registrar issues a Certificate of Dissolution. \nOur initial shareholders, which include our independent directors, have entered into agreements with us, pursuant to which they have waived their rights to liquidating distributions from the Trust Account with respect to their founder shares if we fail to complete our initial business combination by April 26, 2021 or not otherwise extend the date that we need to complete our business combination. However, if our initial shareholders or management team acquire public shares in or after the IPO, they will be entitled to liquidating distributions from the Trust Account with respect to such public shares if we fail to complete our initial business combination by April 26, 2021. \nOur executive officers and directors have agreed, pursuant to written agreements with us, that they will not propose, or vote in favor of, any amendment to our amended and restated memorandum and articles of association, prior to a business combination, that would affect the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial business combination by April 26, 2021, unless we provide our public shareholders with the opportunity to redeem their public shares upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the Trust Account (which interest shall be net of taxes payable), divided by the number of then outstanding public shares. However, we may not redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 (so that we are not subject to the SECs penny stock rules). If this optional redemption right is exercised with respect to a number of public shares such that we cannot satisfy the net tangible asset requirement, we would not proceed with the amendment or the related redemption of our public shares at such time. This redemption right shall apply in the event of the approval of any such amendment, whether proposed by our initial shareholders, any executive officer, director or director nominee, or any other person. \nThere will be no redemption rights or liquidating distributions with respect to our warrants or rights, both of which will expire worthless if we fail to complete our initial business combination by April 26, 2021. We will pay the costs of our liquidation from our remaining assets outside of the Trust Account. However, the liquidator may determine that he or she requires additional time to evaluate creditors claims (particularly if there is uncertainty over the validity or extent of the claims of any creditors). Also, a creditor or shareholder may file a petition with the British Virgin Islands court which, if successful, may result in our liquidation being subject to the supervision of that court. Such events might delay distribution of some or all of our remaining assets. \nIf we were to expend<|endoftext|>### Explanatory Note \nCamber Energy, Inc (the Company) is filing this Annual Report on Form 10-K/A (Form 10-K/A) to amend our Annual Report on Form 10-K for the year ended March 31, 2020, originally filed with the Securities and Exchange Commission (the SEC) on June 29, 2020 (Original Report) to restate our financial statements and related notes (collectively, the financial statements or Financial Statements) for the fiscal years ended March 31, 2019 and 2020. This Form 10-K/A also amends certain other Items in the Original Report, as listed in Items Amended in this Form 10-K/A below. \nRestatement Background \nOn October 31, 2020, the Company received a comment letter from the SEC (SEC Comment Letter) with respect to Amendment No. Among other things, the SEC Comment Letter questioned the Companys historical accounting treatment regarding the sale of our Series C Redeemable Convertible Preferred Stock (the Series C Stock). After considering the SEC Comment Letter and reviewing the COD, the Company and the holder of the Series C Stock determined there were several errors made in the drafting of the COD that could result in unintended consequences. Both parties agreed the corrections would be applied retroactive to the original filing date of the COD, being August 25, 2016; however, US GAAP requires a transaction to be accounted for in accordance with the terms of an agreement in effect during the period of the financial statements and, consequently, the Company determined that in accordance with the terms of the original COD, the Series C Stock should have been recorded as temporary equity instead of permanent equity. After consultations with the SEC staff and the Companys accounting advisors, the Company determined: (i) the impact of the error(s) is material for the fiscal years ended March 31, 2019 and 2020; and (ii) to restate its Annual Report on Form 10-K for the year ended March 31, 2020, inclusive of comparative financial statements for the year ended March 31, 2019, the previously filed quarterly report on From 10-Q for the three months ended June 30, 2020, and the previously filed quarterly report on Form 10-Q for the three and six month periods ended September 30, 2020. See Note 4 to the Consolidated Financial Statements included in Item 8 for additional information and a reconciliation of the previously reported amounts to the restated amounts. \n\nThis Form 10-K/A presents the Original Report in its entirety, amended and restated with modifications as necessary to reflect the restatements. \nPart I, Item1A. Risk Factors \nPart II, Item7. \n### Part II, Item8. Financial Statements \nIn addition, the Companys Chief Executive Officers and Principal Accounting Officer have provided new certifications dated as of the date of this filing in connection with this Form \n10-K/A (Exhibits 31.1, 31.2, 32.1 and 32.2). \n### GLOSSARY OF OIL AND NATURAL GAS TERMS \nThe following are abbreviations and definitions of certain terms used in this Report, which are commonly used in the oil and natural industry. \n### AFE or \nAuthorization for Expenditures \nA document that lays out proposed expenses for a particular project and authorizes an individual or group to spend a certain amount of money for that project. \nARO \nAsset retirement obligation, a legal obligation associated with the retirement of an asset, which in the Companys case is generally associated with the pugging of oil wells. \nBbl \nOne stock tank barrel, or 42 U.S. gallons liquid volume, used in this Annual Report in reference to crude oil or other liquid hydrocarbons. \nBcf \nAn abbreviation for billion cubic feet. Unit used to measure large quantities of gas, approximately equal to 1 trillion Btu. \nBoe \nBarrels of oil equivalent, determined using the ratio of one Bbl of crude oil, condensate or natural gas liquids, to six Mcf of natural gas. \n### Boepd \nBarrels of oil equivalent per day. \nBopd \nBarrels of oil per day. \n### Btu or \nBritish thermal unit \nThe quantity of heat required to raise the temperature of one pound of water by one degree Fahrenheit. \n### Completion \nThe operations required to establish production of oil or natural gas from a wellbore, usually involving perforations, stimulation and/or installation of permanent equipment in the well or, in the case of a dry hole, the reporting of abandonment to the appropriate agency. \nCondensate \nLiquid hydrocarbons associated with the production of a primarily natural gas reserve. \n### Conventional resources \nNatural gas or oil that is produced by a well drilled into a geologic formation in which the reservoir and fluid characteristics permit the natural gas or oil to readily flow to the wellbore. \nDeveloped acreage \nThe number of acres that are allocated or assignable to productive wells. \n### Development well \nA well drilled into a proved oil or natural gas reservoir to the depth of a stratigraphic horizon known to be productive. \nEstimated ultimate recovery or \nEUR \nEstimated ultimate recovery is the sum of reserves remaining as of a given date and cumulative production as of that date. \n### Exploratory well \nA well drilled to find and produce oil or natural gas reserves not classified as proved, to find a new reservoir in a field previously found to be productive of oil or natural gas in another reservoir or to extend a known reservoir. \n### Farmin or farmout \nAn agreement under which the owner of a working interest in an oil or natural gas lease assigns the working interest or a portion of the working interest to another party who desires to drill on the leased acreage. Generally, the assignee is required to drill one or more wells in order to earn its interest in the acreage. The assignor usually retains a royalty or reversionary interest in the lease. The interest received by an assignee is a farmin while the interest transferred by the assignor is a farmout. \n### FERC \n\nField \nAn area consisting of a single reservoir or multiple reservoirs all grouped on or related to the same individual geological structural feature and/or stratigraphic condition. \n### Gross acres or gross wells \nThe total acres or wells in which a working interest is owned. \nHenry Hub \nA natural gas pipeline located in Erath, Louisiana that serves as the official delivery location for futures contracts on the NYMEX. The settlement prices at the Henry Hub are used as benchmarks for the entire North American natural gas market. \n### Held by production \nAn oil and natural gas property under lease in which the lease continues to be in force after the primary term of the lease in accordance with its terms as a result of production from the property. \n### Horizontal drilling or well \nA drilling operation in which a portion of the well is drilled horizontally within a productive or potentially productive formation. This operation typically yields a horizontal well that has the ability to produce higher volumes than a vertical well drilled in the same formation. A horizontal well is designed to replace multiple vertical wells, resulting in lower capital expenditures for draining like acreage and limiting surface disruption. \nLiquids \nLiquids, or natural gas liquids, are marketable liquid products including ethane, propane, butane and pentane resulting from the further processing of liquefiable hydrocarbons separated from raw natural gas by a natural gas processing facility. \n### LOE or \nLease operating expenses \nThe costs of maintaining and operating property and equipment on a producing oil and gas lease. \n### MBbl \nOne thousand barrels of crude oil or other liquid hydrocarbons. \nMMBbl/d \nOne thousand barrels of crude oil or other liquid hydrocarbons per day. \nMcf \nOne thousand cubic feet of natural gas. \n### Mcfgpd \nThousands of cubic feet of natural gas per day. \nMMcf \nOne million cubic feet of natural gas. \n### MMBtu \nOne million British thermal units. \n### Net acres or net wells \nThe sum of the fractional working interest owned in gross acres or wells. \nNet revenue interest \nThe interest that defines the percentage of revenue that an owner of a well receives from the sale of oil, natural gas and/or natural gas liquids that are produced from the well. \nNGL \nNatural gas liquids. \n### NYMEX \nNew York Mercantile Exchange. \nPermeability \nA reference to the ability of oil and/or natural gas to flow through a reservoir. \n### Petrophysical analysis \nThe interpretation of well log measurements, obtained from a string of electronic tools inserted into the borehole, and from core measurements, in which rock samples are retrieved from the subsurface, then combining these measurements with other relevant geological and geophysical information to describe the reservoir rock properties. \nPlay \nA set of known or postulated oil and/or natural gas accumulations sharing similar geologic, geographic and temporal properties, such as source rock, migration pathways, timing, trapping mechanism and hydrocarbon type. \n### Possible reserves \nAdditional reserves that are less certain to be recognized than probable reserves. \nProbable reserves \nAdditional reserves that are less certain to be recognized than proved reserves but which, in sum with proved reserves, are as likely as not to be recovered. \nProducing well, production well or productive well \nA well that is found to be capable of producing hydrocarbons in sufficient quantities such that proceeds from the sale of the wells production exceed production-related expenses and taxes. \n### Properties \nNatural gas and oil wells, production and related equipment and facilities and natural gas, oil or other mineral fee, leasehold and related interests. \nProspect \nA specific geographic area which, based on supporting geological, geophysical or other data and also preliminary economic analysis using reasonably anticipated prices and costs, is considered to have potential for the discovery of commercial hydrocarbons. \n### Proved developed reserves \nProved reserves that can be expected to be recovered through existing wells and facilities and by existing operating methods. \nProved reserves \nReserves of oil and natural gas that have been proved to a high degree of certainty by analysis of the producing history of a reservoir and/or by volumetric analysis of adequate geological and engineering data. \n### Proved undeveloped reserves or \nPUDs \nProved reserves that are expected to be recovered from new wells on undrilled acreage or from existing wells where a relatively major expenditure is required for recompletion. \n### Repeatability \nThe potential ability to drill multiple wells within a prospect or trend. \nReservoir \nA porous and permeable underground formation containing a natural accumulation of producible oil and/or natural gas that is confined by impermeable rock or water barriers and is individual and separate from other reservoirs. \n### Royalty interest \nAn interest in an oil and natural gas lease that gives the owner of the interest the right to receive a portion of the production from the leased acreage (or of the proceeds of the sale thereof), but generally does not require the owner to pay any portion of the costs of drilling or operating the wells on the leased acreage. Royalties may be either landowners royalties, which are reserved by the owner of the leased acreage at the time the lease is granted, or overriding royalties, which are usually reserved by an owner of the leasehold in connection with a transfer to a subsequent owner. \n### Shut in \nTo shut in a well is to close off the well so that it stops producing. \n2-D seismic \nThe method by which a cross-section of the earths subsurface is created through the interpretation of reflecting seismic data collected along a single source profile. \n3-D seismic \nThe method by which a three-dimensional image of the earths subsurface is created through the interpretation of reflection seismic data collected over a surface grid. 3-D seismic surveys allow for a more detailed understanding of the subsurface than do 2-D seismic surveys and contribute significantly to field appraisal, exploitation and production. \n### Trend \nA region of oil and/or natural gas production, the geographic limits of which have not been fully defined, having geological characteristics that have been ascertained through supporting geological, geophysical or other data to contain the potential for oil and/or natural gas reserves in a particular formation or series of formations. \nUnconventional resource play \nA set of known or postulated oil and or natural gas resources or reserves warranting further exploration which are<|endoftext|>Iconix Brand Group, Inc., or the Company, which may also be referred to as we, us or our, is filing this Amendment No.1 (the Amendment) to its Annual Report on Form10-Kfor the Companys fiscal year ended December31, 2020, as originally filed with the Securities and Exchange Commission (the SEC) on March13, 2021 (the Original Report). The purpose of this Amendment is to include Part III information, which was to be incorporated by reference from the Companys definitive proxy statement for the 2021 Annual Meeting of Stockholders. This information was previously omitted from the Original Report in reliance on General Instruction G(3) to Form10-K,which would permit the Part III information to be incorporated in the Original Report by reference from the Companys definitive proxy statement if such proxy statement is filed no later than 120 days after the fiscalyear-end.The Company is filing this Amendment to include Part III information in the Annual Report on Form10-Kfor the year ended December31, 2020 because a definitive proxy statement containing such information will not be filed by the Company within 120 days after the end of the fiscal year covered by the Original Report. \nIn accordance with Rule 12b-15 under the Securities Exchange Act of 1934, as amended (Exchange Act), the Cover Page, Part III, Items 10 through 14 and Part IV, Item 15 of the Original Report are hereby amended and restated in their entirety. This Amendment does not amend, modify, or otherwise update any other information in the Original Report. In addition, this Amendment does not reflect events that may have occurred subsequent to the Original Reports filing date. \nPursuant to Rule 12b-15 under the Exchange Act, this Amendment also contains new certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, which are attached hereto. Because no financial statements are included in this Amendment and this Amendment does not contain or amend any disclosure with respect to Items 307 and 308 of Regulation S-K, paragraphs 3, 4, and 5 of the certifications have been omitted. \n### ICONIX BRAND GROUP, INC. - FORM 10-K/A \nPage \nPARTIII \n### Item 10. \n\nItem 11. \n### Executive Compensation \nItem 12. \n\n### Item 13. \n\nItem 14. \n\nPARTIV \nItem 15. \n\nItem 16. \n### Form 10-K Summary \nSignatures \nUnless the context requires otherwise, references in this Form 10-K to the Company, Iconix, we, us, our, or similar pronouns refer to Iconix Brand Group, Inc. \n### PART III \nItem10. \nBoard of Directors \nInformation regarding the Companys Board of Directors (the Board) is set forth below. The address for each director is c/o Iconix Brand Group, Inc., \n1450 Broadway, Third Floor New York, New York 10018. \n(1) \nMember of the Governance/Nominating Committee. \n(2) \nMember of the Audit Committee of the Board (the Audit Committee). \n(3) \nMember of the Compensation Committee of the Board (the Compensation Committee). \n### JUSTIN BARNES \nDirector Since 2018 \nAge 56 \nJustin Barnes has served as Chairman of IBSL Consultancy Limited since 2012, previously served as Head of Brands at Sports Direct from 2006 to 2008, and previously worked with Sports Direct as a consultant for a number of years. Mr. Barnes is also a chartered trademark attorney and has significant experience in the field of intellectual property law. \n### DREW COHEN \nDirector Since 2004 \nAge 52 \n### Lead Director \nDrew Cohen has served on our Board of Directors since April 2004. From August 2015 until April 2016, and since September 2016, Mr. Cohen has served as our Lead Director. Since 2007, he has been the President of Music Theatre International (MTI) and currently serves as its Chief Executive Officer and President. MTI represents the dramatic performing rights of classic properties, such as West Side Story and Fiddler on the Roof, and licenses over 50,000 performances a year around the world. Before joining MTI in September 2002, Mr. Cohen was, from July 2001, the director of investments for Big Wave NV, an investment management company, and, prior to that, General Manager for GlassNote Records, an independent record company. Mr. Cohen received a Bachelor of Science degree from Tufts University in 1990, his Juris Doctor degree from Fordham Law School in 1993, and a Masters degree in business administration from Harvard Business School in 2001. \nF. PETER CUNEO \n### Director Since 2006 \nAge 77 \n\nF. Peter Cuneo has served as our since January 1, 2019. Previously, Mr. Cuneo served as Executive Chairman from December 2017 until December 2018, and from April 2016 until December 2016. Since August 2015, and while not serving as Executive Chairman, Mr. Cuneo has served as our Chairman of the Board. He also served as our Interim Chief Executive Officer from August 2015 until April 2016 and again from June 2018 until October 2018. Mr. Cuneo has served on our Board of Directors since October 2006. Mr.Cuneo served as Chief Executive Officer and of CIIG Merger Corp. from September 2019 through March 2021, and, from March 2021 onwards, serves as Chairman of the board of directors of Arrival Luxembourg SARL, the successor parent entity to CIIG Merger Corp. Mr. Cuneo also currently serves as Chairman of BeyondView LLC, a digital twin technology company, since 2017 and as a Director on the Board of electroCore, Inc. since 2020. From June 2004 through December 2009, Mr. Cuneo served as the Vice Chairman of the board of directors of Marvel Entertainment, Inc. (Marvel Entertainment), a publicly traded entertainment company active in motion pictures, television, publishing, licensing and toys, and prior thereto, he served as the President and Chief Executive Officer of Marvel Entertainment from July 1999 to December 2002. Mr. Cuneo has also served as the Chairman of Cuneo & Co., L.L.C., a private investment firm, since July 1997 and previously served on the board of directors of WaterPik Technologies, Inc., a New York Stock Exchange company engaged in designing, manufacturing and marketing health care products, swimming pool products and water-heating systems, prior to its sale in 2006. From October 2004 to December 2005, he served on the board of directors of Majesco Entertainment Company, a provider of video game products primarily for the family-oriented, mass-market consumer. Mr. Cuneo received a Bachelor of Science degree from Alfred University in 1967 and currently serves as the Chairman of the Alfred University Board of Trustees. Mr. Cuneo received a Masters degree in business administration from Harvard Business School in 1973. \n### ROBERT C. GALVIN \nDirector since 2018 \nAge 61 \nRobert C. Galvin has served as our President and Chief Executive Officer and on our Board of Directors since October 2018. He also currently serves as an independent director of Lands End, which he joined in 2014. Until he joined the Company, Mr.Galvin had been a director of Cherokee Inc. since June 2012 and had been its Chairman of the Board since June 2017, as well as an independent director of Big 5 Sporting Goods Corp and Trans World Entertainment. Previously, Mr. Galvin also served as an independent director of Bebe Stores. Mr. Galvin is also the founder and has been a Principal of Galvin Consulting, LLC, a consulting firm providing strategic services to private equity firms since November 2013. Previously, he served as Chief Executive Officer of Elie Tahari, Ltd. from January 2013 to November 2013. Prior to that he served as Chief Operating Officer and President of Sports Brands International Ltd. (Fila), and President of Camuto Group. In these roles Mr. Galvin has had extensive experience managing global brand licensing activities for these companies. In addition, Mr. Galvin was instrumental in the refinancing of material indebtedness and cost restructurings at Cherokee and SBI. Mr. Galvin served as Chief Operating Officer of Nine West Group Inc. Mr. Galvin is a graduate of Fairfield University and holds an MBA from the Stern School of Business at NYU. \n### JAMES A. MARCUM \nDirector since 2007 \nAge 61 \nJames A. Marcum has served on our Board of Directors since October 2007. Since January 2016, Mr. Marcum has served as a Senior Operating Partner for an affiliate of Apollo Global Management Holdings, LLC. Prior to that, Mr. Marcum served as an Operating Partner and Operating Executive of Tri-Artisan Capital Partners, LLC, a merchant banking firm, positions he held from December 2014 to January 2016. From August 2013 to December 2014, Mr. Marcum served as Chief Executive Officer, President and Director of Heartland Automotive Services, Inc., the nations largest franchisee of Jiffy Lubes. From February 2010 through December 31, 2012, Mr. Marcum served as the Chief Executive Officer, President and Director of Central Parking Corporation, a nationwide provider of professional parking management. From September 2008 to January 2010, Mr. Marcum served as Vice Chairman, Acting President and Chief Executive Officer of Circuit City Stores, Inc., a specialty retailer of consumer electronics where Mr. Marcum had also served as a member of the board of directors since June 2008. Circuit City Stores, Inc. filed for bankruptcy in November 2008. Prior to Circuit City Stores Inc., Mr. Marcum served in several other notable board capacities and senior executive roles, including roles as Lead Director, CEO, COO and CFO for a variety of nationwide specialty retailers, both public and private. He received a Bachelor of Science degree from Southern Connecticut State University in accounting and economics in 1980. \n### Executive Officers \nOur executive officers, their positions with us and certain other information with respect to these officers are set forth below: \nFor Mr. Galvins biography, please refer to Board of Directors above. \n### John McClain \nsince 2019 \nAge 60 \nJohn McClain has served as our since February 2019. Previously, Mr.McClain served as the chief financial officer of The Jones Group Inc., formerly Jones Apparel Group, a $4 billion leading global designer, marketer and wholesaler of over 25 brands with product expertise in apparel, footwear, jeanswear, jewelry and handbags, from July 2007 until the sale of Jones to Sycamore Partners in April 2014. From April 2014 to October 2015, he served as a Senior Advisor to Sycamore Partners. From November 2015 until September 2016, he served as chief financial officer of Lindblad Expeditions Holdings, Inc., a global provider of expedition cruises and adventure travel experiences. Prior to that, Mr. McClain held a number of roles at Avis Budget Group, Inc. formerly Cendant Corporation. He joined Cendant Corporation in September 1999 serving as the Senior Vice President, Finance & Corporate Controller until 2006. From July 2006 to 2007, Mr. McClain served as the chief accounting officer of Avis and chief operating officer of Cendant Finance Holdings. Mr. McClain previously held leadership roles at Sirius Satellite Radio Inc. and ITT Corporation. Mr. McClain has served as a trustee of Seritage Growth Properties, a real estate investment trust, since June 2015, and on the board of Lands End since May 2014. He also previously served on the board of Nine West Holdings from April 2014 until October 2015. Mr. McClain is a graduate of Lehigh University with a B.S. in accounting. \n### Corporate Governance \n\nSince January 1, 2019, F. Peter Cuneo has served as Chairman of the Board, Robert C. Galvin has served as our Chief Executive Officer, and Drew Cohen has served as our Lead Director. The Board believes that having separate Chairman and Chief Executive Officer roles provides an enhanced governance framework for our Company and promotes the long-term success of our Company, both for our employees and for our stockholders. The Lead Directors primary responsibility is to act as the chief of all independent directors and manage all independent Board functions. \n### Risk Management \nThe Board has an active role, as a whole and also at the committee level, in overseeing management of the Companys risks. The Board regularly reviews information regarding the Companys credit, liquidity, proposed acquisitions and operations, as well as other risks associated with the Companys business. The Compensation Committee is responsible for overseeing the management of risks relating to the Companys executive compensation plans and arrangements, as well as all of the Companys benefit plans. The Audit Committee oversees management of financial risks and potential conflicts of interest with related parties. The Governance/Nominating Committee manages<|endoftext|>Considered the effect of the warrants sold in the Initial Public Offering and Private Placement to purchase an aggregate of16,000,000 shares of ClassA common stock in the calculation of diluted loss per share, since their inclusion would be anti-dilutive under the treasury stock method. \nThe Companys statement of operations includes a presentation of income (loss) per common share for common stock subject to redemption in a manner similar to the two-class method of loss per share. Net income (loss) per share, basic and diluted for ClassA common stock is calculated by dividing the investment income earned on the Trust Account, net of applicable income and franchise taxes, which resulted in $0 for the period from June 4, 2020 (inception) to December 31, 2020, by the weighted average number of shares of ClassA common stock outstanding for the period. Net loss per share, basic and diluted for ClassB common stock is calculated by dividing the net loss of approximately $16.1 million, less income attributable to ClassA common stock, by the weighted average number of shares of ClassB common stock outstanding for the period. \n### Income Taxes \n\n\n\n\nFAST ACQUISITION CORP. \n\n\nOnAugust 25, 2020, the Company consummated itsInitial Public Offering of 20,000,000 Units at $10.00 per Unit, generating gross proceeds of$200.0million, and incurring offering costs of approximately $11.5 million, inclusive of $7.0million in deferred underwriting commissions. \nEach Unit consists of one share of Class A common stock, and one-halfof one redeemable warrant (each, a Public Warrant). Each Public Warrant entitles the holder to purchase one share of Class A common stock at a price of $11.50 per share, subject to adjustment (see Note 7). \nThe Company granted the underwriters a 45-dayoption from the date of the final prospectus relating to the Initial Public Offering to purchase up to 3,000,000 additional Units to cover over-allotments, if any, at the Initial Public Offering price, less underwriting discounts and commissions. \n\nFounder Shares \nOn June 19, 2020, the Sponsor purchased 7,187,500shares of the Companys Class B common stock, par value $0.0001 per share, (the Founder Shares) for an aggregate price of $25,000. On August4, 2020, the Company effected a share capitalization resulting in an aggregate of 5,750,000 shares of Class B common stock outstanding. The forfeiture would have been adjusted to the extent that the over-allotmentoption was not exercised in full by the underwriters so that the Founder Shares will represent 20.0% of the Companys issued and outstanding shares after the Initial Public Offering. \nThe initial stockholders agreed, subject to limited exceptions, not to transfer, assign or sell any of the Founder Shares until the earlier to occur of: (i) one year after the completion of the initial Business Combination and (ii) the date following the completion of the initial Business Combination on which the Company completes a liquidation, merger, capital stock exchange or other similar transaction that results in all of the Companys stockholders having the right to exchange their common stock for cash, securities or other property. Notwithstanding the foregoing, if (1) the last reported sales price of the Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-tradingday period commencing at least 150 days after the initial Business Combination or (2) if the Company consummates a transaction after the initial Business Combination which results in the Companys stockholders having the right to exchange their shares for cash, securities or other property, the Founder Shares will be released from the lock-up. \n\nSimultaneously with the closing of the Initial Public Offering, the Company consummated the Private Placement of6,000,000 Private Placement Warrants to the Sponsor, each exercisable to purchase one share of ClassA common stock at $11.50 per share, at a price of $1.00 per Private Placement Warrant, generating gross proceeds to the Company of $6.0 million. \nA certain portion of the proceeds from the sale of the Private Placement Warrants to the Sponsor was added to the proceeds from the Initial Public Offering held in the Trust Account. The Private Placement Warrants will be non-redeemablefor cash and exercisable on a cashless basis so long as they are held by the Sponsor or its permitted transferees. \n\nFAST ACQUISITION CORP. \n\nRelated Party Loans \nOn June4, 2020, the Sponsor agreed to loan the Company an aggregate of up to $300,000 to cover expenses related to the Initial Public Offering pursuant to a promissory note (the Note). Through August 25, 2020, the Company borrowed $300,000 under the Note and received additional advances of approximately $54,000 from the Sponsor to cover for certain offering expenses. The Company fully repaid the Note and the advances to the Sponsor on August 25, 2020. \n\n### \nThe Company agreed that, commencing on the date that the Companys securities were first listed on the New York Stock Exchange and continuing until the earlier of the Companys consummation of a Business Combination and the Companys liquidation, the Company will pay the Sponsor a total of $15,000 per month for office space, utilities, secretarial and administrative support services provided to members of the Companys management team. For the period from June 4, 2020 (inception) through December 31, 2020, the Company paid and incurred $60,000 related to these services. \nThe Sponsor, officers and directors, or any of their respective affiliates will be reimbursed for any out-of-pocketexpenses incurred in connection with activities on the Companys behalf such as identifying potential target businesses and performing due diligence on suitable Business Combinations. The Companys audit committee will review, on a quarterly basis, all payments that were made to the Sponsor, officers or directors, or their affiliates. \n\nRegistration Rights \n\n### Underwriting Agreement \n\nFAST ACQUISITION CORP. \n\nThe underwriters would have been entitled to an additional fee of $0.6 million upon closing of the underwriters over-allotment optionand approximately $1.1 million in deferred underwriting commissions if the over-allotment option was exercised in full. \nRisks and uncertainties \nManagement continues to evaluate the impact of the COVID-19 pandemic on the industry and has concluded that while it is reasonably possible that the virus could have an effect on the Companys financial position, results of its operations and/or close of the Merger Agreement, the specific impact is not readily determinable as of the date of these financial statements. \n### Note 7 Derivative Warrant Liabilities \nAs of December 31, 2020, the Company 10,000,000 and 6,000,000 Public Warrants and Private Warrants outstanding, respectively. \nPublic Warrants may only be exercised in whole and only for a whole number of shares. provided in each case that the Company has an effective registration statement under the Securities Act covering the issuance of the shares of Class A common stock issuable upon exercise of the Public Warrants and a current prospectus relating to them is available (or the Company permits holders to exercise their Public Warrants on a cashless basis and such cashless exercise is exempt from registration under the Securities Act). The Company has agreed that as soon as practicable, but in no event later than 15 business days after the closing of the initial Business Combination, the Company will use its best efforts to file with the SEC and have an effective registration statement covering the shares of Class A common stock issuable upon exercise of the warrants and to maintain a current prospectus relating to those shares of Class A common stock until the warrants expire or are redeemed. Notwithstanding the above, if the Companys shares of Class A common stock are at the time of any exercise of a warrant not listed on a national securities exchange such that they satisfy the definition of a covered security under Section 18(b)(1) of the Securities Act, the Company may, at its option, require holders of Public Warrants who exercise their warrants to do so on a cashless basis in accordance with Section 3(a)(9) of the Securities Act and, in the event the Company so elects, it will not be required to file or maintain in effect a registration statement, and in the event the Company does not so elect, it will use the Companys best efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available. \nThe warrants have an exercise price of $11.50 per share, subject to adjustments. In addition, if (x) the Company issues additional shares of Class A common stock or equity-linkedsecurities for capital raising purposes in connection with the closing of the initial Business Combination at an issue price or effective issue price of less than $9.20 per share of Class A common stock (with such issue price or effective issue price to be determined in good faith by the board of directors and, in the case of any such issuance to the initial stockholders or their affiliates, without taking into account any Founder Shares held by the initial stockholders or such affiliates, as applicable, prior to such issuance) (the Newly Issued Price), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of the initial Business Combination on the date of the consummation of the Companys initial Business Combination (net of redemptions), and (z) the volume weighted average trading price of the Class A common stock during the 20 trading day period starting on the trading day after the day on which the Company consummates its initial Business Combination (such price, the Market Value) is below $9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value and the Newly Issued Price, and the $18.00 per share redemption trigger price described below under Redemption of warrants for cash will be adjusted (to the nearest cent) to be equal to 185% of the higher of the Market Value and the Newly Issued Price. \nFAST ACQUISITION CORP. \n\nThe Private Placement Warrants are identical to the Public Warrants, except that the Private Placement Warrants and the shares of Class A common stock issuable upon exercise of the Private Placement Warrants will not be transferable, assignable or salable until 30 days after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Placement Warrants will be non-redeemableso long as they are held by the Sponsor or its permitted transferees. \nand if, and only if, the last sales price of the Class A common stock equals or exceeds $18.00 per share on each of 20 trading days within the 30-tradingday period ending on the third business day prior to the date on which the Company sends the notice of redemption to the warrant holders. \n\n\n\nClass ACommon Stock \nThe Company is authorized to issue 380,000,000shares of Class A common stock with a par value of $0.0001 per share. As of December 31, 2020, there were 20,000,000 shares of Class A common stock issued and outstanding. Of the outstanding shares of Class A common stock, 18,915,903 were subject to possible redemption at December 31, 2020, and therefore classified outside of permanent equity. \n### Class BCommon Stock \nThe Company is authorized to issue 20,000,000shares of Class B common stock with a par value of $0.0001 per share. On June 19, 2020, the Company issued 7,187,500shares of Class B common stock. On August4, 2020, the Company effected a share capitalization resulting in an aggregate of 5,750,000 Class B common stock outstanding. Of the 5,750,000 Class B common stock outstanding, up to 750,000shares of Class B common stock were subject to forfeiture to the Company by the initial stockholders for no consideration to the extent that the underwriters over-allotmentoption was not exercised in full or in part, so that the number of shares of Class B common stock would collectively equal 20% of the Companys issued and outstanding common stock after the Initial Public Offering. , resulting in 5,000,000 Class B common stock outstanding as of December 31, 2020. \nHolders of Class A common stock and holders of Class B common stock will vote<|endoftext|>Value of $800,000. \n### Note 5 LOANS PAYABLE DUE TO RELATED PARTIES \nAs of December 31, 2020, the Company subsidiarys chief executive officer had an outstanding balance of $3,574. The loan is non-interest bearing and due on demand. \nNote 6 - CONVERTIBLE NOTE PAYABLES \nThe Company had convertible note payables with three third parties with stated interest rates ranging between 10% and 12% and 22% default interest not including penalties. These notes have a conversion feature such that the Company could not ensure it would have adequate authorized shares to meet all possible conversion demands; accordingly, the conversion option has been treated as a derivative liability in the accompanying interim financial statements. As of December 31, 2020, the Company had the following third-party convertible notes outstanding: \n*Note is currently in default. \nAs of March 31, 2021, all of the above notes have been retired and there are no loans in default at March 31, 2021. \nDuring the year ended December 31, 2019, third-party lenders converted $231,444 of principal and interest into 1,153,211,664 shares of common stock. \nDuring the year ended December 31, 2020, third-party lenders converted $809,292 of principal and interest into 2,936,347,316 shares of common stock. \nThe variables used for the Black-Scholes model are as listed below: \nThe Company amortized a debt discount of $63,350 and $100,299 respectively, during the years ended December 31, 2020 and 2019, respectively. \nOn March 8, 2019, a third-party loaned the Company $28,000.00 in a 12% debenture that matures on January 15, 2020. The transaction netted the Company $25,000.00 after legal fees and due diligence expenses. \nOn May 13, 2019, the Company borrowed $12,500.00 pursuant to a convertible note agreement bearing an interest rate of 12% per annum and with a maturity date of September 15, 2019. \nOn July 9, 2019, a third-party lender funded the Company $35,000.00 in the form of a 12% convertible debenture that matures April 30, 2020. The transaction netted the Company $32,000.00 after legal fees and due diligence expenses. \nOn September 6, 2019, a third-party lender funded the Company $35,000.00 in the form of a 12% convertible debenture that matures September 6, 2020. The transaction netted the Company $30,500.00 after legal fees and due diligence expenses \nOn November 12, 2019, a third-party lender funded the Company $18,000.00 in a 10% convertible debenture due November 12, 2020. The transaction netted the Company $15,500.00 after original issue discount (OID) of $2,500.00. \nOn November 14, 2019, a third-party lender funded the Company $18,000.00 in a 10% convertible debenture due November 14, 2020. The transaction netted the Company $12,500.00 after original issue discount (OID) of $3,000.00 and legal fees of $2,500.00. \nOn October 28, 2020, a third-party lender funded the Company $115,000.00 in a 12% convertible debenture due October 28, 2021. The transaction netted the Company $98,000.00 after original issue discount (OID) of $15,000.00 and placement agent fees of $2,000.00. \n\nAoxin License Agreement \nDuring the year ended December 31, 2019, based on failure to perform including a lack of a license to manufacture and export electric vehicles under our agreement with them, we terminated all discussions and agreements with Aoxin Motors. \n### Legal Proceedings \nThe Company may from time to time, become a party to various legal proceedings, arising in the ordinary course of business. The Company investigates these claims as they arise. \nA third-party lender, Auctus Fund, LLC, served the Company notice of a civil lawsuit on November 1, 2019 seeking principal, interest and penalties of $283,000.00 related to a loan provided to the Company on or around January 6, 2017. On November 25, 2019, the Company reached a Settlement Agreement and Mutual General Release with Auctus Fund, LLC. As part of the agreement, the Company agreed that the settlement value of the note and accrued interest was $60,522.32 and the Company would issue the following shares to settle the note and accrued interest: \nThe Company agreed to irrevocably authorize and reserve a sufficient amount of Settlement Shares of the Companys common stock pursuant to the reserve requirements of the Note (with an initial amount of at least One Billion - Five Hundred Million (1,500,000,000) Shares of the publicly tradeable ETFM Common Stock for delivery and issuance to the Auctus Fund, LLC. For year-end 2019, the Company accrued a liability of $260,000, representing the fair value of the settlement shares at the date of the settlement agreement. The Settlement Agreement was subsequently amended in 2020 and all principal, interest and penalties were retired as of December 31, 2020. \n### Note 8 INCOME TAXES \nThe Company did not file its federal tax returns for fiscal years from 2012 through 2020. Management at year-end 2020 believed that it should not have any material impact on the Companys financials because the Company did not have any tax liabilities due to net loss incurred during these years. \nBased on the available information and other factors, management believes it is more likely than not that any potential net deferred tax assets on December 31, 2020 and December 31, 2019 will not be fully realizable. The Company is current with franchise tax board fees due to the State of California and intends to prepare tax statements for the federal and state requirements for 2019 and 2020. \n### Note 9 WARRANTS AND OPTIONS \nAs of December 31, 2019, the Company has fifty million warrants with an exercise price of $0.001 and a three-year expiration issued and outstanding to three members of our Advisory Board who were added to that newly created committee during March - April 2019. Additionally, we issued ten million warrants with a strike price of $0.005 and a three-year expiration to EDGE FiberNet, Inc. as compensation for strategic consulting. During the year ended December 31, 2019, the Company recognized $16,803 in expense related to these warrants. During the year ended December 31, 2020, the Company issued warrants for services. During the year ended December 31, 2020 the Company issued 328,571,428 warrants to a third-party lender for fees on a loan default. The Company recognized $844,754 in expense related to these warrants. On December 31, 2020, a total of 713,571,428 warrants were outstanding with a weighted average life of 3.87 years and an intrinsic value of $844,754. \nNote 10 EQUITY \nDuring the year ended December 31, 2019, the Company increased the authorized shares for common stock of the Company from three (3) billion to ten (10) billion and for preferred shares from ten (10) million to one hundred (100) million. \n\nOn March 6, 2019, our Board of Directors approved, and we filed a Certificate of Determination for with the Secretary of State of California, a new class of Series C Preferred Shares with a total of one million such shares authorized. Each share converts into one common share, has 10,000 votes on every corporate matter requiring a shareholder vote, has a par value of $0.0001, and pays an annual dividend at the option of the Company of $0.01. Subsequent to the end of the three months ended March 30, 2019, the Company issued one million (1,000,000) Series C Preferred Shares to our CEO, Vikram Grover, as consideration for the change of control of the Company. Effective November 6, 2020, the Company increased the authorized Series C Preferred Shares to two (2) million from one (1) million and increased the voting rights of the Series C Preferred shares to 100,000 for every one (1) share from 10,000 for every one (1) share. \nOn March 27, 2019, we issued a demand letter to BKS Cambria, LLC (BKS) and United Biorefineries, Inc. (United) to return 84,770,115 and 53,347,701 of our common stock shares in certificate form, respectively, that may have been invalidly issued by prior management to the corporate entities they controlled. BKS and United failed to respond to our demand letter by the demand date and we have not received the foregoing share amounts in certificate form from either BKS or United. UBC has electronically responded, denied any wrongdoing, and refuses to return the certificates. We are evaluating our legal remedies regarding these share issuances. \nOn April 7, 2019, our Board of Directors approved the creation of a new class of Series B Preferred Shares. A total of six million such shares were authorized. Each share converts into 1,000 common shares, votes on an as converted basis, has a par value of $0.001, and pays a cumulative annual dividend in cash or in kind of $0.01. Effective November 6, 2020, the Company increased the authorized number of Series B Preferred Shares to twenty million from six million to facilitate mergers and acquisitions. \nOn April 8, 2019, we amended the terms of our existing Series A Preferred stock by changing the par value from nil to $0.0001 and establishing a $0.01 per share annual dividend to be approved by our Board of Directors each year. At the time, each share was convertible into one common share and had 50 votes on corporate matters. As part of the management transition plan announced in March 2019, two million of the Series A Preferred Shares were transferred from former management to our current CEO, Vikram Grover. At the time, a total of three million Series A Preferred Shares were authorized, all of which were and are currently issued and outstanding. The financial statements were retroactively adjusted to give effect to this change in par value. \nOn May 5, 2019, 2050 Motors, Inc. executed a Securities Purchase Agreement with our CEO, Vikram Grover, for an investment in the Company of $483,000 in the form of 210,000,000 free-trading common shares of Peer-to-Peer Network aka Mobicard Inc. The transaction closed on May 15, 2019. As consideration, the Company issued the investor 400,000 newly created 1% Cumulative Series B Preferred Shares, each of which bears a RESTRICTED CONTROL STOCK legend. \nOn May 14, 2019, our Board of Directors approved the dissolution of our wholly owned subsidiary, 2050 Motors, Inc., a Nevada corporation doing business under the same name as our publicly traded company, 2050 Motors, Inc., a California corporation. Additionally, our Board of Directors approved the termination of all discussions and prior agreements with Aoxin Motors regarding the importation of electric vehicles to be made by Aoxin Motors in China into the United States. Our termination was driven by Aoxin Motors failure to obtain the necessary license(s) to manufacture e-GO electric vehicles, which have been under development since 2012. Accordingly, on May 14, 2019, we filed paperwork with the Secretary of State of Nevada to dissolve our wholly owned subsidiary, 2050 Motors, Inc., a Nevada corporation, and that dissolution went effective on or around May 17, 2019. \nOn May 15, 2019, based on due diligence and research by management and the Companys advisors, the Board of Directors of 2050 Motors, Inc., a California corporation, approved stop action orders on 162,846,149 common shares held by former management, employees, affiliates, and representatives of the Company. Accordingly, management has directed the Companys transfer agent to prohibit the transfer or sale of any shares associated with their certificates. Pending investigation of the providence of these shares and proof of consideration for said shares, these shares will remain frozen indefinitely and subject to the Companys powers of enforcement and the rules of law. \nOn November 18, 2019, a third-party lender converted $2,170.00 of principal and $500.00 of fees into 89,000,000 shares of common stock. \nOn December 6, 2019, a third-party lender converted $2,350.00 principal and $1,290.00 interest of a convertible debenture into 72,800,000 common shares. \nBetween January 1, 2020 and December 31, 2020, the Company issued to third-party lenders a total of 2,936,347,316 shares of common stock pursuant to conversions of $761,456 debt. \nOn January 8, 2020, a third-party lender converted $5,300.00 principal of a convertible debenture into 106,000,000 common shares. \nOn February 3, 2020, a third-party lender converted $5,600.00 principal of a convertible debenture into 112,000,000 common shares. \nOn February 5, 2020, a third-party lender converted $4,682.00 principal of a convertible debenture into 93,640,000 common shares. \nOn February 18, 2020, a third-party lender converted $7,000.00 principal of a convertible debenture into<|endoftext|>"},"task":{"kind":"string","value":"{\"file\": \"/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz\"}"}}},{"rowIdx":80,"cells":{"text":{"kind":"string","value":"<|endoftext|>And conditions relating to each award; adopt rules and regulations relating to the Equity Incentive Plan; and interpret the Equity Incentive Plan. The Equity Incentive Plan also permits the Compensation Committee to delegate all or any portion of its responsibilities and powers. \nOn April7, 2017, stock options granted under the 2011 Plan automatically became stock options for common stock of Standard, subject to an adjustment for the exchange ratio, and all outstanding grants became fully vested. \n### Tax-Qualified Benefit Plans \n401(k) Plan. \nThe Bank maintains the Standard Bank, PaSB 401(k) Plan, administered by Pentegra Retirement Services, which provides benefits to substantially all of Standards employees (the 401(k) Plan). Employees of the Bank who are 18 or older and have completed 250 hours during a continuous three-month period are eligible to participate in the 401(k) Plan (Participants). Participants may contribute up to 75% of their annual compensation to the 401(k) Plan on a pre-tax basis, subject to limits prescribed by law. the Bank provides a 401(k) match equal to 100% of the Participants salary deferral on the first 3% of compensation and 50% of the Participants salary deferral of the next 2% of compensation, for a maximum employer matching contribution of 4% of a Participants pre-tax compensation. Participants are always 100% vested in employer contributions and their salary deferrals. Participants will also become 100% vested in the employer contributions allocated to their accounts upon attainment of normal retirement age or in the event of the participants death or disability. Participants may invest their accounts in the investment options provided under the 401(k) Plan. Participants may request a withdrawal from their accounts in the event they incur a financial hardship. A Participant will become eligible for distribution of his or her 401(k) Plan benefit upon termination of employment and a Participant that satisfies certain eligibility requirements may request distributions of certain portions of their account balance while employed. Participants may elect to receive payments of their benefits in a lump sum or in installments, provided that their account balance equal or exceeds $500. \n### Defined Benefit Pension Plan. \nThe Bank maintains the Standard Bank, PaSB Defined Benefit Pension Plan and Trust (the Pension Plan), a noncontributory defined benefit pension plan, which was frozen effective August1, 2005. Freezing the Pension Plan eliminated all future benefit accruals; however, the accrued benefit as of August1, 2005 remains. As a frozen plan, future service or salary changes will not increase retirement benefits. \nEmployee Stock Ownership Plan. \nThe Bank adopted an ESOP for eligible employees in 2010. Eligible employees commenced participation in the ESOP on the later of October6, 2010 or upon the first entry date commencing on or after the eligible employees completion of 1,000 hours of service during a continuous 12-month period and the attainment of age 21. \nThe ESOP trustee purchased, on behalf of the ESOP, 178,254 shares of Standard (previously Standard Financial Corp.) common stock issued in the offering and an additional 100,000 shares in the secondary market, for a total of 278,254 shares. The ESOP funded its stock purchase with a loan from Standard equal to the aggregate purchase price of the common stock. The loan is repaid principally through the Banks contribution to the ESOP and dividends payable on common stock held by the ESOP over the 20-year term of the loan. The interest rate for the loan is an annually adjustable rate equal to the prime rate, as published in \n### The Wall Street Journal \n, which is currently 3.25%. \nThe trustee holds the shares purchased by the ESOP in an unallocated suspense account, and shares are released from the suspense account on a pro-rata basis as the Bank repays the loan. The trustee will allocate the shares released among participants on the basis of each participants proportional share of compensation relative to all participants. Participants will become 100% vested upon the completion of sixyears of service. Participants who were employed by the Bank immediately prior to the offering received credit for vesting purposes foryears of service prior to adoption of the ESOP. Generally, participants receive distributions from the ESOP upon separation from service. \nThe ESOP permits participants to direct the trustee as to how to vote the shares of common stock allocated to their accounts. The trustee votes unallocated shares and allocated shares for which participants do not provide instructions on any matter in the same ratio as those shares for which participants provide instructions, subject to fulfillment of the trustees fiduciary responsibilities. \nUnder applicable accounting requirements, the Bank records a compensation expense for the ESOP at the fair value of the shares as they are committed to be released from the unallocated suspense account to participants accounts. \nThe compensation expense resulting from the release of the common stock from the suspense account and allocation to plan participants result in a corresponding reduction in the Banks earnings. \nAt least five business days prior to the effective time of the merger, the ESOP will be terminated and all participant accounts will fully vest. In addition, the ESOP loan made by Standard will be repaid by the ESOP by delivering a sufficient number of unallocated shares of Standard common stock to Standard. At the effective time of the merger, all remaining shares of common stock held by the ESOP will be converted into the right to receive the merger consideration, and the balance of any assets remaining in the ESOP but not allocated to the account of a participant will be allocated among all of the participants accounts as earnings. The remaining ESOP assets will be distributed to the participants following the receipt of the favorable determination letter from the IRS, unless Dollar consents to an earlier distribution or as required by law. Standard has agreed to take any actions necessary to effect the foregoing matters, including adopting any amendments to the ESOP. \n### Directors Compensation \nDirector Fees \nDuring the fiscal year ended December31, 2020, each director of Standard, other than Messrs. Hasley and Zimmerman, was paid, on a prorata basis, an annual fee of$30,000 in cash and $8,476 in restricted stock. The annual fee for the prior year was $30,000 in cash. Messrs. Hasley and Zimmerman do not receive director fees. The Chairman of the Board of Directors receives an additional $12,000 retainer annually and the Vice Chairman of the Board of Directors receives an additional $7,200 retainer annually. The Chair for the Audit Committee receives an additional retainer of$4,000 and all members of the Loan Committee receive an additional retainer of$2,000. There is no additional compensation for other committee service. \nThe following table sets forth the total fees received by the directors during the fiscal year ended December31, 2020, other than Messrs. Hasley and Zimmerman: \n______\n(1) Jennifer H. Lunden resigned from the Board of Directors effective January 8, 2021. \nItem 12. \n### Principal Holders \nPersons and groups who beneficially own in excess of fivepercent of the Companys common stock are required to file certain reports with the Securities and Exchange Commission regarding such beneficial ownership. The following table sets forth, as of March31, 2021, certain information as to the shares of the Companys common stock owned by persons who beneficially own more than fivepercent of the Companys outstanding shares of common stock. We know of no persons, except as listed below, who beneficially owned more than fivepercent of the outstanding shares of the Companys common stock as of March31, 2021. For purposes of the following table and the table included under the heading Management, in accordance with Rule13d-3 under the Securities Exchange Act of 1934, as amended, a person is deemed to be the beneficial owner of any shares of common stock (i)over which he or she has, or shares, directly or indirectly, voting or investment power or (ii)as to which he or she has the right to acquire beneficial ownership at any time within 60days after March31, 2021. \n_________________\n(1) \nBased on 4,773,716 shares of Standard common stock outstanding as of March31, 2021. \n(2) Based on information contained in a Schedule13G/A filed with the U.S. Securities and Exchange Commission on February16, 2021. \nThe following table sets forth information about the shares of Standard common stock owned by each director, each named executive officer identified in the summary compensation table and all directors and executive officers as a group, as of March31, 2021. \n_________________\n* \n### Less than 1%. \n(1) The mailing address for each person listed is 2640 Monroeville Boulevard, Monroeville, Pennsylvania 15146. \n(2) As of March31, 2021. \n(3) \nReflects initial election to the Board of Directors of Standard Financial Corp. or Allegheny Valley Bancorp, Inc., as applicable. On April7, 2017, Allegheny Valley Bancorp, Inc. merged into Standard Financial Corp., with the resulting entity renamed Standard AVB Financial Corp. \n(4) \nIn accordance with Rule13d-3 under the Securities Exchange Act of 1934, a person is deemed to be the beneficial owner for purposes of this table, of any shares of common stock if he has shared voting or investment power with respect to such security, or has a right to acquire beneficial ownership at any time within 60days from the date as of which beneficial ownership is being determined. As used herein, voting power is the power to vote or direct the voting of shares and investment power is the power to dispose or direct the disposition of shares, and includes all shares held directly as well as by spouses and minor children, in trust and other indirect ownership, over which shares the named individuals effectively exercise sole or shared voting or investment power. \n(5) Based on 4,773,716 shares outstanding as of March31, 2021. \n(6) Includes 4,147 shares held in an IRA for the benefit of Mr.Ferris spouse. \n(7) \nIncludes 8,982 shares held in an IRA for the benefit of Mr.Iurlano, 263 shares held by Mr.Iurlanos spouse and 1,728 held in an IRA for the benefit of Mr.Iurlanos spouse. \n(8) Includes 2,036 shares held in the ESOP for the benefit of Mr.Hasley. \n(9) \nIncludes 7,995 exercisable stock options, 5,000 shares held in an IRA for the benefit of Mr.Rennie, 100 shares held by Mr.Rennie as custodian for two children and 2,000 shares held by Mr.Rennie as custodian for his grandchildren. \n(10) \nIncludes 6,011 shares held by Mr.Thomasmeyers spouse, 4,376 shares held in a trust for the benefit of Mr.Thomasmeyers spouse, 1,940 held in an IRA for the benefit of Mr.Thomasmeyers spouse, 3,037 shares held by Mr.Thomasmeyer as custodian for his child and 955 shares held by Mr.Thomasmeyers child. \n(11) \nIncludes 24,034 shares held in the 401(k) Plan for the benefit of Mr.Zimmerman, 8,324 shares held in the ESOP for the benefit of Mr.Zimmerman and 5,000 shares held in an SEP for the benefit of Mr.Zimmermans spouse. \n(12) Includes 26,550 shares held in an IRA for the benefit of Mr.Graft. \n(13) \nIncludes 25,248 shares held in an IRA for the benefit of Mr.Mathews, and 7,971 shares held in an IRA for the benefit of Mr.Mathews spouse. \n(14) \nIncludes 2,393 shares held in an IRA for the benefit of Mr.Walkers spouse and 2,286 shares held in an IRA for the benefit of Mr.Walker. \n(15) \nIncludes 4,606 shares held in the ESOP for the benefit of Ms.Parente and 2,539 shares held in the 401(k) Plan for the benefit of Ms.Parente. \n(16) Includes 573 shares held in the ESOP for the benefit of Mr.Kline. \n(17) \nIncludes 1,083 shares held in an IRA for the benefit of Ms.DeLuca and 952 shares held in the ESOP for the benefit of Ms.DeLuca. \n(18) Includes 1,297 shares held in an IRA for the benefit of Mr.Chelli and 1,490 shares held in the ESOP for the benefit of Mr.Chelli. \n(19) \nIncludes3,663 shares held in the ESOP for the benefit of Ms.Crystaloski and 11,091 shares held in the 401(k) Plan for the benefit of Ms.Crystaloski. \nItem 13. \n### Director Independence \nThe Board has determined that, except directors Andrew W. Hasley, Timothy K. Zimmerman and David C. Mathews, each member of the Board is an independent director within the meaning of the NASDAQ corporate governance listing standards and the Companys corporate governance<|endoftext|>The fiscal year. For more information regarding our 2020 TIP, please see the sections of the titled Elements of Compensation and 2020 Determinations. \nEquity Compensation Awards \nConsistent with its practices for awarding restricted stock units described in the above, the Compensation Committee approved equity compensation awards in the form restricted stock units to each of the named executive officers. For more information regarding our equity compensation awards, please refer the section of the titled Elements of Compensation and 2020 Determinations. In addition, the named executive officers equity compensation awards may, under certain circumstances, be subject to accelerated vesting in the event of a change of control and termination. For more information regarding the accelerated vesting provisions and treatment of the equity compensation awards in the event of a change of control, refer to the sections titled Severance and Change of Control Arrangements and Potential Payments Upon Termination or Change of Control. \n### Other Benefits \nFor a description of the other elements of our executive compensation program, see the section Other Benefits in the above. \n\nThe following table shows for the fiscal year ended \n### December 31, 2020 \n, certain information regarding outstanding equity awards at fiscal year-end for the named executive officers \n(1) \nPursuant to the executive agreements between the named executive officer and us, the vesting of such named executive officers stock and option awards will accelerate under certain circumstances as described under Employment, Severance and Change of Control Arrangements. \n(2) \nPrior to our IPO, the exercise price per share reflects the fair market value per share of our common stock on the date of grant as determined by our Board. Following our IPO, the exercise price reflects the closing price of our Class 2 common stock on the date of grant. \n(3) \nThe shares subject to the option are scheduled to vest as follows: 25% of the shares on the twelve (12) month anniversary of the Vesting Commencement Date and the remaining option shares will vest quarterly thereafter at the rate of 6.25% of the total number of shares on each quarterly anniversary of the Vesting Commencement Date thereafter for so long as the optionee remains in Continuous Service (as defined in the Companys 2018 Amended and Restated Tilray, Inc. Equity Incentive Plan (the 2018 Plan)), such that the total number of shares shall be fully vested on the four-year anniversary of the Vesting Commencement Date. \n(4) \nAnnual equity grants of RSUs vest in full on the third anniversary of the grant date. \n(5) \nThe shares subject to the RSU shall vest over a four-year period as follows: two vesting requirements must be satisfied for the RSU to vest - a time and service requirement and a Liquidity Event (as defined below) requirement. The time and service requirement is as follows: the RSUs shall vest at the rate of 25% of the RSUs on the twelve (12) month anniversary of the Vesting Commencement Date, and the remaining RSUs will vest quarterly thereafter at the rate of 6.25% of the total number of RSUs on each quarterly anniversary of the Vesting Commencement Date. The Liquidity Event requirement will be satisfied as to any then-outstanding RSU on the first to occur of: (1) a Change in Control (as defined in the 2018 Plan); or (2) the date following the effective date of a registration statement of the Company filed under the Securities Act for the sale of the Companys common stock on which all shares of common stock issued or issuable under the 2018 Plan are not subject to the lock-up restrictions. The total number of RSUs shall be fully vested on the four-year anniversary of the Vesting Commencement Date, provided that the RSU recipient has remained in Continuous Service (as defined in the 2018 Plan) through each applicable vesting date. \n(6) \n\n(7) \nThe shares subject to the option are scheduled to vest as follows: 25% of the shares on the twelve (12) month anniversary of the Vesting Commencement Date and the remaining option shares will vest monthly thereafter at the rate of 2.08% of the total number of shares on each monthly anniversary of the Vesting Commencement Date thereafter for so long as the optionee remains in Continuous Service (as defined in the Privateer Holdings, Inc. 2011 Equity Incentive Plan), such that the total number of shares shall be fully vested on the four-year anniversary of the Vesting Commencement Date. \n(8) \nThis amount reflects the fair market value of our Class 2 common stock of $8.26 per share, which was the closing price of our Class 2 common stock on December 31, 2020. \n(9) \n\n\nThe following table shows for 2020, certain information regarding option exercises and stock vested during the last fiscal year with respect to the named executive officers: \nPension Benefits \nOur named executive officers did not participate in, or otherwise receive any benefits under, any pension or defined benefit retirement plan sponsored by us in 2020. \n\n\nTransition from Emerging Growth Company Status \nAs of January 1, 2020, we are a large accelerated filer and no longer qualify as an emerging growth company as defined in the JOBS Act. However, under the transition rules for emerging growth companies, we are exempt from certain executive compensation disclosures until our 2021 annual meeting proxy statement, including the Nasdaq requirements to hold a nonbinding advisory vote on our named executive officer compensation, as required by the Investor Protection and Securities Reform Act of 2010, which is part of the Dodd-Frank Wall Street Reform and Consumer Protection Act. \nEmployment, Severance and Change in Control Arrangements \nWe have entered into offer letters with each of our named executive officers. The offer letters generally provide forat-willemployment and set forth the executives initial base salary, target variable compensation, eligibility for employee benefits, the terms of initial equity grants and in some cases severance benefits on a qualifying termination. Each of our named executive officers has also executed our standard form of proprietary information agreement. Any potential payments and benefits due upon a termination of employment or a change of control of us are further described below. \n### Brendan Kennedy \nMr.Kennedy serves as our President and Chief Executive Officer. Kennedy, or the Kennedy Employment Agreement, pursuant to which he received an annual base salary of $425,000 with a target annual bonus equal to 100% of his annual base salary. Mr. Kennedys current base salary is $577,060. On December 15, 2020, Mr. Kennedy, submitted a Letter of Resignation whereby Mr. Kennedy resigned from all positions held at Tilray (other than as a member of Tilrays Board of Directors), with such resignations to be effective upon the effective time of the Arrangement. The Letter of Resignation also includes a form of release agreement to be entered into between Mr. Kennedy and Tilray as of the effective time of the Arrangement (together with the Letter of Resignation, the Termination Agreement), whereby, in consideration for the benefits that Mr. Kennedy may receive as a result of the completion of the Arrangement, including a severance payment and full accelerated vesting of all equity awards. Pursuant to the Termination Agreement, Mr. Kennedy is entitled to (i) a severance payment equal to $3,462,360 which shall be subject to standard payroll deductions and withholdings and paid in a lump sum within sixty (60) days following effective time of the Arrangement; (ii) full accelerated vesting of all of Tilray options, RSUs, and other equity-based awards that are unvested as of the effective time of the Arrangement; and (iii) full reimbursement for continuation coverage pursuant to the COBRA for Mr. Kennedy and his eligible dependents, consistent with Tilrays expense reimbursement policy and subject to applicable tax withholdings, for the COBRA premiums for such coverage (at the coverage levels in effect immediately prior to the effective time of the Arrangement) for a period of thirty-six (36) months after the Effective Time, or until the date upon which Mr. Kennedy and his eligible dependents are no longer eligible for COBRA continuation coverage. \nMichael Kruteck \nMr. Kruteck joined Tilray on January 20, 2020 and became our Chief Financial Officer on March 3, 2020. Pursuant to the terms of his employment agreement, or the Kruteck Agreement, Mr.Kruteck will receive an initial annual base salary of $375,000 USD and is eligible to receive an annual performance and retention bonus of up to 50% of his annual base salary. \nIf Mr.Kruteck is terminated without cause or resigns for good reason, as such terms are defined in the Kruteck Agreement, he will receive a severance payment equal to 12 months his base salary andpro-ratedtarget annual bonus, as then in effect, and accelerated vesting of the portion of each outstanding equity incentive award that would have vested had Mr.Kruteck remained employed through the next vesting date prorated for his period of employment during the vesting period within which Mr.Krutecks employment is terminated. Mr.Kruteck is also entitled to COBRA benefits for up to 12 months after termination without cause or resignation for good reason. Upon a change in control, as such term is defined in the Plan, all of Mr.Krutecks unvested equity-based awards will vest in full. \nOn December 18, 2020, Tilray entered into a retention letter agreement with Mr. Kruteck, who will receive one-time retention cash payment. The retention payments amount for Mr. Kruteck is equivalent to one times his then current base salary, subject to applicable deductions and withholdings. \n### Jon Levin \nMr. Levin became Tilrays Chief Operating Officer on January13, 2020. Pursuant to the terms of his employment agreement, or the Levin Agreement, as amended, Mr.Levin will receive an initial annual base salary of $400,000 USD and received an annual performance and retention bonus of up to 50% of his annual base salary. \nIf Mr.Levin is terminated without cause or resigns for good reason, as such terms are defined in the Levin Agreement, he will receive a severance payment equal to 12 months his base salary andpro-ratedtarget annual bonus, as then in effect, and accelerated vesting of the portion of each outstanding equity incentive award that would have vested had Mr.Levin remained employed through the next vesting date prorated for his period of employment during the vesting period within which Mr.Levins employment is terminated. Mr.Levin is also entitled to COBRA benefits for up to 12 months after termination without cause or resignation for good reason. Upon a change in control, as such term is defined in the Plan, all of Mr.Levins equity-based awards will vest in full. \nOn December 18, 2020, Tilray entered into a retention letter agreement with Mr.Levin, who will receive one-time retention cash payment. The retention payments amount for Mr.Levin is equivalent to one times his then current base salary, subject to applicable deductions and withholdings. \n### Mark Castaneda \nMr.Castaneda served as our Chief Financial Officer and Treasurer until his resignation on March 2, 2020 and then assumed a Business Development role for the Company. Castaneda, or the Castaneda Employment Agreement, pursuant to which he received an annual base salary of $230,000 with a target annual bonus equal to 50% of his annual base salary. Mr. Castanedas base salary during 2020 was $402,000. If Mr. Castaneda had been terminated without cause or resigned for good reason, as such terms are defined in the Castaneda Employment Agreement, he would have received a severance payment equal to 24 months of his base salary and COBRA benefits for up to 24 months after such termination or resignation. Upon a change in control, as such term is defined in the Castaneda Employment Agreement, all of Mr. Castanedas unvested stock options, RSUs and other equity-based awards would have vested in full. \nEdward Wood Pastorius, Jr. \nMr.Pastorius served as our Chief Revenue Officer until October 2020. Pastorius, or the Pastorius Employment Agreement, pursuant to which he received an annual base salary of $325,000 with a target annual bonus equal to 50% of his annual base salary. \nOn October 21, 2020, we entered into a separation agreement and complete release with Mr. Pastorius, the Pastorius Separation Agreement, specifying the terms of Mr. Pastoriuss termination of service<|endoftext|>The executive officers necessary for the Companys success, as described above. As a result, we currently and may in the future pay compensation that is not fully deductible, in whole or in part, under Section162(m) in order to ensure competitive levels of total compensation for our executive officers and when we otherwise view such compensation as consistent with our compensation policies. \n### Report of Leadership and Compensation Committee \nThe Committee of the Board reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with our executives and, based on such review and discussions, the Committee recommended to the Board that the Compensation Discussion and Analysis be included in this Amendment No. 1. \n### The Leadership and Compensation Committee \nJack T. Mollen, Chairman \nDavid Brennan \n### Christopher J. Coughlin \nDeborah Dunsire, M.D. \nSummary Compensation Table \nThe following table sets forth information regarding the compensation awarded to, earned by or paid to each of our NEOs during the fiscal years ended December31, 2020, and (where applicable) 2019 and 2018. \n(1) \nDr. Sarin joined the Company in November 2017 as Senior Vice President, Business Development and Corporate Strategy and from February 2019 to October 2019, she served as Executive Vice President, Chief Strategy and Business Officer and Chief of Staff to the CEO. On September 17, 2019, the Board of Directors appointed Dr. Sarin as Executive Vice President and Chief Financial Officer, effective in October 2019. Dr. Sarin's annual base salary for 2019 as Chief Strategy and Business Officer and Chief of Staff to the CEO was $600,000, retroactive to January 2019, until her appointment as Executive Vice President and Chief Financial Officer, at which time her annual base salary was increased to $800,000, commensurate with her new position. No amounts are reported for Dr. Sarin for 2018 because she was not a named executive officer for that year. \n(2) \nNo amounts are reported for Ms. Chiniara for 2018 or 2019 because she was not a named executive officer for either of those years. \n(3) \nMs. Law served as the Company's Executive Vice President and Chief Human Experience Officer through August 21, 2020. The amount of her annual base salary of $729,750 was pro-rated to reflect that she was \n40 employed for only a portion of 2020. In connection with Ms. Law's departure, the Company and Ms. Law entered into a separation agreement. As of the date of her departure, vesting of RSUs granted in 2017 and 2018 was accelerated and she forfeited unvested 2019 and 2020 RSUs. PSUs granted in 2018, 2019 and 2020 will be pro-rated to the end of the month of separation and will remain outstanding and continue to vest based on final performance results upon certification at the end of the performance periods. Amounts reported as Stock Awards for Ms. Law include incremental fair value of $5,638,071 associated with the modification of Ms. Law's outstanding 2018, 2019 and 2020 PSUs in connection with her departure from the Company pursuant to her separation agreement. \n(4) \nAmounts represent the grant date fair value of stock awards granted to the named executive officer in each of 2020, 2019 and 2018 (where applicable), calculated in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718 (\"FASB ASC Topic 718\"), disregarding the effect of estimated forfeitures. See Notes1 and 13 to our audited consolidated financial statements in our Annual Report on Form10-K for the year ended December31, 2020 for details as to the assumptions used to determine the fair value of the equity awards granted in 2020. See our audited consolidated financial statements in our Annual Reports on Form10-K for the years ended December31, 2019 and 2018 for details as to the assumptions used to determine the fair value of the awards granted in 2019 and 2018, respectively. The amount reported in the \"Stock Awards\" column includes the grant date fair value of RSUs and PSUs, the terms of which are more fully discussed in the Compensation Discussion and Analysis above. For PSUs, the amounts represent the grant date fair value based on the probable outcome of the performance conditions at the grant date. For 2020, the grant date fair value of PSUs was $5,403,048 for Dr. Hantson, $1,329,979 for Dr. Sarin, Mr. Goff and Dr. Orloff, and $1,246,847 for Ms. Chiniara and Ms. Law. The grant date fair value of these PSUs, if the highest level of performance conditions were achieved, is $12,454,240 for Dr. Hantson, $3,065,654 for Dr. Sarin, Mr. Goff and Dr. Orloff, and $2,874,032 for Ms. Chiniara and Ms. Law. \nIn addition, the 2020 amounts reported in the \"Stock Awards\" column also include the incremental fair value associated with the modification of the outstanding 2019 PSUs that occurred in 2020. Following the acquisition of Portola Pharmaceuticals, Inc (Portola) in July 2020, the Compensation Committee approved a modification to the revenue and operating margin targets and payout curves to include the results of the Portola business. See page 31 of the CD&A for further details of this modification. This modification was accounted for in accordance with FASB ASC Topic 718. The incremental fair value resulting from the modification of the outstanding 2019 PSUs, based on the probable outcome of the performance conditions at the modification date, was determined to be $4,111,091 for Dr. Hantson, $911,757 for Dr. Sarin and Ms. Chiniara, $542,734 for Ms. Law and $1,042,025 for Mr. Goff and Dr. Orloff. \n(5) \nAmounts represent the annual incentive bonus earned by each of the NEOs for services performed in 2020, 2019 and 2018 (where applicable). \n(6) \nThe amounts within the All Other Compensation column for 2020 are as follows: \n(7) Amounts represent employer matching contributions to the Alexion 401(K) plan related to employee 2020 contributions. \n(8) Amounts represent cash severance payments and the value of the outplacement services to which Ms. Law became entitled pursuant to her separation agreement with the Company. This amount reflects cash payments equal to 18-months salary and target bonus, or approximately $1,860,863, 18-months of health insurance premiums paid after deducting applicable taxes and withholding, or approximately $44,709, and $60,000 of outplacement assistance fees. \n(9) Amounts in this column for fiscal year 2020 represent commuter and parking benefits. \n### CEO Pay Ratio \nWe have estimated the median of the 2020 annual total compensation of our employees, other than our Chief Executive Officer, to be $250,651. The 2020 annual total compensation of Dr. Hantson was $17,919,259 (this is same amount reported in the Total column reported in the Summary Compensation Table included above). As a result, the estimated ratio of the annual total compensation of our Chief Executive Officer to the estimated median of the annual total compensation of our other employees was approximately 71 to 1. We believe that the pay ratio reported above is a reasonable estimate calculated in a manner consistent with SEC rules based on our internal records and the methodology described below. \nOverview of Methodology and Assumptions \nAlexion is a global company, with employees in 29 countries, approximately half of whom are located outside of the United States. As of December 31, 2020, Alexions workforce consisted of approximately 3,837 full-time world-wide employees, including hourly employees. \nIn determining the employee population to be used to calculate the compensation of the median employee, we included employees in all countries. As a result, the employee population that we used for purposes of determining the compensation of our median employee was 3,837 employees. We selected December 31, 2020, the last day of our fiscal year, as the date upon which we would identify the median employee. Given our population changes over the last two years and in accordance with SEC rules, we identified a new median employee for use in our 2020 CEO pay ratio calculations. \nEarnings of our employees outside the U.S. were converted to U.S. dollars using the currency exchange rates used for organizational planning purposes. We did not make any cost of living adjustments. To identify the median employee, we utilized 2020 base salary or base rate of pay (annualized in the case of employees who were not employed for the full fiscal year), target annual cash incentive award and target annual LTI award for our consistently applied compensation measure because we believe that this measure reasonably reflects the annual compensation of our employees. \nWith respect to the SEC rules for identifying the median of the annual total compensation of our employees and calculating the pay ratio based on that employees annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their employee populations and compensation practices, the pay ratio reported by other companies may not be comparable to the pay ratio for our Company, as other companies have headquarters offices in different countries, have different employee populations and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their pay ratios. \nWe invest in our employees at all levels in the Company by rewarding performance that balances risk and reward, empowering professional growth and development and by offering affordable benefits and programs that meet the diverse needs of our employees. \n### Grants Of Plan-Based Awards In Fiscal 2020 \nThe following table sets forth information regarding plan-based awards made to each of our NEOs during the fiscal year ended December31, 2020. \n(1) \nThe amounts represent the annual cash incentive award target and maximum percentage payout amounts for the NEO for 2020 multiplied by such individual's base salary. See \"Annual Cash Incentive Awards\" in the CD&A. Actual amounts paid to the NEO for 2020 are included in the \"Non-Equity Incentive Plan Compensation\" column under the \"Summary Compensation Table\" above. The maximum amount a NEO may earn is 200% of target bonus amount. The threshold values for this grant are excluded from the table as the minimum award value that could be received is zero. \n(2) \nThe amount includes the number of shares of common stock underlying awards of RSUs granted to the NEO in 2020. These RSUs provide by their terms for ratable vesting on an annual basis over a four-year period. \n(3)The amount represents the estimated payouts for PSUs granted to the NEO in 2020. The target and maximum achievement amounts include shares that may be earned over the vesting period for the achievement of cumulative revenue goals and research and development (R&D) launch goals during the performance period. In addition, the relative TSR cap can limit, but not increase, the payout to 74%. The threshold values for these grants are excluded from the table above as the minimum award value that \n43 could be received is zero. To the extent earned based on performance, these 2020 PSUs cliff vest following the end of a three-year performance period. \n(4)The amount represents the grant date fair value of RSUs and PSUs granted in 2020 calculated in accordance with FASB ASC Topic 718, disregarding the effect of estimated forfeitures. For PSUs, the amounts represent the grant date fair value based on the probable outcome of the performance conditions on the grant date. See footnote 4 to the Summary Compensation Table above for the amounts included with respect of PSUs and the amounts that would be included if the highest level of performance conditions were achieved. See Notes1 and 13 to our audited consolidated financial statements in our Annual Report on Form10-K for the year ended December31, 2020 for details as to the assumptions used to determine the fair value of the awards. \n(5)The amounts represents the incremental fair value of $5,638,071 associated with the modification of Ms. Law's outstanding 2018, 2019 and 2020 PSUs in connection with her departure from the Company on August 21, 2020 pursuant to her separation agreement. Ms. Law's unvested RSUs granted in 2020 were forfeited upon her departure on August 21, 2020. PSUs granted in 2020 will be pro-rated to the end of the month of separation and will remain outstanding and continue to vest based on final performance results upon certification at the end of<|endoftext|>After) a. \n75% of Mr. and b. \nImmediate vesting of all unvested equity awards outstanding. \n### Charles Carter \nOn entry into the Retention Bonus Agreement and Consulting Agreement as of December 31, 2020, Mr. Carter forfeited any post-termination rights. \nStephen Linhares. \nMr. Linhares is an at-will employee and has no severance terms defined in his offer letter. Severance payments are determined by the Company on a case-by-case basis and not guaranteed. \nWe believe that the Companys current chief executive officers severance packages are in line with severance packages offered to executive officers of similar rank at companies of similar size to GI Dynamics in the Companys industry. \n### Director Compensation \nThe following table shows the total compensation paid or accrued during the fiscal year ended December31, 2020 to each of the Companys non-employee directors who received compensation for their service as directors. \nIn August 2011, the Companys board adopted a non-executive director compensation policy, which was amended in May 2014 and further amended in January 2017, pursuant to which the non-executive directors will be compensated for their service on the Companys board including as members of the various committees of the Companys board. The number of directors on the Companys board is determined from time to time by the Companys board, up to a maximum of ten directors. The material terms of the policy are as follows: each non-executive director will receive an annual fee of $50,000 payable for the directors service during the year; the chairman of the Companys board will receive an additional annual fee of $25,000 payable for that directors service during the year; each non-executive director who serves as either a member or chair of certain committees of the Companys board will receive an additional annual fee for their work on such committee as either a member or chair as follows: audit committee: chair ($15,000) and member ($3,000); compensation committee: chair ($10,000) and member ($2,000); and nominating and corporate governance committee: chair ($5,000) and member ($1,000). \nThese fees are payable quarterly in arrears as of the last day of each fiscal quarter. Each director is also entitled to be reimbursed for reasonable travel and other expenses incurred in connection with attending meetings of the Companys board and any committee on which he or she serves. \nAll prior equity awards granted to the board members who resigned on August 10, 2020 were cancelled and forfeited prior to December 31, 2020. \nOn January 28, 2021, Mark Lerdal was granted an option to purchase up to 1,384,483 shares of Common Stock for $0.06 per share. \nOn January 28, 2021, Ginger Glaser was granted an option to purchase up to 1,384,483 shares of Common Stock for $0.06 per share. \nITEM12. \nThe following table sets forth, as of May 15, 2021, information regarding beneficial ownership of the Companys common stock by the following: each person, or group of affiliated persons, who is known by GI Dynamics to beneficially own 5% or more of any class of the Companys voting securities; each of the Companys directors; each of the Companys named executive officers; \nBeneficial ownership is determined according to the rules of the SEC. Beneficial ownership generally includes voting or investment power of a security and includes shares underlying stock options that are currently exercisable or exercisable within 60 days of May 15, 2021. This table is based on information supplied by officers, directors and principal stockholders. Except as otherwise indicated, we believe that the beneficial owners of the CDIs and common stock listed below, based on the information each of them has given to us, have sole investment and voting power with respect to their shares, except where community property laws may apply. \nPercentage of ownership is based on 88,095,659 shares of outstanding common stock outstanding on May 15,2021. Unless otherwise indicated, we deem shares subject to stock options that are exercisable within 60 days of May 15, 2021, to be outstanding and beneficially owned by the person holding the stock options for the purpose of computing percentage ownership of that person, but we do not treat them as outstanding for the purpose of computing the ownership percentage of any other person. \nUnless otherwise indicated in the table, the address of each of the individuals named below is: c/o GI Dynamics, Inc., 320 Congress Street, Boston, MA 02210, U.S.A \n* \nIndicates less than 1% \n(1) \nBased upon the Companys corporate records and upon the information provided by Crystal Amber Fund Limited, (CAFL), in a Notice of Change of Interests of Substantial Holder (Form 604) filed with the ASX on 3 February 2020, reporting as of 3 February 2020. The address for CAFL is P.O. Box 286, Floor 2, Trafalgar Court, Les Banques, St Peter Port, Guernsey GY14LY U.K. \nExcludes shares that may be issued in the future upon the conversion of the 2020 Note (as defined below). \n(2) \nOptions were granted to Mr. Lerdal, Ms. Glaser, Mr. Virgilio, and Mr. Linhares on January 28, 2021 with the earliest portion of each grant not vesting within the 60 days following May 15, 2021. \n(3) \nScott Schorer was the former President and CEO, who resigned and forfeited all outstanding vested equity awards effective November 2, 2020. \n(4) \nMr. Carter forfeited all outstanding vested equity awards as of December 31, 2020. \n(5) \nIncludes 90,000 shares vested as of May 15, 2021, and an additional 10,000 vesting within 60 days of May 15, 2021. \nITEM13. \n\nThere are no existing agreements or arrangements and there are no currently proposed transactions in which the Company was, or is to be, a participant, in which the amount involved exceeded or will exceed the lesser of $120,000 or one percent of the average of the Companys total assets at year-end for the last two completed fiscal years and in which any current director, executive officer, beneficial owner of more than 5% of the Companys common stock, or entities affiliated with them, had or will have a material interest since January 1, 2019, except that \n(i) in June 2017, the Company issued a convertible term promissory note (the 2017 Note) in the aggregate principal amount of $5.0million to Crystal Amber Fund Limited, the Companys largest shareholder, which note accrued interest at 5% per annum compounded annually and was secured by substantially all of the Companys personal property.On July 13, 2020, Crystal Amber converted the note into 2,574,873,400 CHESS Depositary Interests (CDIs), representing 51,497,468 shares of the Companys common stock. On July 13, 2020, the Company issued 1,920,085,200 CDIs, representing 38,401,704 shares of common stock to Crystal Amber with the remaining 13,095,764 shares of the Companys common stock that were due in connection with the conversion of the June 2017 Note being issued September 10, 2020.The Note was considered paid in full on July 13, 2020. \n(ii) in May 2018, we issued a convertible term promissory note in the aggregate principal amount of $1.75million to Crystal Amber Fund Limited, the Companys largest shareholder, which note accrued interest at 10% per annum compounded annually, matured on the fifth anniversary of the issuance date, and contained certain provisions for conversion during the term of the note.On June 30, 2019, the $1.75 million of principal and approximately $192 thousand of accrued interest was converted into 134,852,549 CDIs, and \n(v) in May 2018, we issued a warrant to Crystal Amber Fund Limited, the Companys largest shareholder, to purchase up to 97,222,200 CDIs prior to expiration on the fifth anniversary of issuance for an initial exercise price of $0.014 per CDI, subject to subsequent anti-dilution price adjustments, and \n(vii) in March 2019, we issued a convertible term promissory note in the aggregate principal amount of $1.0million to Crystal Amber Fund Limited, the Companys largest shareholder, which note accrued interest at 10% per annum compounded annually, matured on the fifth anniversary of the issuance date, and contingent on obtaining shareholder approval, which was granted June 30, 2019, contained certain provisions for conversion during the term of the note.On June 30, 2019, the $1.0 million of principal and approximately $30 thousand of accrued interest was converted into 81,070,003 CDIs, and \n(viii) in March 2019, we issued a warrant to Crystal Amber Fund Limited, the Companys largest shareholder, to purchase up to 78,984,823 CDIs prior to expiration on the fifth anniversary of issuance for an initial exercise price of $0.0127 per CDI, subject to subsequent anti-dilution price adjustments, and \n(ix) in May 2019, we issued a convertible term promissory note in the aggregate principal amount of $3.0million to Crystal Amber Fund Limited, the Companys largest shareholder, which note accrued interest at 10% per annum compounded annually, matured on the fifth anniversary of the issuance date, and contingent on obtaining shareholder approval, which was granted June 30, 2019, contained certain provisions for conversion during the term of the note. On June 30, 2019, the $3.0 million of principal approximately $19 thousand of accrued interest was converted into 237,687,411 CDIs, and \n(x) in May 2019, we issued a warrant to Crystal Amber Fund Limited, the Companys largest shareholder, to purchase up to 236,220,472 CDIs prior to expiration on the fifth anniversary of issuance for an initial exercise price of $0.0127 per CDI, subject to subsequent anti-dilution price adjustments, and \n(xi) in August 2019, we issued a convertible term promissory note in the aggregate principal amount of up to approximately $4.6million to Crystal Amber Fund Limited, the Companys largest shareholder, which note accrued interest at 10% per annum compounded annually, matured on the fifth anniversary of the issuance date, and contained certain provisions for conversion during the term of the note. The note was funded to the maximum amount of approximately $4.6 million on January 13, 2020, and \n(xii) in January 2020, we issued a warrant to Crystal Amber Fund Limited (as part of the issue of the note in paragraph xi), the Companys largest shareholder, to purchase up to 229,844,650 CDIs prior to expiration on the fifth anniversary of issuance for an initial exercise price of $0.02 per CDI, subject to subsequent anti-dilution price adjustments. \n(xiii) \nOn September 4, 2020 we sold to Crystal Amber an aggregate 60,085,583 shares of Series A Preferred Stock, par value $0.01 per share, at a purchase price of $0.08863 per share, for gross proceeds to the Company of approximately $5.0 million, pursuant to an initial closing of a private placement offering for up to $10.0 million of Series A Preferred Stock The gross proceeds from the Initial Closing included the conversion of $1.25 million in principal plus accrued but unpaid interest from outstanding convertible promissory notes that were converted into shares of Series A Preferred Stock at a per share conversion price equal to 80% of the Purchase Price. The net proceeds from the Initial Closing of approximately $4.7 million will be used for product development and other general corporate purposes. \nThe Initial Closing was conditioned on the sale of a minimum of 59,343,599 shares of Series A Preferred Stock. Crystal Amber agreed to purchase any shares not subscribed for by other investors, up to the remaining offering amount of approximately $5.0 million, on or before October 31, 2020. The second closing date was subsequently postponed into 2021. \n(xiv) \nOn September 4, 2020, we entered into a note cancellation and exchange agreement with Crystal Amber which extinguished the August 2019 Note and Warrant and issued a Note with a principal amount of $4.9 million, which note accrues interest at 5% per annum compounded annually, matures on January 30, 2022, and contains certain provisions for conversion into shares of Common Stock at a conversion price of $0.17726 during the term of the note. \nPolicies and Procedures for Review and Approval of Related Party Transactions \nWe have adopted a policy and procedure for related party transactions. The Companys audit committee is responsible for reviewing and approving all transactions in which we are a participant and in which any parties related to us, including the Companys executive officers, directors, beneficial owners of more than 5% of the Companys common stock, immediate family members of the foregoing persons and<|endoftext|>Regularly provides fairness opinions solely with respect to the satisfaction of such criteria. While we consider it unlikely that our Board of Directors will not be able to make such independent determination of fair market value, it may be unable to do so if the board is less familiar or experienced with the target companys business, there is a significant amount of uncertainty as to the value of the companys assets or prospects, including if such company is at an early stage of development, operations or growth, or if the anticipated transaction involves a complex financial analysis or other specialized skills and the board determines that outside expertise would be helpful or necessary in conducting such analysis. Since any opinion, if obtained, would merely state that the fair market value meets the 80% fair market value test, unless such opinion includes material information regarding the valuation of a target business or the consideration to be provided, it is not anticipated that copies of such opinion would be distributed to our shareholders. \nWe will structure our initial business combination so that the post-transaction company in which our public shareholders own shares will own or acquire 100% of the equity interests or assets of the target business or businesses. We may, however, structure our initial business combination such that the post-transaction company owns or acquires less than 100% of such interests or assets of the target business in order to meet certain objectives of the target management team or shareholders or for other reasons, but we will only complete such business combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act of 1940, as amended, or the Investment Company Act. If less than 100% of the equity interests or assets of a target business or businesses are owned or acquired by the post-transaction company, the portion of such business or businesses that is owned or acquired is what will be taken into account for purposes of NYSEs 80% fair market value test. If the business combination involves more than one target business, the 80% fair market value test will be based on the aggregate value of all of the target businesses. \n\nIn evaluating a prospective target business, we will continue to conduct a due diligence review which may encompass, among other things, meetings with incumbent management and employees, document reviews, interviews of customers and suppliers, inspections of facilities, as well as reviewing financial and other information made available to us and other reviews as we deem appropriate. We may also retain consultants with expertise relating to a prospective target business. \nFifth Partners may, from time to time, assist us in the identification of assets or companies that may be appropriate acquisition targets. While we may also draw upon Fifth Partners platforms, infrastructure, personnel, network and relationships to provide access to deal prospects, along with any necessary resources to aid in the identification and diligence of a target for the initial business combination, Fifth Partners is not obligated to identify any such target assets or companies or to perform due diligence on any acquisition targets. Any such activities are solely the responsibility of our management team. \nIn the event we seek to complete our initial business combination with a company that is affiliated with our sponsor, officers or directors, we, or a committee of independent directors, will obtain an opinion from an independent investment banking firm or another independent valuation or appraisal firm that regularly provides fairness opinions that our initial business combination is fair to our company from a financial point of view. In addition, we have not contacted any of the prospective target businesses that prior blank check companies with which our officers and directors have been involved, and had considered and rejected. We do not currently intend to contact any of such targets; however, we may do so in the future if we become aware that the valuations, operations, profits or prospects of such target business, or the benefits of any potential transaction with such target business, would be attractive. \nMembers of our management team directly and indirectly own our securities following our initial public offering, and accordingly, they have a conflict of interest in determining whether a particular target business is an appropriate business with which to effectuate our initial business combination. \nIn order to minimize potential conflicts of interest which may arise from multiple corporate affiliations, each of our officers and directors has contractually agreed, pursuant to a written agreement with us, until the earliest of a business combination, our liquidation or such time as he ceases to be an officer or director, to present to our company for our consideration, prior to presentation to any other entity, any suitable business opportunity which may reasonably be required to be presented to us, subject to any pre-existing fiduciary or contractual obligations he might have. Each of our directors and officers presently has, and in the future any of our directors and our officers may have additional, fiduciary or contractual obligations to other entities, including other blank check companies, pursuant to which such officer or director is or will be required to present acquisition opportunities to such entity. Our amended and restated memorandum and articles of association provides that, subject to his or her fiduciary duties under Cayman Islands law, to the fullest extent permitted by applicable law: (i)no individual serving as a director or an officer shall have any duty, except and to the extent expressly assumed by contract, to refrain from engaging directly or indirectly in the same or similar business activities or lines of business as us; \nOur officers and directors may, under certain circumstances, become an officer or director of another special purpose acquisition company with a class of securities intended to be registered under the Securities Exchange Act of 1934, as amended, or the Exchange Act, even before we have entered into a definitive agreement regarding our initial business combination. \n\nGeneral \nWe are not presently engaged in, and we will not engage in, any substantive commercial business until we consummate our initial business combination. We will utilize cash derived from the proceeds of our initial public offering and the private placement of private warrants, our share capital, debt or a combination of these in effecting a business combination. Although substantially all of the net proceeds of our initial public offering and the private placement of private warrants are intended to be applied generally toward effecting a business combination as described in this report, the proceeds are not otherwise being designated for any more specific purposes. These include time delays, significant expense, loss of voting control and compliance with various Federal and state securities laws. \nWe have until December 17, 2021 (or June 17, 2021 if we extend the time period to consummate our initial business combination by the full amount of time) to consummate an initial business combination. However, if we anticipate that we may not be able to consummate our initial business combination by December 17, 2021, we may, by resolution of our board if requested by our sponsor, extend the period of time to consummate a business combination up to two times, each by an additional three months (to June 17, 2021 to complete a business combination), subject to the sponsor depositing additional funds into the trust account as set out below. Pursuant to the terms of our amended and restated certificate of incorporation and the trust agreement to be entered into between us and Continental Stock Transfer & Trust Company on the date of this report, in order for the time available for us to consummate our initial business combination to be extended, our sponsor or its affiliates or designees, upon five days advance notice prior to the applicable deadline, must deposit into the trust account $1,150,000 if the underwriters over-allotment option is exercised in full ($0.10 per unit, or up to an aggregate of $2,300,000 if the underwriters over-allotment option is exercised in full) on or prior to the date of the applicable deadline, for each three month extension. In the event that we receive notice from our sponsor five days prior to the applicable deadline of its wish for us to effect an extension, we intend to issue a press release announcing such intention at least three days prior to the applicable deadline. In addition, we intend to issue a press release the day after the applicable deadline announcing whether or not the funds had been timely deposited. Our sponsor and its affiliates or designees are not obligated to fund the trust account to extend the time for us to complete our initial business combination. If we are unable to consummate an initial business combination within such time period, we will redeem 100% of our issued and outstanding public shares for a pro rata portion of the funds held in the trust account, equal to the aggregate amount then on deposit in the trust account including interest earned on the funds held in the trust account and not previously released to us to pay our taxes, divided by the number of then outstanding public shares, subject to applicable law and as further described herein, and then seek to dissolve and liquidate. We expect the pro rata redemption price to be approximately $10.10 per public share (regardless of whether or not the underwriters exercise their over-allotment option), without taking into account any interest earned on such funds. However, we cannot assure you that we will in fact be able to distribute such amounts as a result of claims of creditors which may take priority over the claims of our public shareholders. Our public shareholders will not be entitled to vote or redeem their shares in connection with any such extension. As a result, we may conduct such an extension even though a majority of our public shareholders do not support such an extension and will not be able to redeem their shares in connection therewith. \n### We Have Not Identified a Target Business \nTo date, we have not selected any target business on which to concentrate our search for a business combination. None of our officers, directors, initial shareholders and other affiliates has engaged in discussions on our behalf with representatives of other companies regarding the possibility of a potential merger, share exchange, asset acquisition or other similar business combination with us, nor have we, nor any of our agents or affiliates, been approached by any candidates (or representatives of any candidates) with respect to a possible business combination with our company. \nSubject to the limitations that a target business have a fair market value of at least 80% of the balance in the trust account (excluding any taxes payable) at the time of the execution of a definitive agreement for our initial business combination, as described below in more detail, we will have virtually unrestricted flexibility in identifying and selecting a prospective acquisition candidate. We have not established any other specific attributes or criteria (financial or otherwise) for prospective target businesses. \n\nOur business combination must be with a target business or businesses that collectively satisfy the minimum valuation standard at the time of such acquisition, as discussed above, although this process may entail the simultaneous acquisitions of several operating businesses at the same time. Therefore, at least initially, the prospects for our success may be entirely dependent upon the future performance of a single business. Unlike other entities which may have the resources to complete several business combinations of entities operating in multiple industries or multiple areas of a single industry, it is probable that we will not have the resources to diversify our operations or benefit from the possible spreading of risks or offsetting of losses. By consummating a business combination with only a single entity, our lack of diversification may: subject us<|endoftext|>(the Additional Stock Consideration) based upon the volume weighted average price per share (VWAP) for the 20 days prior to issuance, in the event that sales of products utilizing sellers flavored products exceed $500,000 monthly for a three-month average period. The Additional Stock Consideration shall vest 1/24 on the signature or execution date of this Green Goddess Purchase Agreement and an additional 1/24 vests on the first day of each month thereafter provided that the Company and the Executive under the Employment Agreement discussed below are neither in breach of this Green Goddess Purchase Agreement or the Employment Agreement. \nAdditionally, on July 1, 2019, the Company entered into an Executive Employment Agreement (the Employment Agreement) with Alejandro De La Espriella (the Executive) who is the managing member of Green Goddess Extracts, LLC. The term of the Employment Agreement shall be for two years and shall be automatically renewed for successive one-year periods unless either party provides a written notice of non-renewal. The Company agrees to pay the Executive an initial base salary of $120,000 per year subject to annual adjustments determined by the board of directors of the Company and such Executive shall also be eligible for annual bonus, performance bonus and equity awards as defined in the Employment Agreement. \nPursuant to ASU 2017-01 and ASC 805, the Company analyzed the operations of Green Goddess and the related agreements to determine if the Company acquired a business or acquired assets. The gross assets include the intellectual property (the related trademark, brand, and IP addresses are determined to be a single intangible asset), the inventory, customer list, non-compete/non-solicitation and the excess of the consideration transferred over the fair value of the net assets acquired. The Company concluded that substantially all of the fair values of the gross assets acquired is not concentrated in a single identifiable asset or group of similar identifiable assets. \nThe set has outputs through the continuation of revenues, and the Company considered the criteria in paragraph 805-10-55-5E to determine whether the set includes both inputs and a substantive process that together significantly contribute to the ability to create outputs. The set is not a business because: 1) It does not include an organized workforce that could meet the criteria in paragraph 805-10-55-5E (a) through (b), 2) There are no acquired processes that could meet the criteria in paragraph 805-10-55-5E(c) through (d), and 3) It does not include both an input and a substantive process. \nAdditionally, in accordance with ASC 805-10, the 250,000 shares of common stock and the Additional Stock Consideration are tied to continued employment of the Company and as such are recognized as compensation expenses in the post combination period under Share-Based Payment Topic of ASC 718 which requires recognition in the financial statements of the cost of employee and services received in exchange for an award of equity instruments over the period the employee is required to perform the services in exchange for the award (presumptively, the vesting period). \nThe relative fair value of the assets acquired were based on managements estimates of the fair values on July 31, 2019. \nDuring the year ended December 31, 2019 the Company fully impaired the assets and resulted in an impairment loss of $186,025 related to the Green Goddess intangible asset. \nThe Company, Green Goddess and the founder of Green Goddess have each asserted various claims against the other for breach of contract although no proceedings have been commenced. Currently, the Company has suspended efforts to market and sell CBD products under the Green Goddess brand and Green Goddess has suspended delivery of the Companys inventory due to the disputes which involve, among other things, the amounts that were due and owing Green Goddess from C2M for orders placed prior to the asset purchase, the nature and going concern value of the assets purchased by the Company and representations concerning the operation of the business and performance by the founder under the employment agreement. There can be no assurance the parties will resolve their differences or that the prior agreements will not be terminated. The CBD products with a cost of $837,153 were written down to a value of $0 during the year ended December 31, 2019, due to the age and questionable salability of the product. \nThe cost of the inventory write off is included in cost of sales in the accompanying consolidated statements of operations. \n### Levor, LLC \nOn September 30, 2019 the Company entered into an Asset Purchase Agreement (the Levor Purchase Agreement) with Levor, LLC (Levor) and the sole owner and manager of Levor (the Seller). Under the Levor Purchase Agreement, the Company acquired the asset of Levor consisting principally of its rights and interest in the cosmetic brand collection, Levor Collection, which is an all-virtual brand that offers cannabinoid-infused cosmetic products. Under the terms of the Levor Purchase Agreement, the Company agreed to issue 100,000 shares of the Companys Common Stock at closing. In addition, the Company entered into an agreement under which the Company may become obligated to issue additional shares of the Companys common stock to be earned and payable to the Seller on the 12-month anniversary of the closing date which value is equivalent to 35% of the total annual net revenue of the Levor brand divided by the then closing bid price of the common stock on the 12-month anniversary (the Earn-out Consideration). The Seller of Levor was an employee of the Company from July, 2019 through November 2020. \nPursuant to ASU 2017-01 and ASC 805, the Company analyzed the operations of Levor and the related agreements to determine if the Company acquired a business or acquired assets. Based on this analysis, it was determined that the Company acquired assets, primarily consisting of its rights and interest in the cosmetic brand collection, Levor Collection. The Company concluded that substantially all of the fair values of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets. \nPursuant to the terms of the Levor Purchase Agreement, the Company granted 100,000 shares of its Common Stock valued at $70,000, or $0.70 per share, the fair value of the Companys Common Stock based on the sale of common stock in the recent private placement. \nAdditionally, in accordance with ASC 805-10, the Earn-out Consideration is deemed as contingent payment to an employee and the Company determined that the arrangement is compensatory in nature and as such are recognized as compensation expenses in the post combination period under Share-Based Payment Topic of ASC 718 which requires recognition in the financial statements of the cost of employee and services received in exchange for an award of equity instruments over the period the employee is required to perform the services in exchange for the award (presumptively, the vesting period). \nThe relative fair value of the assets acquired were based on managements estimates of the fair values on September 30, 2019. \nDuring the year ended December 31, 2019 the Company recorded an impairment expense of $64,167 related to the Levor intangible asset. \nNOTE 4 \n### INVENTORY \nInventory, net consisted of the following: \nDuring the years ended December 31, 2020 and 2019, the Company recorded a reserve or inventory write-off related to inventory of $ \n678,870 and $723,391 which is equal to the difference between the cost of the inventory and its estimated net realizable value and is included in cost of sales in the accompanying consolidated statements of operations. Additionally, during the year ended December 31, 2019, the Company fully impaired the finished goods related to purchased CBD products from C2M and resulted in an impairment loss of $837,153 which is included in cost of sales on the accompanying consolidated statements of operations. \nNOTE 5 \n### PROPERTY AND EQUIPMENT \n\nDepreciation expense amounted to $ \n85,233 and $63,770 for the years ended December 31, 2020 and 2019, respectively. \nDuring the year ended December 31, 2020, the Company recorded impairment expense of $372,041 which was equivalent to the remaining net book values of the greenhouse, fencing and storage, irrigation, farming equipment and leasehold improvement related to a commercial lease with Skybar Holding, LLC. \nNOTE 6 \n### INTANGIBLE ASSET \nAt December 31, 2020 and 2019, intangible asset consisted of the following: \nFor the years ended December 31, 2020 and 2019, amortization of intangible assets amounted to $ \n734,584 and $828,526, respectively. \nDuring fiscal 2019, the Company fully impaired the intangible assets related to the Green Goddess and Lever Brands. \nDuring the third quarter of fiscal 2020, the Company determined that intangible assets related to EOW farm leases were impaired due to managements intent of not pursuing farm operations in Oregon and the non-renewal of the related EOW farm leases. Accordingly, the Company fully impaired the remaining carrying value of the intangible assets related to EOW farm leases and recorded an impairment expense of $1,412,727 for the year ended December 31, 2020. \nAmortization of intangible assets attributable to future periods is $0 as all acquired intangible assets were written off as of September 30, 2020. \nNOTE 7 - \nOPERATING LEASE RIGHT-OF-USE ASSETS AND OPERATING LEASE LIABILITIES \nThe lease premise, located in Cave Junction, Oregon, consisted of approximately 100 acres. The lease required the Company to pay 5% of the net income realized by the Company from the operation of the lease farm. Accordingly, the Company recognized $0 Right-of-use asset (ROU) and lease liabilities on this farm lease as the Company had not determined when net income would be generated from this lease. The lease was to continue in effect year-to-year except for at least a 30-day written notice of termination. The Company has not paid any lease under this agreement for the years ended December 31, 2020 and 2019. \nThe lease premise, located in Glendale, Oregon, consisted of approximately 100 acres. The lease required the Company to pay $120,000 per year, whereby $50,000 was payable upon execution and $70,000 payable prior to planting for agricultural use or related purposes. The lease was to continue in effect from year-to-year except for at least a 30-day written notice of termination. The Company recognized lease expense of $100,000 for the year ended December 31, 2019 and was included in cost of sales on the accompanying consolidated statements of operations. \nThe lease premise, located in Cave Junction, Oregon, consisted of approximately 38 acres. The lease requires the Company to pay $76,000 per year, whereby $38,000 was payable upon execution and $38,000 payable on September 15, 2019 and 2% of the net income realized by the Company from the operation of the leased farm. The lease was to continue in effect from year-to-year for five years except for at least a 30-day written notice of termination. The Company paid the initial payment of $26,000 and the remaining $12,000 was paid directly to the landlord by an affiliated company who is renting the portion of the lease property from the Company. The Company recognized lease expense of $134,667 included in cost of sales for the year ended December 31, 2019 and recorded $17,333 as prepaid expense amortized over the term of the lease. \nThe Company planned to develop the Premises to create a hemp-oriented health and wellness retail venue, including education, clothing and cosmetics, and explore franchise opportunities. The initial term of the Lease was 5 years commencing August 1, 2019, with two 5-year extension options. The Lease included a right of first refusal in favor of the Company to lease any space that becomes available on the 2nd and 3rd floor of the Premises and a right of first refusal to purchase the Premises. Pursuant to the Lease, the Company agreed to pay rent equal to $40,000 per month in advance in addition to all applicable Florida sales and/or federal taxes and security deposit of $40,000. Effective one year from the lease commencement date and each year thereafter, the rent was to increase at least three percent (3%) per year. The lessor of the Premises is a limited liability company owned or controlled byVladislav (Bobby) Yampolsky, the manager and<|endoftext|>Shares, which number will be based on the requirement that we may not redeem public shares in an amount that would cause our net tangible assets, to be less than $5,000,001 upon completion of our initial business combination (so that we are not subject to the SECs penny stock rules), or any greater net tangible asset or cash requirement which may be contained in the agreement relating to our initial business combination. If public stockholders tender more shares than we have offered to purchase, we will withdraw the tender offer and not complete our initial business combination. \nIf, however, stockholder approval of the transaction is required by law or Nasdaq, or we decide to obtain stockholder approval for business or other legal reasons, we will, pursuant to our amended and restated certificate of incorporation: conduct the redemptions in conjunction with a proxy solicitation pursuant to Regulation 14A of the Exchange Act, which regulates the solicitation of proxies, and not pursuant to the tender offer rules, and file proxy materials with the SEC. \n\nOur sponsor, officers and directors will count toward this quorum and have agreed to vote their founder shares, private placement shares and any public shares held by them in favor of our initial business combination. We expect that at the time of any stockholder vote relating to our initial business combination, our initial stockholders and their permitted transferees will own at least 26.9% of our outstanding shares of common stock entitled to vote thereon. These quorum and voting thresholds and agreements may make it more likely that we will consummate our initial business combination. \nOur amended and restated certificate of incorporation provides that in no event will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 upon consummation of our initial business combination and, in any event, the terms of the proposed business combination may require our net tangible assets to be greater than $5,000,001. If the aggregate cash consideration we would be required to pay for all shares of Class A common stock that are validly tendered for redemption plus the amount of any cash payments required pursuant to the terms of the proposed business combination exceeds the aggregate amount of cash available to us, we will not consummate the business combination or redeem any shares and all shares of Class A common stock submitted for redemption will be returned to the holders thereof. \nLimitation on redemption upon consummation of our initial business combination if we seek stockholder approval \nNotwithstanding the foregoing, if we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our business combination pursuant to the tender offer rules, our amended and restated certificate of incorporation provides that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a group (as defined under Section 13 of the Exchange Act), will be restricted from seeking redemption rights with respect to an more than aggregate of 15.0% of the shares sold in the initial public offering without our prior consent. We believe the restriction described above will discourage stockholders from accumulating large blocks of shares, and subsequent attempts by such holders to use their ability to exercise their redemption rights as a means to force us or management to purchase their shares at a significant premium to the then-current market price or on other undesirable terms. Absent this provision, a public stockholder holding more than an aggregate of 15.0% or more of the shares sold in the initial public offering could threaten to exercise its redemption rights against a business combination if such holders shares are not purchased by us or management at a premium to the then-current market price or on other undesirable terms. By limiting our stockholders ability to redeem no more than 15.0% of the shares sold in the initial public offering, we believe we will limit the ability of a small number of stockholders to unreasonably attempt to block our ability to complete our initial business combination, particularly in connection with a business combination with a target that requires as a closing condition that we have a minimum net worth or a certain amount of cash. However, our amended and restated certificate of incorporation does not restrict our stockholders ability to vote all of their shares (including all shares held by those stockholders that hold more than 15.0% of the shares sold in the initial public offering) for or against our business combination. \n\nWe may require our public stockholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in street name, to either tender their certificates to our transfer agent prior to the date set forth in the tender offer documents mailed to such holders, or up to two business days prior to the vote on the proposal to approve our initial business combination in the event we distribute proxy materials, or to deliver their shares to the transfer agent electronically using The Depository Trust Companys DWAC (Deposit/Withdrawal At Custodian) System, at the holders option. \nThe transfer agent will typically charge the tendering broker $100.00 and it would be up to the broker whether or not to pass this cost on to the redeeming holder. \nIn order to perfect redemption rights in connection with their business combinations, many blank check companies would distribute proxy materials for the stockholders vote on an initial business combination, and a holder could simply vote against a proposed business combination and check a box on the proxy card indicating such holder was seeking to exercise his redemption rights. After the business combination was approved, the company would contact such stockholder to arrange for him to deliver his certificate to verify ownership. As a result, the stockholder then had an option window after the consummation of the business combination during which he could monitor the price of the companys stock in the market. If the price rose above the redemption price, he could sell his shares in the open market before actually delivering his shares to the company for cancellation. As a result, the redemption rights, to which stockholders were aware they needed to commit before the stockholder meeting, would become option rights surviving past the consummation of the business combination until the redeeming holder delivered its certificate. \nFurthermore, if a holder of a public share delivers its certificate in connection with an election of redemption rights and subsequently decides prior to the applicable date not to elect to exercise such rights, such holder may simply request that the transfer agent return the certificate (physically or electronically). \nIf the initial business combination is not approved or completed for any reason, then our public stockholders who elected to exercise their redemption rights would not be entitled to redeem their shares for the applicable pro rata share of the trust account. \nIf our initial business combination is not consummated, we may continue to try to consummate a business combination with a different target until 24 months from the completion of the initial public offering. \n\nOur amended and restated certificate of incorporation provides that we will have only until September 29, 2022 to complete our initial business combination. If we are unable to consummate our initial business combination by September 29, 2022, we will: (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including any amounts representing interest earned on the trust account not previously released to us to pay our franchise and income taxes and up to $100,000 of interest to pay dissolution expenses, divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect to our warrants, which will expire worthless if we fail to complete our initial business combination within such completion window. \nOur sponsor, officers and directors have waived their rights to liquidating distributions from the trust account with respect to any founder shares and placement shares held by them if we fail to complete our initial business combination by September 29, 2022. However, if our sponsor, officers or directors acquire public shares in or after the initial public offering, they will be entitled to liquidating distributions from the trust account with respect to such public shares if we fail to complete our initial business combination by September 29, 2022. \nOur sponsor, executive officers and directors have agreed, pursuant to a letter agreement with us, that they will not propose any amendment to our amended and restated certificate of incorporation that (i) would modify the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial business combination by September 29, 2022 or (ii) with respect to any other provisions relating to stockholders rights or pre-initialbusiness combination activity, unless we provide our public stockholders with the opportunity to redeem their shares of Class A common stock upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account and not previously released to us to pay our franchise and income taxes, divided by the number of then outstanding public shares. However, we may not redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 upon completion of our initial business combination (so that we are not subject to the SECs penny stock rules). \nWe expect that all costs and expenses associated with implementing our plan of dissolution, as well as payments to any creditors, will be funded from amounts remaining out of the approximately $1,250,000 of proceeds held outside the trust account, although we cannot assure you that there will be sufficient funds for such purpose. \nIf we were to expend all of the net proceeds of the initial public offering and the sale of the placement units, other than the proceeds deposited in the trust account, and without taking into account interest, if any, earned on the trust account, the per-shareredemption amount received by stockholders upon our dissolution would be approximately $10.00.The proceeds deposited in the trust account could, however, become subject to the claims of our creditors which would have higher priority than the claims of our public stockholders. We cannot assure you that the actual per-share redemption amount received by stockholders will not be substantially less than the $10.00. \nAlthough we will seek to have all vendors, service providers (except our Independent Registered Public Accounting Firm), prospective target businesses or other entities with which we do business execute agreements with us waiving any right, title, interest and claim of any kind in or to any monies held in the trust account for the benefit of our public stockholders, there is no guarantee that they will execute such agreements or even if they execute such agreements that they would be prevented from bringing claims against the trust account including but not limited to fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain an advantage with respect to a claim against our assets, including the funds<|endoftext|>Two officers: Fanglu Wang and Eric Chan. \nAvailable Information \nWe are required to file Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q with the SEC on a regular basis, and are required to disclose certain material events (e.g., changes in corporate control, acquisitions or dispositions of a significant amount of assets other than in the ordinary course of business and bankruptcy) in a Current Report on Form 8-K. In addition, the Company will provide copies of these documents without charge upon request from us in writing at 9/F, East Tower, Genesis Beijing, No. 8 Xinyuan South Road, Chaoyang District, Beijing 100027, Peoples Republic of Chinaor by telephone at +86 10 5802 3889. \n### ITEM1A. RISK FACTORS. \nYou should consider carefully all of the risks described below, together with the other information contained in this Annual Report on Form 10-K, the prospectus associated with our public offering and the Registration Statement, before making a decision to invest in our securities. \nRISKS RELATING TO OUR SEARCH FOR, AND CONSUMMATION OF OR INABILITY TO \n### CONSUMMATE, A BUSINESS COMBINATION \n\n\n\nOur initial shareholders own 20% of our issued and outstanding ordinary shares immediately following the completion of the offering. If we seek shareholder approval of our initial business combination, the agreement by our initial shareholders and management team to vote in favor of our initial business combination will increase the likelihood that we will receive an ordinary resolution, being the requisite shareholder approval for such initial business combination. \n\n\n\n\n\nFurthermore, this dilution would increase to the extent that the anti-dilution provision of the Class B ordinary shares results in the issuance of ClassA ordinary shares on a greater than one-to-one basis upon conversion of the Class B ordinary shares at the time of our initial business combination. \n\n\nThe requirement that we complete our initial business combination within 24 months after the closing of the offering may give potential target businesses leverage over us in negotiating a business combination and may limit the time we have in which to conduct due diligence on potential business combination targets, in particular as we approach our dissolution deadline, which could undermine our ability to complete our initial business combination on terms that would produce value for our shareholders. \nAny potential target business with which we enter into negotiations concerning a business combination will be aware that we must complete our initial business combination within 24 months from the closing of the offering. \n\nOn January30, 2020, the World Health Organization declared the outbreak of the coronavirus disease (COVID-19) a Public Health Emergency of International Concern. On January31, 2020, U.S. healthcare community in responding to COVID-19, and on March11, 2020 the World Health Organization characterized the outbreak as a pandemic. \nWe may not be able to complete our initial business combination within 24 months after the closing of the offering, in which case we would cease all operations except for the purpose of winding up and we would redeem our public shares and liquidate. \nWe may not be able to find a suitable target business and complete our initial business combination within 24 months after the closing of the offering. \n\n\n\n\n\n\n\nSince the net proceeds of the offering and the sale of the private placement warrants are intended to be used to complete an initial business combination with a target business that has not been selected, we may be deemed to be a blank check company under the United States securities laws. However, because we will have net tangible assets in excess of $5,000,000 upon the completion of the offering and the sale of the private placement warrants and will file a Current Report on Form 8-K, including an audited balance sheet demonstrating this fact, we are exempt from rules promulgated by the SEC to protect investors in blank check companies, such as Rule 419. Moreover, if the offering were subject to Rule 419, that rule would prohibit the release of any interest earned on funds held in the trust account to us unless and until the funds in the trust account were released to us in connection with our completion of an initial business combination. \n\nIf we seek shareholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our amended and restated memorandum and articles of association provides that a public shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a group (as defined under Section13 of the Exchange Act), will be restricted from seeking redemption rights with respect to more than an aggregate of 20% of the shares sold in the offering without our prior consent, which we refer to as the Excess Shares. \n\nWhile we believe there are numerous target businesses we could potentially acquire with the net proceeds of the offering and the sale of the private placement warrants, our ability to compete with respect to the acquisition of certain target businesses that are sizable will be limited by our available financial resources. \n\nWithumSmith+Brown, PC, our independent registered public accounting firm, and the underwriters of the offering will not execute agreements with us waiving such claims to the monies held in the trust account. \nPursuant to the letter agreement the form of which is filed as an exhibit to the registration statement of which the prospectus forms a part, our sponsor has agreed that it will be liable to us if and to the extent any claims by a third party for services rendered or products sold to us, or a prospective target business with which we have entered into a written letter of intent, confidentiality or other similar agreement or business combination agreement, reduce the amount of funds in the trust account to below the lesser of (i)$10.00 per public share and (ii) the actual amount per public share held in the trust account as of the date of the liquidation of the trust account, if less than $10.00 per share due to reductions in the value of the trust assets, less taxes payable, provided that such liability will not apply to any claims by a third party or prospective target business who executed a waiver of any and all rights to the monies held in the trust account (whether or not such waiver is enforceable) nor will it apply to any claims under our indemnity of the underwriters of the offering against certain liabilities, including liabilities under the Securities Act. \n\nIn the event that the proceeds in the trust account are reduced below the lesser of (i)$10.00 per share and (ii)the actual amount per public share held in the trust account as of the date of the liquidation of the trust account if less than $10.00 per share due to reductions in the value of the trust assets, in each case less taxes payable, and our sponsor asserts that it is unable to satisfy his obligations or that he has no indemnification obligations related to a particular claim, our independent directors would determine whether to take legal action against our sponsor to enforce its indemnification obligations. \n\n\n\n\n\n\n\nTo this end, the proceeds held in the trust account may only be invested in United States government securities within the meaning of Section2(a)(16) of the Investment Company Act having a maturity of 185 days or less or in money market funds meeting certain conditions under Rule The offering was not intended for persons who were seeking a return on investments in government securities or investment securities. The trust account was intended as a holding place for funds pending the earliest to occur of either: (i)the completion of our initial business combination; (ii)the redemption of any public shares properly submitted in connection with a shareholder vote to amend our amended and restated memorandum and articles of association (A)to modify the substance or timing of our obligation to allow redemption in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of the offering or (B)with respect to any other material provisions relating to shareholders rights or pre-initial business combination activity; or (iii)absent an initial business combination within 24 months from the closing of the offering, our return of the funds held in the trust account to our public shareholders as part of our redemption of the public shares. \n\n\nIf we are unable to consummate our initial business combination within 24 months from the closing of the offering, our public shareholders may be forced to wait beyond such to 24 months before redemption from our trust account. \nIf we are unable to consummate our initial business combination within 24 months from the closing of the offering, the proceeds then on deposit in the trust account, including interest earned on the funds held in the trust account (less taxes payable and up to $100,000 of interest to pay dissolution expenses), will be used to fund the redemption of our public shares, as further described herein. In that case, investors may be forced to wait beyond 24 months from the closing of the offering before the redemption proceeds of our trust account become available to them, and they receive the return of their pro rata portion of the proceeds from our trust account. \n\n\n\n\nBecause we are neither limited to evaluating a target business in a particular industry sector nor have we selected any target businesses with which to pursue our initial business combination, you will be unable to ascertain the merits or risks of any particular target businesss operations. \nWhile we may pursue an initial business combination opportunity in any industry or sector, we intend to capitalize on the ability of our management team to identify and acquire a business or businesses that can benefit from our management teams established global relationships and operating experience. Our management team has extensive experience in identifying and executing strategic investments globally and has done so successfully in a number of sectors, including the energy efficiency, clean technology and sustainability sectors. Our amended and restated memorandum and articles of association prohibits us from effectuating a business combination with another blank check company or similar company with nominal operations. \n\nWe also cannot assure you that an investment in our units will not ultimately prove to be less favorable to investors in the offering than a direct investment, if an opportunity were available, in a business combination candidate. In the event we elect to pursue a business combination outside of the areas of our managements expertise, our managements expertise may not be directly applicable to its evaluation or operation, and the information contained in the prospectus regarding the areas of our managements expertise would not be relevant to an understanding of the business that we elect to acquire. \n\n\n\n\n\nOur amended and restated memorandum and articles of association authorizes the issuance of up to 200,000,000 ClassA ordinary shares, par value $0.0001 per share, 20,000,000 Class B ordinary shares, par value $0.0001 per share, and 1,000,000 preferred shares, par value $0.0001 per share. Immediately after the offering, there were 27,600,000 and 6,900,000 authorized but unissued ClassA ordinary shares and Class B ordinary shares, respectively, available for issuance which amount does not take into account shares reserved for issuance upon exercise of outstanding warrants or shares issuable upon conversion of the Class B ordinary shares. The Class B ordinary shares are automatically convertible into ClassA ordinary shares concurrently with or immediately following the consummation of our initial business combination, initially at a one-for-one ratio but subject to adjustment as set forth herein and in our amended and restated memorandum and articles of association, including in certain circumstances in which we issue ClassA ordinary shares or equity-linked securities related to our initial business combination. Immediately after the offering, there were no preferred shares issued and outstanding. \nWe may also issue ClassA ordinary shares upon conversion of the Class B ordinary shares at<|endoftext|>Votes. In the future, we intend to consider the outcome of the say-on-pay and say-on-frequency votes when making compensation decisions regarding our named executive officers. \n\nThe following table sets forth certain information with respect to compensation for the fiscal years ended December31, 2020, December31, 2019, and December31, 2018. \n(1) \nThe amounts reported in this column reflect special one-time discretionary bonuses. Our board of directors and our CEO participated in the determination of the special bonus allocations. \n(2) \nThe amounts reported in this column reflect the aggregate dollar amounts recognized for Incentive Units for financial statement reporting purposes for each respective fiscal year (disregarding any estimate of forfeitures related to service-based vesting conditions) in accordance with FASB ASC 718. See note20 to our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-Ks. \n(3) \nThe amounts reported in this column represent annual cash bonuses to our named executive officers earned during each respective fiscal year, as further described below under \n\n(4) \nThis column includes 401(k) Plan contributions for eligible employees and other personal benefits. \n(a) \nReflects amounts of contributions to the 401(k) Plan for eligible employees. \n(b) \nReflects a onetime $475 work from home stipend and $27,500 in rental payments for an apartment located in Newport Beach, CA generally used as temporary office space for Mr.Hsieh. The Company made monthly rental payments of $5,500 from August, 2020 through the end of the year. The lease on the apartment expires on February28, 2021, and the Company does not anticipate renewing the lease. The Company did not pay for any other fees or expenses related to the apartment other than the monthly rental payments. \n(c) \nReflects a onetime $475 work from home stipend. \n(5) \nMr.Hsieh also serves as the Chairman of our board of directors but does not receive any additional compensation for his service as a director. \n(6) \nRepresents the aggregate total of base salary along with payout of unused floating holidays and/or accrued but unused vacation during 2020 (Accrued Holidays). The total base salary and Accrued Holidays for each executive in 2020 were as follows: \n\nThe following table sets forth certain information with respect to grants of plan-based awards for the year ended December31, 2020 with respect to our named executive officers. \n(1) \nThe amounts reported in this column reflect the target bonus award opportunities to our named executive officers in 2020. We do not have a threshold or maximum payout with respect to our cash incentive award opportunities. The actual amounts earned by each of our executive officer in 2020 are set forth in the section titled \nSummary Compensation Table under the column Bonus. \n(2) \nRepresents the number of ClassX Units granted in 2020 that are subject to the vesting conditions set forth below in the section titled \nIncentive Unit Awards ClassX Units and Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Tabl e Incentive Unit Awards ClassV Units. \n(3) \nRepresents the aggregate grant date fair values, respectively, of ClassX Units granted in 2020. The methodology to determine their value is described in further detail in the section titled Summary Compensation Table under footnote (2). \n(4) \nRepresents a grant of 71,045,729 Exchanged Units, and a grant of an additional 32,690,271 ClassX Units. \n(5) \nRepresents a grant of 142,091,457 Exchanged Units, and a grant of an additional 32,690,271 ClassX Units. \n(6) \nRepresents the aggregate value of $1,155,914 of Exchanged Units and $531,871 of ClassX Units. \n(7) \nRepresents the aggregate value of $2,311,828 of Exchanged Units and $531,871 of ClassX Units. \n\n\nWe have entered into an employment agreements with Mr.Hsieh and an offer letter with each of Messrs. Flanagan, Walsh, andDerGurahian. The material terms of the employment agreement and the offer letters are summarized below. These summaries are qualified by reference to the actual text of the agreements. \n### Mr.Hsieh \nMr.Hsieh previously entered into an employment agreement with the Company, dated December30, 2009, (the Hsieh Agreement). The Hsieh Agreement provides for an initial two-year term and automatically renews for a successive one-year period unless either party provides written notice of at least 30 days prior to the end of the applicable renewable period. Mr.Hsieh is entitled to receive a minimum annual base salary of $350,000, subject to annual review by the Companys board of directors, and is eligible to participate in the Companys equity incentive programs. Mr.Hsieh is also eligible to participate in any bonus pool established by the board of directors and in the manner determined by the board of directors as can participate in the Companys employee and fringe benefit plans as may be in effect from time to time on the same basis as other similarly situated executives of the Company generally. \nThis reduction in salary amounted to Mr.Hsieh having a new annualized salary of $4,779 in 2018 and $5,148 in 2019. \nFor a description of the payments and benefits Mr.Hsieh would be entitled to receive under the Hsieh Agreement in connection with a qualifying termination, see the section Potential Payments Upon a Termination or Change in Control below. \n### Mr.Flanagan \nMr.Flanagan previously entered into an offer letter with the Company, dated May17, 2017 (the Flanagan Letter). The Flanagan Letter provides for at-will employment without a specified term. Mr.Flanagan is entitled to receive an annual base salary of $400,000 and is eligible to participate in the Companys equity incentive programs and the Companys other employee and fringe benefits plans, as may be in effect from time to time. Mr.Flanagan is also eligible to receive an annual discretionary bonus with a minimum annual bonus amount of $250,000 and a target bonus equal to $800,000. \nFor a description of the payments and benefits Mr.Flanagan would be entitled to receive under the Flanagan Letter in connection with a qualifying termination, see the section Potential Payments Upon a Termination or Change in Control below. \n### Mr.Walsh \nMr.Walsh previously entered into an offer letter with the Company, dated October22, 2012 (the Walsh Letter). The Walsh Letter provides for at-will employment without a specified term. Mr.Walsh is entitled to receive an annual base salary of $300,000 and is eligible to participate in the Companys equity incentive programs and the Companys other employee and fringe benefits plans, as may be in effect from time to time. Mr.Walsh is also eligible to receive eligible to receive an annual discretionary bonus based on individual and Company performance with a target bonus equal to $600,000. On September27, 2019, Mr.Walsh entered into a letter of understanding to the Company pursuant to which Mr.Walshs base salary was increased to $500,000 and increased his annual target bonus amount to $2,100,000, of which $1,000,000 was guaranteed to be paid in 2019. \nMr.DerGurahian \nMr.DerGurahian previously entered into an offer letter with the Company, dated April25, 2012 (the DerGurahian Letter). The DerGurahian Letter provides for at-will employment without a specified term. Mr.DerGurahian is entitled to receive an annual base salary of $320,000 and is eligible to participate in the Companys equity incentive programs and the Companys other employee and fringe benefits plans, as may be in effect from time to time. Mr.DerGurahian is also entitled to an annual bonus based on individual and Company performance with a target bonus equal to $320,000. The DerGurahian Letter also provided for a reimbursement of up to $80,000 in relocation expenses. On March8, 2018, Mr.DerGurahians annual base salary was increased to $375,000. \nFor a description of the payments and benefits Mr.DerGuriahian would be entitled to receive under the DerGurahian Letter in connection with a qualifying termination, see the section Potential Payments Upon a Termination or Change in Control below. \n### Incentive Unit Awards \nWe have granted Incentive Units pursuant to unit grant agreements for the Incentive Units with PCP Managers, L.P. ClassZ Units were granted under the LDLLC 2009 Incentive Equity Plan (the 2009 Equity Plan), ClassY Units were granted under the LDLLC 2012 Incentive Equity Plan (the 2012 Equity Plan), ClassW Units and ClassX Units were granted pursuant to the LDLLC 7th Amended and Restated LLC Agreement, dated December31, 2015 (the LLC Agreement), and the ClassV Units were granted under the LDLLC 2015 Incentive Equity Plan (the 2015 Equity Plan). \nAs profits interests, the Incentive Units have no value for tax purposes on the date of grant, but instead are designed to gain value only after LDLLC has realized a certain level of returns for the holders of LDLLCs common units. Holders of Incentive Units are generally entitled to participate in any pro rata distributions together with the holders of the common units in the proportions set forth in the LLC Agreement based on their respective sharing percentages, provided that no Incentive Unit is entitled to any portion of a distribution until the return threshold (as defined in the LLC Agreement) with respect to such unit has been realized and such Incentive Unit has vested. The threshold value of each Incentive Unit is set forth in the LLC Agreement, and is subject to the terms provided in the 2009 Equity Plan, 2012 Equity Plan, LLC Agreement, and 2015 Equity Plan, respectively. \nThe following is a summary of the material terms of the Incentive Units granted to each of our named executive officers that were outstanding during the 2020 fiscal year: \n### ClassX Units \nClassX Units were granted to Messrs. Hsieh and DerGurahian on May20, 2015, to Mr.Walsh on May21, 2015 (collectively, the 2015 ClassX Units), to Messrs. DerGurahian, Walsh, and Flanagan on June5, 2020 (the 2020 ClassX Units), and are generally subject to specific return thresholds pursuant to their respective agreements and the LD Holdings LLC Agreement. The 2015 ClassX Units held by Mr.Hsieh are split into two groups, the first grant units and the new grant units (each as defined in Mr.Hsiehs 2015 ClassX Unit Grant Agreement), and are subject to the following vesting schedule: (i) 100% of the first grant units vest on May20, 2015 (the 2015 ClassX Vesting Commencement Date) and (ii)(A) 50.74368% of the new grant units vest on the 2015 ClassX Vesting Commencement Date (B) 1.48225% of the new grant units vest on the last day of each calendar month commencing on the first full calendar month following the 2015 ClassX Vesting Commencement Date (C) 0.79813% of the new grant units vest on the last day of each calendar month commencing on the first full calendar month following the second anniversary of the 2015 ClassX Vesting Commencement Date (D) 0.34206% of the new grant units vest on the last day of each of the next 11 calendar months commencing on the first full calendar month following the third anniversary of the 2015 ClassX Vesting Commencement Date (E) 0.3428% of the new grant units vest on May31, 2019 such that 100% of the new grant units became vested on May31, 2019. \nThe 2015 ClassX Units held by Mr.DerGurahian are split into three groups, the first grant units the second grant units and the new grant units (each as defined in Mr.DerGurahians 2015 ClassX Unit Grant Agreement), and are subject to the following vesting schedule: (i)(A) 60.008% of the first grant units vest on 2015 ClassX Vesting Commencement Date and (B) 1.667% of the first grant units vest on the last day of each calendar month commencing on the first full calendar month following 2015 ClassX Vesting Commencement Date such that 100% of the first grant units became vested on May31, 2017, and (ii)(A) 48.339% of the second grant units vest on the 2015 ClassX Vesting Commencement Date, (B) 1.667% of the second grant units vest on the last day of each calendar month commencing on the first full calendar month following the 2015 ClassX Vesting Commencement Date, and (C) 1.667% of the new grant units vest on December24, 2017, such that 100% of the second grant units became vested on December24, 2017, and (iii)(A) 20% of new grant units vest on the first anniversary of the 2015 ClassX Vesting Commencement Date and (B) 1.667% of the new grant units vest on the last day of each calendar month commencing on the first full calendar month following the first<|endoftext|>From November of 2006 to June 2009, Mr. Sharp served part-time as Chief Financial Officer of Commodore Applied Technologies, Inc., an environmental solutions company formerly trading on the FINRA OTCBB. Prior to 2003, he worked for 14 years in positions of Chief Financial Officer, Managing Director of European Operations and Corporate Controller for Key Technology, Inc., a publicly-traded manufacturer of capital goods. Mr. Sharp has more than 30 years of experience in treasury management, internal financial controls, SEC reporting and Corporate Governance. \n\n\n### Family Relationships \nNone of our Directors are related by blood, marriage, or adoption to any other Director, executive officer, or other key employees. \nOther Directorships \nNone of the Directors of the Company are also directors of issuers with a class of securities registered under Section12 of the Exchange Act (or which otherwise are required to file periodic reports under the Exchange Act). \n### Legal Proceedings \nOther than as noted below, we are not aware of any of our directors or officers being involved in any legal proceedings in the past ten years relating to any matters in bankruptcy, insolvency, criminal proceedings (other than traffic and other minor offenses) or being subject to any of the items set forth under Item 401(f) of Regulation S-K. \n\nWe have a standing Audit Committee and audit committee charter, which complies with Rule 10A-3 of the Exchange Act, and the requirements of the NYSE American LLC. Our Audit Committee is composed of two (2) directors each of whom, in the opinion of the Board, are independent (in accordance with Rule 10A-3 of the Exchange Act and the requirements of Section 803A of the NYSE American Company Guide) and financially literate (pursuant to the requirements of Section 803B of the NYSE American Company Guide): Leigh Freeman (Chairman), David Mathewson. Mr. Freeman, and Mr. Mathewson each satisfy the requirement of a financial expert as defined under Item 407(d)(5) of Regulation S-K and meets the requirements for financial sophistication under the requirements of Section 803B of the NYSE American Company Guide. At December 27, 2020, Mr. Freeman and Mr. Mathewson are the only members of the Audit Committee. \n\nThe Corporate Governance and Nominating Committee does not have a set policy for whether or how stockholders are to recommend nominees for consideration by the Board. \n\nWe have adopted a corporate administered by our President and Chief Executive Officer, Patrick Highsmith. We believe our is reasonably designed to deter wrongdoing and promote honest and ethical conduct, to provide full, fair, accurate, timely and understandable disclosure in public reports, to comply with applicable laws, to ensure prompt internal reporting of code violations, and to provide accountability for adherence to the code. Our provides written standards that are reasonably designed to deter wrongdoing and to promote: \n\n\nand \nand \n### Accountability for adherence to the code. \nOur is available on our web site at www.timberline-resources.com. A copy of the will be provided to any person without charge upon written request to us at our executive offices: Timberline Resources Corporation, 101 East Lakeside Avenue, Coeur dAlene, Idaho 83814. We intend to disclose any amendment to or any waiver from a provision of our code of ethics that applies to any of our principal executive officer, principal financial officer, principal accounting officer or controller or persons performing similar functions that relates to any element of our code of ethics on our website. No waivers were granted from the requirements of our during the year ended September 30, 2020, or during the subsequent period from October 1, 2020 through the date of this Form 10-K. \n\nSection 16(a) of the Securities Exchange Act of 1934, as amended, requires our officers, directors, and persons who beneficially own more than 10% of our common stock (10% Stockholders), to file reports of ownership and changes in ownership with the Securities and Exchange Commission (SEC). Such officers, directors and 10% Stockholders are also required by SEC rules to furnish us with copies of all Section 16(a) forms that they file. \nBased solely on our review of the copies of such forms received by us, or written representations from certain reporting persons, the Company believes that during fiscal year ended September 30, 2020, the filing requirements applicable to its officers, directors and greater than 10% percent beneficial owners were complied with. \n### ITEM 11. EXECUTIVE COMPENSATION \nThe following summary compensation tables set forth information concerning the annual and long-term compensation for services in all capacities to the Company for the year ended September 30, 2020 of those persons who were, at September 30, 2020 (i) the Chief Executive Officer (Steven Osterberg), (ii) the Chief Financial Officer (Ted R. Sharp), and (iii) any other highly compensated executive officers of the Company, whose annual base salary and bonus compensation was in excess of $100,000: \n(1) \nMr. Patrick Highsmith was appointed President & Chief Executive Officer on October 8, 2020 and received no compensation for the fiscal year ended September 30, 2020. \n(2) \nMr. Osterberg was President and Chief Executive Officer, appointed on January 19, 2016, until October 8, 2020, resigned from those positions and was then appointed VP Exploration. \n(3) \nIncludes 456,522 stock option awards, with an exercise price of $0.08 per share, which vested immediately. \n(4) \nIncludes 152,173 stock option awards, with an exercise price of $0.08 per share, which vested immediately. \n(5) \nIncludes 100,000 stock option awards, with an exercise price of $0.10 per share, which vested immediately. \n(6) \nMr. Sharp provides services as Chief Financial Officer under a consulting contract. \n(7) \nMr. McDowell provides services as VP-Corporate Development under a consulting arrangement. \n(8) \nStock Option awards are valued using the Black-Scholes method in accordance with FASB ASC Topic 718 and stock unit awards are valued at the market price of the stock on the date of grant. These amounts reflect the Companys accounting expense for these awards, and do not correspond to the actual value that may be recognized by the named executive officers. For additional information on the assumptions underlying the valuation of the Companys stock-based awards, please refer to Note 10 of the Companys consolidated financial statements included in its Annual Report on Form 10-K for fiscal year ended September 30, 2020 and Note 11 of the Companys consolidated financial statements included in its Annual Report on Form 10-K for fiscal years ended September 30, 2019. \n### Executive Compensation Agreements \nCompensation agreements for executives are on terms normal to the industry in which we operate. Each agreement is publicly available by inquiring on the Companys filings as described in the Exhibits of Item 15, Part IV of this document. \nRetirement, Resignation or Termination Plans \nWe sponsor no plan, whether written or verbal, that would provide compensation or benefits of any type to an executive upon retirement, or any plan that would provide payment for retirement, resignation, or termination as a result of a change in control of our Company or as a result of a change in the responsibilities of an executive following a change in control of our Company. Specific executive employment agreements described above do, however, provide thatif the executives employment is terminated by the Company without Cause or by the executive for Good Reason, as such terms are defined in their respective employment agreements, the executive will be entitled to receive payments as set forth in the above discussions, which payments are greater in each case in the event that such termination or resignation is in relation to a change in control transaction. \n\nThe following table sets forth the stock options granted to our named executive officers, as of September 30, 2020. \nDirectors \nThe following table sets forth the compensation granted to our directors during the fiscal year ended September 30, 2020. Compensation to Directors that are also executive officers is detailed above and is not included on this table. \n### Name \nFees Earned or Paid in Cash \n($) \n### Stock \nAwards \n($) \n### Option \nAwards \n($) \n### Non-Equity \nIncentive Plan \nCompensation \n($) \n### Non-Qualified \nCompensation \nEarnings \n($) \n### All Other \nCompensation \n($) \nTotal \n($) \n### Leigh Freeman \n### Paul Dircksen \n(1) \nQuinton Hennigh \n(2) \n### David Mathewson \n### William Matlack \n(3) \n(3) \nHealth care premium reimbursements per Mr. Dircksens employment letter prior to his retirement. This reimbursement agreement has no expiration date. \n(2) \nMr. Hennigh was appointed a director on September 14, 2020 and received no compensation during the fiscal year ended September 30, 2020. \n(3) \nMr. Matlack received payment for service performed in FY2018, prior to being a director. \n\n\nITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDERS MATTERS \nThe following tables set forth information as of September 30, 2020, regarding the ownership of our common stock by: each named executive officer, each director and all of our directors and executive officers as a group; and each person who is known by us to own more than 5% of our shares of common stock. \nThe number of shares beneficially owned and the percentage of shares beneficially owned are based on 112,075,224 shares of common stock outstanding as of September 30, 2020. Shares subject to options that are exercisable within 60 days following September 30, 2020 are deemed to be outstanding and beneficially owned by the optionee for the purpose of computing share and percentage ownership of that optionee but are not deemed to be outstanding for the purpose of computing the percentage ownership of any other person. Except as indicated in the footnotes to this table, and as affected by applicable community property laws, all persons listed have sole voting and investment power for all shares shown as beneficially owned by them. \n\n* less than 1%. \n** The percentages listed for each shareholder are based on 112,075,224 shares outstanding as of September 30, 2020 and assume the exercise by that shareholder only of his entire option or warrant, exercisable within 60 days of September 30, 2020. \n(a) Director only \n(b) Officer and Director \n(c) Officer only \n(1) \nA vested option to purchase 365,217 shares was granted to this stockholder on October 29, 2019 with an exercise price of $0.08 per share and an expiration date of October 29, 2024. \n(2) \nA vested option to purchase 500,000 shares was granted to this stockholder on February 2, 2018 with an exercise price of $0.17 per share and an expiration date of February 2, 2023. A vested option to purchase 456,522 shares was granted to this stockholder on October 29, 2019 with an exercise price of $0.08 per share and an expiration date of October 29, 2024. This stockholder acquired units on May 4, 2018 which included 125,000 shares of common stock and 125,000 warrants to acquire one share of common stock with an exercise price of $0.08 and an expiration date of April 30, 2021. This stockholder acquired units on October 29, 2018 which included 187,500 shares of common stock and 187,500 warrants to acquire one share of common stock with an exercise price of $0.14 and an expiration date of October 29, 2021. This stockholder acquired units on March 22, 2019 which included 175,000 shares of common stock and 175,000 warrants to acquire one share of common stock with an exercise price of $0.14 and an expiration date of March 22, 2022. This stockholder acquired units on August 15, 2020 which included 90,909 shares of common stock and 90,909 Series L Warrants exercisable at a price of $0.20 per share that expire on August 15, 2023. \n(3) \nMr. McDowell, a director of the Company, is the principal holder of shares of Americas Gold Exploration, Inc., owning approximately 75% of the voting securities of that company. The shares include 609,200 shares, a vested option to purchase 100,000 shares was granted to this stockholder on June 21, 2018 with an exercise price of $0.10 per share and an expiration date of June 21, 2023, a vested option to purchase 456,522 shares was granted to this stockholder on October 29, 2019 with an exercise price of $0.08 per share and an expiration date of October 29, 2024, and 475,000 warrants to<|endoftext|>### Overview \nTuscan Holdings Corp. (the Company or Tuscan) is filing this Amendment No. Securities and Exchange Commission (the SEC) on March 25, 2021 (the Original 10-K) as a comprehensive amendment to amend and restate its financial statements and related footnote disclosures as of and for the year ended December 31, 2020, and the financial statements and related footnote disclosures included in the Annual Report on Form 10-K as of and for the year ended December 31, 2019 (the 2019 10-K), each of the Forms 10-Q as of and for the periods ended March 31, 2019, June 30, 2019, September 30, 2019, March 31, 2020, June 30, 2020 and September 30, 2020 (collectively, the Original 10-Qs), and the balance sheet as of March 7, 2019 (the March 7, 2019 Balance Sheet). \n\nAs noted above, Part II, Item 8 Financial Statements and Supplementary Data and Part IV, Item 15, Exhibits and Financial Statement Schedules of this Amendment reflects the restatement of financial information included in the Original 10-K, 2019 10-K, the Original 10-Qs, and March 7, 2019 Balance Sheet, and it supersedes the financial information included therein. We have also evaluated subsequent events and events that occurred after December 31, 2020 and have updated Note 12 to the financial statements included herein. The 2019 10-K, March 7, 2019 Balance Sheet, and the Original 10-Qs are not being separately amended and, accordingly, the financial information therein should not be relied upon. \n\n\nOn May 28, 2021, the Companys management and audit committee of the board of directors (Audit Committee) of the Company determined, after consultation with Marcum LLP, the Companys independent registered public accounting firm, that the Companys financial statements which were included in the Original 10-K, 2019 10-K, the Original 10-Qs, and March 7, 2019 Balance Sheet should no longer be relied upon due to an error in such financial statements relating to the Companys accounting for an aggregate of 687,000 warrants underlying units issued to the Companys sponsor in a private placement that closed concurrently with the closing of the Companys initial public offering (such warrants, the Private Warrants) as equity instead of accounting for the Private Warrants as derivative liabilities. \n\n\n\n\n\n### Fair Value Measurement \n\nThe restatement results in non-cash, non-operating financial statement corrections and will have no impact on Tuscans current or previously reported cash position, operating expenses or total operating, investing or financing cash flows. \n\n\n\nTUSCAN HOLDINGS CORP. \n### FORM 10-K/A i \nItem 1ARisk Factors \nYou should consider carefully the risks described below, which we believe represent the material risks related to Tuscan, together with the other information contained in this Amendment and the Original 10-K, before making a decision to invest in Tuscan. The risks set forth below do not include specific risks relating to our proposed business combination with Microvast, or the risks inherent in Microvasts business, which are included in the preliminary proxy statement which we filed with the SEC on February 16, 2021. The risks presented below assumes that we will not consummate the proposed business combination with Microvast, and that we will secure a further extension to consummate an initial business combination and then seek to find an alternative target with which to consummate an initial business combination. \nThis Amendment and the Original 10-K also contains forward-looking statements that involve risks and uncertainties. \n\n\n\nAs a result, included on our balance sheet as of December 31, 2020 is a derivative liability related to embedded features contained within our Private Warrants. \n\nFollowing this issuance of the SEC Statement, on May 28, 2021, after consultation with Marcum LLP, the Companys independent registered public accounting firm, the Companys management and the Audit Committee concluded that the Companys financial statements which were included in the Original 10-K, 2019 10-K, March 7, 2019 Balance Sheet, and the Original 10-Qs should no longer be relied upon due to errors in such financial statements relating to the Companys accounting for the Private Warrants as equity rather than as liabilities. \n\nWe have restated our financial statements for several prior periods, which may affect investor confidence, our stock price, our ability to raise capital in the future, our results of operations and financial condition, our ability to complete the proposed business combination with Microvast, and which may result in stockholder litigation. \nThis Amendment includes restated financial statements for several prior periods. Such restatement may have the effect of eroding investor confidence in the Company and our financial reporting and accounting practices and processes, and may negatively impact the trading price of our securities, could have a material adverse effect on our business, results of operations and financial condition, may make it more difficult for us to raise capital on acceptable terms, if at all, and may adversely impact our ability to complete our proposed business combination with Microvast. \n\n\n\nIf we are unable to consummate a business combination, our public stockholders may be forced to wait until after July 31, 2021 before receiving distributions from the trust account. \nOur public stockholders will be entitled to receive funds from the trust account only upon the earlier to occur of: (i) the consummation of our initial business combination; (ii) the redemption of our public shares if we are unable to consummate a business combination by July 31, 2021, subject to applicable law; (iii) the redemption of any public shares properly tendered in connection with a stockholder vote to amend our amended and restated certificate of incorporation to modify the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial business combination by July 31, 2021. In addition, if our plan to redeem our public shares if we are unable to consummate an initial business combination by July 31, 2021 is not consummated for any reason, Delaware law may require that we submit a plan of dissolution to our then-existing stockholders for approval prior to the distribution of the proceeds held in our trust account. In that case, public stockholders may be forced to wait beyond July 31, 2021 before they receive funds from our trust account. \nThe requirement that we complete an initial business combination by July 31, 2021 (or such later date as may be approved by our stockholders) may give potential target businesses leverage over us in negotiating a business combination. \nWe have until July 31, 2021 (which was extended from April 30, 2021 by vote of our stockholders), or such later date as may be approved by our stockholders, to complete an initial business combination. \n\nWe will either (1) seek stockholder approval of our initial business combination at a meeting called for such purpose at which public stockholders may seek to convert their shares, regardless of whether they vote for or against the proposed business combination or dont vote at all, into their pro rata share of the aggregate amount then on deposit in the trust account (net of taxes payable), or (2) provide our public stockholders with the opportunity to sell their shares to us by means of a tender offer (and thereby avoid the need for a stockholder vote) for an amount equal to their pro rata share of the aggregate amount then on deposit in the trust account (net of taxes payable). \n\nOur Sponsor, Tuscan Holdings Acquisition LLC, owns approximately 21% of our issued and outstanding shares of common stock. \nAs a consequence of our staggered board of directors, only a minority of the board of directors will be considered for election and our Sponsor, because of its ownership position, will have considerable influence regarding the outcome. \nYou may be unable to ascertain the merits or risks of any particular target business operations. \nWe may pursue an acquisition opportunity in any business industry or sector. \n\n\n\n\nIn connection with any stockholder meeting called to approve a proposed initial business combination or an amendment to our charter to extend the date by which we must complete an initial business combination, we may require stockholders who wish to convert their shares in connection with such proposal to comply with specific requirements for conversion that may make it more difficult for them to exercise their conversion rights prior to the deadline for exercising their rights. \nIn connection with any stockholder meeting called to approve a proposed initial business combination or an amendment to our charter to extend the date by which we must complete an initial business combination, each public stockholder will have the right, regardless of whether he is voting for or against such proposal or does not vote at all, to demand that we convert his shares into a pro rata share of the trust account as of two business days prior to the consummation thereof. We may require public stockholders who wish to convert their shares to either (i) tender their certificates to our transfer agent or (ii) deliver their shares to the transfer agent electronically using the Depository Trust Companys DWAC (Deposit/Withdrawal At Custodian) System, at the holders option, in each case prior to a date set forth in the tender offer documents or proxy materials sent in connection with the proposal. \n\n\n\n\n\n\n\n\n\nOur amended and restated certificate of incorporation authorizes the issuance of up to 65,000,000shares of common stock, par value $0.0001 per share, and 1,000,000shares of preferred stock, par value $0.0001 per share. \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nAlthough some of our key personnel may serve in senior management or advisory positions following a business combination, it is likely that most, if not all, of the management of the target business will remain in place. \n\nWe may consummate a business combination with a target business in any geographic location or industry we choose, although we intend to focus on companies or assets ancillary to the cannabis industry. \n\n\n\ntariffs and trade barriers; longer payment cycles; employment regulations; \n\n\n\n\n\n\n\nOur officers and directors do not commit their full time to our affairs. We expect each of our officers and directors to devote such amount of time as they reasonably believe is necessary to our business. \n\nOur Sponsor has waived its right to convert its founders shares or any other shares purchased in our IPO or thereafter, or to receive distributions from the trust account with respect to its founders shares upon our liquidation if we are unable to consummate a business combination. Accordingly, the shares acquired prior to our IPO, as well as the private securities and any warrants purchased by our officers or directors in the aftermarket, will be worthless if we do not consummate a business combination. \n\n\n\n\n\nWe will pay EarlyBirdCapital a cash fee for such services in an aggregate amount equal to up to 3.5% of the total gross proceeds raised in our IPO only if we consummate our initial business combination. \n\n\n\n\n\nThe private warrants included in the Private Units may be exercised at a time when the public warrants may not be exercised. \nOnce the private warrants included in the Private Units become exercisable, such warrants may immediately be exercised on a cashless basis, at the holders option, so long as they are held by the initial purchasers or their permitted transferees. \n\n\n\nIf we are unable to complete a business combination and distribute the proceeds held in trust to our public stockholders, our Sponsor has agreed (subject to certain exceptions described elsewhere in this Form 10-K) that it will be liable to ensure that the proceeds in the trust account are not reduced below $10.00 per share by the claims of target businesses or claims of vendors or other entities that are owed money by us for services rendered or contracted for or products sold to us. As a result, the per-sharedistribution from the trust account may be less than $10.00, plus interest, due to such claims. \n\n\nOur amended and restated certificate of incorporation provides that we will continue in existence only until July 31, 2021 (which was extended from April 30, 2021 by vote of our stockholders), unless such date is further extended by our stockholders. If we have not completed a business combination by such date, we will (i) cease all operations<|endoftext|>Preferred Units are convertible into common units at the option of the holders of such units. If a substantial portion of the Series A Preferred Units were converted into common units, common unitholders could experience significant dilution. In addition, if holders of such converted Series A Preferred Units were to dispose of a substantial portion of these common units in the public market, whether in a single transaction or series of transactions, it could adversely affect the market price for Enable's common units. In addition, these sales, or the possibility that these sales may occur, could make it more difficult for Enable to sell its common units in the future. \nAffiliates of Enable's general partner may sell common units in the public or private markets, which could have an adverse impact on the trading price of the common units and may sell their interest in its general partner, which may impact its strategic direction. \nAs of January 29, 2021, CenterPoint held 233,856,623 of Enable'scommon units and 14,520,000 Series A Preferred Units, and OGE Energy held 110,982,805 of Enable's common units. Enable's Series A Preferred Units are convertible into common units upon a change of control or certain fundamental transactions at the option of the holders of such units. Both Enable's common units held by CenterPoint and OGE Energy, as well as Enable's Series A Preferred Units held by CenterPoint, are subject to certain registration rights. The sale of these units in the public or private markets could have an adverse impact on the price of the common units or on any trading market that may develop. In addition, any sale of Enable's general partner by CenterPoint or OGE Energy may impact Enable's strategic direction, business or results of operations. \nEnable's Series A Preferred Units have rights, preferences and privileges that are not held by, and are preferential to the rights of, holders of its common units. \nEnable's Series A Preferred Units rank senior to all of its other classes or series of equity securities with respect to distribution rights and rights upon liquidation. Enable cannot declare or pay a distribution to its common unitholders for any quarter unless full distributions have been or contemporaneously are being paid on all outstanding Series A Preferred Units for such quarter. These preferences could adversely affect the market price for Enable's common units or could make it more difficult for Enable to sell its common units in the future. \nHolders of the Series A Preferred Units will receive, on a non-cumulative basis and if and when declared by Enable's general partner, a quarterly cash distribution, subject to certain adjustments, equal to an annual rate of 10 percent on the stated liquidation preference from the date of original issue to, but not including, the five year anniversary of the original issue date, and an annual rate of the London interbank offered rate, or LIBOR, plus a spread of 850 basis points on the stated liquidation preference thereafter. In connection with certain transfers of the Series A Preferred Units, the Series A Preferred Units will automatically convert into one or more new series of preferred units (the \"other preferred units\") on the later of the date of transfer or the second anniversary of the date of issue. The other preferred units will have the same terms as Enable's Series A Preferred Units except that unpaid distributions on the other preferred units will accrue from the date of their issuance on a cumulative basis until paid. Enable's Series A Preferred Units are convertible into common units by the holders of such units in certain circumstances. Payment of distributions on Enable's Series A Preferred Units, or on the common units issued following the conversion of such Series A Preferred Units, could impact its liquidity and reduce the amount of cash flow available for working capital, capital expenditures, growth opportunities, acquisitions, and other general partnership purposes. Enable's obligations to the holders of Series A Preferred Units could also limit its ability to obtain additional financing or increase its borrowing costs, which could have an adverse effect on its financial condition. \nEnable's Series A Preferred Units contain covenants that may limit its business flexibility. \nEnable's Series A Preferred Units contain covenants preventing it from taking certain actions without the approval of the holders of 66 2/3 percent of the Series A Preferred Units. The need to obtain the approval of holders of the Series A Preferred Units before taking these actions could impede Enable's ability to take certain actions that its management or its board of directors may consider to be in the best interests of its unitholders. The affirmative vote of 66 2/3 percent of the outstanding Series A Preferred Units, voting as a single class, is necessary to amend Enable's Partnership Agreement in any manner that would or could reasonably be expected to have a material adverse effect on the rights, preferences, obligations or privileges of the Series A Preferred Units. The affirmative vote of 66 2/3 percent of the outstanding Series A Preferred Units and any outstanding series of other preferred units, voting as a single class, is necessary to (A) create or issue certain party securities with proceeds in an aggregate amount in excess of $700.0 million or create or issue any senior securities or (B) subject to Enable's right to redeem the Series A Preferred Units, approve certain fundamental transactions. \nEnable's Series A Preferred Units are required to be redeemed in certain circumstances if they are not eligible for trading on the New York Stock Exchange, and Enable may not have sufficient funds to redeem its Series A Preferred Units if it is required to do so. \nThe holders of Enable's Series A Preferred Units may request that Enable list those units for trading on the New York Stock Exchange. If Enable is unable to list the Series A Preferred Units in certain circumstances, it will be required to redeem the Series A Preferred Units. There can be no assurance that Enable would have sufficient financial resources available to satisfy its obligation to redeem the Series A Preferred Units. In addition, mandatory redemption of Enable's Series A Preferred Units could adversely affect its financial position, results of operations and ability to make cash distributions to its unitholders, including OGE Energy. \n### Enable's Pending Merger with Energy Transfer \nBecause the exchange ratio is fixed and because the market price of Energy Transfers common units may fluctuate, Enable's unitholders, including OGE Energy, cannot be certain of the precise value of any merger consideration they may receive in the Energy Transfer merger. \nAt the time the Energy Transfer merger is completed, each issued and outstanding common unit of Enable will be converted into the right to receive the merger consideration of 0.8595 of one common unit representing limited partner interests in Energy Transfer. The exchange ratio for the merger consideration is fixed, and there will be no adjustment to the merger consideration for changes in the market price of Energy Transfer common units or Enable's common units prior to the completion of the merger. If the merger is completed, there will be a time lapse between the date of signing the merger agreement and the date on which Enable's unitholders, including OGE Energy, who are entitled to receive the merger consideration actually receive the merger consideration. The market value of Energy Transfer's common units may fluctuate during this period as a result of a variety of factors, including general market and economic conditions, changes in Energy Transfer's businesses, operations and prospects and regulatory considerations. Such factors are difficult to predict and in many cases may be beyond Enable's and Energy Transfer's control. The actual value of any merger consideration received by Enable's unitholders, including OGE Energy, upon the completion of the merger will depend on the market value of the common units of Energy Transfer at that time. This market value may differ, possibly materially, from the market value of Energy Transfer's common units at the time the merger agreement was entered into or at any other time. Enable's unitholders, including OGE Energy, should obtain current quotations for Energy Transfer's common units and for Enable's common units. \nThe merger may not be completed and the merger agreement may be terminated in accordance with its terms. \nThe merger is subject to a number of conditions that must be satisfied or waived prior to the completion of the merger, including (i) the receipt of the required approvals from Enable's unitholders, including OGE Energy, (ii) the expiration or termination of the waiting period under the Hart-Scott-Rodino Act, (iii) the absence of any governmental order or law that prohibits or makes illegal the consummation of the merger, (iv) Energy Transfer common units issuable in connection with the merger having been authorized for listing on the New York Stock Exchange, subject to official notice of issuance and (v) Energy Transfer's registration statement on Form S-4 having been declared effective by the Securities and Exchange Commission under the Securities Act of 1933. The obligation of each party to consummate the merger is also conditioned upon the other party's representations and warranties being true and correct (subject to certain materiality exceptions) and the other party having performed in all material respects its obligations under the merger agreement. The obligation of Enable to consummate the merger is further conditioned upon the receipt of a customary tax opinion of counsel to Enable that for U.S. federal income tax purposes, subject to certain exceptions, (i) Enable should not recognize any income or gain as a result of the merger and (ii) no gain or loss should be recognized by holders of Enable's common units or Series A Preferred Units as a result of the merger. These conditions to the completion of the merger may not be satisfied or waived in a timely manner or at all, and, accordingly, the merger may be delayed or may not be completed. \nMoreover, if the merger is not completed by November 30, 2021, either Energy Transfer or Enable may choose not to proceed with the Energy Transfer merger, and the parties can mutually decide to terminate the merger agreement at any time, before or after approval by Enable's common unitholders, including OGE Energy. In addition, Energy Transfer and Enable may elect to terminate the merger agreement in certain other circumstances as further detailed in the merger agreement. \nThe merger agreement limits Enable's ability to pursue alternatives to the merger. \nThe merger agreement contains provisions that may discourage a third party from submitting a competing proposal that might result in greater value to Enable's unitholders, including OGE Energy, than the merger, or may result in a potential competing acquirer proposing to pay a lower per unit price to acquire Enable than it might otherwise have proposed to pay. These provisions include covenants not to solicit, initiate or knowingly encourage or facilitate proposals relating to alternative transactions or, subject to certain exceptions, enter into discussions concerning or provide any non-public information in connection with alternative transactions. \nFailure to complete the merger could negatively impact the price of Enable's common units, as well as Enable's future businesses and financial results. \nThe merger agreement contains a number of conditions that must be satisfied or waived prior to the completion of the merger. There can be no assurance that all of the conditions to the completion of the merger will be so satisfied or waived. If these conditions are not satisfied or waived, Enable will be unable to complete the merger. \nIf the merger is not completed for any reason, including the failure to receive the required approval of holders of Enable's common units, including OGE Energy, Enable's future businesses and financial results may be adversely affected, including as follows: \nEnable may experience negative reactions from the financial markets, including negative impacts on the market price of Enable's common units; the manner in which customers, vendors, business partners and other third parties perceive Enable may be negatively impacted, which in turn could affect its marketing operations or<|endoftext|>"},"task":{"kind":"string","value":"{\"file\": \"/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz\"}"}}},{"rowIdx":81,"cells":{"text":{"kind":"string","value":"<|endoftext|>On Form 5, with the SEC.Such executive officers, directors and greater than ten percent shareholders are required by SEC rules to furnish Omnitek with copies of all such forms that they have filed. \nBased solely on its review of the copies of such forms filed with the SEC electronically, received by Omnitek and representations from certain reporting persons, Omnitek believes that for the fiscal year ended December 31, 2020, all the officers, directors and more than 10% beneficial owners complied with the above-described filing requirements. \n### Code of Ethics \nOn August 3, 2012, Omnitek, in accordance with Section 406 of the Sarbanes-Oxley Act of 2002 adopted a Code of Ethics that applies to its principal executive officer, principal financial officer, and principal accounting officer that is reasonably designed to deter wrongdoing and to promote: \nHonest and ethical conduct, including ethical handling of actual or apparent conflicts of interest between personal and professional relationship; \nFull, fair, accurate, timely and understandable disclosure in SEC reports and in other public communications; \n\nPrompt internal reporting of violations of the code of ethics to appropriate person or persons identified in the code of ethics; and \nAccountability for adherence to the code of ethics. \nThe description of the Code of Ethics contained in this report is qualified in its entirety by reference to the full text of the Code of Ethics filed as Exhibit 14.01 to that certain Current Report on Form 8-K filed August 7, 2012.The Code of Ethics shall be available on Omniteks website at www.omnitekcorp.com \n\nOur board of directors is comprised of five directors, three of which are outside independent directors and make up the audit committee.John M. Palumbo, considered an audit committee financial expert, chairs our audit committee. \nIT \nEM 11. \n### EXECUTIVE COMPENSATION \nSummary Compensation Table \nThe following table sets forth the compensation paid to our Chief Executive Officer and those executive officers that earned in excess of $100,000 during the periods ended December 31, 2020 and 2019 (collectively, the Named Executive Officers): \n### Name and Principal Position \nYear Ended Dec. 31 \nSalary \n($) \n### Stock \nAward(s) \n($) \n### Option Awards $ \n\nAll Other Compensation ($) \n### Total ($) \n(a) \n(b) \n(c) \n(e) \n(f) \n(g) \n(i) \n(j) \n(1) \nIn 2020, Mr. Mr. Funk deferred $49,039 of his 2020 salary. In 2019, Mr. Mr. Funk deferred $145,092 of his 2019 salary. \n\nOn January 15, 2018, Omnitek entered into an Employment Agreement with, and to continue the employment of, Werner Funk, the President and CEO of the Company.The term of Employment Agreement began on January 15, 2018, (the Effective Date) and shall continue for a period of three years until January 14, 2021, unless terminated earlier pursuant to other provisions of the Agreement.During the Employment Period, Omnitek agrees to pay Mr. Funk a Base Salary of $150,000 per year. \nOn January 15, 2018, per the employment agreement of Mr. Funk, President and CEO, Omnitek granted to Mr. Funk a Non-Qualified Stock Option pursuant to the 2017 Long-Term Incentive Plan, to purchase 300,000 shares of common stock at an exercise price of $0.077 representing 110% of the closing price (i.e., $0.07) of the common stock on such date. One-thirty sixth (1/36) of the total number of shares subject to the Option shall vest and become exercisable at the end of each month following the Date of Grant the same day of each month as the Date of Grant, so that all shares subject to the Options will be fully vested on the third anniversary of the Date of Grant. The Options will be exercisable for a period of seven years from the Effective Date. \nNo Named Executive Officer exercised any options or SARs during the last completed fiscal year or owned any unexercised options or SARs at the end of the fiscal year. \nNone of our executive officers act, or will act, on behalf of, or at the direction of, any other person. \n\nThere was no compensation paid to any director who was not a Named Executive Officer during the year ended December 31, 2020, other than that provided for attendance at meetings. \nThere are no employment contracts, compensatory plans or arrangements, including payments to be received from Omnitek with respect to any Director that would result in payments to such person because of his or her resignation with Omnitek, or its subsidiaries, any change in control of Omnitek. There are no agreements or understandings for any Director to resign at the request of another person. None of our Directors or executive officers acts or will act on behalf of or at the direction of any other person. \nOn March 27, 2020 the two independent directors each received, a non-qualified stock option grant to purchase fifty thousand (50,000) shares of Omniteks common stock at an exercise price of $0.06 per share.The one executive officer director received, a non-qualified stock option grant to purchase fifty thousand (50,000) shares of Omniteks common stock at an exercise price of $0.066 per share (i.e. 110% of the price of the stock as of on March 26, 2020). Such Options shall be exercisable for a period of seven years.The Option shall vest and be exercisable immediately. \nAs set forth in Item 9B., on March 10, 2021, the Company granted to each of John M. Palumbo and Gary S. \n\nThe following table provides information for the named executive officers on stock option holdings as of December 31, 2020. \nITEM 12. \n\nThe following tables sets forth certain information, as of March 26, 2021, respecting the beneficial ownership of our outstanding common stock by: (i)any holder of more than 5%; and (iii)our directors and Named Executive Officers as a group, based on 21,600,189 shares of common stock outstanding: \n\nThe following table shows the amount of common stock beneficially owned by holders of more than 5% of the outstanding shares of any class of our voting securities. \n(1) \n\n(2) \n\n\nThe following table sets forth the amount and nature of beneficial ownership of any class of our voting securities held by all of Omniteks current directors and executive officers. \n(1) \n\n(2) \n\n(3) \nThis amount includes 90,500 shares of common stock held by Mr. Maier directly currently vested options to purchase 325,000 shares of common stock. Does not include 10,000 shares of common stock held by Mr. Maiers spouse. \n(4) \nThis amount includes 149,820 shares of common stock and currently vested options to purchase 325,000 shares of common stock \n### Ch anges in Control \nTo the best of Omniteks knowledge there are no present arrangements or pledges of Omniteks securities, which may result in a change in control. \n\nThe following table sets forth information as of December 31, 2020 with respect to our equity compensation plans previously approved by stockholders and equity compensation plans not previously approved by stockholders. \n(1) \nOf these shares, 750,000 are subject to options outstanding under the 2017 Plan, 2,065,556 are subject to options outstanding under the 2015 Plan and 125,000 are subject to options outstanding under the 2011 Plan. \n(2) \nRepresents 4,250,000 shares available for issuance under the 2017 Plan, 334,444 shares available for issuance under the 2015 Plan and 45,000 shares available for issuance under the 2011 Plan. No new awards will be granted under the 2011Plan. Shares available under the 2015 Plan may be used for any type of award authorized in that plan, including stock options, stock appreciation rights, and full-value awards. \nOn August 3, 2011, the Board of Directors adopted the Omnitek Engineering Corp. 2011 Long-term Incentive Plan (the 2011 Plan), under which 1,000,000 shares of Companys Common Stock were reserved for issuance by the company to attract and retain employees and directors of the Company and to provide such persons with incentives and awards for superior performance and providing services to the Company. The 2011 Plan is administered by a committee comprised of the Board of Directors of the Company or appointed by the Board of Directors, which has broad flexibility in designing stock-based incentives. \nOn September 11, 2015, the Board of Directors adopted the Omnitek Engineering Corp. 2015 Long-term Incentive Plan (the 2015 Plan), under which 2,500,000 shares of Companys Common Stock were reserved for issuance by the company to attract and retain employees and directors of the Company and to provide such persons with incentives and awards for superior performance and providing services to the Company. The 2015 Plan is administered by a committee comprised of the Board of Directors of the Company or appointed by the Board of Directors, which has broad flexibility in designing stock-based incentives. \nOn June 30, 2017, the Board of Directors adopted the Omnitek Engineering Corp. 2017 Long-term Incentive Plan (the 2017 Plan), under which 5,000,000 shares of Companys Common Stock were reserved for issuance by the company to attract and retain employees and directors of the Company and to provide such persons with incentives and awards for superior performance and providing services to the Company. The 2017 Plan was approved by the shareholders on October 27, 2017. The 2017 Plan is administered by a committee comprised of the Board of Directors of the Company or appointed by the Board of Directors, which has broad flexibility in designing stock-based incentives. \nITEM 13.CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR \n### INDEPENDENCE \n\nOmnitek has not been a party to any transactions between persons who were executive officers, directors, or principal stockholders of our corporation during the fiscal year ended December 31, 2020. \n### Director Independence \nThe Board has determined that three of Omniteks Directors have met the independence requirements based upon the application of objective categorical standards adopted by the Board.In making a determination regarding a Directors independence, the Board considers all relevant facts and circumstances, including the Directors commercial, banking, consulting, legal, accounting, charitable and familial relationships and such other criteria as the Board may determine from time to time. \nITEM 14. \n\nAudit Fees \nDuring the fiscal year ended December 31, 2020, we incurred $41,006 in fees to our principal independent accountants for professional services rendered in connection with the audit and reviews of our financial statements for fiscal year ended December 31, 2020. \nDuring the fiscal year ended December 31, 2019, we incurred $37,417 in fees to our principal independent accountants for professional services rendered in connection with the audit and reviews of our financial statements for fiscal year ended December 31, 2019. \n### Audit-Related Fees \nThe aggregate fees billed during the fiscal years ended December 31, 2020 and 2019 for assurance and related services by our principal independent accountants that are reasonably related to the performance of the audit or review of our financial statements (and are not reported under Item9(e)(1) of Schedule 14A was $0 and $0, respectively. \nTax Fees \nThe aggregate fees billed during the fiscal years ended December 31, 2020 and 2019 for professional services rendered by our principal accountant for tax compliance, tax advice and tax planning was $2,400 and $2,350, respectively. \n### All Other Fees \nThe aggregate fees billed during the fiscal years ended December 31, 2020 and 2019 for products and services provided by our principal independent accountants (other than the services reported in Items 9(e)(1) through 9(e)(3) of Schedule 14A was $0 and $0, respectively. \nPART IV. \nITEM 15. EXHIBITS \n1. \n### Financial Statements. \n\n3. \n### Exhibits \nThe following exhibits are either filed as a part hereof or are incorporated by reference. Exhibit numbers correspond to the numbering system in Item601 of Regulation S-K. \n(1) \nIncorporated by reference from our Registration Statement on Form 10 filed with the SEC on April 27, 2010. \n(2) \nIncorporated by reference from our Current Report on Form 8-K filed with the SEC on March 12, 2021 \n(3) Incorporated by reference from our Current Report on Form 8-K filed with the SEC on \nAugust 7, 2012 \n(4) \nFiled herewith \n* \nAll exhibits are numbered with the number preceding the decimal indicating the applicable SEC reference number in Item 601 and the number following the decimal indicating the sequence of the particular document. \n** \nUsers of this data are advised that, pursuant to Rule 406T of<|endoftext|>Doxil. He previously served as a Member of Medical Advisory Board at Gem Pharmaceuticals, LLC and served as a Director of Ambit Biosciences Corporation. Dr. Zukiwski holds a bachelors degree in pharmacy from the University of Alberta and a Doctor of Medicine degree from the University of Calgary. He conducted his post-graduate training at St. Thomas Hospital Medical Center in Akron, Ohio and the University of Texas MD Anderson Cancer Center. \nAll executive officers of the Company are elected by the Board of Directors on an annual basis and serve until their successors have been duly elected and qualified. \n\nSection 16(a) of the 1934 Securities and Exchange Act (the 1934 Act) requires the Companys executive officers, directors and persons who beneficially own more than 10% of a registered class of the Companys equity securities to file with the SEC initial reports of ownership and reports of changes in ownership of Common Stock and other equity securities of the Company. Such executive officers, directors, and greater than 10% beneficial owners are required by SEC regulation to furnish the Company with copies of all Section 16(a) reports filed by such reporting persons. \nBased solely on our review of such forms furnished to the Company and written representations from certain reporting persons, we believe that all filing requirements applicable to our executive officers, directors and greater than 10% beneficial owners were timely made during fiscal 2020, with the exception of one late Form 4 filing by Wealth Strategy Holding Limited. \n### Code of Ethics \nThe Company has adopted a Code of Ethics, as defined in applicable SEC and NASDAQ rules, which applies to the Companys directors, officers and employees, including the Companys principal executive officer and principal financial and accounting officer. The Code of Ethics is available on the Companys website at www.casipharmaceuticals.com \nThe Company intends to disclose any amendment to or waiver of a provision of the Code of Ethics that applies to its principal executive officer, principal accounting officer or controller, or persons performing such information on its website. \n### Audit Committee \nOur Board of Directors has a standing Audit Committee. The Board of Directors has adopted a written charter for the Audit Committee, a copy of which is available on our website at www.casipharmaceuticals.com. The current members of the Audit Committee are James Huang, Franklin C. Salisbury, Jr. and Y.Alexander Wu. All members of the Audit Committee meet the independence and financial literacy requirements as defined by applicable NASDAQ and SEC rules. The Board of Directors has determined that James Huang, chairman of the Audit Committee, is an audit committee financial expert as defined by the rules and regulations of the SEC. \nITEM11. EXECUTIVE COMPENSATION. \n\nThe following summary compensation table includes information concerning compensation for each of our named executive officers during fiscal years ended December 31, 2020 and 2019. \n(1) \nThe amounts in this column represent the aggregate grant date fair value of these awards as calculated in accordance with ASC 718. \n(2) \nDr. He was appointed Chief Executive Officer effective April 2, 2019. \n(3) \nIncludes 401(k) matching contributions ($19,020), housing allowance for an apartment in Beijing ($123,414), allowance for tuition for pre-college age children ($79,348), and Company paid health insurance ($20,049). \n(4) \nMr. Zhang was appointed President, CASI China, effective September 1, 2018, and appointed President of CASI Pharmaceuticals, Inc., effective September 10, 2019. \n(5) \nIncludes reimbursement for total annual expenditures, including housing rental, meals, laundry services, and costs for childrens education and language training ($246,693). Also includes Company paid health insurance ($31,982). \n(6) \nRepresents 401(k) matching and profit sharing contributions by the Company. \n(7) \nMr. \n\nThe following table includes certain information with respect to the value of all unexercised options previously awarded to the executive officers named above at the fiscal year ended December31, 2020. \n(1) \nThe term of each option is ten years. \n(2) \nOptions vest at the earlier of (i) the completion of a transformative event by the Company as determined in the discretion of the Compensation Committee and (ii) the second anniversary of the date of grant. \n(3) \nOptions vest as follows: 25% on each of the first, second, third and fourth anniversary of the date of grant. \n(4) \nOptions became exercisable 25% on date of grant and then in equal monthly installments over the next three years. \n(5) \nMr. \n(6) \nOptions vest as follows: 160,000 options on each of the first and second anniversaries of the date of grant and 240,000 options on each of the third and fourth anniversaries of the date of grant. \nDue to Mr. Xus resignation on March 29, 2021, these stock options have been forfeited or cancelled. \n### Employment Arrangements \nThe Company is currently a party to employment agreements with Wei-Wu He, Wei (Larry) Zhang, and Alexander Zukiwski. The terms of such agreements and the respective payments payable upon termination are set forth below. \nWei-Wu He, Ph.D., Chairman and CEO \nDr. He started as CEO on April 2, 2019 pursuant to the terms of an offer letter (the Offer Letter) from the Company, dated March 22, 2019. Under the terms of the Offer Letter, Dr. He is entitled to: an annual base salary of $568,000; and an expatriate allowance consisting of tuition for pre-college age children (up to $120,000 per year) and a housing allowance for an apartment in Beijing. \nDr. He was also awarded a grant of options to purchase four million shares of the Companys common stock at an exercise price of $2.85, the closing price on April 2, 2019, the grant date, vesting at the earlier of (i) the completion of a transformative event by the Company as determined in the discretion of the Compensation Committee or (ii) the second anniversary of the date of grant, April2, 2021. \n### Wei (Larry) Zhang, President \nEffective September 1, 2018, CASI (Beijing) Pharmaceuticals, Inc., now known as CASI Pharmaceuticals (China) Co., Ltd., entered into a labor contract with Wei (Larry) Zhang, governed by the laws of the Peoples Republic of China. The term of the agreement is set for three years, until August 31, 2021. The contract will automatically terminate if not renewed, but the contract can be renewed if the parties agree to the terms of the renewal. \nThe contract provides for a base salary pre-tax of 170,000 yuan per month. \nMr. Zhang was also awarded an option to purchase 1,000,000 shares of common stock of the Company at an exercise price of $6.95, representing the closing price of our stock price on the Nasdaq Stock Market on September 1, 2018 (the date of grant). The stock options will vest 25% (250,000 shares) on each of the first four anniversaries of the date of grant. \nCASI China can terminate the labor contact if it provides 30 days written notice or after it pays Mr. Zhang an extra months wages in cases where: (a) Mr. Zhang is injured and cannot resume his position; (b) Mr. Zhang fails the performance appraisal; or (c) where the employment contract cannot be performed. CASI China can terminate the labor contract at any time if (a) Mr. Zhang seriously violates the rules and regulations of CASI China; (b) Mr. Zhang is grossly negligent resulting in a loss of 10,000 Yuan or greater; (c) Mr. Zhang is investigated for criminal responsibility; or (d) Mr. Zhang has a labor relationship with other employers. Mr. Zhang can terminate the employment contract if CASI China (a) fails to provide appropriate working conditions; (b) fails to provide labor remuneration in a full and timely manner; or (c) fails to pay social insurance premiums. The contract is terminated if (a) CASI China is declared bankrupt and business license is revoked; or (b) if Mr. Zhang retires, resigns, dies or goes missing. \nUnder his contract, Mr. Zhang is also entitled to reimbursement for total annual expenditures up to 1,020,000 RMB per year. Included in that 1,020,000 RMB is up to 600,000 RMB for housing rental, up to 10,000 RMB for meals, up to 10,000 RMB for laundry services, and reimbursed costs for his childrens education and language training. In the event the amount of invoice for these items is less than 1,020,000 RMB, the remaining amount will be consolidated into Mr. Zhangs annual bonus. \n### Alexander A. Zukiwski, MD, Chief Medical Officer \nOn April 3, 2017, the Company entered into an employment agreement with Alexander A. Zukiwski, MD. The term of the employment agreement is subject to automatic one-year extensions unless either party gives at least sixty days prior written notice not to extend. \nThe agreement provides for an annualized minimum base salary of $400,000. Dr. Zukiwski shall be eligible to earn incentive compensation up to an aggregate of $180,000, based upon the attainment of pre-established specific milestones related to his duties, the exact amount of which are determined by the Board of Directors or the Compensation Committee. Dr. Zukiwskis base salary for fiscal 2020 was $414,529. In addition, upon the commencement of his employment, the Company granted stock options to Dr. Zukiwski covering 300,000 shares of Common Stock with a per share exercise price of $1.34, vested as to 25% 90 days from the date of grant, and the remainder ratably over three years on a monthly basis. These option awards are subject to the terms and conditions of the Companys form of non-qualified stock option award agreement. \nIf the Company terminates Dr. Zukiwski without cause, Dr. Zukiwski will receive a severance benefit equal to six months of salary, payable in accordance with the Companys customary pay practices, a pro-rata portion of any incentive compensation he would have been entitled to for that year, and continued insurance coverage for up to six months. Dr. Zukiwski also may resign at any time for good reason, (which generally means any material diminution or change in salary, responsibilities or title; relocation to an office more than 50miles from Company headquarters; failure to continue health benefits; or the failure to honor any material aspect of the employment agreement), by providing at least thirty days prior written notice. Resignation for good reason or non-extension of the term of his agreement will be deemed a termination without cause. In addition, if Dr. Zukiwskis employment is terminated upon disability or death, Dr. Zukiwski or his estate will be entitled to receive a payment equal to six months salary plus a pro-rated amount of any incentive compensation he would have been entitled to for that year. \nThe employment agreement imposes confidentiality obligations and a 6-month non-compete (12months in the event of a resignation for other than good reason) on Dr. Zukiwski following termination of employment. \nOn April 3, 2017, the Company entered into a change-in-control agreement with Dr. Zukiwski. See Change-in-Control Severance Agreements for information on change-in-control termination payments. These change-in-control severance payments will be made in lieu of the severance payments under the executives employment agreement. \n### Change-In-Control Severance Agreements \nThe Company currently is a party to a Change in Control Agreement with Alexander A. Zukiwski. \nDr. Zukiwskis Change in Control Agreement provides for certain benefits either upon an involuntary termination of employment, other than for cause, or resignation for good reason, upon a Triggering Event. \nA Triggering Event includes a merger of the Company with and into an unaffiliated corporation if the Company is not the surviving corporation or the sale of all or substantially all of the Companys assets. Good reason generally means any material diminution or change in salary, responsibilities or title; relocation to an office more than 50 miles from Company headquarters or office; a failure to continue health benefits; or the failure to honor any material aspect of the employment agreement. \nThe benefits to be received by Dr. Zukiwski, in the event his employment is terminated after a Triggering Event occurs, include: (i) receipt of a lump sum severance payment equal to Dr. Zukiwskis then current annual salary and the average of the two prior years bonuses; (ii) pro rata current year bonus; (iii) continuation of life, health and disability benefits for twelve months after the termination of employment and (iv)<|endoftext|>By each director. \n(3) \nAcheson was awarded nonqualified stock options to acquire 23,781 shares of common stock, each with an exercise price of $5.45 per share. The nonqualified stock options will vest in full immediately prior to our 2022 Annual Meeting of Stockholders, subject to accelerated vesting upon a defined change in control and subject to continued service. \n(4) \nAcheson was awarded 14,678 RSUs, each to acquire one share of common stock. The RSUs vest in three equal installments on December 17, 2021, 2022 and 2023, subject to accelerated vesting upon a defined change in control and subject to continued service. \n(5) \nNonqualified stock option to acquire 36,252 shares of common stock that is exercisable at a price of $2.36 per share and vests in full immediately prior to our 2021 Annual Meeting, subject to accelerated vesting upon a defined change in control and subject to continued service. \n(6) \n16,314 RSUs, each to acquire one share of common stock and each vesting in full immediately prior to our 2 \n021 Annual Meeting of Stockholders, subject to accelerated vesting upon a defined change in control and subject to continued service. \nAs discussed under Item 11. Executive CompensationSummary Compensation TableNarrative Explanation of Summary Compensation Table, on February 20, 2020, the board adopted the Grant Guidelines in the form recommended by the compensation committee. The Grant Guidelines provide for the grant of equity awards to non-employee directors once annually, on the date of our annual meeting of stockholders at which the non-employee directors are elected (or re-elected) to the board unless such annual stockholder meeting occurs either (a) earlier than the third trading day following the date on which we file our Quarterly Report on Form 10Q for the quarter ended March 31 of such year, in which case the grant date generally shall be the first Monday that follows the date of such filing, or (b) on or after June 1 of such year, in which case the grant date generally shall be the first Monday that follows the date on which we next file an Annual Report on Form 10K or Quarterly Report on Form 10Q. \nOn December 17, 2020, the board approved a non-employee director compensation policy, or the Revised Policy, effective immediately. The purpose of the Revised Policy is to provide a total compensation package that enables us to attract and retain, on a long-term basis, high-caliber directors. The Revised Policy applies to each non-employee who serves on the board. The board approved the Revised Policy in accordance with a recommendation of the boards compensation committee, which had considered recommendations made by our compensation consultant based in part upon assessments of our director compensation relative to that of a peer group of comparable companies. \nThe Revised Policy sets forth (a) cash and equity compensation for directors serving during calendar year 2021 and (b) onetime equity compensation for new directors joining the board on or after December 17, 2020. The board reviews and approves director compensation annually and will amend or restate the Revised Policy accordingly. \n### Compensation for 2021 Services. \nUnder the Policy, the following terms will apply during calendar year 2021: \nCash Compensation \nEach non-employee director will be entitled to a cash retainer of $35,000 for service on the board of directors for 2021, except that the Chair of the Board will instead receive a cash retainer of $70,000. In addition, a non-employee director serving on the boards audit committee, compensation committee, or nominating and corporate governance committee in a non-Chair capacity will be entitled to a cash retainer of $7,500, $5,000 or $3,750, respectively, for services on those committees for the year. The Chair of one of those committees will be entitled to a cash retainer twice the amount payable to other members of that committee. Directors are not entitled to receive attendance fees for any meetings of the board or its committees. \n### Equity Awards \nEach non-employee director who is elected (or re-elected) to the board at our 2021 annual meeting of stockholders will receive annual equity-based awards under our 2019 Omnibus Incentive Plan having an aggregate value of $80,000, based upon the fair market value of common stock on the grant date and consisting of $40,000 in value of RSUs and $40,000 in value of nonqualified stock options. These awards will be, subject to certain timing exceptions, granted as of the date of the 2021 annual meeting. They will vest immediately prior to our 2022 annual meeting of stockholders (or upon a Change in Control as defined in the 2019 Omnibus Incentive Plan, if earlier). \nOne-time Equity Award for New Directors. \nEach non-employee director who is initially elected to our board on or after December 17, 2020 will receive equity awards with an aggregate value of $160,000, which will consist of $80,000 in value of RSUs and $80,000 in value of nonqualified stock options unless otherwise determined by the compensation committee. These awards are to be granted upon commencement of board service. The RSUs will vest on the first, second and third anniversaries of the grant date, and the nonqualified stock options will vest in full immediately prior to second annual meeting of stockholders following the grant (unless the director is first elected at an annual meeting, in which case the nonqualified stock option will vest in full immediately prior to the next annual meeting). All of the RSUs and nonqualified stock options will be subject to accelerated vesting upon a defined change in control. \nITEM 12. \n\nThe following table sets forth the number of outstanding shares of common stock beneficially owned, and the percentage of the class beneficially owned, as of March 31, 2021, by: each person known to us to be the beneficial owner of more than five percent of the then-outstanding shares of common stock; each NEO; each of our directors; \nThe number of shares of common stock beneficially owned by each person is determined under the rules of the SEC. Under these rules, beneficial ownership includes any shares as to which the individual has sole or shared voting power or investment power and also any shares that the individual has the right to acquire by May 30, 2021 (60 days after March 31, 2021) through the exercise or conversion of a security or other right. Unless otherwise indicated, each person has sole investment and voting power, or shares such power with a family member, with respect to the shares set forth in the following table. The inclusion in this table of any shares deemed beneficially owned does not constitute an admission of beneficial ownership of those shares for any other purpose. As of March 31, 2021, there were a total of 20,216,056 shares of common stock outstanding. Shares not outstanding, but deemed beneficially owned by virtue of the right of a person to acquire those shares, are treated as outstanding only for purposes of determining the number and percent of shares of common stock owned by such person or group. Unless otherwise noted below, the address of each person listed in the table is in care of Corporate Secretary, Chembio Diagnostics, Inc., 555 Wireless Boulevard, Hauppauge, New York. 11788. \n(footnotes appear on following page) \n* \nLess than 1%. \n(1) \nBased on a Schedule 13D/A filed with the SEC on July 18, 2019 by Norman H. Pessin. Mr. Pessin has sole voting power over 1,367,587 shares and sole dispositive power over 1,367,587 shares. \n(2) \nBased on a Schedule 13G filed with the SEC on February 2, 2021 by BlackRock, Inc.. BlackRock, Inc. has sole voting power over 1,190,119 shares and sole dispositive power over 1,199,594 shares. \n(3) \nBased on a Schedule 13G filed with the SEC on February 10, 2021 by The Vanguard Group. The Vanguard Group has shared voting power over 38,056 shares, sole dispositive power over 995,425 shares and shared dispositive power over 42,858 shares. \n(4) \nIncludes 178,242 shares issuable under options exercisable by May 30, 2021 \n(5) \nIncludes 82,688 shares issuable under options exercisable by May 30, 2021. \n(6) \nIncludes 12,085 shares issuable under options exercisable by May 30, 2021. \n(7) \nIncludes 58,959 shares issuable under options exercisable by May 30, 2021 \n(8) \nConsists of 51,413 shares held by Mr. Eberlys spouse. \n(9) \nIncludes 43,334 shares issuable under options exercisable by May 30, 2021. \n(10) \nIncludes 375,307 shares issuable under options exercisable by May 30, 2021. \n\nTh e following table provides information as of December 31, 2020 with respect to shares of common stock that may be issued under equity plans and standalone option grants: \n(1) \nConsists of 56,000 shares to be issued under the 2008 Stock Incentive Plan, 230,659 shares to be issued under the 2014 Stock Incentive Plan and 1,024,563 shares to be issued under the 2019 Omnibus Incentive Plan. \n(2) \nConsists of shares available under the 2019 Omnibus Incentive Plan. \n(3) \nConsists of 233,589 shares issued as an inducement grant under our employment agreement with Richard L. Eberly. \nITEM 13. \n\nProcedures for Approval of Related Person Transactions \nThe board of directors reviews all transactions involving us in which any of our directors, director nominees, significant stockholders and executive officers and their immediate family members are participants, in order to determine whether any such party has a direct or indirect material interest in the transaction. All directors, director nominees and executive officers must notify us of any proposed transaction involving us in which such person has a direct or indirect material interest. The proposed transaction is then reviewed by either the board as a whole or the audit committee, which determines whether to approve the transaction. After such review, the reviewing body approves the transaction only if it determines that the transaction is in, or not inconsistent with, the best interests of our company and stockholders. \n\nSee Item 10. Directors, Executive Officers and Corporate GovernanceCorporate Governance and Board Structure and Board Committees. \nITEM 14. \n\nErnst & Young LLP, or E&Y, has served as our independent auditor since March 2020. Prior to that time, BDO USA, LLP, or BDO, served as our independent registered public accounting firm until the audit committee of the board of directors approved its dismissal on March 30, 2020. During the fiscal year ended December 31, 2019 and in the subsequent interim period through March 30, 2020, there were (a) no disagreements (as defined in Item 304(a)(1)(iv) of the SECs Regulation SK and the related instructions) with BDO on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure that, if not resolved to the satisfaction of BDO, would have caused BDO to make reference thereto in its reports on the consolidated financial statements for such fiscal years and (b) no reportable events (as defined in Item 304(a)(1)(v) of Regulation SK). \nPrincipal Independent Auditor Fees \nThe following table sets forth the aggregate fees billed to us by E&Y, our current independent auditor, for professional services rendered for the fiscal year ended December 31, 2020 and the aggregate fees billed to us by BDO, our former independent auditor, for professional services rendered for the fiscal years ended December 31, 2019 and the interim period ended March 27, 2020: \n(1) \nIncludes services relating to the audit of annual consolidated financial statements, review of quarterly consolidated financial statements, statutory audits, comfort letters, and consents and review of documentation filed with SEC-registered and other securities offerings. \n(2) \nIncludes services related to assistance with general accounting matters, work performed on acquisitions and divestitures, employee benefit plan audits and assistance with statutory audit matters. \n(3) \nIncludes services for tax compliance, tax advice and tax planning. \n\nThe audit committee approves in advance all audit and non-audit services performed by the independent registered public accounting firm. There are no other specific policies or procedures relating to the pre-approval of services performed by the independent registered public accounting firm. \nITEM 15. \n\n(a) \nThe following is filed as part of the 2020 Form 10K: \n(1) \nIndex to Consolidated Financial Statements in Item 8 of 2020 Form 10K. \nAll schedules were omitted because they are not applicable, not required under<|endoftext|>[\n\nCrossamerica Partners Lp\n]\n\n### EXPLANATORY NOTE \nCrossAmerica Partners LP (CrossAmerica, the Partnership, we, us or our) is filing this Amendment No. 1 on Form 10-K/A (this Amendment) to amend its Annual Report on Form 10-K for the fiscal year ended December 31, 2019 (the Form 10-K), which was originally filed on February 26, 2020 with the U.S. The sole purpose for filing this Amendment is to include summarized financial information for our investment in CST Fuel Supply, an entity in which we owned a 17.5% interest from July 1, 2015 through March 25, 2020 and that has been accounted for as an equity method investment during that period. No other changes to the contents of the Form 10-K have been made, except as specified in this explanatory note. \nIn the Form 10-K, we disclosed the 1.7 billion gallons of motor fuel purchased by CST Fuel Supply during 2019 in Note 2 under Concentration Risk. We also disclosed the $0.05 fixed markup per gallon CST Fuel Supply generated and our limited partner interest of 17.5% in Note 13 under CST Fuel Supply Equity Interests. With this information, users can recompute the equity income from CST Fuel Supply presented on our statements of operations as well as the cash received from CST Fuel Supply presented in our statements of cash flows by multiplying the volume by the fixed markup per gallon by our limited partner interest. Consistent information was provided for 2018 and 2017. \nThis Amendment inserts supplemental financial information into Note 13 to the financial statements under the heading CST Fuel Supply Equity Interests. Although the Form 10-K included all information to enable users of our financial statements to understand the operations of CST Fuel Supply and to recompute the equity income from CST Fuel Supply presented on our statements of operations as well as the cash received from CST Fuel Supply presented in our statements of cash flows, we are filing this Amendment to also include supplemental financial information for certain periods of 2017, 2018 and 2019 in Note 13 to the financial statements in order to more clearly comply with the requirements of Regulation S-X Rule 4-08(g). The inclusion of this summarized financial information of CST Fuel Supply in this Amendment does not impact or affect our consolidated financial condition or results of operations. \nThis summarized financial information was required to be included in the Form 10-K pursuant to Rule 4-08(g) of Regulation S-X and we failed to include such information. In light of these and related omissions, this Amendment includes updated disclosure regarding our conclusions with respect to the effectiveness of our disclosure controls and procedures in Item 9A. Controls and Procedures. \nThere are no revisions to managements report on internal control over financial reporting nor to Grant Thornton LLPs opinions on the financial statements and internal control over financial reporting, other than the dual-dating of Grant Thorntons opinion on the financial statements as required by this Amendment to include the supplemental financial information in Note 13 to the financial statements. \nThis Amendment does not affect any other parts of, or exhibits to, the Form 10-K, and those unaffected parts or exhibits are not included in this Amendment. Except as expressly stated in this Amendment, the Form 10-K continues to speak as of the date of the filing of the Form 10-K, and we have not updated the disclosure contained in this Amendment to reflect events that have occurred since the filing of the Form 10-K. Accordingly, this Amendment must be read in conjunction with the Partnerships other filings made with the SEC subsequent to the filing of the Form 10-K, including amendments to those filings, if any. \nNo changes have been made and the inclusion of Part I, Commonly Defined Terms is solely for the convenience of the reader. \nPART I \n### COMMONLY USED DEFINED TERMS \nThe following is a list of certain acronyms and terms generally used in the industry and throughout this document: \nCrossAmerica Partners LP and subsidiaries: \n### CrossAmerica Partners LP \nCrossAmerica, the Partnership, we, us, our \nLGP Operations LLC a wholly owned subsidiary of the Partnership \nLGW \nLehigh Gas Wholesale LLC \n### LGPR \nLGP Realty Holdings LP \nLGWS \nLehigh Gas Wholesale Services, Inc. and subsidiaries \nCrossAmerica Partners LP related parties at any point during 2019: \n### Circle K \nCircle K Stores Inc., a Texas corporation, and a wholly owned subsidiary of Couche-Tard \nCouche-Tard \n### Alimentation Couche-Tard Inc. (TSX: ATD.A ATD.B) \nCouche-Tard Board the Board of Directors of Couche-Tard \nCST \nCST Brands, LLC and subsidiaries, indirectly owned by Circle K \n### CST Fuel Supply \nCST Fuel Supply LP is the parent of CST Marketing and Supply, indirectly owned by Circle K. Since July 1, 2015, we have owned a 17.5% limited partner interest in CST Fuel Supply. See Note 25 to the financial statements for information regarding the exchange of this investment for certain assets owned by Circle K. \nCST Marketing and Supply \nCST Marketing and Supply, LLC, indirectly owned by Circle K. It is CSTs wholesale motor fuel supply business, which provides wholesale fuel distribution to the majority of CSTs legacy U.S. retail convenience stores on a fixed markup per gallon. \n### CST Services \nCST Services LLC, a wholly owned subsidiary of Circle K \nDMI \nDunne Manning Inc. (formerly Lehigh Gas Corporation), an entity affiliated with the Topper Group \nDMP \nDunne Manning Partners LLC, an entity affiliated with the Topper Group and controlled by Joseph V. Topper, Jr. Since November 19, 2019, DMP has owned 100% of the membership interests in the sole member of the General Partner. \nDMR \nDunne Manning Realty LP, an entity affiliated with the Topper Group \nDMS \nDunne Manning Stores LLC (formerly known as Lehigh Gas-Ohio, LLC), an entity affiliated with the Topper Group. DMS is an operator of retail motor fuel stations. DMS leases retail sites from us in accordance with a master lease agreement and purchases a significant portion of its motor fuel for these sites from us on a wholesale basis under rack plus pricing. The financial results of DMS are not consolidated with ours. \n### General Partner \nCrossAmerica GP LLC, the General Partner of CrossAmerica, a Delaware limited liability company, indirectly owned by the Topper Group \nTopper Group \nJoseph V. Topper, Jr., collectively with his affiliates and family trusts that have ownership interests in the Partnership. Joseph V. Topper, Jr. is the founder of the Partnership and a member of the Board. The Topper Group is a related party and large holder of our common units. \n### TopStar \nTopStar Inc., an entity affiliated with a family member of Joseph V. Topper, Jr.TopStar is an operator of convenience stores that leases retail sites from us but does not purchase fuel from us. \nRecent Acquisitions: \n### Nice N Easy Assets \nThe assets acquired from Nice N Easy Grocery Shoppes in November 2014 \nLandmark Assets \nThe assets acquired from Landmark Industries in January 2015 \n### Franchised HolidayStores \nThe franchised Holiday stores acquired in March 2016 \nJet-Pep Assets \nThe assets acquired from Jet-Pep, Inc. in November 2017 \n### Other Defined Terms: \nApplegreen \nApplegreen plc or one of its subsidiaries \nASC \n\nASU \n### Accounting Standards Update \nBoard \nBoard of Directors of our General Partner \nBP \nBP p.l.c. \n### Branded Motor Fuels \nMotor fuels that are purchased from major integrated oil companies and refiners under supply agreements. We take legal title to the motor fuel when we receive it at the rack and generally arrange for a third-party transportation provider to take delivery of the motor fuel at the rack and deliver it to the appropriate sites in our network. \nCircle K Omnibus Agreement \nThe Amended and Restated Omnibus Agreement, dated October1, 2014, as amended effective January 1, 2016, February 1, 2018 and April 29, 2019 by and among CrossAmerica, the General Partner, DMI, DMS, CST Services and Joseph V. Topper,Jr., which amends and restates the original omnibus agreement that was executed in connection with CrossAmericas initial public offering on October 30, 2012. The terms of the Circle K Omnibus Agreement were approved by the conflicts committee of the Board. Pursuant to the Circle K Omnibus Agreement, CST Services agrees, among other things, to provide, or cause to be provided, to the Partnership certain management services. \n### CST Fuel Supply Exchange \nExchange Agreement, dated November 19, 2019, between the Partnership and Circle K. Pursuant to the CST Fuel Supply Exchange Agreement, Circle K has agreed to transfer to the Partnership certain owned and leased convenience store properties and related assets (including fuel supply agreements) and wholesale fuel supply contracts covering additional sites, and, in exchange, the Partnership has agreed to transfer to Circle K 100% of the limited partnership units in CST Fuel Supply. \nCST Merger \nThe merger of Ultra Acquisition Corp., a Delaware corporation and an indirect, wholly owned subsidiary of Circle K (Merger Sub), with CST, with CST surviving the merger as a wholly owned subsidiary of Circle K, which closed on June 28, 2017. See CST Merger Agreement below. \n### CST Merger Agreement \nCSTs Agreement and Plan of Merger entered into on August 21, 2016 with Circle K and Merger Sub. Under and subject to the terms and conditions of the CST Merger Agreement, on June 28, 2017, Merger Sub was merged with and into CST, with CST surviving the CST Merger as a wholly owned subsidiary of Circle K. \nDTW \nDealer tank wagon contracts, which are variable cent per gallon priced wholesale motor fuel distribution or supply contracts; DTW also refers to the pricing methodology under such contracts \n### EBITDA \nEarnings before interest, taxes, depreciation, amortization and accretion, a non-GAAP financial measure \nEICP \nThe Partnerships Lehigh Gas Partners LP Executive Income Continuity Plan, as amended \nEMV \nPayment method based upon a technical standard for smart payment cards, also referred to as chip cards \n### Exchange Act \nSecurities Exchange Act of 1934, as amended \nExxonMobil \nExxonMobil Corporation \n### FASB \n\nForm 10-K \nCrossAmericas Annual Report on Form 10-K for the year ended December 31, 2019 \nFTC \n### U.S. Federal Trade Commission \nGetty Lease \nIn May 2012, the Predecessor Entity, which represents the portion of the business of DMI and its subsidiaries and affiliates contributed to the Partnership in connection with the initial public offering, entered into a 15-year master lease agreement with renewal options of up to an additional 20 years with Getty Realty Corporation. \n### GP Purchase \nPurchase by DMP from subsidiaries of Circle K of: 1) 100% of the membership interests in the sole member of the General Partner; 2) 100% of the Incentive Distribution Rights issued by the Partnership; These transactions closed on November 19, 2019. \nIDRs \nIncentive Distribution Rights represent the right to receive an increasing percentage of quarterly distributions after the target distribution levels have been achieved, as defined in our Partnership Agreement. As a result of the GP Purchase, DMP owned 100% of the outstanding IDRs from November 19, 2019 through February 6, 2020. See Note 25 to the financial statements for information regarding the elimination of the IDRs. \n### Internal Revenue Code \nInternal Revenue Code of 1986, as amended \nIPO \nInitial public offering of CrossAmerica Partners LP on October 30, 2012 \nIRS \nInternal Revenue Service \n### LIBOR \nLondon Interbank Offered Rate \nMD&A \n\n### Motiva \nMotiva Enterprises, LLC \nNTI \nCSTs new to industry stores opened after January 1, 2008, which is generally when CST began designing and operating its larger format stores that accommodate broader merchandise categories and food offerings and have more fuel dispensers than its legacy stores \n### NYSE \nNew York Stock Exchange \nPartnership Agreement \nThe First Amended and Restated Agreement of Limited Partnership of CrossAmerica Partners LP, dated as of October 1, 2014, as amended; see Note 25 to the financial statements regarding the elimination of the IDRs, which triggered the need to further amend the Partnership Agreement \n### Plan \nIn connection with the IPO, the General Partner adopted the Lehigh Gas Partners LP 2012 Incentive Award Plan, a long-term incentive plan for employees, officers, consultants and directors of the General Partner and any of its affiliates who perform services for<|endoftext|>Involve payment of a premium over prevailing market prices for our securities. \n\nOur amended and restated certificate of incorporation requires, unless we consent in writing to the selection of an alternative forum, that (i)any derivative action or proceeding brought on our behalf, (ii)any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee to us or our stockholders, (iii)any action asserting a claim against us, our directors, officers or employees arising pursuant to any provision of the DGCL or our amended and restated certificate of incorporation or bylaws, or (iv)any action asserting a claim against us, our directors, officers or employees governed by the internal affairs doctrine may be brought only in the Court of Chancery in the State of Delaware, except any claim \n(A) as to which the Court of Chancery of the State of Delaware determines that there is an indispensable party not subject to the jurisdiction of the Court of Chancery (and the indispensable party does not consent to the personal jurisdiction of the Court of Chancery within ten days following such determination), (B) which is vested in the exclusive jurisdiction of a court or forum other than the Court of Chancery, (C)for which the Court of Chancery does not have subject matter jurisdiction, or (D)any action arising under the Securities Act, as to which the U.S. federal district courts shall have exclusive jurisdiction, unless we consent otherwise. \nUnless we consent in writing to the selection of an alternative forum, the federal district courts of the United States of America will be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act. \nYou will not be permitted to exercise your warrants unless we register and qualify the underlying shares of ClassA common stock or certain exemptions are available. \nIf the issuance of the shares of ClassA common stock upon exercise of the warrants is not registered, qualified or exempt from registration or qualification under the Securities Act and applicable state securities laws, holders of warrants will not be entitled to exercise such warrants and such warrants may have no value and expire worthless. In such event, holders who acquired their warrants as part of a purchase of CAPS \nTM will have paid the full CAPS \nTM purchase price solely for the shares of ClassA common stock included in the CAPS \nTM \nHowever, under the terms of the warrant agreement, we have agreed that, as soon as practicable, but in no event later than 15 business days, after the closing of our partnering transaction, we will use our best efforts to file with the SEC a registration statement covering the registration under the Securities Act of the shares of ClassA common stock issuable upon exercise of the warrants and thereafter will use our best efforts to cause the same to become effective within 60 business days following our partnering transaction and to maintain a current prospectus relating to the shares of ClassA common stock issuable upon exercise of the warrants until the expiration of the warrants in accordance with the provisions of the warrant agreement. \n\n\n\n\n\n\n\n\nWe have the ability to redeem outstanding warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01 per warrant, provided that the closing price of our shares of ClassA common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within a \n30-trading day period ending on the third trading day prior to proper notice of such redemption provided that on the date we give notice of redemption. We will not redeem the warrants unless an effective registration statement under the Securities Act covering the shares of ClassA common stock issuable upon exercise of the warrants is effective and a current prospectus relating to those shares of ClassA common stock is available throughout the \n30-day redemption period, except if the warrants may be exercised on a cashless basis and such cashless exercise is exempt from registration under the Securities Act. None of the private placement CAPS \nTM will be redeemable by us for cash so long as they are held by their initial purchasers or their permitted transferees. \nOur warrants may have an adverse effect on the market price of our shares of ClassA common stock and make it more difficult to effectuate our partnering transaction. \nWe issued warrants to purchase 4,140,000 after giving effect to the underwriters full exercise of their over-allotment option (10,350,000 after giving effect to the Stock Split) shares of our ClassA common stock as part of the CAPS \nTM offered by our initial public offering and, simultaneously with the closing of our initial public offering, we issued in a private placement an aggregate of 245,600 private placement CAPS \nTM \n(614,000 private placement CAPS \nTM after giving effect to the Stock Split), with 61,400 warrants (153,500 warrants after giving effect to the Stock Split) underlying such private placement CAPS \nTM \n, each exercisable to purchase one share of ClassA common stock at $28.75 per share ($11.50 after giving effect to the Stock Split). In addition, if our sponsor or an affiliate of our sponsor or certain of our officers and directors makes any working capital loans, such lender may convert those loans into up to an additional 60,000 private placement CAPS \nTM \n(150,000 private placement CAPS \nTM after giving effect to the Stock Split), at the price of $25.00 per private placement CAPS \nTM \n\nTM after giving effect to the Stock Split), with 15,000 (37,500 warrants after giving effect to the Stock Split) underlying such private placement CAPS \nTM \nTo the extent we issue common stock to effectuate a business transaction, the potential for the issuance of a substantial number of additional shares of ClassA common stock upon exercise of these warrants could make us a less attractive acquisition vehicle to a partnering candidate. Such warrants, when exercised, will increase the number of issued and outstanding shares of ClassA common stock and reduce the value of the shares of ClassA common stock issued to complete the business transaction. Therefore, our warrants may make it more difficult to effectuate a business transaction or increase the cost of acquiring the partnering candidate. \nBecause each CAPS \nTM contains one-fourth of one warrant and only a whole warrant may be exercised, the CAPS \nTM may be worth less than CAPS \nTM of other special purpose acquisition companies. \nEach CAPS \nTM contains one-fourth of one warrant. Pursuant to the warrant agreement, no fractional warrants will be issued upon separation of the CAPS \nTM \n, and only whole CAPS \nTM will trade. This is different from other offerings similar to ours whose CAPS \nTM include one common share and one warrant to purchase one whole share. We have established the components of the CAPS \nTM in this way in order to reduce the dilutive effect of the warrants upon completion of a partnering transaction since the warrants will be exercisable in the aggregate for one-fourth of the number of shares compared to CAPS \nTM that each contain a whole warrant to purchase one share, thus making us, we believe, a more attractive merger partner for partnering candidates. Nevertheless, this CAPS \nTM structure may cause our CAPS \nTM to be worth less than if it included a warrant to purchase one whole share. \nThe grant of registration rights to our initial stockholders and holders of our private placement CAPS \nTM may make it more difficult to complete our partnering transaction, and the future exercise of such rights may adversely affect the market price of our shares of ClassA common stock. \nPursuant to an agreement entered into concurrently with the issuance and sale of the securities in our initial public offering, our initial stockholders and their permitted transferees can demand that we register the founder shares, the performance shares and the ClassA common stock into which such founder shares and performance shares are convertible, holders of our private placement CAPS \nTM and their permitted transferees can demand that we register the shares of ClassA common stock and the warrants (and the shares of ClassA common stock issuable upon exercise of such warrants) underlying such private placement CAPS \nTM \n, and holders of private placement CAPS \nTM that may be issued upon conversion of working capital loans may demand that we register the shares of ClassA common stock and the warrants (and the shares of ClassA common stock issuable upon exercise of such warrants) underlying such private placement CAPS \nTM \nIn addition, the existence of the registration rights may make our partnering transaction more costly or difficult to conclude. This is because the stockholders of the partnering candidate may increase the equity stake they seek in the combined entity or ask for more cash consideration to offset the negative impact on the market price of our shares of ClassA common stock that is expected when the shares of common stock owned by our initial stockholders, holders of our private placement CAPS \nTM \n, holders of our working capital loans or their respective permitted transferees are registered. \n\nThe price of our securities may vary significantly due to one or more potential partnering transactions and general market or economic conditions, including as a result of the \nCOVID-19 outbreak. \n### Risks Related to Our Sponsor and Management Team \n\nWe believe that our success depends on the continued service of our officers and directors, at least until we have completed our partnering transaction. In addition, our executive officers and directors are not required to commit any specified amount of time to our affairs and, accordingly, will have conflicts of interest in allocating their time among various business activities, including identifying potential partnering transactions and monitoring the related due diligence. \nOur ability to successfully effect our partnering transaction and to be successful thereafter will be dependent upon the efforts of our key personnel, some of whom may join us following our partnering transaction. \nOur ability to successfully effect our partnering transaction is dependent upon the efforts of our key personnel. The role of our key personnel in the partnering candidate, however, cannot presently be ascertained. Although some of our key personnel may remain with the partnering candidate in senior management or advisory positions following our partnering transaction, it is likely that some or all of the management of the partnering candidate will remain in place. While we intend to closely scrutinize any individuals we engage after our partnering transaction, we cannot assure you that our assessment of these individuals will prove to be correct. \nOur key personnel may negotiate employment or consulting agreements with a partnering candidate in connection with a particular partnering transaction, and a particular partnering transaction may be conditioned on the retention or resignation of such key personnel. These agreements may provide for them to receive compensation following our partnering transaction and as a result, may cause them to have conflicts of interest in determining whether a particular partnering transaction is the most advantageous. \nOur key personnel may be able to remain with our Company after the completion of our partnering transaction only if they are able to negotiate employment or consulting agreements in connection with the partnering transaction. Such negotiations would take place simultaneously with the negotiation of the partnering transaction and could provide for such individuals to receive compensation in the form of cash payments and/or our securities for services they would render to us after the completion of the partnering transaction. The personal and financial interests of such individuals may influence their motivation in identifying and selecting a partnering candidate, subject to their fiduciary duties under Delaware law. \nWe may have a limited ability to assess the management of a prospective partnering candidate and, as a result, may effect our partnering transaction with a partnering candidate whose management may not have the skills, qualifications, or abilities to manage a public company. \nWhen evaluating the desirability of effecting our<|endoftext|>Business combination, we shall either (1)seek stockholder approval of our initial business combination at a meeting called for such purpose at which public stockholders may seek to convert their shares of common stock, regardless of whether they vote for or against the proposed business combination, into a portion of the aggregate amount then on deposit in the trust account, or (2)provide our stockholders with the opportunity to sell their shares to us by means of a tender offer (and thereby avoid the need for a stockholder vote) for an amount equal to their pro rata share of the aggregate amount then on deposit in the trust account, in each case subject to the limitations described herein; if our initial business combination is not consummated within 18 months of the closing of the Initial Public Offering, then our existence will terminate and we will distribute all amounts in the trust account to all of our public holders of shares of common stock; upon the consummation of the Initial Public Offering, $115.0million was placed into the trust account; and prior to our initial business combination, we may not issue additional shares of capital stock that would entitle the holders thereof to (i)receive funds from the trust account or (ii)vote on any initial business combination. \n\nIn particular: \nRestrictions relating to liquidating the trust account if we failed to consummate a business combination in the timeframes specified above could be amended, but only if we allowed all stockholders to redeem their shares in connection with such amendment; \n\n\n\n\nand \n\n\n\n\nand \n\n\n### Competition \nIn identifying, evaluating and selecting a target business for our initial business combination, we may encounter intense competition from other entities having a business objective similar to ours, including other blank check companies, venture capital firms, private equity groups and leveraged buyout funds, and operating businesses seeking strategic acquisitions. Our ability to acquire larger target businesses will be limited by our available financial resources, which could be reduced further because of our obligation to convert shares held by our public stockholders as well as any tender offer we conduct. These inherent limitations give others an advantage in pursuing the acquisition of a target business. \nFacilities \n\n### Employees \nWe have three executive officers, Peter Kuo as our chief executive officer, Timothy Chen as our chief financial officer and Ker Zhang as our Secretary. \n\nWe have registered our units, common stocks and warrants under the Exchange Act and have reporting obligations, including the requirement that we file annual, quarterly and current reports with the SEC. \nThese financial statements will need to be prepared in accordance with or reconciled to United States GAAP or IFRS as issued by the IASB. A particular target business identified by us as a potential business combination candidate may not have the necessary financial statements. To the extent that this requirement cannot be met, we may not be able to consummate our initial business combination with the proposed target business. \nWe may be required by the Sarbanes-Oxley Act to have our internal control over financial reporting audited for the fiscal year ending December31, 2021. A target company may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding the adequacy of their internal control over financial reporting. The development of the internal control over financial reporting of any such entity to achieve compliance with the Sarbanes-Oxley Act may increase the time and costs necessary to complete any such initial business combination. \nHowever, if our non-convertible debt issued within a three-year period or our total revenues exceed $1.0billion or the market value of our shares of common stock that are held by non-affiliates exceeds $700.0million on the last day of the second fiscal quarter of any given fiscal year, we would cease to be an emerging growth company as of the following fiscal year. \nWe will remain a smaller reporting company until the last day of the fiscal year in which (1)the market value of our common stock held by non-affiliates exceeds $250.0million as of the end of that years second fiscal quarter, or (2)our annual revenues exceeded $100.0million during such completed fiscal year and the market value of our common stock held by non-affiliates exceeds $700.0million as of the end of that years second fiscal quarter. \n### Legal Proceedings \n\nItem1A. \n### Risk Factors \nYou should consider carefully all of the risks described below, which we believe represent the material risks related to the offering, together with the other information contained in this Annual Report on Form 10-K, before making a decision to invest in our units. In that event, the trading price of our securities could decline and you could lose all or part of your investment. This Annual Report on Form 10-K also contains forward-looking statements that involve risks and uncertainties. \nRISKS ASSOCIATED WITH OUR BUSINESS \nWe are a newly formed early stage company with no operating history and, accordingly, you have no basis on which to evaluate our ability to achieve our business objective. \nWe are a newly formed early stage company with no operating results. Because we lack an operating history, you have no basis upon which to evaluate our ability to achieve our business objective, which is to complete our initial business combination with one or more target businesses. We have not engaged in any substantive discussions and we have no plans, arrangements or understandings with any prospective target business concerning a business combination and may be unable to complete our business combination. \nIf we are unable to consummate our initial business combination, our public stockholders may be forced to wait more than 18 months before receiving distributions from the trust account. \nWe may not be able to find a suitable target business and consummate our initial business combination within such time period. Additionally, the outbreak of the COVID-19 coronavirus pandemic may negatively impact businesses we may seek to acquire. Similarly, the outbreak of this pandemic, the measures being taken to counter it, and volatility in valuations in the financial markets that are resulting from the imposition of such measures and the pending health crisis, may make it harder for us to find a suitable target business and consummate our initial business combination. We have no obligation to return funds to investors prior to such date unless we consummate our initial business combination prior thereto or we seek to amend out amended and restated certificate of incorporation prior to the consummation of our initial business combination and only then in cases where investors have sought to convert their shares. Only after the expiration of this full time period will holders of our common stock be entitled to distributions from the trust account if we are unable to complete our initial business combination. \nOur search for a business combination, and any target business with which we ultimately consummate a business combination, may be materially adversely affected by the COVID-19 coronavirus pandemic and the status of debt and equity markets. \nOn January30, 2020, the World Health Organization declared the outbreak of the COVID- 19 coronavirus disease a Public Health Emergency of International Concern. On January31, 2020, U.S. COVID-19 could materially and adversely affect the business of any potential target business with which we consummate a business combination. \nIn addition, our ability to consummate a business combination may be dependent on the ability to raise equity and debt financing which may be impacted by COVID-19 and other events. \n\nWe will either (1)seek stockholder approval of our initial business combination at a meeting called for such purpose at which public stockholders may seek to convert their shares, regardless of whether they vote for or against the proposed business combination, into their pro rata share of the aggregate amount then on deposit in the trust account (net of taxes payable), or (2)provide our public stockholders with the opportunity to sell their shares to us by means of a tender offer (and thereby avoid the need for a stockholder vote) for an amount equal to their pro rata share of the aggregate amount then on deposit in the trust account (net of taxes payable), in each case subject to the limitations described elsewhere in this Annual Report on Form 10-K. Accordingly, it is possible that we will consummate our initial business combination even if holders of a majority of our public shares do not approve of the business combination. For instance, NYSE rules currently allow us to engage in a tender offer in lieu of a stockholder meeting but would still require us to obtain stockholder approval if we were seeking to issue more than 20% of our outstanding shares to a target business as consideration in any business combination. \nIf we determine to amend certain agreements made by our management team, many of the disclosures contained in this Annual Report on Form 10-K regarding those agreements would no longer apply. \nWe could seek to amend certain agreements with our management team disclosed in this Annual Report on Form 10-K without the approval of our stockholders, although we have no current intention to do so. For example, restrictions on our executives relating to the voting of securities owned by them, the agreement of our management team to remain with us until the closing of a business combination, the obligation of our management team to not propose certain changes to our organizational documents or the obligation of the management team and its affiliates to not receive any compensation in connection with a business combination could be modified without obtaining stockholder approval. Although stockholders would not be given the opportunity to redeem their shares in connection with such changes, in no event would we be able to modify the redemption or liquidation rights of our stockholders without permitting our stockholders the right to redeem their shares in connection with any such change. We will not agree to any such changes unless we believed that such changes were in the best interests of our stockholders (for example, if such a modification were necessary to complete a business combination). \nWe may issue shares of our capital stock to complete our initial business combination, which would reduce the equity interest of our stockholders and likely cause a change in control of our ownership. \nOur amended and restated certificate of incorporation will authorize the issuance of up to 100,000,000 shares of common stock, par value $0.0001 per share, and up to 1,000,000 shares of preferred stock, par value $0.0001 per share. As of the date of this Annual Report on Form 10-K, there will be 85,625,000 authorized but unissued shares of common stock and 1,000,000 authorized but unissued shares of preferred stock available for issuance (after appropriate reservation for the issuance of the shares underlying the private warrants and public warrants). Although we have no commitment as of the date of this Annual Report on Form 10-K, we may issue a substantial number of additional shares of common stock or shares of preferred stock, or a combination of common stock and preferred stock, to complete our initial business combination. The issuance of additional shares of common stock or preferred stock: may significantly reduce the equity interest of investors; \n\nHowever, the incurrence of debt could have a variety of negative effects, including: default and foreclosure on our assets if our operating revenues after our initial business combination are insufficient to repay our debt obligations; \nWe may be limited to the funds held outside of the trust account to fund our search for target businesses, to pay our tax obligations and to complete our initial business combination. \nAs of the date of the Annual Report on Form 10-K we have approximately $333,000 available to us outside the trust account to fund our working capital requirements. We may not have sufficient funds available with which to structure, negotiate or close our initial business combination. In such event, we would need to borrow funds from our insiders, officers or directors to operate or may be forced to liquidate. Our insiders, officers and directors are under no obligation to loan us any<|endoftext|>Section 404 of the Sarbanes-Oxley Act of 2002, or SOX 404. SOX 404 requires management to establish and maintain a system of internal control over financial reporting and annual reports on Form 10-K filed under the Securities Exchange Act of 1934, as amended, or the Exchange Act, to contain a report from management assessing the effectiveness of a companys internal control over financial reporting. Separately, under SOX 404, as amended by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, public companies that are large accelerated filers or accelerated filers must include in their annual reports on Form 10-K an attestation report of their regular auditors attesting to and reporting on managements assessment of internal control over financial reporting. Non-accelerated filers and smaller reporting companies, like us, are not required to include an attestation report of their auditors in annual reports. \nA report of our management is included under Item 9A. \nControls and Procedures below.We are a smaller reporting company and, consequently, are not required to include an attestation report of our auditor in our annual report. However, if and when we become subject to the auditor attestation requirements under SOX 404, we can provide no assurance that we will receive a positive attestation from our independent auditors. \nDuring its evaluation of the effectiveness of internal control over financial reporting as of December 31, 2020, managementidentified material weaknesses. These material weaknesses were associated with our lack of (i) appropriate policies and procedures to evaluate the proper accounting and disclosures of key documents and agreements, (ii) adequate segregation of duties with our limited accounting personnel and reliance upon outsourced accounting services and (iii) sufficient and skilled accounting personnel with an appropriate level of technical accounting knowledge and experience in the application of GAAP commensurate with our financial reporting requirements.We are undertaking remedial measures, which measures will take time to implement and test, to address these material weaknesses. There can be no assurance that such measures will be sufficient to remedy the material weaknesses identified or that additional material weaknesses or other control or significant deficiencies will not be identified in the future. If we continue to experience material weaknesses in our internal controls or fail to maintain or implement required new or improved controls, such circumstances could cause us to fail to meet our periodic reporting obligations or result in material misstatements in our financial statements, or adversely affect the results of periodic management evaluations and, if required, annual auditor attestation reports. Each of the foregoing results could cause investors to lose confidence in our reported financial information and lead to a decline in our share price. \nRisks Related to Our Relationship with Our Manager \nTermination of the management services agreement will not affect our managers rights to receive profit allocations and removal of our manager may cause us to incur significant fees. \nOur manager owns all of our allocation shares, which generally will entitle our manager to receive a profit allocation as a form of preferred distribution. In general, this profit allocation is designed to pay our manager 20% of the excess of the gains upon dispositions of our subsidiaries, plus an amount equal to the net income of such subsidiaries since their acquisition by our company, over an annualized hurdle rate. If our manager resigns or is removed, for any reason, it will remain the owner of our allocation shares. It will therefore remain entitled to all profit allocations while it holds our allocation shares regardless of whether it is terminated as our manager. If we terminate our manager, it may therefore be difficult or impossible for us to find a replacement to serve the function of our manager, because we would not be able to force our manager to transfer its allocation shares to a replacement manager so that the replacement manager could be entitled to a profit allocation. Therefore, as a practical matter, it may be difficult for us to replace our manager without its cooperation. If it becomes necessary to replace our manager and we are unable to replace our manager without its cooperation, we may be unable to continue to manage our operations effectively and our business may fail. \nIf we terminate the management services agreement with our manager, any fees, costs and expenses already earned or otherwise payable to our manager upon termination would become immediately due. Moreover, if our manager were to be removed and our management services agreement terminated by a vote of our board of directors and a majority of our common shares other than common shares beneficially owned by our manager, we would also owe a termination fee to our manager on top of the other fees, costs and expenses. In addition, the management services agreement is silent as to whether termination of our manager for cause would result in a termination fee; there is therefore a risk that the agreement may be interpreted to entitle our manager to a termination fee even if terminated for cause. The termination fee would equal twice the sum of the amount of the quarterly management fees calculated with respect to the four fiscal quarters immediately preceding the termination date of the management services agreement. As a result, we could incur significant management fees as a result of the termination of our manager, which may increase the risk that our business may be unable to meet its financial obligations or otherwise fail. \nMr. Ellery W. Roberts, our Chairman and Chief Executive Officer, controls our manager. If some event were to occur to cause Mr. Roberts (or his designated successor, heirs, beneficiaries or permitted assigns) not to control our manager without the prior written consent of our board of directors, our manager would be considered terminated under our agreement. \nOur manager and the members of our management team may engage in activities that compete with us or our businesses. \nAlthough our Chief Executive Officer intends to devote substantially all of his time to the affairs of our company and our manager must present all opportunities that meet our companys acquisition and disposition criteria to our board of directors, neither our manager nor our Chief Executive Officer is expressly prohibited from investing in or managing other entities. In this regard, the management services agreement and the obligation to provide management services will not create a mutually exclusive relationship between our manager and its affiliates, on the one hand, and our company, on the other. See Item 1 \nBusinessOur Manager for more information about our relationship with our manager and our management team. \nOur manager need not present an acquisition opportunity to us if our manager determines on its own that such acquisition opportunity does not meet our companys acquisition criteria. \nOur manager will review any acquisition opportunity to determine if it satisfies our companys acquisition criteria, as established by our board of directors from time to time. If our manager determines, in its sole discretion, that an opportunity fits our criteria, our manager will refer the opportunity to our board of directors for its authorization and approval prior to signing a letter of intent, indication of interest or similar document or agreement. Opportunities that our manager determines do not fit our criteria do not need to be presented to our board of directors for consideration. In addition, upon a determination by our board of directors not to promptly pursue an opportunity presented to it by our manager, in whole or in part, our manager will be unrestricted in its ability to pursue such opportunity, or any part that we do not promptly pursue, on its own or refer such opportunity to other entities, including its affiliates. If such an opportunity is ultimately profitable, we will have not participated in such opportunity. See Item 1 \nBusinessOur ManagerAcquisition and Disposition Opportunities for more information about our companys current acquisition criteria. \nOur Chief Executive Officer, Mr. Ellery W. Roberts, controls our manager and, as a result we may have difficulty severing ties with Mr. Roberts. \nUnder the terms of the management services agreement, our board of directors may, after due consultation with our manager, at any time request that our manager replace any individual seconded to our company, and our manager will, as promptly as practicable, replace any such individual. However, because Mr. Roberts controls our manager, we may have difficulty completely severing ties with Mr. Roberts absent terminating the management services agreement and our relationship with our manager. Further, termination of the management services agreement could give rise to a significant financial obligation of our company, which may have a material adverse effect on our business and financial condition. See Item 1 \nBusinessOur Manager for more information about our relationship with our manager. \nIf the management services agreement is terminated, our manager, as holder of the allocation shares, has the right to cause our company to purchase its allocation shares, which may have a material adverse effect on our financial condition. \nIf: (i) the management services agreement is terminated at any time other than as a result of our managers resignation, subject to (ii); or (ii) our manager resigns, our manager will have the right, but not the obligation, for one year from the date of termination or resignation, as the case may be, to cause our company to purchase the allocation shares for the put price. The put price shall be equal to, as of any exercise date: (i) if we terminate the management services agreement, the sum of two separate, independently made calculations of the aggregate amount of the base put price amount as of such exercise date; or (ii) if our manager resigns, the average of two separate, independently made calculations of the aggregate amount of the base put price amount as of such exercise date. If our manager elects to cause our company to purchase its allocation shares, we are obligated to do so and, until we have done so, our ability to conduct our business, including our ability to incur debt, to sell or otherwise dispose of our property or assets, to engage in certain mergers or consolidations, to acquire or purchase the property, assets or stock of, or beneficial interests in, another business, or to declare and pay distributions, would be restricted. These financial and operational obligations of our company may have a material adverse effect on our financial condition, business and results of operations. See Item 1 \nBusinessOur ManagerOur Manager as an Equity HolderSupplemental Put Provision for more information about our managers put right and our obligations relating thereto, as well as the definition and calculation of the base put price amount. \nIf the management services agreement is terminated, we will need to change our name and cease our use of the term 1847, which in turn could have a material adverse impact upon our business and results of operations as we would be required to expend funds to create and market a new name. \nOur manager controls our rights to the term 1847 as it is used in the name of our company. Our company and any businesses that we acquire must cease using the term 1847, including any trademark based on the name of our company that may be licensed to them by our manager under the license provisions of our management services agreement, entirely in their businesses and operations within 180 days of our termination of the management services agreement. The sublicense provisions of the management services agreement would require our company and its businesses to change their names to remove any reference to the term 1847 or any reference to trademarks licensed to them by our manager. This also would require us to create and market a new name and expend funds to protect that name, which may have a material adverse effect on our business and results of operations. \nWe have agreed to indemnify our manager under the management services agreement that may result in an indemnity payment that could have a material adverse impact upon our business and results of operations. \nThe management<|endoftext|>In September 2020 the Nominating, Corporate Governance and Compensation Committee awarded discretionary bonuses of (i) $245,000 to Mr.Howe and $75,000 to Mr. Ruiz, in each case payable over twelve months, for retention and as a reward for performance, and (ii) $40,000 to Mr. Barrett for retention and as a reward for performance. \n### Plan Awards \nThe objective of our long-term incentive program is to provide a long-term retention incentive for the named executive officers and others and to align their interests directly with those of our stockholders by way of stock ownership. Under our 2017 Plan, our board of directors or the Nominating, Corporate Governance and Compensation Committee has the discretion to determine whether equity awards will be granted to named executive officers and if so, the number of shares subject to each award. Both our \n2010 Plan (which expired in April of 2020) and 2017 Plan allow or allowed our board of directors or the Nominating, Corporate Governance and Compensation Committee to grant options and restricted stock units and other stock-based awards with respect to up to shares of our common stock, valued in whole or in part by reference to the fair market value of the stock. In most instances, these long-term grants vest over a multi-year basis. \nOur board of directors or the Nominating, Corporate Governance and Compensation Committee determines the recipients of long-term incentive awards based upon such factors as performance, the length of continuous employment, managerial level, any prior awards, and recruiting and retention demands, expectations and needs. All our employees are eligible for awards. Our board of directors or the Nominating, Corporate Governance and Compensation Committee grants such awards by formal action, which awards are not final until a stock option agreement is delivered by us and executed by both the Company and the employee. There is no set schedule for our board of directors or the Nominating, Corporate Governance and Compensation Committee to consider and grant awards. Our board of directors and the Nominating, Corporate Governance and Compensation Committee have the discretion to make grants whenever it deems it appropriate in our best interests. The Nominating, Corporate Governance and Compensation Committee has discretion to grant equity awards at any time. \nWe do not have any program, plan or practice in place to time option or other award grants with the release of material, non-public information and we do not release such information for the purpose of affecting the value of executive compensation. The exercise price of stock subject to options awarded under our plans is the fair market value of the stock on the date the grant is approved by our board of directors or the Nominating, Corporate Governance and Compensation Committee. Under the terms of each plan, the fair market value of the stock is the closing sales price of the stock on the date the grant is approved by our board of directors or the Nominating, Corporate Governance and Compensation Committee as reported by the NYSE American. \n### Other Compensation and Benefits \nWe have historically provided perquisites and other types of non-cash benefits on a very limited basis in an effort to avoid an entitlement mentality, reinforce a pay-for-performance orientation and minimize expense. Such benefits, when provided, can include additional health care benefits and additional life insurance. \nRetirement and Other Post-Termination Benefits \nOther than our 401(k) plan, employment agreements with our named executive officers and certain other employment agreements which provide for severance for termination without cause, we have not entered into any employment agreements that provide for a continuation of post-employment benefits. Our benefits plans are generally the same for all employees, and so as of the date of this amended report, the Nominating, Corporate Governance and Compensation Committee does not believe that any such plans in their present forms would continue post-employment, except as required by law (including with respect to COBRA). We do not currently maintain any other retirement or post-termination benefits plans. \n### Change in Control Severance Policy \nWe do not currently maintain any change in control severance plans or severance policies, except as provided in the executive employment agreements and the 2010 Plan and 2017 Plan, both of which are discussed in this section. Therefore, none of our named executive officers will receive any cash severance payments in the event we undergo a change in control, unless their employment agreement otherwise provides. \nInsurance \nAll full-time employees, including the named executive officers, are eligible to participate in our standard medical, dental and life insurance plans. The terms of such benefits for the named executive officers are generally the same as those for all other company employees, with the exception of the level of life insurance coverage. We pay approximately 95% of the annual health insurance premium with employees paying the balance through payroll deductions. We pay for up to $1,000,000 of basic life insurance and AD&D insurance for our CEO, CFO, COO and General Counsel. All other full-time employees can elect basic life insurance and AD&D insurance coverage equal to their annual salary, up to $50,000, paid by us. \n401(k) \nOur employees can participate in a 401(k) plan, which is a qualified defined contribution retirement plan, sponsored by the company. Participants are provided the opportunity to make salary reduction contributions to the plan on a pre-tax basis. We have the ability to make discretionary matching contributions and discretionary profit sharing contributions to such plan. Our practice has been to match participants contributions up to the first four percent of their annual earnings. Our match is fully vested when made. We suspended our match throughout 2019 and resumed it in 2020 except for a two month suspension in May and June 2020. \n### Other Benefits \nWe seek to maintain an open and inclusive culture in our facilities and operations among executives and other company employees. Thus, we do not provide executives with separate dining or other facilities, nor do we have programs for providing personal-benefit perquisites to executives, such as defraying the cost of personal entertainment or family travel. Our basic health care and other insurance programs are generally the same for all eligible employees, including the named executive officers. \nSummary Compensation Table \nThe following table summarizes all compensation recorded by us in each of the last two completed fiscal years for: all individuals serving as our principal executive officer or acting in a similar capacity during the year ended December 31, 2020; our two most highly compensated named executive officers at December 31, 2020 whose annual compensation exceeded $100,000; and up to two additional individuals for whom disclosure would have been made in this table but for the fact that the individual was not serving as a named executive officer of our company at December 31, 2020. \n(1) \nThe value attributable to any stock awards is computed in accordance with FASB ASC Topic 718. The assumptions made in the valuations of the stock awards are included in Note 13 of the notes to our consolidated financial statements for the year ended December 31, 2020. \nOn March 1, 2012, we entered into employment agreements with each of Messrs. Howe and Ruiz. Mr. Barrett does not have an employment agreement and his compensation is set by the Nominating, Corporate Governance and Compensation Committee. \n\nThe employment agreements entered into by Messrs. Howe and Ruiz, each referred to as an executive, have an initial term of one year, after which each executives employment agreement automatically renews for additional one-year periods on the same terms and conditions, unless either party to the agreement exercises the respective termination rights available to such party in the agreement. \nThe employment agreements currently provide for a minimum annual base salary of $425,000 for Mr. Howe and $275,000 for Mr. Ruiz, however, each of Messers. Howe and Ruiz agreed to temporary base salary reductions to $212,500 and $200,750, respectively, under the Temporary Salary Reduction Plan described above. The employment agreements require our company to compensate the executives and provide them with certain benefits if their employment is terminated. The compensation and benefits the executives are entitled to receive upon termination of employment vary depending on whether their employment is terminated: by us for cause (as defined in the employment agreements); by us without cause, or by the executive for good reason (as defined in the employment agreements); due to death or disability; or by the executive without good reason. \nIn the event of a termination by our company without cause or a termination by the executive for good reason (including in the event of a change of control), the executive would be entitled to receive the following: his earned but unpaid basic salary through the termination date, plus a portion of the executives bonus based upon the bonus he would have earned in the year in which his employment was terminated, pro-rated for the amount of time employed by us during such year and paid on the original date such bonus would have been payable; an amount payable over the 12-month period following termination equal to one times the sum of his basic salary at the time of termination, plus a termination bonus equal to the bonus paid to the executive during the four fiscal quarters prior to the date of termination (except that if a target bonus has been established for Mr. Howe, each such persons termination bonus is equal to his target bonus for the fiscal year in which the termination occurs, increased or decreased pursuant to actual performance versus targeted performance in the then current plan measured as of the end of the calendar month preceding the termination date), or in the event of a change of control, the greater of the relevant calculation above or the bonus paid to the executive during the four fiscal quarters prior to the change of control; any other amounts or benefits owing to the executive under our then-applicable employee benefit, long-term incentive, or equity plans and programs, within the terms of such plans, payable over the 12-month period following termination; and benefits (including health, life, and disability) as if the executive was still an employee during the 12-month period following termination. \nFinally, in the event of a termination without cause by our Company, with good reason by the executive, or following a change of control (as defined in the employment agreements), any equity award held by the executive will immediately and fully vest and become exercisable throughout the full term of such award as if the executive were still employed by us. In the event of a termination by us with cause, Messrs. Ruiz and Howe would be entitled to receive the earned but unpaid portion of such executives base salary through the date of termination. \nRuiz upon the death or permanent disability of such executive, the executive would be entitled to receive the earned but unpaid portion of such executives base salary through the date of termination, the earned but unpaid portion of any vested incentive compensation under and consistent with plans adopted by us prior to the date of termination, and over the 12 months following the date of termination an amount equal to 20% base salary at the time of termination for each year of employment with us, capped at 100% of the base salary. \nHowe upon the death or permanent disability of such executive, the executive would be entitled to receive the earned but unpaid portion of such executives base salary through the date of termination, any other amounts or benefits owing to the executive under any of our then-applicable employee benefit, long-term incentive or equity plans and \n11 programs, and over the 12 months following the date of termination an amount equal to 20% base salary at the time of termination for each year of employment with us, capped at 100% of the base salary. \nRuiz without good reason, such executive is entitled to receive the earned but unpaid portion of such executives base salary through the date of termination, and the earned but unpaid portion of any vested incentive compensation under<|endoftext|>Independence in BGC Partners Definitive Proxy Statement on Schedule 14A for its 2020 Annual Meeting of Stockholders filed on April28, 2020 for a description of these and other approved arrangements. \nThe following is a description of certain relationships and transactions that have existed or that we have entered into with our directors, executive officers, or stockholders who are known to us to beneficially own more than five percent of our ClassA common stock or Class B common stock, including Cantor, and their immediate family members as well as certain other transactions. The following summary does not purport to describe all the terms of such agreements or transactions and is qualified in its entirety by reference to the complete text of these agreements, to the extent filed as exhibits to our Annual Report on Form 10-K, this Amendment No.1 to such Annual Report filed on Form 10-K/A, and our other filings with the SEC. We urge you to read the full text of these agreements. \n### Separation, Initial Public Offering, and Spin-Off \nSeparation and Distribution Agreement \nOn December13, 2017, prior to the closing of the IPO, BGC, BGC Holdings, BGC U.S. OpCo, Newmark, Newmark Holdings, Newmark OpCo and, solely for the provisions listed therein, Cantor and BGC Global OpCo entered into a separation and distribution agreement (as amended on November8, 2018 and amended and restated on November23, 2018, the Separation and Distribution Agreement). The Separation and Distribution Agreement sets forth the agreements among BGC, Cantor, Newmark and their respective subsidiaries regarding, among other things: the principal corporate transactions pursuant to which BGC, BGC Holdings and BGC U.S. OpCo and their respective subsidiaries (other than the Newmark group (defined below), the BGC group) transferred to Newmark, Newmark Holdings and Newmark OpCo and their respective subsidiaries (the Newmark group) the assets and liabilities of the BGC group relating to BGCs Real Estate Services business (the Separation); future access to information, records and personnel necessary or appropriate to comply with regulatory requests or inquiries, for the preparation of financial statements or tax returns, or to conduct litigation; and other agreements governing the relationship between BGC, Newmark and Cantor. \n### Initial Public Offering \nIn December 2017, we completed our IPO of 23,000,000 shares of ClassA common stock (the IPO). Prior to the IPO, we were a wholly owned subsidiary of BGC Partners. We received approximately $295.4 million in aggregate net proceeds from the IPO, all of which we used to partially repay indebtedness under a certain term loan that we assumed from BGC Partners prior to the closing of our IPO. \nNew Newmark \nTo facilitate tax-free exchanges of the Newmark Holdings exchangeable limited partnership interests, Cantor has a one-time right, exercisable at any time after the second anniversary of the Spin-Off and otherwise subject to preserving the tax-free treatment of the Spin-Off to BGC Partners, at Newmark Holdings expense to (1)incorporate, or cause the incorporation of, a newly formed, wholly owned subsidiary of ours (which we refer to as New Newmark), (2)incorporate, or cause the incorporation of, a newly formed, wholly owned subsidiary of New Newmark (which we refer to as New Newmark Sub) and (3)cause the merger of New Newmark Sub with us, with the surviving corporation being a wholly owned subsidiary of New Newmark. In connection with such a merger, our ClassA common stock and Class B common stock will each hold equivalent common stock in New Newmark, with identical rights to the applicable class of shares held prior to such merger. As a condition to such merger, we will have received an opinion of counsel, reasonably satisfactory to our Audit Committee, to the effect that such merger will qualify as a reorganization within the meaning of Section368(a) of the Code. Cantor will indemnify us to the extent that we incur any material income taxes as a result of the transactions related to such merger. \n### Indemnification \nNewmark OpCo agreed to indemnify, defend and hold harmless the Cantor group, the BGC Partners group and the Newmark group (other than Newmark OpCo and its subsidiaries) and each of their respective directors, officers, general partners, managers and employees, from and against all liabilities to the extent relating to, arising out of or resulting from: the transferred liabilities; the failure of any member of the Newmark group or any other person to pay, perform or otherwise promptly discharge any of the transferred liabilities in accordance with their terms, whether prior to, at or after the Separation; any breach by any member of the Newmark group of the Separation and Distribution Agreement or any of the ancillary agreements, other than the transition services agreement or the administrative services agreement; except to the extent relating to an excluded liability, any guarantee, indemnification or contribution obligation, surety bond or other credit support agreement or arrangement for the benefit of any member of the Newmark group by any member of the BGC Partners group that survives following the Separation; and any untrue statement or alleged untrue statement of a material fact in our registration statement on Form S-1 with respect to our IPO other than statements made explicitly in the name of a member of the BGC Partners group (including the reasons of the Board of Directors of BGC Partners for the Separation) or specifically relating to the BGC Partners group or the BGC Partners business. \nBGC U.S. OpCo and BGC Global OpCo agreed to indemnify, defend and hold harmless the Cantor group, the Newmark group and the BGC Partners Group (other than BGC U.S. OpCo, BGC Global OpCo and their respective subsidiaries) and each of their respective directors, officers, general partners, managers and employees from and against all liabilities to the extent relating to, arising out of or resulting from: the excluded liabilities; the failure of any member of the BGC Partners group or any other person to pay, perform or otherwise promptly discharge any of the excluded liabilities in accordance with their terms, whether prior to, at or after the Separation; any breach by any member of the BGC Partners group of the Separation and Distribution Agreement or any of the ancillary agreements, other than the transition services agreement; except to the extent relating to a transferred liability, any guarantee, indemnification or contribution obligation, surety bond or other credit support agreement or arrangement for the benefit of any member of the BGC Partners group by any member of the Newmark group that survives following the Separation; and any untrue statement or alleged untrue statement of a material fact in our registration statement on Form S-1 with respect to our IPO, but only with respect to statements made explicitly in the name of a member of the BGC Partners group (including the reasons of the Board of Directors of BGC Partners for the Separation) or specifically relating to the BGC Partners group or the BGC Partners business. \nThe Separation and Distribution Agreement specified procedures with respect to claims subject to indemnification and related matters. \n### Employee Matters \nIn general, any employee of BGC Partners or its subsidiaries primarily engaged in the conduct of the Newmark business immediately prior to the Separation, except those employees employed by BGC Partners primarily in corporate or executive level functions, were transferred to us. As promptly as practicable following each fiscal quarter, our management will provide a report to our Audit Committee specifying all of the founding partners who have been terminated by us. Our management will also give the Committee notice prior to such termination if the capital account underlying the Newmark Holdings founding partner interests held by a founding partner or, in the case of a series of related terminations, by a group of founding partners, exceeds $2.0 million on the date of termination. \nIn connection with the Spin-Off, the compensation committee of the board of directors of BGC Partners had the exclusive authority to determine the treatment of restricted stock awards and RSU awards outstanding under the BGC Equity Plan. BGC Partners restricted stock awards participated in the distribution as if such holder held unrestricted shares of BGC Partners common stock, and following the Spin-Off, any shares of Newmark common stock issued in respect of restricted BGC Partners common stock remain subject to any vesting, lapse or forfeiture restrictions applicable to the restricted BGC Partners shares prior to the Spin-Off. RSU awards outstanding under the BGC Equity Plan were adjusted so that each holder of a BGC Partners RSU award shall continue to hold a BGC RSU award covering BGC Partners ClassA common shares, but also received a Newmark RSU award covering Newmark ClassA common shares on an as distributed basis in order to reflect the impact of the Spin-Off on the pre-Spin-Off BGC Partners RSU awards. Such RSUs shall generally have the same terms, including vesting terms, as the pre-Spin-Off BGC Partners RSU awards, subject to any adjustments made by the compensation committee of the BGC Partners board of directors. \n### Exchange Agreement \nIn connection with the Separation on December13, 2017, we entered into the exchange agreement, which provides BGC Partners, Cantor, CFGM and any other qualified Class B Holder entitled to hold Class B common stock under our certificate of incorporation with the right to exchange at any time and from time to time, on a one-to-one basis, shares of our ClassA common stock now owned or subsequently acquired by such persons for shares of our Class B common stock, up to the number of shares of Class B common stock that are authorized but unissued under our certificate of incorporation. Our Audit Committee and Board of Directors have determined that the exchange agreement is in the best interests of Newmark and its stockholders because, among other things, it will help ensure that Cantor retains its exchangeable limited partnership units in Newmark Holdings, which is the same partnership in which Newmarks partner employees participate, thus continuing to align the interests of Cantor with those of the partner employees. \nThe Spin-Off \nOn November30, 2018, BGC completed the Spin-Off to its stockholders of all of the shares of our common stock owned by BGC as of immediately prior to the effective time of the Spin-Off, with shares of our ClassA common stock distributed to the holders of shares of BGCs ClassA common stock (including directors and executive officers of BGC Partners) of record as of the close of business on November23, 2018 (the Record Date), and shares of our Class B common stock distributed to the holders of shares of BGCs Class B common stock (consisting of Cantor and CFGM of record as of the close of business on the Record Date). \nIn the aggregate, BGC distributed 131,886,409 shares of our ClassA common stock and 21,285,537 shares of our Class B common stock to BGCs stockholders in the Spin-Off. These shares of our common stock collectively represented approximately 94% of the total voting power of our outstanding common stock and approximately 87% of the total economics of our outstanding common stock in each case as of the Spin-Off Date. \nOn November30, 2018, BGC Partners also caused its subsidiary, BGC Holdings, to distribute pro rata all of the 1,458,931 exchangeable limited partnership units of Newmark Holdings held by BGC Holdings immediately prior to the effective time of the BGC Holdings distribution to its limited partners entitled to receive distributions on their BGC Holdings units (including Cantor and executive officers of BGC) who were holders of record of such units as of the Record Date. The Newmark Holdings units distributed to BGC Holdings partners in the BGC Holdings distribution are exchangeable for shares of Newmark ClassA common stock, and in the case of the 449,917 Newmark Holdings units received by Cantor also into shares of Newmark Class B common stock, at the applicable exchange ratio (subject to adjustment). \nFollowing the Spin-Off and the BGC Holdings distribution, BGC Partners ceased to be our controlling stockholder, and BGC and its subsidiaries no longer held any shares of our common stock or other equity interests in us or our subsidiaries. \nAmended and Restated Newmark Holdings Limited<|endoftext|>Results of operations and financial condition of the Company. Expectations of future financial condition and results of operations are based upon current business plans and may change. The discussion should be read in conjunction with the audited financial statements and notes thereto. \nIn this Report, we may rely on and refer to information regarding our industry which comes from market research reports, analyst reports and other publicly available information. \n\nCompany, we \n, us \n, our, \n### Camber and \nCamber Energy, Inc. refer specifically to Camber Energy, Inc., and our consolidated subsidiaries: CE Operating, LLC, an Oklahoma limited liability company, which is wholly-owned, C E Energy LLC, a Texas limited liability company which is wholly-owned ( \nCE \n) and Elysium Energy, LLC, a Nevada limited liability which is 30% owned (25% acquired February 3, 2020 and 5% acquired June 25, 2020). \nCertain abbreviations and oil and gas industry terms used throughout this Annual Report are described and defined in greater detail above under Glossary of Oil and Natural Gas Terms on page 1 of this Report, and readers are encouraged to review that section. \n\n\n### SEC or the \nand \n\nPART I \nITEM 1. BUSINESS. \n### General \nCamber Energy, Inc., a Nevada corporation, is based in Houston, Texas. We are currently primarily engaged in the acquisition, development and sale of crude oil, natural gas and natural gas liquids from various known productive geological formations, including the Cline shale and upper Wolfberry shale in Glasscock County, Texas. Incorporated in Nevada in December 2003 under the name Panorama Investments Corp., the Company changed its name to Lucas Energy, Inc., effective June 9, 2006, and effective January 4, 2017, the Company changed its name to Camber Energy, Inc. After the divestiture of our South Texas properties during fiscal 2019, as discussed in further detail below under Mid-Continent Acquisition and Divestiture, we initiated discussions with several potential acquisition and merger candidates to diversify our operations. \nPursuant to those discussions on July 8, 2019, we acquired Lineal Star Holdings, LLC ( \n### Lineal \n) pursuant to the terms of an Agreement and Plan of Merger dated as of the same date (the \n\n### Lineal Merger or the \nLineal Acquisition \n), by and between Lineal, Camber, Camber Energy Merger Sub 2, Inc., Cambers wholly-owned subsidiary ( \n### Merger Sub \n), and the Members of Lineal (the \nLineal Members \n). \n### Series E Preferred Stock \n\nSeries F Preferred Stock \n), as discussed in greater detail below under Lineal Acquisition and Divestiture. \nOn December 31, 2019, the Company entered into, and closed the transactions contemplated by a Preferred Stock Redemption Agreement, by and between the Company, Lineal and the holders of the Companys Series E Preferred Stock and Series F Preferred Stock (the \n### Preferred Holders \n). Additionally, all of the Series E Preferred Stock and Series F Preferred Stock of the Company were automatically cancelled and deemed redeemed by the Company and the Series F Holder waived and forgave any and all accrued dividends on the Series F Preferred Stock. See also Lineal Acquisition and Divestiture below. \nOn February 3, 2020, the Company entered into an Agreement and Plan of Merger (as amended to date, the \n### Merger Agreement \n( \nViking \n). The Merger Agreement provides that a newly-formed wholly-owned subsidiary of the Company ( \n### Merger Sub \n) will merge with and into Viking (the \nMerger \n), with Viking surviving the Merger as a wholly-owned subsidiary of the Company, as described in greater detail below under Viking Plan of Merger. \nThe Company anticipates raising additional financing to complete acquisitions following the closing of the Merger, which may be through the sale of debt or equity. As described below, the Merger is subject to various closing conditions which may not be met pursuant to the contemplated timeline, if at all. \n### Mid-Continent Acquisition and Divestiture \nOn December 30, 2015, the Company entered into an Asset Purchase Agreement (as amended from time to time, the \nAsset Purchase Agreement \n) to acquire, from twenty-three different entities and individuals (the \n### Sellers \n), working interests in producing properties and undeveloped acreage (the \nAcquisition \n), which acquisition transaction was completed on August 25, 2016. The assets acquired include varied interests in two largely contiguous acreage blocks in the liquids-rich Mid-Continent region. In connection with the closing of the acquisition, we assumed approximately $30.6 million of commercial bank debt, issued 417 shares of common stock to certain of the Sellers, issued 552,000 shares of Series B Preferred Stock to one of the Sellers and its affiliate, and paid $4,975,000 in cash to certain of the Sellers. The effective date of the Acquisition was April 1, 2016. \nOn July 12, 2018, the Company entered into an Asset Purchase Agreement (as amended, the \n### Sale Agreement \n\nN&B Energy \nAzar II, the Companys former Chief Executive Officer and former director, and Donnie B. Seay, the Companys former director (each of which were Sellers). Pursuant to the Sale Agreement, which closed September 26, 2018, effective August 1, 2018, the Company sold to N&B Energy a substantial portion of its assets, including all of the assets acquired pursuant to the Acquisition and certain other assets, other than the production payment and overriding royalty interests discussed below (the \n### Disposed Assets \n). In consideration for the Disposed Assets, N&B Energy agreed to pay the Company $100 in cash, to assume the Companys liabilities and contractual obligations in connection with the Disposed Assets (including lease and bonus payments), to assume all of the Companys obligations and debt owed under its outstanding loan agreement with International Bank of Commerce ( \nIBC Bank \n\n\n### Assumption Agreement \n) with IBC Bank; \nCE Operating \nN&B Energy; Mr. Azar; RAD2 Minerals, Ltd., an entity owned and controlled by Mr. Azar ( \n### RAD2 \n); Mr. Seay; and DBS Investments, Ltd., an entity owned and controlled by Mr. Seay ( \nDBS \n). \n### Guarantors \n\nIBC Obligations \n). Finally, pursuant to the Assumption Agreement, IBC Bank released and forever discharged the Company and CE Operating and each of their current and former officers, directors, and stockholders, from all covenants, agreements, obligations, claims and demands of any kind, whether in law or at equity, which IBC Bank then had, arising out of or related to the amounts which the Company owed to IBC Bank under the Loan Agreement or mortgages and/or under such documents or agreements, and further agreed to release the lien which IBC Bank then held on certain of the Companys properties located in west Texas. \nOn September 26, 2018, the transactions contemplated by the Sale Agreement closed and N&B Energy assumed all of the IBC Obligations (pursuant to the Assumption Agreement) and paid the Company $100 in cash, and the Company transferred ownership of the Disposed Assets to N&B Energy. \nNotwithstanding the sale of the Disposed Assets, the Company retained its assets in Glasscock and Hutchinson Counties, Texas and also retained a 12.5% production payment (effective until a total of $2.5 million has been received, of which no funds have been received to date) and a 3% overriding royalty interest, in its then existing Okfuskee County, Oklahoma asset; \n\n\n### Lineal Acquisition and Divestiture \n\nExchange Agreement \n), by and between the Company and an accredited institutional investor, Discover Growth Fund LLC, who has funded the Company over the past several years ( \n### Discover \n); \nDiscover Growth \n\n### Funding Agreement \n\nJuly 2019 Lineal Note \n). \n\n\n### Series D Designation \n); \n\n### Series E Designation \n); \n\n### Series F Designation \n\n\n). \n\nSeries C Designation \n). \n\n\n\n\n\n\n### Evercon \n). The acquisition required Lineal to assume certain liabilities and provide working capital for a period of six months in an amount of $50,000 per month to Evercon. \n\n### Loan \n). \nSubsequent to the closing date of the Lineal Plan of Merger, for various reasons, the parties to such Lineal Plan of Merger were unable to complete a further acquisition or combination which would allow the post-Merger combined company to meet the initial listing standards of the NYSE American. This was a requirement to the Company having to seek shareholder approval for the terms of the Series E Preferred Stock (including the voting rights (i.e., the right, together with the Series F Preferred Stock, to vote 80% of the Companys voting shares) and conversion rights (i.e., the right to convert into between 67-70% of the Companys post-shareholder approval capitalization) associated therewith). Consequently, and because no definitive timeline was able to be established for when the Company believed it would meet the NYSE American initial listing standards and consequently, when shareholder approval would be sought or received for the terms of the Series E Preferred Stock and Series F Preferred Stock, the Preferred Holders and the Company determined it was in their mutual best interests to unwind the Lineal Merger. \nIn order to affect such unwinding, on December 31, 2019, we, Lineal (and its subsidiaries) and the Preferred Holders entered into, and closed the transactions contemplated by, a Preferred Stock Redemption Agreement (the \n\n### Redemption or the \nLineal Divestiture \n). \nIn connection therewith, the Company redeemed the Companys issued in connection with the Lineal Merger and ownership of 100% of Lineal was transferred back to the Preferred Holders, and all of the Series E Preferred Stock and Series F Preferred Stock of the Company outstanding were cancelled through the redemption. \n\n\n); \nLineal Note No. 2 \n); \n\n### GAAP \n). \nViking Plan of Merger \nOn February 3, 2020, the Company and Viking entered into the Merger Agreement. \n### Effective Time \n\nViking Common Stock \nSpecifically, the percentage of shares retained by Camber shareholders (initially 80%, the \n### Camber Percentage \n) is adjusted as follows: (i) for each (A) $500,000 in Camber unencumbered cash (without any associated debt) available for use by the combined company (the \nCombined Company \n) after the Effective Time, with a permitted use being to, among other things, pay debt obligations of Viking outside of Vikings Ichor division or Elysium division, which comes from equity sold by Camber for cash from February 3, 2020, through the Effective Time, which is not contingent or conditional upon the closing of the Merger (the \n### Camber Surplus Cash \n), or (B) $500,000 in other unencumbered assets acquired by Camber after February 3, 2020 and prior to closing without increasing Cambers liabilities (the \nOther Camber Surplus Assets \n), the Camber Percentage will increase by an incremental 0.5% (a \n### Camber Percentage Increase \n); and (ii) for each additional $500,000 in Viking unencumbered cash (without any associated debt) for use by the Combined Company after the Effective Time which is not contingent or conditional upon the closing of the Plan of Merger, with a permitted use being to, among other things, pay debt obligations of Viking outside of Vikings Ichor division or Elysium division in excess of $500,000 at Closing, which comes from equity sold by Viking for cash from February 3, 2020 through the Effective Time, the Camber Percentage will decrease by an incremental 0.5% (a \nCamber Percentage Decrease \n). The aggregate Camber Percentage Increase or Camber Percentage Decrease shall not exceed 5% pursuant to this particular section of the Merger Agreement, and neither party will raise capital from the other partys existing shareholders without the prior written consent of such other party. \n(iii) by either Viking or the Company if the Merger shall not have been consummated on or before September 30, 2020, provided that the Company or Viking shall have the right to extend such date from time to time, until up to December 31, 2020, in the event that the Company has not fully resolved SEC comments on the Form S-4 (a preliminary draft of which has previously been filed) or other SEC filings related to the Merger, and Camber is responding to such comments in a reasonable fashion, subject to certain exceptions; (v) by the Company if Viking is unable to obtain the affirmative vote of its stockholders for approval of the Merger; (vi) by Viking if the Company is unable to obtain the affirmative vote of its stockholders required pursuant<|endoftext|>Of outstanding stock options and RSU awards, assuming the vesting acceleration took place on December31, 2020. For a description of the potential vesting acceleration provisions in the 2011 Plan and the 2007 Plan, see Description of Compensation ArrangementsEquity Compensation Arrangements above. \n(3) \nThe value of stock option and RSU award vesting acceleration is based on the closing price of $165.05 per ordinary share on December31, 2020, minus, in the case of stock options, the exercise price of the unvested stock option shares subject to acceleration. \n### Pay Ratio Disclosure \nUnder SEC rules, we are required to calculate and disclose the annual total compensation of our median employee, as well as the ratio of the annual total compensation of our median employee as compared to the annual total compensation of our CEO, or our CEO pay ratio. Consistent with the process adopted for 2019, to identify our median employee for 2020, we used the following methodology: \nTo determine our total population of employees, we included all full-time, part-time, regular and temporary employees as of October1, 2020. \nTo identify our median employee from our employee population, we calculated the annual target amount of each employees 2020 base salary (using a reasonable estimate of the hours worked and no overtime for hourly employees) and bonus or commission, as applicable, and added the estimated value of all equity awards granted during 2020. For purposes of base salaries, bonuses and commissions, we used an estimate based on the rates in effect on October1, 2020. To estimate the value of stock options, we multiplied the number of shares subject to each stock option by the estimated per share Black-Scholes value based on assumptions disclosed in our 2020 Annual Report on Form \n10-K, and to estimate the value of other equity awards, we used the same methodology we use for reporting the value of equity awards granted to our NEOs in our Summary Compensation Table. \nIn making this determination, we annualized the base salaries, bonuses and commissions of employees who were employed by us for less than the entire calendar year. \nCompensation paid in foreign currencies was converted to U.S. dollars based on the average daily exchange rates for the year to date period ending on October1, 2020. \nUsing this approach, we determined our median employee and then calculated the annual total compensation of this employee for 2020 in accordance with the requirements of the Summary Compensation Table. \nFor 2020, the median of the annual total compensation of our employees (other than our CEO) was $234,935.46 and the annual total compensation of our CEO, as reported in our Summary Compensation Table, was $12,573,300. Based on this information, the ratio of the annual total compensation of our CEO to the median of the annual total compensation of all employees was 54 to 1. \n\n\n### DIRECTOR COMPENSATION \nNon-Employee \nDirector Compensation Policy \nPursuant to our non-employee director compensation policy, or director compensation policy, each non-employee director was entitled to receive the following cash compensation for board services, as applicable, for 2020: a $60,000 annual retainer for service as a member of our board of directors (paid quarterly); a supplemental $50,000 annual retainer for service as the Lead Independent Director (paid quarterly); a supplemental annual retainer for the chairs of the following board committees in the following amounts: $25,000 for the chairperson of the audit committee, $22,500 for the chairperson of the compensation committee, $20,000 for the chairperson of the nominating and corporate governance committee and $22,500 for the chairperson of the transaction committee (each paid quarterly); and a supplemental annual retainer for each member of the following board committees other than the chairs, in the following amounts: $15,000 for service as a member of the audit committee, $12,500 for service as a member of the compensation committee, $10,000 for service as a member of the nominating and corporate governance committee and $12,500 for service as a member of the transaction committee (each paid quarterly). \nOur director compensation policy was originally approved by our board of directors in May 2013 and has been amended as follows: in August 2013 to, among other things, provide for cash retainers for the chairperson and members of the transaction committee; in May 2014 to provide for compensation to our Lead Independent Director and revise the number of initial and continuing equity grants; in October 2014 to provide for a tax equalization payment on any Irish tax that may be paid on company reimbursement of reasonable travel, lodging and meal expenses related to service on the board of directors; in April 2015 to revise the number of initial and continuing equity grants; in May 2016 to increase the annual retainer for service as a member of our board of directors, increase the annual retainer for service as our Lead Independent Director and revise the number of initial and continuing RSU awards; in May 2018 to replace the fixed number of initial and continuing option and RSU awards with a specified grant date dollar value; and in July 2020 to revise the vesting schedule for continuing option grants and provide an annual limit on compensation payable to a director. \nThe director compensation policy currently provides for the automatic grant of equity awards to our non-employee directors over the period of their service on our board of directors. Any individual who first becomes a non-employee director is automatically granted the following: (a)an initial option to purchase ordinary shares that vests with respect to one-third of the shares on the first anniversary of the date of such individuals election or appointment to the board of directors, and, with respect to the balance, in a series of 24 successive equal monthly installments thereafter and (b)an initial RSU award that vests in equal annual installments over three years from the date of such individuals election or appointment to the board of directors, subject in each case to the non-employee directors continuous service through such dates. The grant date value of the initial option together with the initial RSU award is equal to approximately $600,000, with generally 50% of the value delivered as an initial option and 50% of the value delivered as an initial RSU award, using the applicable ratio of stock option grants to RSUs that is approved by the compensation committee on an annual basis, with the actual share amounts for the initial option and initial RSU award to be determined by applying the value methodology used by the compensation committee for determining equity grants for employees generally. If a non-employee director does not stand for reelection at an annual general meeting of our shareholders in the year in which his or her term expires or otherwise resigns effective at an annual general meeting of our shareholders and, in either case, the non-employee directors continuous service terminates at such meeting, then effective as of the date of such meeting, any unvested portion of the initial option award will become vested and exercisable, and any unvested portion of the initial RSU award will become vested, in each case with respect to the portion of the award that would have vested through the anniversary of the awards vesting commencement date in the year of that meeting. \nUnder the current director compensation policy, each continuing non-employee director will automatically be granted the following continuing grants in connection with each annual general meeting: (a)a continuing option to purchase ordinary shares that vests in full on the first anniversary of the annual general meeting of our shareholders in the year the option is granted and (b)a continuing RSU award that vests in full on the first anniversary of the date of the annual general meeting of our shareholders with respect to which the RSU award is granted, subject in each case to the non-employee directors continuous service through such dates. The grant date value of the continuing option together with the continuing RSU award is equal to approximately $400,000, with generally 50% of the value delivered as a continuing option and 50% of the value delivered as a continuing RSU award, using the applicable ratio of stock option grants to RSUs that is approved by the compensation committee on an annual basis, with the actual share amounts for the continuing option and continuing RSU award to be determined by applying the value methodology used by the compensation committee for determining equity grants for employees generally. If a director is elected or appointed as a director for the first time other than at an annual general meeting, in order to receive automatic continuing grants, the director must have first joined the board at least four calendar months before the date of the applicable annual general meeting. If a director is elected or appointed as a director for the first time at an annual general meeting, the director will not receive automatic continuing grants for such meeting. If a non-employee director does not stand for reelection at an annual general meeting of our shareholders in the year in which his or her term expires or otherwise resigns effective at an annual general meeting of our shareholders and, in either case, the non-employee directors continuous service terminates at such meeting, then effective as of the date of such meeting, any unvested portion of the continuing option award will become vested and exercisable in full and any unvested portion of a continuing RSU award will become vested in full. In any case, the aggregate value of all compensation granted or paid, as applicable, to any non-employee director with respect to any period commencing on the date of the annual general meeting of our shareholders for a particular year and ending on the day immediately prior to the date of the annual general meeting of our shareholders for the subsequent year, including equity awards granted and cash fees paid by us to the non-employee director, will not exceed (i) $750,000 in total value or (ii)in the event such non-employee director is first appointed or elected to the board during that same period, $1,350,000 in total value. \nThe automatic initial and continuing options and RSU awards are granted under the Amended and Restated 2007 \n### Non-Employee \nDirectors Stock Award Plan, or 2007 Directors Plan. \nThe grant date of these equity awards is the second trading day following the filing date of our next quarterly or annual report filed under the Exchange Act that occurs after the date the director first joined our board of directors (with respect to the automatic initial option and RSU awards) or the date of our annual general meeting (with respect to the automatic continuing option and RSU awards). The other terms and conditions applicable to equity awards made to our non-employee directors are included below under the heading \n\nIn addition, our non-employee directors are reimbursed for travel and other reasonable expenses incurred in attending board or committee meetings, as are our employees who serve as directors. If any reimbursement payment is subject to tax imposed by the Irish Revenue Commissioners, each non-employee director is also entitled to a tax equalization payment in order to allow them to retain the full reimbursement payment. There were no such tax equalization payments made to any of our non-employer director with respect to any reimbursement payments in 2019. \n### Directors Continuing Education \nIn furtherance of our ongoing commitment to the continuing education of our directors, our nominating and corporate governance committee adopted a policy for the reimbursement of director continuing education in February 2013, as amended in February 2014. Under this policy, we will pay or reimburse each director for enrollment fees and reasonable expenses incurred in connection with attending and participating each year in one director continuing education program and in one healthcare industry continuing education program, each sponsored by an outside provider. \nDirectors Deferred Compensation Plan \nIn May 2007, the Jazz Pharmaceuticals, Inc. board of directors adopted the Directors Deferred Compensation Plan, which was amended and restated in August 2010. The Directors Deferred Compensation Plan, as amended and restated, is referred to in this report as the<|endoftext|>The \nTrust Account are reduced below (i) $10.00 per public share or (ii)such lesser amount per public share held in the \n\n### Trust Account \n, due to reductions in value of the trust assets, in each case net of the amount of interest which may be withdrawn to pay our taxes, and our \nSponsor asserts that it is unable to satisfy its indemnification obligations or that it has no indemnification obligations related to a particular claim, our independent directors would determine whether to take legal action against our \nSponsor to enforce its indemnification obligations. While we currently expect that our independent directors would take legal action on our behalf against our \nSponsor to enforce its indemnification obligations to us, it is possible that our independent directors in exercising their business judgment may choose not to do so in any particular instance. \n\n\n\n\n\n; \n; \n\n### Competition \n\nConflicts of Interest \n\nIn addition, TPG or its affiliates may s ponsor other blank check companies similar to ours during the period in which we are seeking a Business \n### Combination \n, and members of our management team may participate in such blank check companies. In particular, TPG is currently s ponsor ing another blank check company, TPG Pace Beneficial Finance \n### Corp. \n, which is a blank check company focusing on a business combination with a target business with the potential for strong ESG principles. Although TPG Pace Beneficial Finance \nCorp. intends to seek a business combination with a target business with the potential for strong ESG principles, it may seek to complete a business combination in any industry or location. Further, our Non-Executive Chairman and Director, Mr.Peterson, also serves as the Non-Executive Chairman and Director of TPG Pace Beneficial Finance \n### Corp. \n, and three of our directors, Messrs. David Bonderman, Chad Leat and Kneeland Youngblood, also serve as directors of TPG Pace Beneficial Finance \nCorp \nIn addition, Mr. Davidson, our Chief Financial Officer, also serves as the Chief Financial Officer of TPG Pace Beneficial Finance \n### Corp. \n, and Mr. Tamraz, our Executive Vice-President of Corporate Development and Secretary, also serves as the Secretary of TPG Pace Beneficial Finance \nCorp \nAny such companies, including TPG Pace Beneficial Finance \n### Corp. \n, may present additional conflicts of interest in pursuing an acquisition target, particularly in the event there is overlap among the management teams, like in TPG Pace Beneficial Finance \n### Corp \n\n\n\n\nConflicts of Interest. \n### Indemnity \nOur \nSponsor has agreed that it will be liable to us if and to the extent any claims by a third party (other than our independent auditors) for services rendered or products sold to us, or a prospective target business with which we have discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account to below (i) $10.00 per public share or (ii)such lesser amount per public share held in the Trust Account due to reductions in the value of the trust assets, in each case net of the interest which may be withdrawn to pay our taxes, except as to any claims by a third party who executed a waiver of any and all rights to seek access to the Trust Account and except as to any claims under our indemnity of the underwriters of the Public Offering against certain liabilities, including liabilities under the Securities Act. \n### Employees \n\n\n\nWe have no current intention of filing a Form 15 to suspend our reporting or other obligations under the Exchange Act prior or subsequent to the consummation of our Business Combination. In accordance with the requirements of the Exchange Act, this Annual Report on Form 10-K/A contains financial statements audited and reported on by our independent registered public accountants. \nWe will file audited financial statements of Nerdy as part of the proxy statement/prospectus, which we will send to our shareholders to assist them in assessing the Proposed Business Combination. In the event that the Proposed Business Combination is not consummated, we will provide shareholders with audited financial statements of the prospective target business as part of the tender offer materials or proxy solicitation materials sent to shareholders to assist them in assessing the target business. GAAP) or International Financing Reporting Standards (IFRS), depending on the circumstances and the historical financial statements may be required to be audited in accordance with the standards of the United States Public Company Accounting Oversight Board (PCAOB). \n\n\n\n\n\n### Item 1A. R isk Factors \nSummary of Risk Factors \n\nour financial performance; \n### Risk Factors \n\nR isk factors related to Nerdy and the Proposed Business Combination will be described in the proxy statement/prospectus that the Company will file with the SEC relating to the Proposed Business Combination. \n\n\n\n\nPlease see Item 1. \n\n\n\nPrior to the Public Offering, we entered into a forward purchase agreement with TPG pursuant to which it is obligated to purchase an aggregate of at least $50,000,000 of forward purchase securities, consisting of 5,500,000ClassA ordinary shares, plus an aggregate of 1,000,000 forward purchase warrants to purchase one ClassA ordinary share at $11.50 per share, in one or more private placements that will close no later than simultaneously with our Business Combination. \nAdditionally, the obligation of TPG and any forward transferee to purchase the forward purchase securities are subject to termination prior to the closing of the sale of such forward purchase shares and forward purchase warrants by mutual written consent of us and TPG, or, automatically if the Business Combination is not completed within 24 months of the \nClose Date or such later date as may be approved by the Companys shareholders. The obligation of TPG and any forward transferees to purchase the forward purchase securities is subject to fulfillment of customary closing conditions and other conditions as set forth in the forward purchase agreement, including: (a)the \nBusiness Combination shall be completed substantially concurrently with the purchase of the forward purchase securities (if the company has not elected to make TPG consummate such purchase at an earlier date); \n\n\n\n\n\n\nThe ability of our public shareholders to exercise redemption rights with respect to a large number of our shares could increase the probability that our \nBusiness Combination would be unsuccessful and that you would have to wait for liquidation in order to redeem your shares. \n\nWe expect that the additional forward purchasers will purchase up to $100,000,000 of additional forward purchase securities prior to or simultaneously with our Business Combination pursuant to additional forward purchase agreements, but have no obligation to make such purchase. \nWe expect that the additional forward purchasers will purchase up to $100,000,000 of additional forward purchase securities prior to or simultaneously with our Business Combination. In addition, if our board of directors determines that additional capital is needed in order to consummate our Business Combination or for other reasons, and the additional forward purchasers do not purchase in full the up to $100,000,000 of additional forward purchase securities, we may not have the capital to satisfy certain conditions to our Business Combination. If the additional forward purchasers elect to purchase the entire additional amount, they would receive an additional 11,000,000 additional forward purchase shares and 2,000,000 additional forward purchase warrants exercisable for an additional 2,000,000 ClassA ordinary shares (or such greater amount as mutually agreed upon). \n\nFor example, if TPG acquired all 5,000,000 of the forward purchase shares prior to the record date for a shareholder vote on our Business Combination and were to vote in favor of such transaction, in addition to the voting power of such forward purchase shares and the 11,250,000 ClassF ordinary shares held by our Sponsor, we would need only 11,875,000, or 26.4%, of the 45,000,000 ClassA ordinary shares to be voted in favor of a transaction for it to be approved, assuming (i)the over-allotment option is not exercised, (ii)our Sponsor, officers, directors and director nominees do not acquire any other ClassA ordinary shares and (iii)all outstanding shares are voted. \n\n\n### We may not be able to complete our \nBusiness Combination within the prescribed time frame, in which case we would cease all operations except for the purpose of winding up and we would redeem our \nPublic Shares and liquidate, in which case our public shareholders may only receive $10.00 per share, or less than such amount in certain circumstances, and our redeemable warrants and private placement warrants will expire worthless. \n\n\nOn January31, 2020, U.S. \n\n\n\nIn the event that our \n### Sponsor \n, directors, officers, advisors or their affiliates purchase shares in privately negotiated transactions from public shareholders who have already elected to exercise their redemption rights, such selling shareholders would be required to revoke their prior elections to redeem their shares. The purpose of such purchases could be to vote such shares in favor of the \nBusiness Combination and thereby increase the likelihood of obtaining shareholder approval of the \n### Business Combination \n, or to satisfy a closing condition in an agreement with a target that requires us to have a minimum net worth or a certain amount of cash at the closing of our \nBusiness Combination \n, where it appears that such requirement would otherwise not be met. The purpose of any such purchases of the redeemable warrants could be to reduce the number of such redeemable warrants outstanding or to vote such redeemable warrants on any matters submitted to the redeemable warrant holders for approval in connection with our \n### Business Combination \nAny such purchases of our securities may result in the completion of our \nBusiness Combination that may not otherwise have been possible. \n\n\nSee the sections of Item 1. \n\n\n\n\n\n; \n\n\nHowever, we are exempt from rules promulgated by the SEC to protect investors in blank check companies, such as Rule 419. Moreover, if the Public Offering were subject to Rule 419, that rule would prohibit the release of any interest earned on funds held in the Trust Account to us unless and until the funds in the Trust Account were released to us in connection with our completion of a Business Combination. \n\nOur internal control over financial reporting is a process designed to provide a reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with GAAP. We had a material weakness in our internal control over financial reporting as of December 31, 2020, and as a result our disclosure controls and procedures were not effective as of December 31, 2020, as further described under Part II of this Form 10-K/A. \n\n\n\n\n\n\n\nIf the net proceeds of our Public Offering and the sale of the \nP rivate \nP lacement \n### W arrants not being held in the \nTrust Account are insufficient, it could limit the amount available to fund our search for a target business or businesses and complete our \nBusiness Combination and we will depend on loans from our \nSponsor or management team to fund our search, to pay our taxes and to complete our \n### Business Combination \n\n\n\n\n\n\n\nOur \nSponsor has agreed that it will be liable to us if and to the extent any claims by a third party (other than our independent auditors) for services rendered or products sold to us, or a prospective target business with which we have discussed entering into a transaction agreement, reduce the amount of funds in the \nTrust Account to below (i) $10.00 per public share or (ii)such lesser amount per public share held in the \n\nTrust Account due to reductions in the value of the trust assets, in each case net of the interest which may be withdrawn to pay our taxes, except as to any claims by a third party who executed a waiver of any and all rights to seek access to the \nTrust Account and except as to any claims under our indemnity of the underwriters of the Public Offering against certain liabilities, including liabilities under the Securities Act. \n\n\nSponsor s only assets are securities of our \n### C ompany. Our \nSponsor may not have sufficient funds available to satisfy those obligations. We have not asked our \nSponsor to reserve for such obligations, and therefore, no funds<|endoftext|>"},"task":{"kind":"string","value":"{\"file\": \"/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz\"}"}}},{"rowIdx":82,"cells":{"text":{"kind":"string","value":"<|endoftext|>To receive funds from the trust account only (i)in the event of the redemption of our public shares if we do not complete our initial business combination within 24 months from the closing of our initial public offering, (ii)in connection with a shareholder vote to amend our amended and restated memorandum and articles of association (A)to modify the substance or timing of our obligation to provide holders of our ClassA ordinary shares the right to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of our initial public offering or (B)with respect to any other provision relating to the rights of holders of our ClassA ordinary shares, or (iii)if they redeem their respective shares for cash upon the completion of the initial business combination. \n### Competition \nIn identifying, evaluating and selecting a target business for our initial business combination, we may encounter intense competition from other entities having a business objective similar to ours, including other blank check companies, private equity groups and leveraged buyout funds, public companies, and operating businesses seeking strategic acquisitions. \nFacilities \nWe currently maintain our executive offices at PO Box 1093, Boundary Hall, Cricket Square, Grand Cayman, \n### KY-1102, \nCayman Islands. \nEmployees \nWe currently have three executive officers. These individuals are not obligated to devote any specific number of hours to our matters but they each intend to devote as much of their time as they deem necessary to our affairs until we have completed our initial business combination. The amount of time they each will devote in any time period will vary based on whether a target business has been selected for our initial business combination and the stage of the business combination process we are in. \n\nWe have registered our units, ClassA ordinary shares and warrants under the Exchange Act and have reporting obligations, including the requirement that we file annual, quarterly and current reports with the SEC. In accordance with the requirements of the Exchange Act, our annual reports contain financial statements audited and reported on by our independent registered public accountants. \nThese financial statements may be required to be prepared in accordance with, or reconciled to, GAAP, or IFRS, depending on the circumstances, and the historical financial statements may be required to be audited in accordance with the standards of the PCAOB. \nA target business may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding adequacy of its internal controls. \nOn October1, 2020, we filed a Registration Statement on Form \n8-A with the SEC to voluntarily register our securities under Section12 of the Exchange Act. \nExempted companies are Cayman Islands companies conducting business mainly outside the Cayman Islands and, as such, are exempted from complying with certain provisions of the Companies Act. As an exempted company, we applied for and received a tax exemption undertaking from the Cayman Islands government that, in accordance with Section6 of the Tax Concessions Law (2020 Revision) of the Cayman Islands, for a period of 20 years from the date of the undertaking, no law which is enacted in the Cayman Islands imposing any tax to be levied on profits, income, gains or appreciations will apply to us or our operations and, in addition, that no tax to be levied on profits, income, gains or appreciations or which is in the nature of estate duty or inheritance tax will be payable (i)on or in respect of our shares, debentures or other obligations or (ii)by way of the withholding in whole or in part of a payment of dividend or other distribution of income or capital by us to our shareholders or a payment of principal or interest or other sums due under a debenture or other obligation of us. \n\n\n\n\n### S-K. \nWe will remain a smaller reporting company until the last day of the fiscal year in which (1)the market value of our ordinary shares held by non-affiliates exceeds $250million as of the prior June30, or (2)our annual revenues exceeded $100million during such completed fiscal year and the market value of our ordinary shares held by non-affiliates exceeds $700million as of the prior June 30. \n### Availability of Reports and Other Information \nWe use our website, [IDX] to disseminate certain information that may be relevant to investors. SEC filings, including our Annual Report on Form \n10-K, \nQuarterly Reports on Form \n10-Q, \nCurrent Reports on Form \n8-K and all amendments and exhibits to those reports are available through the SECs website, [IDX] \nITEM1A. \n### RISK FACTORS \nYou should consider carefully all of the risks described below, together with the other information contained in this Report, before making a decision to invest in our securities. \n\nWe have no operating history and no revenues, and you have no basis on which to evaluate our ability to achieve our business objective. \nWe are an exempted company established on July29, 2020 under the laws of the Cayman Islands and have no operating results. Because we lack an operating history, you have no basis upon which to evaluate our ability to achieve our business objective of completing our initial business combination with one target business. \nOur shareholders may not be afforded an opportunity to vote on our proposed initial business combination, which means we may complete our initial business combination even though a majority of our shareholders do not support such a combination. \nWe may choose not to hold a shareholder vote before we complete our initial business combination if the business combination would not require shareholder approval under applicable law or stock exchange listing requirement. For instance, if we were seeking to acquire a target business where the consideration we were paying in the transaction was all cash, we would typically not be required to seek shareholder approval to complete such a transaction. Except for as required by applicable law or stock exchange listing requirement, the decision as to whether we will seek shareholder approval of a proposed business combination or will allow shareholders to sell their shares to us in a tender offer will be made by us, solely in our discretion, and will be based on a variety of factors, such as the timing of the transaction and whether the terms of the transaction would otherwise require us to seek shareholder approval. Accordingly, we may complete our initial business combination even if holders of a majority of our issued and outstanding ordinary shares do not approve of the business combination we complete. \nThe only opportunity of our public shareholders to affect the investment decision regarding a potential business combination may be limited to the exercise of their right to redeem their shares from us for cash. \nAt the time of the investment by our public shareholders in us, our public shareholders were not provided with an opportunity to evaluate the specific merits or risks of any target businesses. Accordingly, the only opportunity of our public shareholders to affect the investment decision regarding a potential business combination may be limited to exercising their redemption rights within the period of time (which will be at least 20 business days) set forth in our tender offer documents mailed to our public shareholders in which we describe our initial business combination. \nIf we seek shareholder approval of our initial business combination, our sponsor and members of our management team have agreed to vote in favor of such initial business combination, regardless of how our public shareholders vote. \nOur initial shareholders own, on anas-convertedbasis, \n20% of our outstanding ordinary shares immediately following the completion of our initial public offering. Our sponsor and members of our management team also may from time to time purchase ClassA ordinary shares prior to our initial business combination. Our amended and restated memorandum and articles of association provide that, if we seek shareholder approval, we will complete our initial business combination only if we obtain the approval of an ordinary resolution under Cayman Islands law, being the affirmative vote of a majority of the ordinary shares represented in person or by proxy and entitled to vote thereon and who vote at a general meeting. As a result, in addition to our initial shareholders founder shares, we would need 12,500,001, or 31.25% (assuming all issued and outstanding shares are voted), or 1 (assuming only the minimum number of shares representing a quorum are voted), of the 40,000,000 public shares sold in our initial public offering to be voted in favor of an initial business combination in order to have our initial business combination approved. Accordingly, if we seek shareholder approval of our initial business combination, the agreement by our sponsor and each member of our management team to vote in favor of our initial business combination will increase the likelihood that we will receive the requisite shareholder approval for such initial business combination. \n\nOur public shareholders are entitled to receive funds from the trust account only upon the earliest to occur of: (i)our completion of an initial business combination, and then only in connection with those ClassA ordinary shares that such shareholder properly elected to redeem, subject to the limitations described herein, (ii)the redemption of any public shares properly tendered in connection with a shareholder vote to amend our amended and restated memorandum and articles of association (A)to modify the substance or timing of our obligation to provide holders of our ClassA ordinary shares the right to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of our initial public offering or (B)with respect to any other provision relating to the rights of holders of our ClassA ordinary shares, and (iii)the redemption of our public shares if we have not consummated an initial business within 24 months from the closing of our initial public offering, subject to applicable law and as further described herein. In no other circumstances will a public shareholder have any right or interest of any kind in the trust account. \n\nFurthermore, in no event will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 (so that we do not then become subject to the SECs penny stock rules). \n\nAt the time we enter into an agreement for our initial business combination, we will not know how many shareholders may exercise their redemption rights, and therefore will need to structure the transaction based on our expectations as to the number of shares that will be submitted for redemption. If a large number of shares are submitted for redemption, we may need to restructure the transaction to reserve a greater portion of the cash in the trust account or arrange for additional third-party financing. The amount of the deferred underwriting commissions payable to the underwriters will not be adjusted for any shares that are redeemed in connection with an initial business combination. \nTheper-shareamount we will distribute to shareholders who properly exercise their redemption rights will not be reduced by the deferred underwriting commission and after such redemptions, the amount held in trust will continue to reflect our obligation to pay the entire deferred underwriting commissions. \n\nIf our initial business combination is unsuccessful, you would not receive your pro rata portion of the funds in the trust account until we liquidate the trust account. \nThe requirement that we consummate an initial business combination within 24 months after the closing of our initial public offering may give potential target businesses leverage over us in negotiating a business combination and may limit the time we have in which to conduct due diligence on potential business combination targets, in particular as we approach our dissolution deadline, which could undermine our ability to complete our initial business combination on terms that would produce value for our shareholders. \nAny potential target business with which we enter into negotiations concerning<|endoftext|>OF SIGNIFCANT ACCOUNTING POLICIES \nBasis of presentation \nThe accompanying financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America. The Companys year end is March 31. \n### Use of Estimates \n\nApplication Development Costs \nThe Company follows the provisions of ASC 985, Software, which requires that all costs relating to the purchase or internal development and production of software products to be sold, leased or otherwise marketed, be expensed in the period incurred unless the requirements for technological feasibility have been established. The Company capitalizes all eligible software costs incurred once technological feasibility is established. The Company amortizes these costs using the straight-line method over a period of three years, which is the remaining estimated economic life of the costs. \n\nThe Company records depreciation and amortization when appropriate using straight-line method over the estimated useful life of the assets. We estimate that the useful life of equipment is 5 years and website development is 1 year. Property sold or retired, together with the related accumulated depreciation is removed from the appropriate accounts and the resultant gain or loss is included in net income. \nCash and Cash \nE q ui v a lents \nT h e C o m p a ny c o nsi d ers all h i gh ly li qu i d inves t m e n ts wit h ori g i n a l m atu ritie s o f thre e m on t hs or les s to be ca s h e q u i v a le n t s. \n### The Company had $ \n60,364 of cash as of March 31, 2021. \n### Prepaid Expenses \nPrepaid expenses are amounts paid to secure the use of assets or the receipt of services at a future date or continuously over one or more future periods. When the prepaid expenses are eventually consumed, they are charged to expense. Prepaid Expenses are recorded at fair market value. \nLLC had $ \n203,628 in prepaid expenses as of March 31, 2021 (March 31, 2020 $9,243). Prepaid expenses consist of prepaid goods for resale and services. \n### Lease \nOperating leases are included in operating lease right-of-use (ROU) assets, other current liabilities, and operating lease liabilities in our consolidated balance sheets. \n16|Page \nAs most of the leases do not provide an implicit rate, The Company generally use the incremental borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments at commencement date. \n### Website Development Costs \nThe Company amortizes these costs using the straight-line method over a period of one years, which is the remaining estimated economic life of the costs. \nForeign Currency Translation \nThe Company considers the U.S. dollar to be its functional currency as it is the currency of the primary economic environment in which the Company operates. All assets, liabilities, revenues and expenses denominated in foreign currencies are translated into U.S. All exchange gains and losses are included in operations. \nFor the year ended March 31, 2021, foreign currency transaction gain was $11,392. \n### I ncome Taxes \n\nRevenue Recognition \n\n\n\n\n\n\nStep 5: Recognize revenue \n\nRevenue from supplies of consulting services is recognized when title and risk of loss are transferred and there are no continuing obligations to the customer. Title and the risks and rewards of ownership transfer to and accepted by the customer when the services are collected by the customer at the Companys office. Based on limited operating history, management estimates that there was no sales return for the period reported. \nThe Company derives its revenue from direct sales to individuals and business companies. Generally, the Company recognizes revenue when services are sold and accepted by the customers and there are no continuing obligations to the customer. \n17|Page \n\nThe Company computes income (loss) per share in accordance with FASB ASC 260 Earnings per Share. For the period from November 6, 2017 (inception) through March 31, 2021, there were no potentially dilutive debt or equity instruments issued or outstanding. \nComprehensive Income \nComprehensive income is defined as all changes in stockholders equity (deficit), exclusive of transactions with owners, such as capital investments. Comprehensive income includes net income or loss, changes in certain assets and liabilities that are reported directly in equity such as translation adjustments on investments in foreign subsidiaries and unrealized gains (losses) on available-for-sale securities. For the year ended March 31, 2021, our net loss was $302,292 and comprehensive loss was $290,900. \n\nOur company may be subject to the risks arising from COVID-19's impacts on the IT industry. Our management believes that these impacts, which include but are not limited to the following, may have a negative effect on our financial position, results of operations, and cash flows: (i) prohibitions or limitations on in-person activities associated with meetings; (ii) lack of consumer desire for incurring additional expenses during these times; and (iii) deteriorating economic conditions, such as increased unemployment rates. In addition, we have considered the impacts and uncertainties of COVID-19 in our use of estimates in preparation of our consolidated financial statements. \nIn Spring of 2020, a lot of governments around the world issued lockdown orders prohibiting their respective citizens from working in the offices and arranging face-to-face meetings. There also were instances of reducing number of hours available to each employee. These actions were taken in response to the economic impact of COVID-19 on business areas resulted in a reduction of productivity for the year 2020. Due to the online nature of the companys operations, our regular course of business did not incur significant changes. However, the companys clients and third parties had to adjust their operations which resulted in a decreased number of agreements. \n\nWe have reviewed all the recently issued, but not yet effective, accounting pronouncements and we do not believe any of these pronouncements will have a material impact on the Company. \nIn May 2017, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2017-09, Compensation Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. This guidance changes how companies account for certain aspects of share-based payments to employees. Among other things, under the new guidance, companies will no longer record excess tax benefits and certain tax deficiencies in additional paid-in-capital (APIC), but will instead record such items as income tax expense or benefit in the income statement, and APIC pools will be eliminated. Companies will apply this guidance prospectively. Another component of the new guidance allows companies to make an accounting policy election for the impact of forfeitures on the recognition of expense for share-based payment awards, whereby forfeitures can be estimated, as required today, or recognized when they occur. If elected, the change to recognize forfeitures when they occur needs to be adopted using a modified retrospective approach. The amendment is effective for public entities for fiscal years beginning after December 15, 2017. Early adoption is permitted. The Company is currently evaluating the impact of this guidance, if any, on its financial statements and related disclosures. \nNote 4 \n### FIXED ASSETS \nAs of March 31, 2021, our fixed assets comprised of $1,500 in equipment and $33,720 in vehicles. Depreciation expense of equipment was $12,015 as of March 31, 2021. \nNote 5 \n### INTANGIBLE ASSETS \nAs of March 31, 2021, the total amount of website development was $8,361. Depreciation expense of website development was $8,361 as of March 31, 2021. \n18|Page \nAs of March 31, 2021, the unamortized balance of the costs related to the purchase or internal development and production of software to be sold, leased, or otherwise marketed was $97,400, which is deemed to be equal to the net realizable value, and is included within Application Development Costs in the balance sheet. Depreciation expense of application development was $56,817 as of March 31, 2021. \nAs of March 31, 2021, the total amount of Capitalized Application Development Costs was $40,583. \nIn December 2019 and March 2020, the Company purchased an RSS Database. As of March 31, 2021, the total amount of RSS Database was $149,000. Depreciation expense of RSS Database was $18,750 as of March 31, 2021. \nNote 6 \n\nDuring the period from November 6, 2017 (inception) through March 31, 2021, our president has loaned to the Company $ \nThis loan is unsecured, non-interest bearing and due on demand. \nThe Companys subsidiary Thynews Tech LLC received $124,590 as advances from related parties as of March 31, 2021. \nLLC received $(25,852) as advances from related parties as of March 31, 2021. \nAs of March 31, 2021, the Company has an outstanding debt to Mr. Mikhail Bukshpan, our Treasurer, COO and Director, who is also the owner of Itina Co. LLC. The amount of such debt is $ \nNote 7 \n### THIRD PARTY TRANSACTIONS \nOn January 11, 2021, Natalija Tunevic, assigned her $60,000 loan to Mr. Oleg Sapojnicov. A conversion clause was added to the Note. Conversion may take place after a lockup period of 60 days following the issue of the note. The conversion price shall be at market share price on the day of conversion subject to a 40% discount. \nNote 8 \n### COMMON STOCK \nPreferred Stock \nThe Company has 5,000,000, $0.001 par value shares of preferred stock authorized as of March 31, 2021. \nThere were 5,000,000 shares of preferred stock issued and outstanding as of March 31, 2021. \n### Common Stock \nThe Company has 250,000,000, $0.001 par value shares of common stock as of March 31, 2021. \nThere were 23,281,600 shares of common stock issued and outstanding as of March 31, 2021. \n### Warrants \nNo warrants were issued or outstanding as of March 31, 2021. \nStock Options \nThe Company has never adopted a stock option plan and has never issued any stock options. \nNote 9 \n\n\n19|Page \nNote 10 \n### INCOME TAXES \nThe Company adopted the provisions of uncertain tax positions as addressed in ASC 740 \nIncome Taxes \n(ASC 740). As a result of the implementation of ASC 740, the Company recognized no increase in the liability for unrecognized tax benefits. As of March 31, 2021, the Company had net operating loss carry forwards of approximately $369,330 that may be available to reduce future years taxable income in varying amounts through 2039. \nThe valuation allowance at March 31, 2021, was approximately $77,559. The net change in valuation allowance during the year ended March 31, 2021, was $(63,481).In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred income tax assets will not be realized. \nThe ultimate realization of deferred income tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible.Management considers the scheduled reversal of deferred income tax liabilities, projected future taxable income, and tax planning strategies in making this assessment.Based on consideration of these items, management has determined that enough uncertainty exists relative to the realization of the deferred income tax asset balances to warrant the application of a full valuation allowance as of March 31, 2021.All tax years since inception remain open for examination by taxing authorities. \n\nFor the years ended March 31, 2021 and 2020, the provision for \n### Federal income tax consists of the following: \nThe actual tax benefit at the expected rate of 21% differs from the expected tax benefit for the years ended March 31, 2021 and 2020, as follows: \nThe related deferred tax benefit on the above unutilized tax losses has a full valuation allowance not recognized against it as there is no certainty of its realization. Management has evaluated tax positions in accordance with ASC 740 and has not identified any significant tax positions, other than those disclosed. \nNOTE 11 - \n### CONCENTRATION RISK \nThe Company is potentially subject to concentration risk in its sales revenue. \nMajor Customer \nThe Company has two major customer that accounted for approximately 52% and $622,999 of sales for the year ended March 31, 2021. \nNote 12 \n### SUBSEQUENT EVENTS \nIn accordance with ASC 855, Subsequent Events, the<|endoftext|>The Amended Cash-Based Retention Awards to fully vest if such awards had not already vested by such time. \nPursuant to the Amended and Restated Employment Agreements, and pursuant to Mr.Stewarts employment agreement, upon a termination without cause or by the executive for good reason, the named executive officers are eligible to receive severance payments based on a multiple of the applicable executive officers base salary and target annual bonus for the year of termination. Cash payments are payable in accordance with the Companys regular payroll cycle over the applicable severance period, except in the case of a termination in connection with a change of control, in which case the payments are made in a lump sum within sixty days of the termination event. We are not obligated to make any cash payments to these executives if their employment is terminated by us for cause or by the executive without good reason. In the event of an executives death, we will pay the executives estate an amount equal to his annual base salary, bonus and the value of any equity awards. In the event of an executives disability, his employment will continue for one year from the date of disability. In addition, assuming the employment of any of our named executive officers was to be terminated without cause, for good reason, or constructive[ly] terminated without cause, or in the event of a change of control (as each such term is defined in the employment agreements), they would be entitled to accelerated vesting of all options and share awards (other than awards, if any, granted under the Amended 2016 MIP, which awards will be governed by the Amended 2016 MIP). \nDuring the executives employment and for a period of (a)one year following a termination (or, with respect to the non-competition restriction, a period of time not to exceed two years following a termination during which the executive receives any payment of base salary from the Company) without cause, for good reason, constructive termination without cause or a termination in connection with a change of control or (b)two years following a termination due to retirement, the executive cannot work anywhere in the specified geographic region, and directly or indirectly: \n(i) perform services for, have any ownership interest in, or participate in any business that engages or participates in a competing business purpose; \n(ii) induce or attempt to induce any customer or client or prospective customer or client whom the executive dealt with or solicited while employed by us during the last twelve months of his employment; or \n(iii) solicit, attempt to hire, or have any person employed by us work for the executive or for another entity, firm, corporation or individual. \nIf we terminate Mr.Tomas employment without cause or if Mr.Toma resigns his employment for good reason (as those terms are defined in his employment agreement, and in either case, a Qualifying Termination), Mr.Toma will be eligible to receive an amount equal to two times the sum of (i)his annual base salary plus (ii)his target annual bonus, payable in equal installments over a two-year period following the termination date. In the event of an anticipatory termination within six months prior to a change of control (as those terms are defined in the employment agreement) or a Qualifying Termination within two years following a change of control, Mr.Toma will be eligible to receive one year of outplacement assistance and an amount equal to three times the sum of (i)his annual base salary plus (ii)his average bonus amount (as defined in the employment agreement, and which generally means the average of any annual bonuses paid or payable during the three-year period prior to occurrence of the change of control (but no less than his target annual bonus for any such year)). In the event of Mr.Tomas death or disability (as defined in the employment agreement), he will be eligible to receive a pro-rated annual bonus, based on the actual achievement of the applicable performance criteria, and pro-rated for the number of days Mr.Toma was employed with the Company during the Companys applicable fiscal year. In order to receive any of the severance benefits described above, Mr.Toma must execute a valid release of claims in favor of the Company. The employment agreement provides that Mr.Toma will not compete with us or solicit our customers or employees, in any case during his employment with us or for a period of one year thereafter. \nIn connection with Mr. Ciminos termination of employment, the Company and Mr. Cimino entered into a Separation, Transition and General Release Agreement (the \n### Cimino Separation Agreement \n) setting forth the severance benefits to be paid in connection with his separation from the Company. As contemplated under his employment agreement, the Company paid to Mr. Cimino an amount equal to $498,750 (representing the sum of his annual base salary and target annual bonus opportunity), payable over 12 months.In consideration for the transition and consulting services that Mr. Cimino provided to the CEO through June 30, 2020, the Company agreed to pay Mr. Cimino the portion of his Petrobras Litigation Award that was otherwise scheduled to vest on June 21, 2020 in the amount of $285,770. \nDirector Compensation \nPrior to 2020, the Board of Directors had approved compensation for independent board members consisting of $133,333 of annual cash compensation and $66,667 of annual stock awards in the form of restricted stock units. Additionally, each independent board member receives $2,000 for each board or committee meeting attended in-person and $1,000 for each board or committee meeting attended telephonically. The Chairman of the Board of Directors receives an additional $50,000 of annual cash consideration and the Chairman of the Audit Committee and Chairman of the Compensation Committee each receive an additional $10,000 of annual cash consideration. Cash consideration is paid quarterly in arrears. The board members currently determined to be independent for purposes of receiving compensation during 2020 were Messrs. Bates, Larsen, and Wells. \nOn March 31, 2020, as part of the Companys efforts to reduce operating and corporate costs in light of the global economic decline and public health crisis resulting from the spread of COVID-19, each of the independent directors agreed to reduce their annual cash compensation by 20% effective April 1, 2020 until June 30, 2020. On July 1, 2020, the independent directors annual cash compensation levels were restored to levels in effect prior to April 1, 2020 and then subsequently reduced by 10%. \nIn 2020, none of the independent board members received a restricted stock unit award. Rather, in February 2021, the Board granted each of the independent board members in lieu of any restricted stock unit award a cash award equal to $66,667 in respect of their service in 2020, which was paid in February 2021. \nAll of the directors are reimbursed for reasonable, necessary and documented travel, subsistence, and other related expenses incurred in connection with the performance of their official board duties. \n(1) \n(2) \n\nNotwithstanding anything to the contrary set forth in any of our filings under the Securities Act of 1933, as amended (the Securities Act), or the Exchange Act, that might incorporate future filings, including this report, in whole or in part, the following Report of the Compensation Committee shall not be deemed to be Soliciting Material, is not deemed filed with the SEC and shall not be incorporated by reference into any filings under the Securities Act or Exchange Act whether made before or after the date hereof and irrespective of any general incorporation language in such filing except to the extent that we specifically request that the information be treated as soliciting material or specifically incorporates it by reference into a document filed under the Securities Act or the Exchange Act. \nThe Compensation Committee of the Board of Directors has reviewed and discussed the required by Item402(b) of Regulation S-K with management and, based on such review and discussions, the Compensation Committee recommended to the Board of Directors that the be included in this Amendment to the Form 10-K. \n\nNone of the current members of our Compensation Committee serves, or has at any time served, as an officer or employee of us or any of our subsidiaries. None of our executive officers has served as a director or member of the Compensation Committee, or other committee serving an equivalent function, of any other entity, one of whose executive officers served as one of our directors or a member of our Compensation Committee. \n### CEO Pay Ratio Disclosure \nAs required by Section953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item402(u) of Regulation S-K, we are providing the following information about the relationship of the annual total compensation of our employees to the annual total compensation of our CEO, Mr.Toma. \nWe determined that, as of December 31, 2020, our employee population consisted of 319 individuals, not including our CEO. As of such date, approximately 94% of our employee population was located outside of the U.S. \nTo identify the median employee, we calculated the total cash compensation of each employee for the twelve-month period ended December 31, 2020. Total cash compensation for these purposes included base salary, bonuses and comparable cash elements of compensation in non-U.S. jurisdictions and was calculated using internal payroll records. We did not apply any cost of living adjustments as part of the calculation. We annualized the compensation of all permanent employees who were hired in 2020 but did not work for us or our consolidated subsidiaries for the entire fiscal year, but did not annualize the compensation of any part-time employee. We did not include any independent contractors or leased employees in our determination. \nOnce we identified the median employee, we calculated all of the elements of such employees compensation for the 2020 fiscal year in accordance with the requirements of Item402(c)(2)(x) of Regulation S-K, resulting in an estimated annual total compensation of $69,533. To calculate the annual total compensation of Mr.Toma, we used the amount reported in the Total column of the 2020 Summary Compensation Table included in this Form 10-K/A, which was $1,948,900, resulting in a ratio of the annual total compensation of our CEO to the median of the annual total compensation of our employees of 28 to 1. We believe this pay ratio is a reasonable estimate calculated in a manner consistent with Item402 of Regulation S-K. \nBecause the SEC rules for identifying the median of the annual total compensation of our employees and calculating the pay ratio based on that employees annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their employee populations and compensation practices, the pay ratio reported by other companies may not be comparable to our pay ratio, as other companies have headquarters in different countries, have different employee populations and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their pay ratios. \nItem12. \n\nSecurity Ownership of Directors, Executive Officers and Certain Beneficial Owners \nThe following table sets forth information regarding the beneficial ownership of our outstanding ordinary shares on April15, 2021, except as noted below, by (i)each person who is known by us to beneficially own more than 5% of our outstanding voting power, (ii)each director, nominee for director and named executive officer, and (iii)all of our directors and executive officers as a group. To our knowledge, unless it is otherwise stated in the footnotes, each person listed below has sole voting and investment power with respect to his or her shares beneficially owned. For purposes of the tables below, a person or group of persons is deemed to have beneficial ownership of any shares that such person has the right to acquire on or within 60 days after April15, 2021. \n(1)\tUnless otherwise indicated, the address of all beneficial owners of our ordinary shares set forth above is c/o Vantage Energy Services, Inc. 777 Post Oak Boulevard, Suite 800, Houston, Texas 77056. \n(2)\tBased on 13,115,026 ordinary shares outstanding as of April29, 2020.<|endoftext|>Accounting Standards Board Accounting Standards Codification Topic 718 (FASB ASC Topic 718) of the stock option awards made to any of our directors during 2020. \n(2) \nTaglich Private Equity provides services to the Company pursuant to a Management Services Agreement. Messrs. Baum and Cooke are related persons of Taglich Private Equity or Taglich Brothers, and, by agreement with Taglich Private Equity amending the Management Services Agreement, the annual consulting fee paid by the Company to Taglich Private Equity under the Management Services Agreement is reduced by the amount of director fees paid to Messrs. Baum and Cooke and by any equity awards received as compensation for serving on the Board. \n(3) \nMr. Cavanagh was elected to the Board of Directors on July 2, 2020 at the 2020 Annual Meeting of Stockholders. \n(4) \nMr. Viola retired from the Board following the 2020 Annual Meeting on July 2, 2020. \nEach member of our Board of Directors is also entitled to reimbursement for reasonable travel and other expenses in connection with attending meetings of the Board of Directors and any committee of the Board of Directors on which they serve. \nItem12. \n### Equity Compensation Plan Table \nThe following table includes equity compensation plan information as of December 31, 2020, the Companys last day of its 2020 fiscal year. \n\n(1) \nConsists of (i)221,500 shares to be issued upon exercise of outstanding options under the 2013 Plan, as of December 31, 2020, and (ii)505,000 shares to be issued upon exercise of outstanding options under the 2014 Plan, as of December 31, 2020. \n(2) \nConsists of the weighted-average exercise price of the 726,500 stock options outstanding on December 31, 2020. \n(3) \nConsists of (i) 106,180 shares that remained available for future issuance under the 2013 Plan as of December 31, 2020 and (ii) 187,000 shares that remained available for future issuance under our 2014 Plan as of December 31, 2020. \n\nThe table sets forth certain information with respect to the beneficial ownership of our common stock as of April 20, 2021, except as otherwise indicated, by: each person known by us to beneficially own more than 5% of the Companys commons stock; each of the Companys directors and director nominees; and all of the Companys directors and executive officers as a group. \nFor further information regarding material transactions between us and certain of our stockholders, see Item 13, Certain Relationships and Related Party Transactions. \nTo our knowledge, except as set forth in the footnotes to this table and subject to community property laws, where applicable, each person named in the table has sole voting and investment power with respect to the shares set forth opposite such persons name. \nExcept as otherwise indicated, the address of each of the persons in this table is as follows: c/o Unique Fabricating, Inc., 800 Standard Parkway, Auburn Hills, Michigan 48326. \n\n(1) \nBased upon 9,779,147 outstanding shares of common stock, as of April 30, 2021. Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to the securities. Shares of common stock subject to options and warrants that are currently exercisable or exercisable within 60 days of April 30, 2021 are considered outstanding and beneficially owned by the person holding the options or warrants for the purposes of computing beneficial ownership of that person but are not treated as outstanding for the purpose of computing the percentage ownership of any other person. \n(2) \nPeninsulas President and Chief Investment Officer, Scott A. Reilly, exercises sole voting and dispositive power for the shares beneficially owned by Peninsula. The number set forth in the table includes 7,500 exercisable options granted to Mr. Illikman. \n(3) \nThe number set forth in the table is based on the Schedule 13G/A for Pacific Ridge Capital Partners, LLC filed with the SEC on February 11, 2021. \n(4) \nThe number set forth in the table is based on the Schedule 13G/A for Royce & Associates LP filed with the SEC on January 27, 2021. \n(5) \nThe number set forth in the table is based on the Schedule 13G for Robert Taglich filed with the SEC on February 14, 2018. The number set forth in the table includes 24,000 shares for which Mr. Taglich is custodian for his children and 8,663 shares of common stock subject to currently exercisable warrants. \n(6) \nThe number set forth in the table includes 56,000 exercisable options. \n(7) \nThe number set forth in the table includes 10,000 exercisable options. \n(8) \nThe number set forth in the table includes shares owned by an investment partnership controlled by Mr. Baum, shares owned by family trusts and 7,500 exercisable options. \n(9) \nThe number set forth in the table includes 7,500 exercisable options for each of Messrs. Cooke, Frascoia and Illikman. \n(10) \nThe number set forth in the table includes 37,500 exercisable options. \n(11) \nWith the exception of Mr. Baum, each director and NEO beneficially owns less than one percent of the outstanding shares of the Common Stock. \nItem13. \n\n\nThe Audit Committee has the primary responsibility for reviewing and approving or disapproving related party transactions, which are transactions between us and related persons in which the aggregate amount involved exceeds or may be expected to exceed $120,000 and in which a related person has or will have a direct or indirect material interest. We adopted a policy regarding transactions between us and related persons. For purposes of this policy, a related person is defined as a director, executive officer, nominee for director, or greater than 5% beneficial owner of our common stock, in each case since the beginning of the most recently completed year, and their immediate family members. Our audit committee charter provides that the audit committee shall review and approve or disapprove any related party transactions. \n### Transactions with Taglich \nFormation. \nTaglich Private Equity, LLC sourced and sponsored our formation in March 2013 under the name UFI Acquisition, Inc. exclusively for the purpose of effecting the acquisition of all of the outstanding shares of Unique Fabricating, Inc. Unique Fabricating, Inc. subsequently changed its name to Unique Fabricating NA, Inc. and we subsequently changed our name to Unique Fabricating, Inc. Taglich Private Equity, LLC has been sourcing and sponsoring leveraged buyouts of companies since 2000 and often retains Taglich Brothers, Inc. as the equity capital placement agent for these transactions. Richard L. Baum. Jr., the Chairman of our board of directors, is an associate of Taglich Private Equity, LLC. Robert Taglich, who is a beneficial owner of 5% or more of our common stock, is a principal of Taglich Brothers, Inc., and William Cooke, one of our directors, is employed by Taglich Brothers, Inc. \n\nIn March 2013, the Company entered into a management services agreement with Taglich Private Equity, LLC. Under this agreement, the Company has been provided advisory and management services in consideration of an annual management fee, payable in monthly installments. Effective upon completion of the IPO, the agreement was amended to reduce the annual management fee of $300,000 by an amount equal to the amount, if any, of annual cash retainers and equity awards received as compensation for service on the Companys board of directors by any director who is a related person (as defined in Rule 5110 of the FINRA Manual) of Taglich Private Equity, LLC or Taglich Brothers, Inc. In accordance with the amendment, the Company paid a total fee of $225,000 during 2019. Pursuant to the terms of the Management Services Agreement, in addition to the annual management fee, the Company will pay Taglich Private Equity, LLC a fee for each acquisition by the Company during the term of the agreement or in the event of the sale of the entire Company calculated as follows: 5% of the first $1 million of value; 4% of the second $1 million of value; 3% of the third $1 million of value; 2% of the fourth $1 million of value, and 1% of the value paid over $4 million. If the Company or any subsidiary pays for investment banking services in connection with any acquisition by the Company or any subsidiary or the sale of the Company, the transaction fee payable to Taglich Private Equity, LLC will be reduced dollar for dollar by any fees paid to a third party investment banker or broker. The services provided to us by Taglich Private Equity, LLC include providing advice and counsel to the directors, executives and personnel of the Company and its subsidiaries through and including: (1) participation in business and strategic planning sessions and reviewing and commenting on business and strategic plans and agreements; (2) identifying and/or communicating with potential strategic partners, as and to the extent requested by the Company and/or its subsidiaries; (3) providing guidance and recommendations and participating in management strategy sessions regarding acquisitions or financings; and (4) participating in the strategy and implementation of the growth activities of the Company and/or its subsidiaries. In addition, Taglich Private Equity, LLC will act as the Companys and its subsidiaries financial advisor in connection with certain transactions including: (1) assisting the Company and/or its subsidiaries in identifying and contacting potential purchasers of the assets or securities of the Company and/or its subsidiaries; (2) advising and assisting the Company and/or its subsidiaries in negotiating the terms and conditions of a transaction; and (3) analyzing the valuation of the Company and/or its subsidiaries or such other entity in connection with a transaction. The agreement currently expires on March 18, 2022, and renews automatically each year for an additional one-year term. The agreement will also terminate on the date that the Taglich Founding Investors or Taglich Equity Investors, as each is defined, no longer collectively own 50% of the equity securities owned by either of them on March 18, 2013. \nInitial Public Offering; Underwriters Warrants. \nTaglich Brothers, Inc. acted as a Joint Book Running Manager and a co-representative of the underwriters of the Companys IPO in 2015.Part of the underwriting compensation that the Company issued to the underwriters were warrants to purchase, in the aggregate, 141,000 shares of our common stock, exercisable at a per share exercise price equal to 125% of the public offering price per share in the offering, commencing one year from the effectiveness of the registration statement with respect to the offering until the fifth anniversary of the effectiveness, or June 30, 2020. Taglich Brothers, Inc. received 70,500 of these warrants.Richard L. Baum, Jr., the Chairman of the Companys Board of Directors, is an associate of Taglich Private Equity, which sourced and sponsored our formation in March 2013, and William Cooke, a member of the Companys Board of Directors, is employed by Taglich Brothers, Inc. Affiliates of Taglich Brothers, \nInc. include Robert Taglich, the beneficial owner of more than 5% of the Companys common stock. None of these warrants were exercised prior to their expiration during 2020. \nCommercial Transaction with National Molding, LLC and its Subsidiaries. \nThe Company entered into a commercial transaction with National Molding, LLCs (NMC) subsidiary NMC Dynaplas, LTD (Dynaplas) during the second quarter of 2020 to supply certain die cut materials to be used in Dynaplas production of personal protection equipment in response to the COVID-19 pandemic. Dynaplas is a wholly owned subsidiary of NMC and Mr. Frascoia has served as NMCs President and Chief Executive Officer since June 2020. Mr. Cavanagh served as NMCs interim Chief Executive Officer from December 2019 to May 2020. Messrs. Cavanagh and Baum both serve as board members of NMC. The Company sold NMC die cut components valued at $455,639 in 2020. \n### Transactions with Engauge Workforce Solutions LLC \nBeginning in February 2021, the Company began utilizing the services of Engauge Workforce Solutions LLC (Engauge), a manufacturing and distribution staffing agency. Ms. Korth is Managing Director of Engauge. In March 2021, the Company entered into an agreement with Engauge for its services. The agreement is for an initial term of 12 months and will continue on a month-to-month basis after the initial term. The Company may terminate the agreement, without penalty, following the initial<|endoftext|>Against us or any director or officer arising pursuant to any provision of the General Corporation Law of the State of Delaware or our certificate of incorporation or bylaws; (iv) any action to interpret, apply, enforce or determine the validity of any provisions in our certificate of incorporation or bylaws; or (v) action asserting a claim against us or any director or officer of ours governed by the internal affairs doctrine, shall, to the fullest extent permitted by law, be exclusively brought in the Court of Chancery of the State of Delaware or, if such court does not have subject matter jurisdiction thereof, the federal district court of the State of Delaware. These choice-of-forum provisions may limit a stockholders ability to bring a claim in a judicial forum that he, she or it believes to be favorable for disputes with us or our or directors, officers or other employees, which may discourage such lawsuits. \n\n### ITEM 1B. UNRESOLVED STAFF COMMENTS \nNot applicable. \nITEM 2. PROPERTIES \nOur principal business operations are located in San Francisco, California. We lease space in Portland, Oregon and Las Vegas, Nevada for our customer support and engineering operations. We intend to acquire additional space as we add employees and expand geographically. \n### ITEM 3. LEGAL PROCEEDINGS \nWe are engaged in the defense of certain claims and lawsuits arising out of the ordinary course and conduct of our business and have certain unresolved claims pending, the outcomes of which are not determinable at this time. We have insurance policies covering certain potential losses where such coverage is available and cost effective. In our opinion, any liability that might be incurred by us upon the resolution of any claims or lawsuits will not, in the aggregate, have a material adverse effect on our financial condition or results of operations. \nITEM 4. MINE SAFETY DISCLOSURES \nNot applicable. \nPART II \nITEM 5. \n\nOur Class A common stock has been listed on the New York Stock Exchange (NYSE) under the symbol SKLZ since December 17, 2020. There is no public market for our Class B common stock. \nHolders of our Common Stock \nAs of March 5, 2021, there were 303 holders of record of our Class A common stock and two holders of record of our Class B common stock. The number of record holders does not include Depository Trust Company participants or beneficial owners holding shares through nominee names. \n### Dividend Policy \nWe have not paid any cash dividends on our common stock to date and we do not intend to pay any cash dividends on our common stock for the foreseeable future. \nStock Performance Graph \nThis performance graph shall not be deemed soliciting material or to be filed with the SEC for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (Exchange Act), or otherwise subject to the liabilities under that Section, and shall not be deemed to be incorporated by reference into any filing of Skillz Inc. \nThe following graph compares the cumulative total stockholder return on our Class A common stock with the cumulative total return on the Standard & Poors (S&P) 500 Index and the Nasdaq Composite Index. The graph assumes an initial investment of $100 in our common stock at the market close on April 27, 2020, which was the initial trading day of the Class A common stock of FEAC (our predecessor) on a stand-alone basis. Our Business Combination with FEAC was announced on September 2, 2020 and closed on December 16, 2020. Data for the S&P 500 Index and the Nasdaq Composite Index assume reinvestment of dividends. \n\nIn connection with FEACs initial formation in January 2020, Eagle Equity Partners II LLC (Eagle Equity) was issued all of FEACs outstanding founder shares. On February 10, 2020, FEAC conducted a 1:1.25 stock split of its founder shares such that Eagle Equity directly continued to own all 14,375,000 outstanding founder shares. On March 2, 2020, 20,000 founder shares were transferred to each of Scott M. Delman and Joshua A. Kazam, FEACs director nominees. On March 6, 2020, FEAC conducted a 1:1.2 stock split of its founder shares, resulting in Eagle Equity holding an aggregate of 17,210,000 founder shares and there being an aggregate of 17,250,000 founder shares outstanding. The number of founder shares outstanding was determined based on the expectation that the founder shares would represent 20% of the outstanding shares after the FEACs initial public offering (IPO) excluding the private placement shares underlying the private pla cement units. In connection with the Business Combination, Eagle Equity agreed to forfeit 899,797 founder shares. \nSimultaneously with the closing of FEACs IPO, Eagle Equity purchased an aggregate of 10,033,333 private placement warrants at $1.50 per private placement warrant ($15,050,000 in the aggregate). Each private placement warrant was exercisable to purchase one share of Class A common stock at an exercise price of $11.50 per share. The proceeds from the private placement warrants were added to the proceeds from the FEAC IPO held in the trust account. In connection with the Business Combination, Eagle Equity agreed to forfeit 5,016,666 private placement warrants. \nPrior to the consummation of the Business Combination, FEAC entered into subscription agreements (the Subscription Agreements), each dated as of September 1, 2020, with certain institutional investors (the Investors), pursuant to which, among other things, FEAC agreed to issue and sell, in private placements, an aggregate of 15,853,052 shares of Class A common stock, par value $0.0001 per share, of FEAC (FEAC Class A common stock) for $10.00 per share (the Private Placement). The Private Placement closed immediately prior to the Business Combination. The shares of FEAC Class A common stock issued to the Investors became shares of Class A common stock upon consummation of the Business Combination. \nIn connection with consummation of the Business Combination, Eagle Equity delivered 5,000,000 of its shares of Class B common stock, par value $0.0001 per share, of FEAC (the FEAC Class B common stock and together with the FEAC Class A common stock, the FEAC Shares) into escrow that are subject to release if certain earn-out conditions are satisfied. Such earn-out conditions were satisfied and on March 5, 2021, these shares were released to the Old Skillz stockholders who received shares of common stock as a result of the Business Combination in the form of shares of Class A common stock (other than the Founder and a trust for the benefit of his family members who will receive shares of Class B common stock and other than 270 shares of Class A common stock that were released to the Company). \n### ITEM 6. SELECTED FINANCIAL DATA \nNone \nITEM 7. \nThe following discussion and analysis of the financial condition and results of operations of Skillz Inc. (for purposes of this section, Skillz, we, us and our) should be read in conjunction with the consolidated financial statements and related notes included in Part II, Item 8, Financial Statements and Supplementary Data, of this Annual Report on Form 10-K/A. This discussion contains forward-looking statements and involves numerous risks and uncertainties, including, but not limited to, those described in Part I, Item 1A, Risk Factors. Our historical results are not necessarily indicative of the results that may be expected for any period in the future. \n\nThis Managements Discussion and Analysis of Financial Condition and Results of Operations has been amended and restated to give effect to the restatement and revision of our consolidated financial statements as more fully described in the Explanatory Note and in Note 3to our accompanying consolidated financial statements. \n### Overview \nWe operate a marketplace that connects the world through competition, serving both developers and users. Our platform enables fair, fun and competitive gaming experiences and the trust we foster with users is the foundation upon which our community is built. We believe our marketplace benefits from a powerful network effect: compelling content attracts users to our platform, while the increasing size of our audience attracts more developers to create new interactive experiences on our platform. \nSkillz was founded in 2012 by Andrew Paradise and Casey Chafkin with the vision to make eSports accessible to everyone possible. Today, the platform has 2.4million MAUs and hosts an average of over 5million daily tournaments, including 1.4 million paid entry daily tournaments, offering over $100million in prizes each month. As of December31, 2020, we had over 9,000 registered game developers on our platform that have launched a game integration. For the year ended December31, 2020, Solitaire Cube, 21Blitz and Blackout Bingo accounted for 79% of our revenue. For the year ended December31, 2019, Solitaire Cube and 21Blitz (each developed by Tether) together with Blackout Bingo (developed by Big Run) accounted for 72% of revenue. For the year ended December31, 2020, Tether and Big Run accounted for 59% and 28%, respectively, of our revenue. For the year ended December31, 2019, Tether and Big Run accounted for 83% and 0.1%, respectively, of our revenue. \nOur top titles rotate over time as more games have generated success on the Skillz platform. In 2020, the number of games that generated over $1 million of annualized GMV has grown 57% from 23 to 36. \nOur culture is built upon a set of values established by our founders, aligning the company and its employees in a common vision. Our seven values are: Honor; Mission; Collaboration; Productivity; Willingness; Frugality; and Balance. Our approach has focused on trust and fairness for users enabling game developers to focus on what they do best: build great content. \nOur technology capabilities are industry-leading and provide the tools necessary for developers to compete with the largest and most sophisticated mobile game developers in the world. Our easy-to-integrate software development kit (SDK) and developer console allow our developers to monitor, integrate and update their games seamlessly over the air. We ingest and analyze over 300 data points from each game play session, enhancing our data-driven algorithms and LiveOps systems. Moreover, we have developed a robust platform enabling fun, fair and meaningful competitive gameplay. \nFor the years ended December31, 2020 and 2019, we served 2.6 million and 1.6 million monthly active users (MAUs), respectively, and had monthly average revenue per user (ARPU) of $7.49 and $6.30, respectively. We monitor the conversion of users to paying users based on the ratio of Paying MAU to MAU. For each of fiscal years 2020 and 2019, our Paying MAU to MAU ratio was 13% and 10%, respectively and our Paying MAU was 0.3 million and 0.2 million, respectively and our monthly average revenue per paying user (ARPPU) was $58 and $62, respectively. We see a substantial opportunity for our developers to expand beyond casual content into other genres of interactive entertainment, from first-person shooters to racing games. In 2020 and 2019, we generated less than 10% of our revenues from users outside of North America, leaving us with several large untapped international markets. We see a significant opportunity to build partnerships with brands to sponsor tournaments on our platform to both inc rease our brand awareness and achieve improvements in profitability through advertiser sponsored prizes. \n### Our Financial Model \nSkillzs financial model aligns the interests of gamers and developers, driving value for our stockholders. By monetizing thro ugh competition, our system eliminates friction that exists in traditional monetization models between the developer and the gamer. The more gamers enjoy our platform the longer they play, creating more value for Skillz and our developers. By generating higher player to payor conversion, retention and engagement, we are able to monetize users at more than five times higher what our developers would generate through advertisements or in-game purchases. \nOur platform allows users to participate in fair competition, while rewarding developers who create games that keep players engaged. We generate revenue by receiving a percentage of player entry fees in paid contests, after deducting end-user prize money (i.e. winnings from the Competitions), end-user incentives accounted for as reduction of revenue and the profit share paid to developers (the Take Rate). GMV represents entry fees that may be paid using cash deposits,<|endoftext|>Connection with the TCF/Chemical merger in 2019. Mr. Dahl was the only NEO participating in the Legacy TCF Cash Balance Pension Plan, which was terminated effective November 1, 2019. As of December 31, 2020, there were no longer any outstanding obligations under the Legacy TCF Cash Balance Pension Plan. \n(5) \nAmounts shown in the All Other Compensation column for 2020 consist of the following: \n(a) \nMr. Provost: $10,229,567 in severance payments; $49,999 in cash payments for his service as a director of TCF; $3,030 consisting of the taxable portion of employer paid premiums for life insurance; $2,769 consisting of the taxable portion of employer paid premiums for disability insurance; $4,154 in car allowances; $350 in cell phone reimbursements; and $79,059 in Company-paid club dues. \n(b) \nMr. Dahl: $11,213,931 in severance payments; $105,960 of employer contributions to the Deferred Compensation Plan; $10,602 of employer contributions to the 401(k) Plan; $6,337 consisting of the taxable portion of employer paid premiums for life insurance; $3,533 in executive tax service; $20,266 in Company-paid club dues; and $32,690 in dividend equivalents earned on TRSUs. \n(c) \nMr. Maass: $38,829 of employer contributions to the Deferred Compensation Plan; $1,193 consisting of the taxable portion of employer paid premiums for life insurance; $12,411 in Company car payments; $3,750 in executive tax service; and $11,651 in dividend equivalents earned on TRSUs. \n(d) \nMr. Klaeser: $2,816,267 in severance payments; $71,667 in compensation pursuant to Mr. Klaesers post-employment consulting agreement with TCF; $4,798 consisting of the taxable portion of employer paid premiums for life insurance; $8,439 consisting of the taxable portion of employer paid premiums for disability insurance; $7,500 in taxable payments for relocation; $7,300 in Company-paid club dues; and $6,484 in dividend equivalents earned on TRSUs. \n(e) \nMr. Torgow: $11,215 in car allowances; $9,649 consisting of the taxable portion of employer paid premiums for disability insurance; $3,723 in company-paid club dues; and $49,035 in dividend equivalents earned on TRSUs. \n(f) \nMr. Shafer: $9,865 of employer contributions to the Deferred Compensation Plan; $11,215 in car allowances; $10,304 consisting of the taxable portion of employer paid premiums for disability insurance; $18,296 in Company-paid club dues; and $17,709 in dividend equivalents earned on TRSUs. \n(g) \nMr. Jones: $1,694 of employer contributions to the Deferred Compensation Plan; $2,632 in deemed compensation for incentive travel award $2,070 consisting of the taxable portion of employer paid premiums for life insurance; $4,469 for an annual executive physical; $8,750 in executive tax service; and $4,786 in Company-paid club dues; and $13,475 in dividend equivalents earned on TRSUs. \n(6) \nProvost for the duration of his employment at TCF in 2020. Mr. Provost served as our Executive Vice Chairman until May 8, 2020, at which time his employment with TCF ended. He remained Vice Chairman of TCFs Board of Directors and received compensation as an external Director until he was named Chief Executive Officer of TCF on October 28, 2020. Mr. Provost remains a non-independent Director of TCF, for which he does not receive compensation. \n(7) \nDahl for the duration of his employment at TCF in 2020. Mr. Dahl served as our President, Chief Executive Officer and a Director until his employment with TCF ceased on October 27, 2020. \n(8) \nKlaeser for the duration of his employment at TCF in 2020. Mr. Klaeser served as our Executive Vice President, Chief Financial Officer until his employment with TCF ceased on October 1, 2020. \n\nProvisions of the employment, separation and release, and consulting agreements for Messrs. Provost, Dahl, Maass, Klaeser, Torgow, Shafer and Jones are described below under Executive Compensation Employment, Separation and Release, and Consulting Agreements. \nAmount of Salary and Bonus in Proportion to Total Compensation \nThe relationship of salary to the NEOs total compensation will vary from year to year primarily depending on the amount of non-equity incentive compensation (annual cash incentive) and grant date fair value of long-term awards, as discussed in the CD&A. \n\nThe following table shows plan-based awards granted to the NEOs in 2020: \n(1) \nFor each NEO, amounts reported represent the potential payout range pursuant to our annual incentive plan, with all payments subject to achievement of corporate and individual performance objectives and the discretion of the Compensation Committee. The annual incentive plan is further explained in Compensation of Named Executive Officers NEO Pay Determinations in the CD&A of this Amendment. Actual amounts earned under the annual incentive plan in 2020 are included in the column entitled Non-Equity Incentive Plan Compensation of the Summary Compensation Table above. Pursuant to his employment agreement entered into on December 13, 2020, Mr. Provost was not eligible in 2020 for an annual incentive award. Mr. Klaeser received a prorated award under our annual incentive plan in connection his departure from TCF in October 2020. Mr. Dahl did not receive an award under our annual incentive plan due to his departure from TCF in October 2020. \n(2) \nRepresents shares of restricted stock granted in 2020 under the 2019 Stock Plan for Mr. Provosts service as a non-employee Director. \n(3) \nRepresents the award of PRSUs granted in 2020 under the 2019 Stock Plan and the Omnibus Plan, with a performance period that ends on April 30, 2023. The vesting is subject to the achievement of pre-established performance targets and the NEOs continued service through the vesting date. PRSUs that do not vest will be forfeited. \n(4) \nOn October 27, 2020, Mr. Dahls award vested in full at target in connection with his departure from TCF. \n(5) \nRepresents the award of TRSUs granted in 2020 under the 2019 Stock Plan and the Omnibus Plan. See Compensation of Named Executive Officers NEO Pay Determinations 2020 Long-Term Equity Compensation in the CD&A of this Amendment for a description of the terms of these awards. TRSUs that do not vest will be forfeited. \n(6) \nUpon his ceasing employment with TCF on October 27, 2020, Mr. Dahls award vested in full. \n(7) \nKlaesers award vested in full at target in connection with his departure from TCF. \n(8) \nKlaesers award vested in full. \n(9) \nThe values shown are the aggregate grant date fair value for initial awards computed in accordance with ASC 718. The PRSUs are valued based on the probable outcome of the performance conditions, payout at the target level. \n\nThe following table shows all equity awards that were outstanding at December 31, 2020 for each NEO: \n(1) \nRepresents the closing market price of our common stock on the date of the stock option award. \n(2) \nMarket value was determined using the 2020 year-end closing stock price of $37.02 per share as reported on Nasdaq. \n(3) \nRepresents a restricted stock award granted to Mr. Provost on May 6, 2020 as compensation for his service as a non-employee director prior to being named Chief Executive Officer on October 28, 2020 that vests on May 6, 2021. \n(4) \nVested on January 1, 2021. \n(5) \nRepresents PRSUs granted by Legacy TCF and assumed by us in the TCF/Chemical merger (as adjusted for the exchange ratio applied during the TCF/Chemical merger) and converted to earned PRSUs on the TCF/Chemical merger date, which are now only subject to time-based vesting requirements. PRSUs granted in 2018 were converted to earned PRSUs at the maximum level of performance and awards granted in 2019 were converted to earned PRSUs at the target level of performance based on Legacy TCFs performance as measured at June 30, 2019, under the terms of the TCF/Chemical merger agreement. \n(6) \nRepresents service-based restricted stock awards granted by Legacy TCF that we assumed in the TCF/Chemical merger (as adjusted for the exchange ratio applied during the TCF/Chemical merger) and that vest(ed) pro-rata on April 1, 2020, January 1, 2021 and 2022. \n(7) \nVests on January 1, 2022. \n(8) \nTRSUs including accrued dividend equivalent units from grant date. \n(9) \nVest(ed) in equal 50% increments on December 1, 2020 and August 1, 2021. \n(10) \nAccrues cash dividends and vests in equal 25% increments on May 6, 2021, 2022, 2023, and 2024. \n(11) \nRepresents awards of PRSUs granted at target level with vesting based on TCFs total shareholder return as compared against the 2020 Peer Group over the three-year performance period ending April 30, 2023. \n(12) \nVest(ed) in equal 20% increments on February 27, 2019, 2020, 2021, 2022, and 2023. \n(13) \nRepresents PRSUs granted by us that were converted to earned PRSUs in the TCF/Chemical merger, which are now subject only to time-based vesting requirements, at rates equal to the target level of performance based on our performance as measured at June 30, 2019, under the terms of the PRSU agreements. Torgow and Shafer in 2019, were converted into earned PRSUs at a rate equal to 100% of the target number of shares on the TCF/Chemical merger date, and vest on December 31, 2021. \n(14) \nVest(ed) in equal one-third increments on February 25, 2020, 2021, and 2022. \n(15) \nVest(ed) in equal 20% increments on February 25, 2020, 2021, 2022, 2023, and 2024. \n(16) \nRepresents stock options that vest ratably on the anniversary date of the February 21, 2017 grant date over a period of five years. \n(17) \nRepresents stock options that vest ratably on the anniversary date of the August 9, 2017 grant date over a period of five years. \n(18) \nVests on August 31, 2021. \n(19) \nVests on February 21, 2022. \n(20) \nVests on August 9, 2022. \n(21) \nVest(ed) in equal 50% increments on August 1, 2020 and 2021. \n\nThe following table shows information for option exercises and vesting of stock awards in 2020: \n(1) \nThe number of shares shown reflects the gross number of shares covered by awards that vested in 2020. Shares for the required tax withholding were deducted from the gross number of shares vested, resulting in a smaller number of shares acquired upon vesting. \n(2) \nAmounts were calculated using the closing stock price as reported on Nasdaq on the vesting dates of the stock awards. \n### Pension Benefits in 2020 \nThe following table shows information on the defined benefit pension plan benefits of the NEOs: \n(1) \nWe assumed the obligations under the Legacy TCF Cash Balance Pension Plan in connection with the TCF/Chemical merger. \n(2) \nThe number of years of credited service is less than actual years of service with Legacy TCF or its subsidiaries because the plan was frozen during the NEOs tenure with Legacy TCF or its subsidiaries. Mr.Dahl was not given credit for service other than for his actual years of service with Legacy TCF or its subsidiaries through April 1, 2006, the date the plan was frozen. Benefits were assumed to commence at age 65. \n(3) \nThe Board of Directors of Legacy TCF approved the termination of the Legacy TCF Cash Balance Pension Plan effective November 1, 2019. Mr. Dahls accumulated benefit balance was paid in full using the weighted-average interest rate in effect during 2020. The balance was transferred as part of an in-service rollover entirely into the TCF 401(k) Plan. For a discussion of the valuation methods and material assumptions applied in quantifying the present value of the current accrued benefit under Legacy TCF Cash Balance Pension Plan, see Note 23 Retirement Plans of the Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2020. \n### Nonqualified Deferred Compensation in 2020 \nThe following table shows certain information for TCFs nonqualified account-type plans for the NEOs. In September 2006, the TCF board approved the TCF Financial Corporation Deferred Compensation Plan (the Deferred Compensation Plan, formerly the Chemical Financial Corporation Deferred Compensation Plan), a voluntary nonqualified supplemental retirement program for a select group of management personnel. \nThe TCF 401K Supplemental Plan (the Supplemental Plan) shown below is a Legacy TCF nonqualified supplemental program for the TCF 401K Plan, a qualified tax or deferred plan under Section 401(k) of the Code which we assumed in connection with the TCF/Chemical merger. \nThe TCF contributions shown in the table for the Supplemental Plan are matching contributions which are made at the same rate as under the TCF 401K Plan. For further information about this plan, refer to the<|endoftext|>Board has the right to amend or discontinue the Legacy GLF Plan or to modify its terms and conditions; however, any amendment that would materially impair an outstanding award would require the award holders consent. No awards may be granted under the Legacy GLF Plan after April 13, 2028 although any awards that are outstanding at the time that the Legacy GLF Plan is terminated may remain outstanding in accordance with their terms. \n\nThe table below shows the name, address and stock ownership of each person known by us to beneficially own more than 5% of our common stock as of April 12, 2021. \n________________ \n(1) \nBased on 40,731,777 shares of common stock outstanding on April 12, 2021, plus the number of any shares of common stock underlying the companys warrants beneficially owned by the applicable beneficial owner. \n(2) \nBased on a Schedule 13G/A filed with the SEC on February 16, 2021 by T. Rowe Price Associates, Inc., a registered investment advisor (Price Associates), which has sole voting power over 2,431,246 shares and sole dispositive power over all reported shares. T. Rowe Price Mid-Cap Value Fund, Inc., a registered investment company sponsored by Price Associates, has sole voting power over 4,372,175 of the reported shares and no dispositive power over any of the reported shares. \n(3) \nBased on a Schedule 13D/A filed with the SEC on March 12, 2021 by a group including Robert E. Robotti. Mr. Robotti has sole voting and dispositive power over 7,092 of the reported shares and he shares the power to vote or dispose of 2,895,211 of the reported shares with certain entities controlled by him and or certain clients of such controlled entities. Included in the total number of shares shown as beneficially owned are 1,074 shares issuable upon the exercise of warrants held directly by Mr. Robotti and 387,700 shares issuable upon the exercise of warrants held directly owned by certain entities controlled by Mr. Robotti or advisory clients of certain entities controlled by Mr. Robotti. \n(4) \nBased on a Schedule 13G/A filed with the SEC on February 16, 2021 by Moerus Capital Management, LLC, which has sole voting power over 2,679,898 shares and sole dispositive power over 2,679,898 shares and shares voting power over 30,107 shares. \n(5) \nBased on a Schedule 13G/A filed with the SEC on February 1, 2021, by BlackRock, Inc., which has sole voting power over 2,494,214 shares and sole dispositive power over all reported shares. \n(6) \nBased on a Schedule 13G/A filed with the SEC on February 12, 2021 by Third Avenue Management LLC, which reports sole voting and dispositive power over all reported shares in its capacity as investment adviser to several investment companies. \n(7) \nBased on a Schedule 13G/A filed with the SEC on February 16, 2021 by American International Group, Inc., which has sole voting and dispositive power over 2,341,223 shares and shares voting and dispositive power over the remaining 50,069 shares with its wholly-owned subsidiaries, SunAmerica Asset Management, LLC or Variable Annuity Life Insurance Company. \n(8) \nBased on a Schedule 13G filed with the SEC on February 10, 2021 by The Vanguard Group, which has sole dispositive power over 2,105,115 shares and shares voting power over 26,710 shares and dispositive power over 39,181 shares. \n\nThe following table sets forth the beneficial ownership of our common stock as of April 12, 2021 by each current director, by each executive officer named in the 2020 Summary Compensation Table (our named executives or NEOs), and by all current directors and executive officers as a group. Unless otherwise indicated, each person has sole voting and investment power with respect to all shares of our common stock beneficially owned by him or her. \n* \nLess than 1.0%. \n(1) \nBased on 40,731,777 shares of common stock outstanding on April 12, 2021 and includes for each person and group the number of shares that such person or group has the right to acquire within 60 days of such date. \n(2) \nReflects the number of restricted stock units held by each director or executive officer that will not vest within 60 days of April 12, 2021 and thus are not included in his or her beneficial ownership calculation. \n(3) \nMr. Anderson was appointed as a director effective September 8, 2020. \n(4) \nThe total number of shares shown as beneficially owned for each named executive and all current directors and executive officers as a group includes the following: \n(5) \nIncludes 30,000 shares held in an IRA for Mr. Rigdons benefit, over which he has sole voting and investment power. \n(6) \nInformation regarding shares beneficially owned by Mr. Kneen, who was a named executive for fiscal 2020 in addition to Messrs. Darling, Hudson, and Rubio, appears immediately above under the caption Current Directors. \nITEM 13. \n\nOur practice has been that any transaction or relationship involving a related person which would require disclosure under Item 404(a) of Regulation S-K of the rules and regulations of the SEC will be reviewed and approved, or ratified, by our audit committee. We had one such transaction since the beginning of the last fiscal year. \nMr. Rigdon, a former executive who retired from the company in 2002, was appointed as an independent director on July 31, 2017 (the effective date of our restructuring) and currently serves as an independent director and our chairman of the board. Based on his prior service, Mr. Rigdon receives fixed retirement benefits from the company (including Pension Plan payments, benefits under the SERP, and life insurance benefits), with a total annual value of approximately $127,670. \nThe audit committee also reviews and investigates any matters pertaining to the integrity of management and directors, including conflicts of interest, or adherence to standards of business conduct required by our policies. \n### DIRECTOR INDEPENDENCE. \nThe standards relied upon by the board in affirmatively determining whether a director is independent are the objective standards set forth in the corporate governance listing standards of the NYSE. In making independence determinations, our board evaluates responses to a questionnaire completed annually by each director regarding relationships and possible conflicts of interest between each director, the company, and management. In its review of director independence, our board also considers any commercial, industrial, banking, consulting, legal, accounting, charitable, and familial relationships any director may have with the company or management of which it is aware. \nOur board has affirmatively determined that six of our seven current directors Messrs. Anderson, Fagerstal, Raspino, Rigdon, and Traub and Ms. Zabrocky are independent. Mr. Kneen is not independent as he serves as our president and chief executive officer. \nITEM 14. \nFEES AND RELATED DISCLOSURES FOR ACCOUNTING SERVICES \nThe following table lists the aggregate fees and costs billed by Deloitte & Touche LLP, the member firms of Deloitte Touche Tohmatsu, and their respective affiliates to our company for fiscal years 2019 and 2020. \n(1) \nRelates to services rendered in connection with auditing our companys consolidated financial statements for each annual or transition period and reviewing our companys quarterly financial statements. Also includes services rendered in connection with statutory audits and financial statement audits of our subsidiaries. \n(2) \nConsists of financial accounting and reporting consultations and employee benefit plan audits and fee related to registration statements and SEC comment letters. \n(3) \nConsists of United States and foreign corporate tax compliance services and consultations. \n(4) \nConsists of fees billed for all other professional services rendered to Tidewater, other than those reported in the previous three rows. These fees relate to an annual subscription to an online research resource. \nThe audit committee has determined that the provision of services described above is compatible with maintaining the independence of the independent auditors. \n\nThe audit committees policy is to pre-approve the scope of all audit services, audit-related services and other services permitted by law provided by our independent registered public accounting firm. Audit services and permitted non-audit services must be pre-approved by the full audit committee, except that the chairman of the audit committee has the authority to pre-approve any specific service if the total anticipated cost of such service is not expected to exceed $25,000, and provided the full audit committee ratifies the chairmans approval at its next regular meeting. All fiscal 2019 and fiscal 2020 non-audit services were pre-approved by the audit committee. \nPART IV \n### ITEM 15. \n(a)(3) \nExhibits \n\n2.1 \nJoint Prepackaged Chapter 11 Plan of Reorganization of Tidewater Inc. and its Affiliated Debtors, dated May 11, 2017 (filed with the Commission as Exhibit A to Exhibit T3E.1 of the Form T-3 filed on May 12, 2017, File No. 22-29043). \n2.2 \nDisclosure Statement for Joint Prepackaged Chapter 11 Plan of Reorganization of Tidewater Inc. and its Affiliated Debtors, dated May 11, 2017 (filed with the Commission as Exhibit T3E.1 of the Form T-3 filed on May 12, 2017, File No. 22-29043). \n2.3 \nSecond Amended Joint Prepackaged Chapter 11 Plan of Reorganization of Tidewater Inc. and its Affiliated Debtors, dated July 13, 2017 (filed with the Commission as Exhibit 2.1 to the company s current report on Form 8-K on July 18, 2017, File No. 1-6311). \n2.4 \nAgreement and Plan of Merger by and between Tidewater Inc. and GulfMark Offshore, Inc., dated as of July 15, 2018 (filed with the Commission as Exhibit 2.1 to the company s current report on Form 8-K filed on July 16, 2018, File No. 1-6311). \n3.1 \nAmended and Restated Certificate of Incorporation of Tidewater Inc. (filed with the Commission as Exhibit 3.1 to the company s current report on Form 8-K on July 31, 2017, File No. 1-6311). \n3.2 \nAmended and Restated By-Laws of Tidewater Inc., dated November 15, 2018 (filed with the Commission as Exhibit 3.2 to the company s registration statement on Form 8-A on November 15, 2018, File No. 1-6311). \n3.3 \nCertificate of Designations of Series A Junior Participating Preferred Stock (filed with the Commission as Exhibit 3.1 to the company s current report on Form 8-K on April 14, 2020, File No. 1-6311). \n4.1** \nDescription of Registered Securities of Tidewater, Inc. \n4.2 \nIndenture for 8.00% Senior Secured Notes due 2022, dated July 31, 2017, by and among Tidewater Inc., each of the Guarantors party thereto, and Wilmington Trust, National Association, as Trustee and Collateral Agent (filed with the Commission as Exhibit 4.1 to the company s current report on Form 8-K on July 31, 2017, File No. 1-6311). \n4.3 \nThird Supplemental Indenture, dated November 22, 2019, by and among Tidewater Inc., the guarantors party thereto and Wilmington Trust, National Association, as trustee and collateral agent (filed with the Commission as Exhibit 4.1 to the company s current report on Form 8-K on November 26, 2019, File No. 1-6311). \n4.4 \nFourth Supplemental Indenture, dated November 18, 2020, by and among Tidewater Inc., the guarantors party thereto and Wilmington Trust, National Association, as trustee and collateral agent (filed with the Commission as Exhibit 4.1 to the company s current report on Form 8-K on November 23, 2020, File No. 1-6311). \n4.5 \nTax Benefits Preservation Plan by and between the Company and Computershare Trust Company, N.A., a federally chartered trust company, as Rights Agent, dated as of April \n13, 2020 (filed with the Commission as Exhibit 4.1 to the company s registration statement on Form 8-K on April 14, 2020, File No. 1-6311). \n10.1 \nRestructuring Support Agreement, dated May 11, 2017 (filed with the Commission as Schedule 1 to Exhibit A to Exhibit T3E.1 of the Form T-3 filed on May 12, 2017, File No. 22-29043). \n10.2 \nAmendment and Restatement Agreement No. 5 to the Troms Facility Agreement, dated December 11, 2020 (filed with the Commission as Exhibit 10 to the company s current report on Form 8-K on December 15, 2020, File No. 1-6311). \n10.3 \nCreditor Warrant Agreement, dated July 31, 2017, between Tidewater Inc., as Issuer and Computershare Inc. and Computershare Trust Company, N.A., collectively as Warrant Agent (filed with the Commission as Exhibit 10.1 to the company s current report on Form 8-K on July 31, 2017, File No. 1-6311). \n10.4 \nExisting Equity Warrant Agreement, dated July 31, 2017, between Tidewater Inc.,<|endoftext|>Funds released from the trust account are used for payment of the consideration in connection with our initial business combination or used for redemptions of our Public Shares, we may apply the balance of the cash released to us from the trust account for general corporate purposes, including for maintenance or expansion of operations of the post-transaction company, the payment of principal or interest due on indebtedness incurred in completing our initial business combination, to fund the purchase of other companies or for working capital. \nIn addition, we intend to target businesses larger than we could acquire with the funds held in the trust account, and may as a result be required to seek additional financing to complete such proposed initial business combination. \n\nWe anticipate that target business candidates will be brought to our attention from various sources, including our global networks, as well as other sources such as investment bankers and investment professionals. These sources may also introduce us to target businesses in which they think we may be interested on an unsolicited basis, since many of these sources will have read the prospectus filed in connection with the initial public offering and know what types of businesses we are targeting. Our Sponsor, officers and directors and their respective affiliates may also bring to our attention target business candidates that they become aware of through their business contacts as a result of formal or informal inquiries or discussions they may have. In no event will our Sponsor or any of our existing officers or directors, or any entity with which our Sponsor or officers are affiliated, be paid any finders fee, reimbursement, consulting fee, monies in respect of any payment of a loan or other compensation by the company prior to, or in connection with, any services rendered in order to effectuate the completion of our initial business combination (regardless of the type of transaction that it is). Although none of our Sponsor, officers or directors, or any of their respective affiliates, will be allowed to receive any compensation, finders fees or consulting fees from a prospective business combination target in connection with a contemplated initial business combination, we do not have a policy that prohibits our Sponsor, officers or directors, or any of their respective affiliates, from negotiating for the reimbursement of out-of-pocket expenses by a target business. \n\nNasdaq listing rules require that our initial business combination must be with one or more target businesses that together have an aggregate fair market value of at least 80% of the value of the trust account (excluding any deferred underwriting fees and taxes payable on the income earned on the trust account) at the time of our signing a definitive agreement in connection with our initial business combination. \n\n\nIn evaluating a prospective business target, we expect to conduct a thorough due diligence review, which may encompass, among other things, meetings with incumbent management and key employees, document reviews, interviews of customers and suppliers, inspection of facilities, as well as a review of financial and other information that will be made available to us. \n\nRedemption Rights for Public Stockholders upon Completion of our Initial Business Combination or Certain Stockholder Votes to Amend our Amended and Restated Certificate of Incorporation \nWe will provide our public stockholders with the opportunity to redeem all or a portion of their Public Shares upon (i) the completion of our initial business combination or (ii) a stockholder vote to approve an amendment to our amended and restated certificate of incorporation (A) to modify the substance or timing of our obligation to allow redemption in connection with our initial business combination or to redeem 100% of our Public Shares if we do not complete our initial business combination within 24 months from the closing of the Initial Public Offering or (B) with respect to any other provision relating to stockholders rights or pre-initial business combination activity. Such redemptions, if any, will be made at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account as of two business days prior to the event triggering the right to redeem, including interest earned on the funds held in the trust account and not previously released to us to pay our franchise and income taxes, divided by the number of then outstanding Public Shares, subject to certain limitations. The per-share amount we will distribute to investors who properly redeem their shares will not be reduced by the deferred underwriting commissions we will pay to the underwriter of the Initial Public Offering. The redemption rights will include the requirement that a beneficial holder must identify itself in order to validly redeem its Public Shares. There will be no redemption rights upon the completion of our initial business combination with respect to the Public Warrants or the Private Placement Warrants. Our Sponsor and each of our officers and directors have entered into a letter agreement with us, pursuant to which they have agreed to waive their redemption rights with respect to any shares of our Class B common stock and any Public Shares held by them in connection with the completion of our initial business combination or a stockholder vote to approve an amendment to our amended and restated certificate of incorporation. \nManner of Conducting Redemptions in Conjunction with a Stockholder Vote on our Initial Business Combination \nWe may conduct redemptions without a stockholder vote pursuant to the tender offer rules of the SEC unless stockholder approval is required by law or stock exchange listing requirements or we choose to seek stockholder approval for business or other reasons. So long as we obtain and maintain a listing for our securities on the Nasdaq, we will be required to comply with such rules. \nIf a stockholder vote is not required and we do not decide to hold a stockholder vote for business or other reasons, we will, pursuant to our amended and restated certificate of incorporation: conduct the redemptions pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, which regulate issuer tender offers, and file tender offer documents with the SEC prior to completing our initial business combination which contain substantially the same financial and other information about the initial business combination and the redemption rights as is required under Regulation 14A of the Exchange Act, which regulates the solicitation of proxies. \n\nIn addition, the tender offer will be conditioned on public stockholders not tendering more than a specified number of Public Shares which are not purchased by our Sponsor, which number will be based on the requirement that we may not redeem Public Shares in an amount that would cause our net tangible assets to be less than $5,000,001 upon consummation of our initial business combination and after payment of deferred underwriting commissions (so that we are not subject to the SECs penny stock rules) or any greater net tangible asset or cash requirement which may be contained in the agreement relating to our initial business combination. \nIf, however, stockholder approval of the transaction is required by law or stock exchange listing requirements, or we decide to obtain stockholder approval for business or other reasons, we will, pursuant to our amended and restated certificate of incorporation: conduct the redemptions in conjunction with a proxy solicitation pursuant to Regulation 14A of the Exchange Act, which regulates the solicitation of proxies, and not pursuant to the tender offer rules, and file proxy materials with the SEC. \n\nOur Initial Stockholders will count toward this quorum and pursuant to the letter agreement, our Sponsor and each of our officers and directors have agreed to vote their shares of Class B common stock and any Public Shares purchased during or after this offering (including in open market and privately negotiated transactions) in favor of our initial business combination. \nOur amended and restated certificate of incorporation provides that in no event will we redeem our Public Shares in an amount that would cause our net tangible assets to be less than $5,000,001 upon consummation of our initial business combination and after payment of deferred underwriting commissions (so that we are not subject to the SECs penny stock rules) or any greater net tangible asset or cash requirement which may be contained in the agreement relating to our initial business combination. \n\nNotwithstanding the foregoing, if we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our amended and restated certificate of incorporation provides that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a group (as defined under Section 13 of the Exchange Act), will be restricted from seeking redemption rights with respect to more than an aggregate of 15% of the shares sold in the Initial Public Offering, which we refer to as the Excess Shares. We believe this restriction will discourage stockholders from accumulating large blocks of shares, and subsequent attempts by such holders to use their ability to exercise their redemption rights against a proposed initial business combination as a means to force us or our management team to purchase their shares at a significant premium to the then-current market price or on other undesirable terms. Absent this provision, a public stockholder holding more than an aggregate of 15% of the shares sold in the Initial Public Offering could threaten to exercise its redemption rights if such holders shares are not purchased by us or our management at a premium to the then-current market price or on other undesirable terms. By limiting our stockholders ability to redeem no more than 15% of the shares sold in the Initial Public Offering without our prior consent, we believe we will limit the ability of a small group of stockholders to unreasonably attempt to block our ability to complete our initial business combination, particularly in connection with an initial business combination with a target that requires as a closing condition that we have a minimum net worth or a certain amount of cash. \n\nIf we do not complete our initial business combination within such 24-month period or any stockholder approved extension period, we will: (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the Public Shares at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account including interest earned on the funds held in the trust account and not previously released to us to pay our franchise and income taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding Public Shares, which redemption will completely extinguish public stockholders rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect to the Public Warrants or Private Placement Warrants, which will expire worthless if we fail to complete our initial business combination within the 24-month time period, as may be extended by any stockholder approved extension period. \n\nWe may require our public stockholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in street name, to either tender their certificates to our transfer agent prior to the date set forth in the tender offer documents or proxy materials mailed to such holders, or up to two business days prior to the initial vote on the proposal to approve the initial business combination in the event we distribute proxy materials, or to deliver their<|endoftext|>Our initial business combination. \n\nIn addition, when exercising powers or performing duties as a director, the director is required to exercise the care, diligence and skill that a reasonable director would exercise in the same circumstances taking into account, without limitation the nature of the company, the nature of the decision and the position of the director and the nature of the responsibilities undertaken by him. A director need not exhibit in the performance of his duties a greater degree of skill than may reasonably be expected from a person of his knowledge and experience. \nA director shall, forthwith after becoming aware of the fact that he is interested in a transaction entered into or to be entered into by the company, disclose the interest to the board of the company. \n\nFurthermore, most of our officers and directors have pre-existing fiduciary obligations to other businesses of which they are officers or directors. To the extent they identify business opportunities which may be suitable for the entities to which they owe pre-existing fiduciary obligations, our officers and directors will honor those fiduciary obligations. Accordingly, it is possible they may not present opportunities to us that otherwise may be attractive to us unless the entities to which they owe pre-existing fiduciary obligations and any successors to such entities have declined to accept such opportunities. \n\nThe following table summarizes the current pre-existing fiduciary or contractual obligations of our officers and directors. \nIn connection with the vote required for any business combination, all of our existing stockholders, including all of our officers and directors, have agreed to vote their respective insider shares in favor of any proposed business combination. In addition, they have agreed to waive their respective rights to participate in any liquidation distribution with respect to those shares of common stock acquired by them prior to the IPO. If they purchased shares of common stock in the IPO or in the open market, however, they would be entitled to participate in any liquidation distribution in respect of such shares but have agreed not to convert such shares (or sell their shares in any tender offer) in connection with the consummation of our initial business combination or an amendment to our amended and restated memorandum and articles of association relating to pre-business combination activity. \n\nTo further minimize conflicts of interest, we have agreed not to consummate our initial business combination with an entity that is affiliated with any of our officers, directors or initial stockholders, unless we have obtained (i)an opinion from an independent investment banking firm that the business combination is fair to our unaffiliated stockholders from a financial point of view and (ii)the approval of a majority of our disinterested and independent directors (if we have any at that time). Furthermore, in no event will any of our initial stockholders, officers, directors, special advisors or their respective affiliates be paid any finders fee, consulting fee or other similar compensation prior to, or for any services they render in order to effectuate, the consummation of our initial business combination. \n### Code of Ethics \nWe adopted a code of conduct and ethics applicable to our directors, officers and employees in accordance with applicable federal securities laws. \n\nSection16(a)of the Securities Exchange Act of 1934, as amended, or the Exchange Act, requires our executive officers, directors and persons who beneficially own more than 10% of a registered class of our equity securities to file with the Securities and Exchange Commission initial reports of ownership and reports of changes in ownership of our shares of common stock and other equity securities. \nBased solely on our review of such forms furnished to us and written representations from certain reporting persons, we believe that all filing requirements applicable to our executive officers, directors and greater than 10% beneficial owners were filed in a timely manner, except that each of Messrs. Paresh Patel, Sebastiano Cossia Castiglioni, Marc Volpe and Jaspaul Singh filed a late Form 4. \nITEM 11. \n### EXECUTIVE COMPENSATION \nEmployment Agreements \nWe have not entered into any employment agreements with our executive officers and have not made any agreements to provide benefits upon termination of employment. \n\nNo compensation of any kind, including finders, consulting or other similar fees, will be paid to any of our existing stockholders, including our directors, or any of their respective affiliates, prior to, or for any services they render in order to effectuate, the consummation of a business combination. \nITEM12. \n\nThe following table sets forth as of March 30, 2021 the number of shares of common stock beneficially owned by (i)each person who is known by us to be the beneficial owner of more than five percent of our issued and outstanding shares of common stock (ii)each of our officers and directors; and (iii)all of our officers and directors as a group. As of March 30, 2021, we had 28,750,000 shares of common stock issued and outstanding. \nThe following table does not reflect record of beneficial ownership of any shares of common stock issuable upon exercise of the warrants, as the warrants are not exercisable within 60 days of March 30, 2021. \n* \nLess than 1%. \n(1) \nUnless otherwise indicated, the business address of each of the individuals is c/o Natural Order Acquisition Corp., 30 Colpitts Road, Weston, MA 02493. \n(2) \nParesh Patel and Sebastiano Cossia Castiglioni are Managing Members of Natural Order Sponsor, LLC. \n(3) \n(ii) 11,000 shares (but not the 5,500 shares issuable upon exercise of 11,000 warrants) owned by Mr. Patels children; and (iii) 500,000 shares (but not the 250,000 shares issuable upon exercise of 500,000 warrants) owned by Mr. Patels wife. \n(4) \nand (ii) 150,000 shares owned by Vegan Capital SA, over which the Sebastiano Cossia Castiglioni shares dispositive power (but not the 75,000 shares issuable upon exercise of 150,000 warrants) owned by Vegan Capital SA. \n(5) \nBased on a Schedule 13G filed by the reporting person, the address of Hartee Partners, LP is 1185 Avenue of the Americas, New York, NY 10036. \nAll of the founder shares are placed into an escrow account maintained by Continental Stock Transfer& Trust Company acting as escrow agent. 50% percent of these shares will not be transferred, assigned, sold or released from escrow until the earlier of (i) 6 months after the date of the consummation of our initial business combination or (ii) the date on which the closing price of our shares of common stock equals or exceeds $12.50 per share (as adjusted for stock splits, stock dividends, reorganizations and recapitalizations) for any 20 trading days within any 30-trading day period commencing after the closing of our initial business combination and the remaining 50% of the founder shares will not be transferred, assigned, sold or released from escrow until 6 months after the date of the closing of our initial business combination, or earlier, in either case, if, subsequent to our initial business combination, we consummate a subsequent liquidation, merger, stock exchange or other similar transaction which results in all of our stockholders having the right to exchange their shares of common stock for cash, securities or other property. \nDuring the escrow period, the holders of these shares are able to sell or transfer their securities except (1) to any persons (including their affiliates and stockholders) participating in the private placement of the private warrants, officers, directors, stockholders, employees and members of our sponsor and its affiliates, (2) amongst initial stockholders or to our officers, directors and employees, (3) if a holder is an entity, as a distribution to its, partners, stockholders or members upon its liquidation, (4) by bona fide gift to a member of the holders immediate family or to a trust, the beneficiary of which is a holder or a member of a holders immediate family, for estate planning purposes, (5) by virtue of the laws of descent and distribution upon death, (6) pursuant to a qualified domestic relations order, (7) by certain pledges to secure obligations incurred in connection with purchases of our securities, or (8) by private sales at prices no greater than the price at which the shares were originally purchased, in each case where the transferee agrees to the terms of the escrow agreement and the insider letter. \nOur initial stockholders, officers and directors or their affiliates may, but are not obligated to, loan us funds, from time to time or at any time, in whatever amount they deem reasonable in their sole discretion. The loans would either be paid upon consummation of our initial business combination, without interest, or, at the lenders discretion, up to $500,000 of the loans may be converted upon consummation of our business combination into additional Private Warrants to purchase shares of common stock at a conversion price of $1.00 per private warrant (which, for example, would result in the holders being issued Private Warrants to purchase $500,000 shares of common stock if $500,000 of loans were so converted). \nITEM 13. \n\nIn August 2020, Mr. Paresh Patel and Mr. Sebastiano Cossia Castiglioni and/or their respective affiliates purchased 7,187,500 shares for an aggregate purchase price of $25,000, which we refer to herein as founder shares or insider shares. Prior to the initial investment in the company of this $25,000, we had no assets, tangible or intangible. The per share purchase price of the founder shares was determined by dividing the amount of cash contributed to the company by the aggregate number of founder shares issued (resulting in a purchase price of approximately $0.003). Subsequently, an aggregate of 100,000 founder shares were transferred to officers and directors of the Company. On November 5, 2020, 1,437,500 founder shares were surrendered and cancelled, resulting in 5,750,000 shares of common stock being outstanding. \n\nIn order to meet our working capital needs, our initial stockholders, officers and directors or their affiliates may, but are not obligated to, loan us funds, from time to time or at any time, in whatever amount they deem reasonable in their sole discretion. The loans would either be paid upon consummation of our initial business combination, without interest, or, at the lenders discretion, up to $500,000 of the loans may be converted upon consummation of our business combination into additional Private Warrants to purchase shares of common stock at a conversion price of $1.00 per private warrant (which, for example, would result in the holders being issued Private Warrants to purchase 500,000 shares of common stock if $500,000 of loans were so converted). \nThe holders of our insider shares issued and outstanding on the date of the IPO, as well as the holders of the Private Warrants (and all underlying securities) and any securities our initial stockholders, officers, directors or their affiliates may be issued in payment of working capital loans made to us, are entitled to registration rights pursuant to the registration rights agreement, dated November 10, 2020. The holders of the majority of the insider shares can elect to exercise these registration rights at any time commencing three months prior to the date on which these shares of common stock are to be released from escrow. The holders of a majority of the Private Warrants or securities issued in payment of working capital loans made to us can elect to exercise these registration rights at any time after we consummate a business combination. \nOur audit committee will review and approve all reimbursements and payments made to any initial stockholder or member of our management team, or our or their respective affiliates, and any reimbursements and payments made to members of our audit committee will be reviewed and approved by our Board of Directors, with any interested director abstaining from such review and approval. \nNo compensation or fees of any kind, including finders fees, consulting fees or other similar compensation, will be paid to any of our initial stockholders, officers or directors who owned our shares of common stock prior to the IPO, or to any of their respective affiliates, prior to or with respect to the business combination (regardless of the type of transaction that it is).<|endoftext|>### EXPLANATORY NOTE \nSC Health Corporation (we, us, our or the Company) is filing this Amendment No. 1 (this Report) to the Annual Report on Form 10-K/A to amend the Companys Annual Report on Form 10-K for the fiscal year ended December 31, 2020, originally filed with the Securities and Exchange Commission (SEC) on March 30, 2021 (the Original Filing), to restate the Companys financial statements and related footnote disclosures as of December 31, 2018, December 31, 2019 and December 31, 2020 and for the periods from December 10, 2018 (date of inception) through December 31, 2018, January 1, 2019 through December 31, 2019 and January 1, 2020 through December 31, 2020. This Report also amends certain other Items in the Original Filing, as listed in Items Amended in this Form 10K/A below. \nOn April 12, 2021, the Staff of the SECs Division of Corporation Finance (Staff) issued a statement entitled Staff Statement on Accounting and Reporting Considerations for Warrants Issued by Special Purpose Acquisition Companies. As a result of the SEC Staff statement and in light of evolving views as to certain provisions commonly included in warrants issued by special purpose acquisition companies, management and the Audit Company of the Companys board of directors re-evaluated its accounting for (i) our outstanding warrants issued in connection with our initial public offering on July 16, 2019, including the 5,000,000 private placement warrants issued to the Sponsor and the 8,625,000 warrants issued as part of the units sold in our initial public offering, each with an exercise price of $11.50 (the IPO Warrants), (ii) the 450,000 private placement warrants issued to the Sponsor in connection with the underwriters election on August 2, 2019 to fully exercise their over-allotment option (the Over-Allotment Warrants), (iii) the 1,250,000 warrants to be issued pursuant to the terms of our forward purchase agreement (the FPA) entered into on July 11, 2019 with the Sponsor at an exercise price of $11.50 share (the Forward Purchase Units) and (iv) the 2,000,000 private placement warrants with an exercise price of $11.50 that may be issued upon conversion of $2,000,000 of working capital loans (the Working Capital Loan Warrants and, together with the IPO Warrants, Over-Allotment Warrants and Forward Purchase Units, the Warrants). As a result, management and the Audit Committee concluded that the Warrants and FPA should be treated as derivative liabilities pursuant to ASC 815-40. \nTherefore, the Company, in consultation with its audit committee, concluded that its previously issued financial statements for the period from July 16, 2019 (inception) through December 31, 2020 (the Affected Period), inclusive of the 8-K IPO filing and 10-Q filings within the aforementioned period, should be restated because of a misapplication in the guidance around accounting for certain of our Warrants and should no longer be relied upon. \n\n\n(ASC 815-40). Additionally, the FPA was previously unrecorded within the previously filed financial statements. The views expressed in the SEC Staff Statement were not consistent with the Companys historical interpretation of the specific provisions within its warrant agreement and FPA and the Companys application of ASC 815-40 to the warrant agreement and FPA. We reassessed our accounting for the warrants and FPA issued on July 16, 2019, in light of the SEC Staffs published views. Based on this reassessment, we determined that the public and private warrants and FPA should be classified as liabilities measured at fair value upon issuance, with subsequent changes in fair value reported in our Statement of Operations each reporting period. \nThe change in accounting for the Warrants and the FPA does not impact the amounts previously reported for the Companys cash and cash equivalents, investments held in the trust account, operating expenses or total cash flows from operations for any of these periods. \nAt an Extraordinary General Meeting of the Company held on April 14, 2021, the Companys shareholders approved a special resolution to amend the Companys amended and restated memorandum and articles of association to extend the date by which the Company must consummate a business combination (as defined herein) from April 16, 2021 to August 16, 2021. \n\n\nPart I, Item 1A. Risk Factors \nPart II, Item 7. \nPart II, Item 8. \n### Part II, Item 9A. Controls and Procedures \nPart II, Item 10. \n\nSome of the statements contained in this Annual Report on Form 10-K (this Form 10-K) may constitute forward-looking statements for purposes of the federal securities laws. Forward-looking statements in this Form 10-K may include, for example, statements about: our ability to select an appropriate target business; the occurrence of any event, change or other circumstance that could give rise to the termination of the Business Combination Agreement or could otherwise cause the transactions contemplated therein to fail to close our expectations around the performance of a prospective target business; the use of funds not held in the trust account or available to us from interest income on the trust account balance; or our financial performance. \n\n### SUMMARY OF RISK FACTORS \n\n\n\n\n\n\n\n\n\nThe requirement that we consummate an initial Business Combination by April 16, 2021 may give potential target businesses leverage over us in negotiating a Business Combination and may limit the time we have in which to conduct due diligence on potential Business Combination targets, in particular as we approach our dissolution deadline, which could undermine our ability to complete our initial Business Combination on terms that would produce value for our shareholders. \n\nWe may not be able to consummate an initial Business Combination within the time frame required after the closing of the initial public offering, in which case we would cease all operations except for the purpose of winding up and we would redeem our public shares and liquidate. \n\n\n\n\n\n\n\nIf the net proceeds of our initial public offering and the sale of the private placement warrants not being held in the trust account are insufficient to allow us to operate for period of time between our initial public offering and any business combination, it could limit the amount available to fund our search for a target business or businesses and our ability to complete our initial Business Combination, and we will depend on loans from our sponsor, its affiliates or members of our management team to fund our search and to complete our initial Business Combination. \nThe other risks and uncertainties discussed in \n### PART I \nReferences in this Form 10-K to we, us or the Company refer to SC Health Corporation. References to our management or our management team refer to our officers and directors, and references to our Sponsor refer to SC Health Holdings Limited, a Cayman Islands exempted company. References to our initial shareholders refer to our Sponsor and the Companys officers and directors. \nItem 1. \nBusiness. \n### Introduction \nWe are a blank check company incorporated on December 10, 2018, as a Cayman Islands exempted company and formed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses (the business combination). We have reviewed, and continue, to review a number of opportunities to enter into a business combination, but we are unable to determine at this time whether we will complete a business combination with any of the target businesses that we have reviewed or with any other target business. \nOn July 16, 2019, we consummated our initial public offering (the initial public offering) of 15,000,000 units (the Units). Each Unit consists of one Class A ordinary share of the Company, par value $0.0001 per share (the Class A Ordinary Shares), and one-half of one redeemable warrant of the Company (the Warrants). Each whole Warrant entitles the holder thereof to purchase one Class A Ordinary Share for $11.50 per share. The Units were sold at a price of $10.00 per Unit, generating gross proceeds to the Company of $150,000,000. \nSimultaneously with the closing of the initial public offering, we completed the private sale of 5,000,000 warrants (the private placement warrants) to our Sponsor at a purchase price of $1.00 per private placement warrant, generating gross proceeds to the Company of $5,000,000. \nOn August 2, 2019, we consummated the closing of the sale of 2,250,000 additional Units at the price of $10.00 per Unit upon receiving the underwriters election to fully exercise their over-allotment option, generating additional gross proceeds of $22,500,000 to us. As used herein, initial public offering includes the consummation of the sale of the shares in connection with the underwriters exercise of their over-allotment option. \nSimultaneously with the exercise of the over-allotment, we completed the private sale of an additional 450,000 private placement warrants to our Sponsor, generating gross proceeds to the Company of $450,000. \nPrior to the consummation of the initial public offering, on December 28, 2018, our Sponsor purchased 3,450,000 Class B ordinary shares of the Company, par value $0.0001 per share (the Founder Shares), for an aggregate purchase price of $25,000. On February 8, 2019, the Company completed a sub-division of its Class B ordinary shares, pursuant to which the Founder Shares were sub-divided into 4,312,500 shares with a par value of $0.00008 per share. On July 9, 2019, the Company issued 1,250,000 Founder Shares to our Sponsor in connection with the forward purchase agreement (as described below) for par value, or $100, resulting in a total of 5,562,500 Founder Shares issued and outstanding, of which an aggregate of up to 562,500 shares were subject to forfeiture to the extent that the underwriters did not exercise their over-allotment option. \nPrior to the initial public offering, we entered into a forward purchase agreement pursuant to which SC Health Group Limited (the forward purchase investor) agreed to subscribe for an aggregate of 5,000,000 Class A ordinary shares (the forward purchase shares) plus 1,250,000 redeemable warrants (the forward purchase warrants and, together with the forward purchase shares, the forward purchase securities) for a purchase price of $10.00 per Class A ordinary share and accompanying fraction of a warrant, or $50,000,000 in the aggregate, in a private placement that closed concurrently with the closing of our initial business combination. The forward purchase warrants will have the same terms as the Warrants. \n\nA total of$172,500,000 from the proceeds we received from the initial public offering and the sale of the private placement warrants was placed in a segregated trust account located in the United States at Deutsche Bank Trust Company Americas, with American Stock Transfer & Trust Company acting as trustee. The amounts held in the trust account are invested in permitted United States government securities within the meaning of Section 2(a)(16) of the Investment Company Act of 1940, as amended (the Investment Company Act), having a maturity of 180 days or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act that invest only in direct U.S. Except with respect to interest earned on the funds in the trust account that may be released to us to pay our taxes, the funds held in the trust account will not be released until the earliest of: (i) the completion of our initial business combination; (ii) the redemption of any public shares properly submitted in connection with a shareholder vote to amend our amended and restated memorandum and articles of association (A) to modify the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial business combination by April 16, 2021 or (B) with respect to any other provisions relating to the rights of our Class A ordinary shares; and (iii) the redemption of our public shares if we are unable to complete our initial business combination by April 16, 2021, subject to applicable law. \nAs of December 31, 2020, there was approximately $174,542,012 in investments and cash held in the trust account and approximately $124,878 of cash held outside the trust account. As of December 31, 2020, no amounts have been withdrawn from the trust account to pay taxes. \nOn January 5, 2021, the Company announced that it had entered into<|endoftext|>We include a safety performance component in our STI program to reinforce our commitment to continue to be an industry leader in safety. We believe that a safe work environment helps us to attract and retain a more experienced work force and gives us a competitive advantage among our peers, both in retaining existing business and when bidding for new work. In addition, a strong safety record helps us to minimize our insurance and loss costs and the overall cost of doing business. \nWe also include an operational efficiency component in our STI program to reinforce our commitment to enhance our operational efficiency. One of the core objectives to enhance our operational efficiency is to maximize the utilization rate of our fleet to remain active and generate revenues. Also, it is important for us to keep our operational costs, such as professional fees and air freight costs, as low as possible to operate our business efficiently and to remain competitive in the market. \nThe committees practice has been to approve the executive STI program during the first quarter of our fiscal year. In approving the plan, the committee approves the company performance metrics, the specific performance levels for each metric, and the target award for each named executive, which is expressed as a percentage of the executives base salary. In March 2020, the committee approved the fiscal 2020 STI program and designated each of the named executives as a participant. \nAll metrics except for the FCF target, payouts could range between 0 - 100% of the individual components target award, depending on performance. Payout on the FCF portion could range from 0 - 125% of the target FCF component, depending on performance. Assuming maximum performance on all metrics, the overall maximum a participant could earn under the fiscal 2020 STI program would be 115% of his target award. \nThe following chart shows the target award for each participating named executive, expressed as a percentage of his base salary, as well as the dollar amount of the target award he was eligible to receive under the STI program for fiscal 2020: \n_________________ \n(1) \nRepresents the annual base salary for each named executive at the end of fiscal 2020. \n_________________ \nCalculation of 2020 STI Program Metrics and Payouts \nThe table below summarizes performance standards and actual achievement for the year. For the Operational Efficiency and Safety performances, performance at or above target results in a 100% payout and performance at or below target results in a 0% payout. For the FCF performance, (i) performance below threshold results in a 0% payout (ii) performance at threshold results in a 75% payout, (iii) performance at target results in 100% payout and (iv) maximum performance or above results in a payout at 125% of target opportunity. Actual payout is calculated using straight line interpolation between threshold and target and between target and maximum. \nThe individual performance was a discretionary component, based on the committees subjective assessment of the individual executives performance. The committee determined that individuals did achieve the 10% in this category. \nDespite unexpected challenges faced during 2020 due to the COVID-19 pandemic, the committee made no adjustment to the goals established for 2020. As shown, actual performance under the plan resulted in a payout at 80% of target, which yielded an aggregate plan payout to all participants of approximately $2.8 million. \n_____________ \n(a) \nFCF \nThe objective was to achieve the FCF of $73.5 million, with the minimum threshold of $50.0 million required to fund the 2020 STI program. \n(b) \n### Operational Efficiency \nThe objectives were to achieve (i) active utilization rate of 84.0%, (ii) professional fees of $13.1 million and (iii) air freight costs of $3.5 million. \n(c) \n### Individual Performance \nThis is a discretionary component, based on the committees subjective assessment of the individual executives performance. The committee determined that individuals did achieve the 10.0% in this category. \n(d) \n### Safety \nThe objectives were to achieve (i) the number of lost time injuries occurring in a workplace per 1 million hours worked, which is referred to as Lost Time Incident Frequencyor LTIF, of 0.5, and the total recordable case frequency in a workplace per 1 million hours worked, which is referred to as Total Recordable Case Frequencyor TRCF, of 1.0. \n(e) \n### Adjustment. \nGiven the significant challenges that the company faced in connection with the COVID-19 pandemic and others during fiscal 2020, the committee adjusted the individual performance component by increasing its weighted payout by 11.0%. \n\nThe company maintains two long-term incentive (LTI) plans, the Tidewater Inc. 2017 Stock Incentive Plan (the 2017 Plan), which became effective as a result of the restructuring of the company in 2017, and the Tidewater Inc. Legacy GLF Management Incentive Plan (the Legacy GLF Plan), which was originally adopted by GulfMark but was assumed and converted by us in the business combination. \nGiven recent senior leadership changes and to address potential retention and motivation concerns, in early 2020, the committee, with the assistance of its compensation consultant, conducted a comprehensive executive compensation review. As a result, the committee granted time-based restricted stock units to each named executive and for Mr. Kneen, stock options with a premium exercise price equal to 125% of the closing price of a share of our common stock on the date of grant. \nFor each named executive, his award (RSUs and, for Mr. Kneen, stock options) vests in three equal installments on the first three anniversaries of the date of grant, contingent upon his continued employment on the vesting date (except in the case of death or termination due to disability). Mr. Kneens stock options have a maximum term of ten years. \nIn light of COVID-related stock price declines during 2020, and to help manage dilution, the committee used a 60-day average stock price to determine the number of shares to grant to our NEOs. This methodology led to actual grant values that were roughly 38% below the intended target grant value in aggregate as shown below: \n### Retention Bonuses \nIn early 2020, given the uncertainty surrounding efforts to contain the global COVID-19 pandemic and the resulting pressure on the worlds economies, the committee installed a retention program for current officers and certain other key employees to preserve management through any payout of the 2020 STI program. As part of this retention program, each designated participant, including all four named executives, entered into a retention agreement with the company that provided for the payment of a cash retention award no later than April 30, 2020. Under that agreement, the retention awards are subject to a recapture provision which will be triggered if the participants employment terminated within a year of the agreements execution. Each of Messrs. Kneen, Rubio and Darling received a retention award in the amount of $300,000 while Mr. Hudson received a retention award in the amount of $210,000. At April 30, 2021, all four of the named executives will successfully complete their retention periods. The retention award amounts for each named executive are reported in his Bonus column of the Fiscal 2020 Summary Compensation Table. \nRetirement Benefits \nOur named executives participate in employee benefit plans generally available to all employees, including a qualified defined contribution retirement plan (the 401(k) Savings Plan). We have a broad-based legacy Pension Plan, which has been frozen and closed to new participants for nearly a decade. Mr. Darling is the only named executive who participates in our Pension Plan. Since his participation is based on his prior employment with us (from 1983 to 1996), he is currently in payout status and receives a modest annual benefit ($2,227). Mr. Darling will not accrue any additional benefits under the Pension Plan for his current service (he rejoined us in March 2018). Since January 1, 2011, when the Pension Plan was frozen, all qualified retirement benefits have been provided through our 401(k) Savings Plan. \nIn addition to these broad-based programs, we provide our executives with a non-qualified deferred compensation plan, the Supplemental Savings Plan (the SSP), which acts as a supplement to our 401(k) Savings Plan. The SSP is designed to provide retirement benefits to our officers that they are precluded from receiving under the underlying qualified plans due to the compensation and benefit limits in the Internal Revenue Code. None of our named executives have elected to participate in the SSP. \nWe also sponsor a Supplement Executive Retirement Plan (the SERP), which has been closed to new participants since 2010 and frozen from additional accruals since 2018. None of our named executives participates in the SERP. \n\nDuring 2020, we had change in control agreements with all four of our named executives, which are described below as our legacy change of control agreements. \nWe continue to offer our executives change of control benefits for several reasons. We believe that offering these protections to our executives and other key personnel is an important part of good corporate governance, as they alleviate individual concerns about the possible involuntary loss of employment and ensure that the interests of our named executives will be materially consistent with the interests of our stockholders when considering corporate transactions. In addition, we believe that these change of control protections preserve morale and productivity and encourage retention in the face of the potential disruptive impact of an actual or potential change of control of our company. \nOur legacy change of control agreements had an initial term of one year (ending on December 31) but were subject to one-year evergreen renewal periods unless the company provided written notice to the officer by June 30 of a given year that it did not wish to extend the agreement past its then-current term. \nThe legacy agreement provided the officer with certain employment protections for a two-year period following a change in control of the company. In addition, if the officer were terminated without cause or terminated his own employment with good reason during that two-year protected period (as defined in the agreement), he would be entitled to receive certain payments and benefits. Specifically, among other benefits, the officer would be entitled to receive: (1) a cash severance payment equal to a specific multiple (three times for the chief executive officer, two times for the executive vice presidents, and one time for vice president) of the sum of (a) his base salary in effect at the time of termination and (b) the greater of his average bonus over the last three years and his target bonus; (2) a pro-rata cash bonus for the fiscal year in which the termination occurs; (3) a cash payment equal to any unpaid bonus with respect to a completed fiscal year as calculated by the Agreement; (4) a lump sum cash payment for continuation coverage under the Companys health benefit plans; (5) immediate vesting of any outstanding but unvested equity awards as of the termination date, including retention of unexercised stock options to term; \nUnder the legacy agreement, the officer would not be entitled to any tax gross-ups for excise taxes that may be triggered under Sections 280G and 4999 of the Internal Revenue Code of 1986, as amended. However, the officer would be entitled to receive the best net treatment, which means that if the total of all change of control payments due him exceeds the threshold that would trigger the imposition of excise taxes, the officer will either (1) receive all payments and benefits due him and be responsible for paying all such taxes or (2) have his payments and benefits reduced such that imposition of the excise taxes is no longer triggered, depending on which method provides him the better after-tax result. \n\nWe also provide certain limited perquisites to our named executives. For 2020, these perquisites consisted primarily of club dues for one country club membership. We do not provide tax gross-ups on any perquisites. \nEmployment Agreements \nDuring 2020, we had employment agreements with two of our named executives, Messrs. Kneen and Rubio, which are described below as our legacy employment agreements. \n### Mr. Kneen. \nWe were party to a legacy<|endoftext|>Facilitys financial covenants, if, among other things, tenants contributing certain levels of base rent terminate their leases, seek bankruptcy protection or obtain rent concessions, we may not continue to comply with the terms thereof. See \nCredit Facility. \n### General Challenges and Uncertainties \nIn addition to the challenges and uncertainties presented by the pandemic, and as also described under \nand \n### Item1A. Risk Factors \n, we, among other things, face additional challenges and uncertainties, which are heightened by the pandemic, including the possibility we will not be able to: acquire or dispose of properties on acceptable terms, lease our properties on terms favorable to us or at all, collect amounts owed to us by our tenants, renew or re-let, on acceptable terms, leases that are expiring or otherwise terminating. \nWe seek to manage the risk of our real property portfolio and the related financing arrangements by (i) diversifying among types of properties, industries, locations, tenants, scheduled lease expirations, mortgage maturities and lenders, and (ii) minimizing our exposure to interest rate fluctuations. As a result, as of December31, 2020: our 2021 contractual rental income is derived from the following property types: 55.5% from industrial, 32.4% from retail, 5.0% from restaurant, 4.7% from health and fitness and 2.4% from other properties, there are seven states with properties that account for five percent or more of 2021 contractual rental income, and no state accounts for more than 9.3% of 2021 contractual rental income, there are two tenants ( i.e \n, Haverty Furniture and FedEx) that account for more than five percent of 2021 contractual rental income and those tenants account for 12.2% of contractual rental income. through 2029, there are two years in which the percentage of our 2021 contractual rental income represented by expiring leases exceeds 10% ( i.e \n, 21.0% in 2022 and 12.6% in 2023)approximately 21.2% of our 2021 contractual rental income is represented by leases expiring in 2030 and thereafter, after giving effect to interest rate swap agreements, substantially all of our mortgage debt bears interest at fixed rates, in 2021, 2022 and 2023, 5.2%, 10.6% and 7.0% of our total scheduled principal mortgage payments ( i.e., amortization and balances due at maturity) is due, respectively, and there are six different counterparties to our portfolio of interest rate swaps: four counterparties, rated A- or better by a national rating agency, account for 90.7%, or $76.9 million, of the notional value of our swaps; and two counterparties, rated A \n- by other ratings providers, account for 9.3%, or $7.8 million, of the notional value of such swaps. \nWe monitor the risk of tenant non-payments through a variety of approaches tailored to the applicable situation. Generally, based on our assessment of the credit risk posed by our tenants, we monitor a tenants financial condition through one or more of the following actions: reviewing tenant financial statements or other financial information, obtaining other tenant related information, regular contact with tenants representatives, tenant credit checks and regular management reviews of our tenants. We may sell a property if the tenants financial condition is unsatisfactory. \nWe monitor, on an ongoing basis, our expiring leases and generally approach tenants with expiring leases (including those subject to renewal options) at least a year prior to lease expiration to determine their interest in renewing their leases. In 2021 and 2022, 31 tenants with 34 leases for 28 properties representing $15.6 million, or \n22.6%, of 2021 contractual rental income expire. The following table provides information, as of December 31, 2020, regarding the leases that expire in 2021 and 2022 (with respect to the multi-tenant shopping centers in Royersford, Pennsylvania and Lakewood, Colorado, which have both retail and restaurant tenants, we have allocated the property count and associated mortgage debt to the retail (and not restaurant) categories because these are mixed-use properties): \n______________ \n(1) \nIn 2020 and 2019, the rental income reflected above of $71.4 million and $73.4 million, respectively, excludes tenant reimbursement income of $10.5 million and $10.4 million, respectively. \n(2) \n\n(3) \nHaverty Furniture leases eleven of these properties. \nWe are negotiating lease extensions with respect to several properties that account for at least 7.0% of 2021 contractual rental income and at which the lease(s) expire in 2022. We anticipate that if such arrangements are finalized, as to which no assurance can be given, (i) we will extend the leases for several properties for periods ranging from four years to nine years, (ii) a lease for at least one of these properties will not be renewed, and (iii) we will expend an aggregate of approximately $3.3 million from 2021 through 2023 for capital improvements and transaction costs at several of these properties. As a result of the foregoing and other accommodations that may be provided in connection with renewing the leases at these properties, we anticipate that the base rent and cash flow from operations generated by the properties that are re-leased will decrease beginning in late 2022 from that currently generated by all of such properties. If other significant tenants with leases expiring in 2021 and 2022 choose not to renew their leases or negotiate for renewals on terms less favorable to us than currently in effect, we may be adversely affected due to the reduction in base rents received and the expenses associated with maintaining vacant properties. \nIn acquiring properties, we balance an evaluation of the terms of the leases and the credit of the existing tenants with a fundamental analysis of the real estate to be acquired, which analysis takes into account, among other things, the estimated value of the property, local demographics and the ability to re-rent or dispose of the property on favorable terms upon lease expiration or early termination. \nWe are sensitive to the risks facing the retail industry as a result of the growth of e-commerce. Over the past several years, we have been addressing our exposure to the retail industry by focusing on acquiring industrial properties (including warehouse and distribution facilities) and properties that we believe capitalize on e- commerce activities - since September 2016, we have not acquired any retail properties and have sold 13 retail properties. As a result of the focus on industrial properties and the sale of retail properties, retail properties generated 32.9%, 35.2%, 41.9% and 43.7%, of rental income, net, in 2020, 2019, 2018 and 2017, respectively, and industrial properties generated 55.4%, 48.7%, 40.1% and 35.1%, of rental income, net, in 2020, 2019, 2018 and 2017, respectively. \nAt December 31, 2020, we have variable rate debt in the principal amount of $97.7 million ( i.e., \n$84.7 million of mortgage debt and $13.0 million of credit facility debt) that bear interest at the one month LIBOR rate plus a negotiated spread. This mortgage debt is hedged through interest rate swaps and the credit facility debt is not hedged. The authority regulating LIBOR announced it intends to stop compelling banks to submit rates for the circulation of LIBOR after June 2023 and it is possible that LIBOR will become unavailable at an earlier date. As approximately $68.7 million of this mortgage debt and the related notional amount of the interest rate swaps mature after June 2023, there is uncertainty as to how the interest rate on this variable rate debt and the related swaps will be determined when LIBOR is unavailable. \n\nSet forth below is a description of the challenges and uncertainties facing certain tenants or properties: \n### Regal Cinemas \nRegal Cinemas is a tenant at three properties, including a property owned by an unconsolidated joint venture. Regal Cinemas closed substantially all of its theaters in October 2020 and has not indicated when the theaters at our properties will re-open. We summarize below certain information about our Regal Cinemas properties: \n- the two consolidated properties accounted for $165,000 and $2.5 million of rental income, during 2020 and 2019, respectively. In 2020, we, among other things, (i) wrote-off, as reduction to rental income, $1.1 million of the tenants unbilled rent receivable, (ii) did not collect and did not accrue $928,000 of the rent due principally for September through December 2020, and (iii) abated rent of $676,000. At December 31, 2020, our Indianapolis, Indiana property had mortgage debt, intangible lease liabilities and intangible lease assets of approximately $4.0 million, $654,000 and $832,000, respectively. There is no mortgage debt, intangible lease liabilities or intangible lease assets at our Greensboro, North Carolina property at which we lease the underlying fee and in turn lease the property to Regal Cinemas. We estimate that the carrying costs for these properties for the twelve months ending December 31, 2021 are approximately $725,000, including real estate taxes of approximately $337,000 and debt service of $184,000. Regal Cinemas is the primary obligor with respect to $541,000 of such costs and we are only responsible with respect to such amount if it is not paid by Regal Cinemas. \n- a Regal Cinemas theater is a tenant at a multi-tenant property located in Manahawkin, New Jersey and which is owned by an unconsolidated joint venture. Our 50% share of the base rent paid by Regal Cinemas at this property was $69,000, $237,000, and $237,000 representing 5.2%, 16.5% and 13.0% of our share of the total base rent payable by all tenants at such property in 2020, 2019 and 2018, respectively. Regal Cinemas has not paid our share ( i.e \n, $89,000) of the base rent due for the four months ended December 31, 2020. At December 31, 2020, our share of the mortgage debt at this property was approximately $11.4 million. \nIn February 2021, we entered into lease amendments with Regal Cinemas pursuant to which: \n- with respect to the Indianapolis, Indiana and Greensboro, North Carolina properties, we agreed to defer an aggregate of $1.4 million of rent otherwise payable from September 2020 through August 2021, the tenant agreed to pay an aggregate of $441,000 of rent during such period and the parties extended the lease for the Indianapolis, Indiana property for two years, and \n- with respect to the Manahawkin, New Jersey property, we agreed to defer our 50% share of an aggregate of $182,000 of rent otherwise payable from September 2020 through August 2021, and the parties extended the lease for one year, and \nThe deferred amounts are to be repaid in equal installments from January 2022 through June 2023. \n### LA Fitness \nLA Fitness, an owner/operator of health and fitness facilities, is a tenant at three properties. During 2020, we deferred $290,000 and abated $500,000 of the base rent this tenant was required to pay. In connection with these accommodations, the tenant agreed to extend the lease at one property for five years which, due to the effect of straight-line rent, we estimate will contribute an additional $24,000 annually to rental income. This tenant paid base rent of $2.4 million and $3.1 million in 2020 and 2019, respectively, and we anticipate that they will pay base rent of $3.4 million in 2021 (including $133,000 of deferral repayments). At December 31, 2020, the mortgage debt, unbilled rent receivable, intangible lease assets and intangible lease liabilities with respect to these properties was $12.5 million, $1.4 million, $523,000 and $36,000, respectively. \nThe Vue - Beachwood, Ohio \nA multi-family complex, which we refer to as The Vue, ground leases from us the underlying land located in Beachwood, Ohio.During 2020, 2019 and 2018, the owner/operator of the property paid us $729,000, $783,000 and $1.4 million, respectively, of rental income, all of which was variable rent. For the past several years, the property has faced, and we anticipate that for at least the next several months, if not longer, the property will continue to face, occupancy, financial and litigation challenges. For the past several months, the property, after giving effect to mortgage payments, has operated on a negative cash flow basis, and we anticipate that it will continue to operate on a negative cash flow basis for at least the next several months, if not longer. The tenant has not paid the aggregate $486,000 of rent owed from October 2020 through March<|endoftext|>"},"task":{"kind":"string","value":"{\"file\": \"/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz\"}"}}},{"rowIdx":83,"cells":{"text":{"kind":"string","value":"<|endoftext|>Date, the sum of (i) consolidated total assets (as determined in accordance with U.S. generally accepted accounting principles, or GAAP) of our company as of such calculation date, plus (ii) the absolute amount of consolidated accumulated amortization of intangibles (as determined in accordance with GAAP) for our company as of such calculation date, minus (iii) total cash and cash equivalents, minus (iv) the absolute amount of adjusted total liabilities of our company as of such calculation date. \nAdjusted total liabilities will be equal to, with respect to our company as of any calculation date, our companys consolidated total liabilities (as determined in accordance with GAAP) as of such calculation date after excluding the effect of any outstanding third party indebtedness of our company. \nQuarterly management fee will be equal to, as of any calculation date, the product of (i) 0.5%, multiplied by (ii) our companys adjusted net assets as of such calculation date; provided, however, that with respect to any fiscal quarter in which the management services agreement is terminated, our company will pay our manager a management fee with respect to such fiscal quarter equal to the product of (i)(x) 0.5%, multiplied by (y) our companys adjusted net assets as of such calculation date, multiplied by (ii) a fraction, the numerator of which is the number of days from and including the first day of such fiscal quarter to but excluding the date upon which the management services agreement is terminated and the denominator of which is the number of days in such fiscal quarter. \nTotal offsetting management fees will be equal to, as of any calculation date, fees paid to our manager by the businesses that we acquire in the future under separate offsetting management services agreements. \n### Transaction Services Agreements \nPursuant to the management services agreement, we have agreed that our manager may, at any time, enter into transaction services agreements with any of our businesses relating to the performance by our manager of certain transaction-related services in connection with the acquisitions of target businesses by our company or its businesses or dispositions of our companys or its businesses property or assets. These services may include those customarily performed by a third-party investment banking firm or similar financial advisor, which may or may not be similar to management services, in connection with the acquisition of target businesses by us or our subsidiaries or disposition of subsidiaries or any of our property or assets or those of our subsidiaries. In connection with providing transaction services, our manager will generally receive a fee equal to the sum of (i) 2.0% of the aggregate purchase price of the target business up to and equal to $50 million, plus (ii) 1.5% of the aggregate purchase price of the target business in excess of $50 million and up to and equal to $100 million, plus (iii) 1.0% of the aggregate purchase price over $100 million, subject to annual review by our board of directors. The purchase price of a target business shall be defined as the aggregate amount of consideration, including cash and the value of any shares issued by us on the date of acquisition, paid for the equity interests of such target business plus the aggregate principal amount of any debt assumed by us of the target business on the date of acquisition or any similar formulation. The other terms and conditions relating to the performance of transaction services will be established in accordance with market practice. \nOur manager may enter into transaction services agreements with our subsidiaries and future subsidiaries, which agreements would be in the form prescribed by our management services agreement. \nThe services that our manager will provide to our subsidiaries and future subsidiaries under the transaction services agreements will include the following services that would be provided in connection with a specific transaction identified at the time that the transaction services agreement is entered into: reviewing, evaluating and otherwise familiarizing itself and its affiliates with the business, operations, properties, financial condition and prospects of the future subsidiary and its target acquisition and preparing documentation describing the future subsidiarys operations, management, historical financial results, projected financial results and any other relevant matters and presenting such documentation and making recommendations with respect thereto to certain of our managers affiliates. \nAny fees received by our manager pursuant to such a transaction services agreement will be in addition to the management fee payable by our company pursuant to the management services agreement and will not offset the payment of such management fee. A transaction services agreement with any of our businesses may provide for the reimbursement of costs and expenses incurred by our manager in connection with the acquisition of such businesses. \nTransaction services agreements will be reviewed, authorized and approved by our companys board of directors on an annual basis. \n### Reimbursement of Expenses \nOur company is responsible for paying costs and expenses relating to its business and operations. Our company agreed to reimburse our manager during the term of the management services agreement for all costs and expenses of our company that are incurred by our manager or its affiliates on behalf of our company, including any out-of-pocket costs and expenses incurred in connection with the performance of services under the management services agreement, and all costs and expenses the reimbursement of which are specifically approved by our companys board of directors. \nOur company will not be obligated or responsible for reimbursing or otherwise paying for any costs or expenses relating to our managers overhead or any other costs and expenses relating to our managers conduct of its business and operations. Also, our company will not be obligated or responsible for reimbursing our manager for costs and expenses incurred by our manager in the identification, evaluation, management, performance of due diligence on, negotiation and oversight of potential acquisitions of new businesses for which our company (or our manager on behalf of our company) fails to submit an indication of interest or letter of intent to pursue such acquisition, including costs and expenses relating to travel, marketing and attendance of industry events and retention of outside service providers relating thereto. In addition, our company will not be obligated or responsible for reimbursing our manager for costs and expenses incurred by our manager in connection with the identification, evaluation, management, performance of due diligence on, negotiating and oversight of an acquisition by our company if such acquisition is actually consummated and the business so acquired entered into a transaction services agreement with our manager providing for the reimbursement of such costs and expenses by such business. In this respect, the costs and expenses associated with the pursuit of add-on acquisitions for our company may be reimbursed by any businesses so acquired pursuant to a transaction services agreement. \nAll reimbursements will be reviewed and, in certain circumstances, approved by our companys board of directors on an annual basis in connection with the preparation of year-end financial statements. \n### Termination Fee \nWe will pay our manager a termination fee upon termination of the management services agreement if such termination is based solely on a vote of our companys board of directors and our shareholders; no other termination fee will be payable to our manager in connection with the termination of the management services agreement for any other reason. The termination fee that is payable to our manager will be equal to the product of (i) two (2) multiplied by (ii) the sum of the amount of the quarterly management fees calculated with respect to the four fiscal quarters immediately preceding the termination date of the management services agreement. The termination fee will be payable in eight equal quarterly installments, with the first such installment being paid on or within five (5) business days of the last day of the fiscal quarter in which the management services agreement was terminated and each subsequent installment being paid on or within five (5) business days of the last day of each subsequent fiscal quarter, until such time as the termination fee is paid in full to our manager. \nOur Manager as an Equity Holder \n### Managers Profit Allocation \nOur manager owns 100% of the allocation shares of our company, which generally will entitle our manager to receive a 20% profit allocation as a form of preferred distribution. The calculation of the profit allocation and the rights of our manager, as the holder of the allocation shares, are governed by the operating agreement. \nOur board will have the opportunity to review and approve the calculation of managers profit allocation when it becomes due and payable. Our manager will not receive a profit allocation on an annual basis. Instead, our manager will be paid a profit allocation only upon the occurrence of one of the following events, which we refer to collectively as the trigger events: the sale of a material amount, as determined by our manager and reasonably consented to by a majority of our companys board of directors, of the capital stock or assets of one of our businesses or a subsidiary of one of our businesses, which event we refer to as a sale event; or at the option of our manager, for the 30-day period following the fifth anniversary of the date upon which we acquired a controlling interest in a business, which event we refer to as a holding event. If our manager elects to forego declaring a holding event with respect to such business during such period, then our manager may only declare a holding event with respect to such business during the 30-day period following each anniversary of such fifth anniversary date with respect to such business. Once declared, our manager may only declare another holding event with respect to a business following the fifth anniversary of the calculation date with respect to a previously declared holding event. \nWe believe this payment timing, rather than a method that provides for annual allocation payments, more accurately reflects the long-term performance of each of our businesses and is consistent with our intent to hold, manage and grow our businesses over the long term. We refer generally to the obligation to make this payment to our manager as the profit allocation and, specifically, to the amount of any particular profit allocation as the managers profit allocation. \nDefinitions used in, and an example of the calculation of profit allocation, are set forth in more detail below. \nThe amount of our managers profit allocation will be based on the extent to which the total profit allocation amount (as defined below) with respect to any business, as of the last day of any fiscal quarter in which a trigger event occurs, which date we refer to as the calculation date, exceeds the relevant hurdle amounts (as described below) with respect to such business, as of such calculation date. Our managers profit allocation will be calculated by an administrator, which will be our manager so long as the management services agreement is in effect, and such calculation will be subject to a review and approval process by our companys board of directors. For this purpose, total profit allocation amount will be equal to, with respect to any business as of any calculation date, the sum of: the contribution-based profit (as described below) of such business as of such calculation date, which will be calculated upon the occurrence of any trigger event with respect to such business; plus the excess of the cumulative gains and losses of our company (as described below) over the high water mark (as described below) as of such calculation date, which will only be calculated upon the occurrence of a sale event with respect to such business, and not on a holding event (we generally expect this component to be the most significant component in calculating total profit allocation amount). \nSpecifically, managers profit allocation will be calculated and paid as follows: managers profit allocation will not be paid with respect to a trigger event relating to any business if the total profit allocation<|endoftext|>AMERICAN RESOURCES CORPORATION \n\nFiscal Year Ended December 31, 2020 \nSpecial Note Regarding Forward Looking Statements. \nThis annual report on Form 10-K of American Resources Corporation for the year ended December 31, 2020 contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are intended to be covered by the safe harbors created thereby. To the extent that such statements are not recitations of historical fact, such statements constitute forward looking statements which, by definition involve risks and uncertainties. In particular, statements under the Sections; Description of Business, contain forward looking statements. Where in any forward-looking statements, the Company expresses an expectation or belief as to future results or events, such expectation or belief is expressed in good faith and believed to have a reasonable basis, but there can be no assurance that the statement of expectation or belief will result or be achieved or accomplished. \nThe following are factors that could cause actual results or events to differ materially from those anticipated and include but are not limited to: general economic, financial and business conditions; the price of metallurgical coal and or thermal coal changes in and compliance with governmental regulations; changes in tax laws; and the cost and effects of legal proceedings. \nYou should not rely on forward looking statements in this annual report. This annual report contains forward looking statements that involve risks and uncertainties. We use words such as anticipates, believes, plans, expects, future, intends, and similar expressions to identify these forward-looking statements. Prospective investors should not place undue reliance on these forward-looking statements, which apply only as of the date of this annual report. Our actual results could differ materially from those anticipated in these forward-looking statements. \n### PART I \nItem 1. Business. \nOverview \nWhen we formed our company, our focus was to (i) construct and/or purchase and manage a chain of combined gasoline, diesel and natural gas (NG) fueling and service stations (initially, in the Miami, FL area); (ii) construct conversion factories to convert NG to liquefied natural gas (LNG) and compressed natural gas (CNG); and (iii) construct conversion factories to retrofit vehicles currently using gasoline or diesel fuel to also run on NG in the United States and also to build a convenience store to serve our customers in each of our locations. \nOn January 5, 2017, American Resources Corporation (ARC) executed a Share Exchange Agreement between the Company and Quest Energy Inc. (Quest Energy), a private company incorporated in the State of Indiana on May 2015 with offices at 12115 Visionary Way, Fishers, IN 46038, and due to the fulfillment of various conditions precedent to closing of the transaction, the control of the Company was transferred to the Quest Energy shareholders on February 7, 2017. This transaction resulted in Quest Energy becoming a wholly-owned subsidiary of ARC. Through Quest Energy, ARC was able to acquire coal mining and coal processing operations, substantially all located in eastern Kentucky and western West Virginia. On November 25, 2020, Quest Energy changed its name to American Carbon Corp. (American Carbon) \nAmerican Carbon currently has seven coal mining and processing operating subsidiaries: McCoy Elkhorn Coal LLC (doing business as McCoy Elkhorn Coal Company) (McCoy Elkhorn), Knott County Coal LLC (Knott County Coal), Deane Mining, LLC (Deane Mining) and Wyoming County Coal LLC (Wyoming County), Quest Processing LLC (Quest Processing), Perry County Resources (Perry County) located in eastern Kentucky and western West Virginia within the Central Appalachian coal basin, and ERC Mining Indiana Corporation (ERC) located in southwest Indiana within the Illinois coal basin. The coal deposits under control by the Company are generally comprise of metallurgical coal (used for steel making), pulverized coal injections (used in the steel making process) and high-BTU, low sulfur, low moisture bituminous coal used for a variety of uses within several industries, including industrial customers and specialty products. \nEfforts to diversify revenue streams have led to the establishment of additional subsidiaries; American Metals LLC (AM) which is focused on the recovery and sale of recovered metal and steel and American Rare Earth LLC (ARE) which is focused on the aggregation and monetization of critical and rare earth element deposits. \nWe have not classified, and as a result, do not have any proven or probable reserves as defined in United States Securities and Exchange Commission Industry Guide 7, and as a result, our company and its business activities are deemed to be in the exploration stage until mineral reserves are defined on our properties. \nSince mid-2019, we have not mined or sold coal which is sold into the thermal coal markets. All production and future investment will be for the mining of metallurgical coal. The following table is presented for historical purposes. \n### McCoy Elkhorn Coal LLC \nGeneral: \nLocated primarily within Pike County, Kentucky, McCoy Elkhorn is currently comprised of two active mines (Mine #15 and the Carnegie 1 Mine), one mine in hot idle status (the PointRock Mine), two coal preparation facilities (Bevins #1 and Bevins #2), and other mines in various stages of development or reclamation. McCoy Elkhorn sells its coal to a variety of customers, both domestically and internationally, primarily to the steel making industry as a high-vol B coal or blended coal. The coal controlled at McCoy Elkhorn (along with our other subsidiaries) has not been classified as either proven or probable as defined in the United States Securities and Exchange Commission Industry Guide 7, and as a result, do not have any proven or probable reserves under such definition and are classified as an Exploration Stage pursuant to Industry Guide 7. \n### Mines: \nMine #15 is an underground mine in the Millard (also known as Glamorgan) coal seam and located near Meta, Kentucky. Mine #15 is mined via room-and-pillar mining methods using continuous miners, and the coal is belted directly from the stockpile to McCoy Elkhorns coal preparation facility. Mine #15 is currently a company run mine, whereby the Company manages the workforce at the mine and pays all expenses of the mine. The coal from Mine #15 is stockpiled at the mine site and belted directly to the Companys nearby coal preparation facilities. Production at Mine #15 re-commenced under Quest Energys ownership in September 2016. Mine #15 has the estimated capacity to produce up to approximately 40,000 tons per month of coal. The Company acquired Mine #15 as an idled mine, and since acquisition, the primary work completed at Mine #15 by the Company includes changing working sections within the underground mine, air ventilation enhancements primarily through brattice work and the use of overcasts and installing underground mining infrastructure as the mine advances due to coal extraction. In 2020, Mine #15 produced approximately 461,570 tons and sold the coal at an average price of $70.28 per ton. In 2019, Mine #15 produced approximately 124,740 tons and sold the coal at an average price of $76.40 per ton. During 2020 and 2019, 100% and 100%, respectively, of the coal extracted from Mine #15 was high-vol B metallurgical coal quality, of which 100% was sold into the PCI market and 100% was sold into the metallurgical market, respectively. \nThe Carnegie 1 Mine is an underground mine in the Alma and Upper Alma coal seams and located near Kimper, Kentucky. In 2011, coal production from the Carnegie 1 Mine in the Alma coal seam commenced and then subsequently the mine was idled. Production at the Carnegie 1 Mine was reinitiated in early 2017 under Quest Energys ownership and is currently being mined via room-and-pillar mining methods utilizing a continuous miner. The coal is stockpiled on-site and trucked approximately 7 miles to McCoy Elkhorns preparation facilities. The Carnegie 1 Mine is currently a company run mine, whereby the Company manages the workforce at the mine and pays all expenses of the mine. The Carnegie 1. Mine has the estimated capacity to produce up to approximately 10,000 tons per month of coal. The Company acquired the Carnegie 1 Mine as an idled mine, and since acquisition, the primary work completed at the Carnegie 1 Mine by the Company includes mine rehabilitation work in preparation for production, changing working sections within the underground mine, air ventilation enhancements primarily through brattice work, and installing underground mining infrastructure as the mine advances due to coal extraction. In 2020, the Carnegie 1 Mine produced approximately 0 tons. In 2019, the Carnegie 1 Mine produced approximately 4,276 tons and sold the coal at an average price of $76.40 per ton. During 2019 100% of the coal extracted from the Carnegie 1 Mine was high-vol B metallurgical coal quality, of which 100% was sold into the metallurgical market. \nQuest Energy acquired the PointRock Mine in April 2018. On May 8, 2020, the PointRock Mine permits were released from the Companys control upon the settlement agreement with Empire. \nBeginning in January 2020 through the report date, Mine #15 and Carnegie 1 mines were idled due to the adverse market effects Covid-19 global pandemic. \n\nThe Bevins #1 Preparation Plant is an 800 ton-per hour coal preparation facility located near Meta, Kentucky, across the road from Mine #15. Bevins #1 has raw coal stockpile storage of approximately 25,000 tons and clean coal stockpile storage of 100,000 tons of coal. The Bevins #1 facility has a fine coal circuit and a stoker circuit that allows for enhance coal recovery and various coal sizing options depending on the needs of the customer. The Company acquired the Bevins Preparation Plants as idled facilities, and since acquisition, the primary work completed at the Bevins Preparation Plants by the Company includes rehabilitating the plants warehouse and replacing belt lines. \nThe Bevins #2 Preparation Plant is on the same permit site as Bevins #1 and is a 500 ton-per-hour processing facility with fine coal recovery and a stoker circuit for coal sizing options. Bevins #2 has raw coal stockpile storage of 25,000 tons of coal and a clean coal stockpile storage of 45,000 tons of coal. We are currently utilizing less than 10% of the available processing capacity of Bevins #1 and Bevins #2. \nBoth Bevins #1 and Bevins #2 have a batch-weight loadout and rail spur for loading coal into trains for rail shipments. The spur has storage for 110 rail cars and is serviced by CSX Transportation and is located on CSXs Big Sandy, Coal Run Subdivision. Both Bevins #1 and Bevins #2 have coarse refuse and slurry impoundments called Big Groundhog and Lick Branch. While the Big Groundhog impoundment is nearing the end of its useful life, the Lick Branch impoundment has significant operating life and will be able to provide for coarse refuse and slurry storage for the foreseeable future at Bevins #1 and Bevins #2. Coarse refuse from Bevins #1 and Bevins #2 is belted to the impoundments. Both Bevins #1 and Bevins #2 are facilities owned by McCoy Elkhorn, subject to certain restrictions present in the agreement between McCoy Elkhorn and the surface land owner. \nBoth Bevins #1 and Bevins #2, as well as the rail loadout, are operational and any work required on any of the plants or loadouts would be routine maintenance. The allocated cost of for this property at McCoy Elkhorn Coal paid by the company is $95,210. \nDue to additional coal processing storage capacity at Bevins #1 and Bevins #2 Preparation Plants, McCoy Elkhorn processes, stores, and loads coal for other regional coal producers for an agreed-to fee. \n### Additional Permits: \nIn addition to the above mines, McCoy Elkhorn holds 11 additional coal mining permits that are idled operations or in various stages of reclamation. For the idled coal mining operations, McCoy Elkhorn will determine which coal mines to bring back into production, if any, as the coal market changes, and there are currently no other idled mines within McCoy Elkhorn that are slated to go into production in the foreseeable future. Any idled mines that are brought into production would require significant upfront capital investment, and<|endoftext|>Top talent. \n\nWe do not provide any nonqualified defined contribution or other deferred compensation plans to any of our employees. \nPerquisites \nWe limit the perquisites that we make available to our executive officers. In certain cases, we have reimbursed our executive officers for their relocation expenses on their initial hire. \n### Prior Severance Plan \nIn November 2015, we entered into a Severance and Change in Control Plan Participation Agreement (the Participation Agreement) witheach ofour executive officers and certain key employees pursuant to our Severance and Change in Control Plan (the Severance Plan) approved by our Compensation Committee. The Severance Plan established the amount of severance payments and benefits available in the event of a (i)termination of employment by the Company for reasons other than Cause (as defined below), death or Disability (as defined below) or by the participant for Good Reason (as defined below) and (ii)termination of employment by the Company for reasons other than Cause, death or Disability or by the participant for Good Reason withinsixmonths before or within 12months after a Change in Control (as defined in the Severance Plan). In May 2020, we amended the Severance Plan to clarify the definitions of Change in Control and Good Reason, and to establish that our General Counsel is included as a Tier 1 Employee under the Severance Plan. The Severance and Change in Control Plan was terminated on November 10, 2020. \nThe Severance Plan established four tiers of employees: Tier 1, Tier 2, Tier 3 and Tier 4. In Fiscal 2021, the Companys Tier 1 employees previously included Taylor Crouch, our former Chief Executive Officer, Craig Kussman, our former Chief Financial Officer, and Jennifer Bush, our former SVP, General Counsel, Corporate Secretary and Compliance Officer. The Companys Tier 2 employees included all non-Tier 1 members of the Companys executive team. The Companys Tier 3 employees included all Senior Vice Presidents who were not members of the Companys executive team. The Companys Tier 4 employees included all Vice Presidents who were not members of the Companys executive team and such other executives as the Compensation Committee could specify from time to time. \nUpon termination of employment by the Company for reasons other than Cause, death or Disability or by the participant for Good Reason that occurred more than 6 months before a Change in Control (as defined in the Severance Plan), each (i)Tier 1 employee was eligible for a cash severance payment equal to 2.0times the employees base salary, paid in a lump sum, plus a pro-rated target bonus for the fiscal year in which the termination occurred, Health Benefit Continuation (as defined in the Severance Plan) for up to 18 months, and Outplacement Assistance (as defined in the Severance Plan) for 18 months; and (ii)Tier 2 employee was eligible for a cash severance payment equal to 1.0 times the employees base salary, paid in a lump sum, plus a pro-rated target bonus for the fiscal year in which the termination occurred, Health Benefit Continuation for up to 12 months, and Outplacement Assistance for 12 months. The Severance Plan did not provide for accelerated vesting of the equity awards held by the Tier 1 or Tier 2 employees in the event of a termination without Cause or a resignation for Good Reason. \nUpon termination of employment by the Company for reasons other than Cause, death or Disability or by the participant for Good Reason within 6 months before or within \n12 months after a Change in Control, each ( i \n)Tier 1 employee was eligible for a cash severance payment equal to 2.0 times the employees base salary, paid in a lump sum, plus a pro-rated target bonus for the fiscal year in which the termination occurs, Health Benefit Continuation (as defined in the Severance Plan) for up to 18 months, and Outplacement Assistance (as defined in the Severance Plan) for 18 months; and \n(ii)Tier 2 employee is eligible for a cash severance payment equal to 1.0 times the employees base salary, paid in a lump sum, plus a pro-rated target bonus for the fiscal year in which the termination occurs, Health Benefit Continuation for up to 12 months, and Outplacement Assistance for 12 months. In addition, each Tier \n1 and Tier 2 employee was eligible to receive full accelerated vesting of all outstanding equity grants and a one-year time period to exercise any stock options or stock appreciation rights which are not cashed out upon the Change in Control. \nPayment of the severance benefits under the Severance Plan was conditioned upon the employee signing a general release of claims in favor of the Company and agreeing to abide by restrictive covenants including maintaining confidential information of the Company, non-solicitation and non-recruitment of Company employees for the Restricted Period (as defined below), non-solicitation of the Companys customers or potential customers during the Restricted Period, non-employment by and limitations on investment in competitors of the Company for the Restricted Period, and no disparagement of the Company. The Restricted Period is twenty-four months for Tier 1 employees and twelve months for Tier 2 employees. \nFurther, pursuant to the terms of the Participation Agreements, any existing employment or severance agreement between the Company and the participantwas immediately terminated and replaced with the provisions of the Severance Plan, subject to limited exceptions required to comply with the requirements of Internal Revenue Code Section409A. \nCause as defined in the Severance Plan meant: (i)the willful and continued failure of the Participant (as defined in the Severance Plan) to perform substantially the Participants duties with Organovo (other than any such failure resulting from incapacity due to physical or mental illness), as determined by the Board with respect to any Tier 1 or Tier 2 employee, and as determined by Organovos Chief Executive Officer with respect to employees in Tiers 3 and 4 no earlier than thirty (30)days after a written demand for substantial performance is delivered to the Participant, which specifically identifies the manner in which Organovo believes that the Participant has willfully and continuously failed to perform substantially the Participants duties with Organovo (provided, however, that with respect to any Tier 1 or Tier 2 employee, the failure to achieve individual or Company-based performance goals, budgets or targets shall not be deemed to be a failure of the Participant to perform his or her duties for purposes of this definition of Cause); (ii)the willful engaging by the Participant in illegal conduct or gross misconduct which is materially and demonstrably injurious to Organovo or Participants ability to perform his or her duties with Organovo; (iii)conviction (including a plea of guilty or nolo contendere \n) of a felony; (iv)a material violation of a material written policy of Organovo or any affiliate, violation of which would be grounds for immediate dismissal under applicable Company policy; (v)failure to comply in any material respect with the Foreign Corrupt Practices Act, the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended (the Exchange Act), the Sarbanes-Oxley Act of 2002, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, or the Truth in Negotiations Act, or any rules or regulations thereunder; or (vi)a material breach of the restrictive covenants in Section7(b) of the Severance Plan subject to the cure provisions provided in Section7(b) of the Severance Plan. \nChange in Control as defined in the Severance Plan meant the effective date of the occurrence of any of the following events: \n(i) any person (as such term is used in Sections13(d) and 14(d) of the Exchange Act, including for purposes of clarity a group (within the meaningof Section13(d)(3) of the Exchange Act)) becomes the beneficial owner (as such term is defined in Rule13d3 under the Exchange Act), directly or indirectly, of securities of Organovo representing more than thirty percent (30%) of the total Fair Market Value (as defined in the Severance Plan) or total combined voting power of Organovos thenoutstanding securities entitled to vote generally in the election of Board directors; provided, however, that a Change in Control shall not be deemed to have occurred if such degree of beneficial ownership results from any of the following: (A)an acquisition by any person or group who on the Effective Date (as defined in the Severance Plan) is the beneficial owner of more than thirty percent (30%) of such voting power, (B)any acquisition directly from Organovo, including, without limitation, pursuant to or in connection with a public offering of securities, (C)any acquisition by Organovo, (D)any acquisition by a trustee or other fiduciary under an employee benefit plan of a participating company, or (E)any acquisition by an entity owned directly or indirectly by the shareholders of Organovo in substantially the same proportions as their ownership of the voting securities of Organovo; or \n(ii) an Ownership Change Event (as defined below) or series of related Ownership Change Events (collectively, a \n### Transaction \n) in which the shareholders of Organovo immediately before the Transaction do not retain immediately after the Transaction direct or indirect beneficial ownership of more than fifty percent (50%) of the total combined voting power of the outstanding securities entitled to vote generally in the election of Board directors or, in the case of an Ownership Change Event described in clause (iii) of that definition, the entity to which the assets of Organovo were transferred (the \nTransferee \n), as the case may be; or \n(iii) a majority of members of the non-employee Incumbent Directors (as defined below) is replaced during any twelve (12)-month period; or \n(iv) a liquidation, winding up or dissolution of the Company; provided, however \n, that a Change in Control shall be deemed not to include an event described in subsection (i) until the earlier of (a) the person or group has two or more representatives on the Board or (b) the person or group becomes the beneficial owner (as such term is defined in Rule13d3 under the Exchange Act), directly or indirectly, of securities of Organovo representing more than fifty percent (50%) of the total Fair Market Value or total combined voting power of Organovos thenoutstanding securities entitled to vote generally in the election of Board directors. \nFor purposes of subsections (i) and (ii), indirect beneficial ownership included, without limitation, an interest resulting from ownership of the voting securities of one or more corporations or other business entities which own Organovo or the Transferee, as the case may be, either directly or through one or more subsidiary corporations or other business entities. \nIn addition, for purposes of subsections (i) and (ii), the Compensation Committee was authorized to determine whether multiple acquisitions of the voting securities of Organovo and/or multiple Ownership Change Events are related and to be treated in the aggregate as a single Change in Control, and its determination shall be final, binding and conclusive. \nFor purposes of this definition of Change in Control, \nIncumbent Director means a director who either (i) is a member of the Board as of the Effective Date or (ii) is elected, or nominated for election, to the Board with the affirmative votes of at least a majority of the Incumbent Directors at the time of such election or nomination (but excluding a director who was elected or nominated in connection with an actual or threatened proxy contest relating to the election of directors of Organovo or at the request of a person or group who is the beneficial owner (as such term is defined in Rule13d3 under the Exchange Act), directly or indirectly, of securities of Organovo representing more than five percent (5%) of the total Fair Market Value or total combined voting power of Organovos thenoutstanding securities entitled to vote generally in the election of Directors); and \nOwnership Change Event means the occurrence of any of the following with respect to Organovo:(i) the direct or indirect sale or exchange in a single or series of related transactions by the shareholders of Organovo of securities of Organovo representing more than fifty percent (50%) of the total combined voting power of Organovos then outstanding securities entitled to vote generally in<|endoftext|>NEO, in the event of a termination of the executives employment by us without Cause (as defined in the agreements), by the executive for Good Reason, (as defined in the agreements), or a non-renewal by us, the executive is entitled to receive the following payments and benefits: \nAn amount equal to the sum of base salary and target annual bonus for each fiscal year during the Severance Period (as defined below), payable in installments; \n\nAll performance-based equity awards remain outstanding and eligible to vest based on achievement of performance objectives through the Severance Period; and \nOutstanding stock options remain outstanding until the earlier of (i) the expiration of the Severance Period and (ii) the original expiration of the stock option. \n\nPursuant to the terms of the employment agreements, in the event of a termination due to death or incapacity, each NEO is entitled to the annual bonus that would have been paid had the executive remained employed until the end of the applicable bonus period. \nIn the event of any termination of employment, each NEO is entitled to a lump sum equal to (i) any earned but unpaid base salary, (ii) any earned but unpaid annual bonus, (iii) any unreimbursed business expenses and (iv) vested and accrued employee benefits, if any, to which the executive is entitled under employee benefit plans. \nFor additional information concerning our executive compensation, see Compensation Discussion and Analysis above. \nThe following table shows the value to the \nNEO of hypothetical benefits and payments provided upon termination as of December 31, 2020 under the Companys policies and programs. \nThe value of the acceleration of time-based equity awards and performance-based equity awards are calculated based on the $27.25 closing price of our Class A common stock on December 31, 2020. \n(1) \nAssumes a change in control occurred on December 31, 2020, immediately followed by the executives termination. \n(2) \nAmount includes 2020 AIP bonus because, under executive employment agreements, such bonus is deemed earned if the executive is employed on December 31, 2020. \n(3) \nAmount is based on the number of shares that would be issued at the target payout level for the performance-vested restricted units granted in 2020. \n### Pay Ratio Disclosure \nPursuant to Item 402(u) of Regulation S-K promulgated under the Exchange Act, we are required to disclose the median annual total compensation of all the Companys employees, the total compensation of our CEO and the ratio of those two amounts. The pay ratio set forth below is a reasonable estimate and has been calculated in a manner consistent with SEC rules and based on the methodology described below. The SEC rules for identifying median employees allow companies to use a variety of methodologies. As a result, the pay ratio reported by others may not be comparable to our reported pay ratio. For the year ended December 31, 2020: the total compensation for our median employee was $102,600; Morris was $4,419,653; and based on the information above, the ratio of the annual total compensation of our CEO to the median of the annual total compensation of all employees is 43 to 1. \nThe methodology that we used and the material assumptions, adjustments and estimates that we used to identify the median and determine annual total compensation were as follows: \n### Employee population. \nAs of December 31, 2020, the date we selected to identify our median employee, our employee population consisted of approximately 361 individuals. Our employee population for purposes of determining the pay ratio described above was 295, after taking into consideration (i) a de minimis adjustment for employees located outside the United States and (ii) the exclusion of certain recently acquired employees, each as permitted by the SEC rules. We excluded approximately 3 individuals who are located in Canada under the de minimis exception. These non-U.S. employees accounted for 5% or less of our total employees. We also excluded employees who joined the Company as a result of our 2020 acquisitions, as follows: 16 employees from the Ventanex acquisition in February 2020; 14 employees from the cPayPlus acquisition in July 2020 and 33 employees from the CPS Payment Services acquisition in November 2020. \nIdentification of Median. \nTo identify the median of the annual total compensation of all of our employees, we reviewed the total cash compensation of all applicable employees for the twelve-month period ending on December 31, 2020 (the reported compensation). In making this calculation, we did not annualize the reported compensation of any of our employees who were hired during the period, nor did we make any cost of living adjustments to the reported compensation in identifying the median employee. Using this methodology, we determined that our median employee was a full-time, salaried employee located in the U.S. \n\nThe following table sets forth information concerning the annual and long-term compensation awarded to, earned by, or paid to each director for all services rendered in all capacities to our company, or any of its subsidiaries, for the last fiscal year. \n(1) \nThe aggregate dollar value of the restricted stock units is based on $24.49 per share of Class A common stock on August 5, 2020. \n(2) \nThe aggregate number of stock awards outstanding for each director as of December 31, 2020 is 19,386. \n\nPrior to the consummation of the Business Combination, we did not maintain a compensation policy for our directors, and we did not pay any compensation to our directions. Following the Business Combination, we adopted a non-employee director compensation policy. Under such policy, we compensate our non-employee directors with a combination of cash and equity in the form of restricted stock units. In addition, we reimburse directors for their reasonable out-of-pocket expenses incurred in connection with attending Board and committee meetings. \n### Annual Cash Retainer \nUnder the non-employee director compensation policy, non-employee directors are entitled to an annual cash retainer of $30,000, which is paid quarterly in arrears on October 1, January 1, April 1 and July 1 of each year. \nAnnual Equity Award \nAn annual equity award is awarded to incumbent directors at each stockholders meeting in the form of restricted stock units, calculated based on the closing price on the grant date (or the most recent trading day if such date is not a trading day) and rounded down to the nearest whole unit. Restricted stock units vest on the earlier of (x) the first anniversary of the date of grant and (y) the next regularly scheduled annual shareholder meeting occurring in the year following the year of the date of grant. Vesting also accelerates upon a change of control or termination from service as a result of the directors death or disability. Vested restricted stock units are settled on the earlier of (x) the date the director undergoes a separation from service as defined in Section 409A of the Internal Revenue Code and (y) a change of control. For fiscal 2020, each director received an award of approximately $170,000 in restricted stock units. \n### Committee and Committee Chair Fees \nThe non-employee director compensation policy also provides that non-employee directors serving as an audit committee member will receive an additional $7,500 cash payment annually. Directors serving as committee members of another committee (other than the audit committee) will receive an additional $5,000 cash payment annually. Such payments are made quarterly in arrears on October 1, January 1, April 1 and July 1 of each year. \nDirectors serving as committee chairpersons will receive additional cash compensation. The non-employee director compensation policy entitles the audit committee chairperson to $20,000, the compensation committee chairperson to $15,000 and all other committee chairpersons (other than audit and compensation) to $10,000 (in each case, on an annual basis). Such payments are made quarterly in arrears on October 1, January 1, April 1, and July 1 of each year. \n\nThe members of our compensation committee are Paul R. Garcia, William Jacobs and Jeremy Schein. \nNone of our executive officers currently serve, and in the past year has not served, (i) as a member of the compensation committee or the board of directors of another entity, one of whose executive officers served on our compensation committee, (ii) as a director of another entity, one of whose executive officers served on our compensation committee, or (iii) as a member of the compensation committee of another entity, one of whose officers served on our Board. \n\nThe Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis contained in this Annual Report on Form 10-K for the year ended December 31, 2020 with management. Based upon such review, the related discussions and such other matters deemed relevant and appropriate to the Compensation Committee, the Compensation Committee has recommended to the Board that the Compensation Discussion and Analysis be included in the Companys Annual Report on Form 10-K for the year ended December 31, 2020 and in the Proxy Statement for the 2021 Annual Meeting of Stockholders. \n\n### William Jacobs, Chair \nPaul R. Garcia \nJeremy Schein \nThe Compensation Committee report does not constitute soliciting material and shall not be deemed to be filed or incorporated by reference into any other filing under the Securities Act of 1933, or the Securities Exchange Act of 1934, except to the extent that the Company specifically incorporates the Compensation Committee report by reference therein. \nITEM 12. \n\nWe maintain the Repay Holdings Corporation Omnibus Incentive Plan (the Incentive Plan), pursuant to which we may grant awards of restricted stock, restricted stock units, stock options, stock appreciation rights and dividend equivalent rights. The Incentive Plan was approved by our stockholders in connection with the Business Combination. \nThe following table includes information with respect to the Incentive Plan as of December 31, 2020. All outstanding awards relate to our Class A common stock. \n(1) \nRepresents shares of unvested restricted stock and restricted stock units outstanding under the Incentive Plan. Does not include shares of Class A common stock with respected to previously granted awards of restricted stock that were vested as of December 31, 2020. \n(2) \nAssumes the maximum 200% of target award payout for performance-based restricted stock units. \n\nThe following table sets forth certain information regarding the beneficial ownership of our Class A common stock, our Class V common stock and the Post-Merger Repay Units as of April 14, 2021. The Post-Merger Repay Units are defined and described in Item 13 of Part III of this Annual Report on Form 10-K and such description is incorporated herein by reference. \nThe information is provided with respect to (1) each person who is known by us to own beneficially more than 5% of the outstanding shares of our Class A common stock, (2) each of our directors, (3) each of our NEOs and (4) all of our directors and executive officers, as a group. \nBeneficial ownership is determined in accordance with the rules of the SEC, which generally deem a person to beneficially own any shares of our Class A common stock the person has or shares voting or dispositive power over and any additional shares obtainable within 60 days through the exercise of options, warrants or other purchase rights. Unless otherwise indicated, each person possesses sole voting and investment power with respect to the shares identified as beneficially owned. Percentage of beneficial ownership is based on 80,452,286 shares of our Class A Common Stock and 7,959,160 Post-Merger Repay Units outstanding on April 14, 2021. \nNo director or executive officer has pledged any of the shares or units disclosed below. Unless otherwise noted, the business address of each of the following entities or individuals is 3 West Paces Ferry Road, Suite 200, Atlanta, Georgia 30305. \n* less than one percent. \n(1) \nInterests shown consist solely of Class A common stock and does not reflect the ownership of the Post-Merger Repay Units or the Class A common stock exchangeable therefore pursuant to the Exchange Agreement (described in Item 13 of Part III of this Annual Report on Form 10-K). Subject to the terms of the Exchange Agreement and the Hawk Parent Limited Liability Company Agreement, each holder of a Post-Merger<|endoftext|>Services agreement relating to Watford Re, AUL receives a profit commission for each underwriting year, calculated annually, earned over four years and paid in arrears and thereafter adjusted annually over the ensuing fifteen years. The profit commission for any underwriting year is payable only if, for the contracts bound by us or on our behalf for such underwriting year and the contracts ceded to us by Arch for such underwriting year, (i) (a) the sum of net losses, loss adjustment expenses, extra-contractual obligations and acquisition expenses, less \n(b) the sum of underwriting investment income is less than (ii) a specified percentage of net premiums earned, and in such event the amount of the profit commission will be one-half of the amount by which (ii) exceeds (i) (but not less than zero). \nUnder the services agreements relating to WSIC, WIC and WICE, AUL or AUI, as applicable, receives a profit commission for each underwriting year, calculated annually, earned over four years and paid in arrears and thereafter adjusted annually over the ensuing fifteen years. The profit commission for any underwriting year is payable only if for the contracts issued by or on behalf of WSIC, WIC or WICE, as applicable, for such underwriting year (i) (a) the sum of losses, loss adjustment expenses, extra-contractual obligations and acquisition expenses, less \n(b) underwriting investment income, is less than (ii) a specified percentage of net premiums earned (net of earned premium ceded under outward reinsurance), and in such event the amount of the profit commission will be one-half of the amount by which (ii) exceeds (i) (but not less than zero). \nProfit commissions on quota share cessions of business from WSIC, WIC and WICE to Watford Re are payable to AUL by Watford Re. The profit commissions related to each of Watford Re, quota share cessions from WSIC, quota share cessions from WIC and quota share cessions from WICE will be added (or netted, as appropriate) each applicable period, but in no case shall the overall sum be less than zero. Such cessions are deducted in the computations of profit commissions paid by WSIC, WIC and WICE. \nIf, at the time any profit commission otherwise is due in respect of the 2019 underwriting year or any subsequent underwriting year, our weighted (by equity) average annual post-2018 return on equity (giving effect to all past paid profit commission and an accrual for profit commission to be paid for the underwriting year in question but not to past deferred profit commission or the accrual for the profit commission otherwise due but to be deferred for the underwriting year in question) is less than or equal to 10%, we shall be entitled to withhold and defer payment of one-half of the profit commission otherwise due.Any deferred profit commission shall be paid, without interest, only if and to the extent that such payment (or an accrual in respect thereof) would not cause the weighted average annual post-2018 return on equity to fall below 10%.There shall be no clawback of any profit commission previously paid if our post-2018 weighted average annual return on equity falls below 10% in asubsequent period. \nIn certain circumstances, including, among others, if we direct the services provider to take any actions or make any changes that we believe are necessary to satisfy a rating agency requirement and such actions or changes are inconsistent with the underwriting guidelines, the services provider may elect, within five business days of the later of the day such business is bound or the services provider becomes aware of such business, to \n31 exclude any underwriting results arising from such business from the determination of its profit commission. \nWith regard to loss portfolio transfers or other non-traditional business, the profit commissions may be based on net cash received rather than net premiums earned. \n### Run-off Fee \nAUL or AUI, as applicable, is also entitled to receive a run-off fee after termination of the applicable services agreement (except where termination is due to willful breaches by the services provider of underwriting guidelines or if the services provider is unable to service in-force business post-termination) in respect of its post-termination servicing of pre-termination business equal to a specified percentage per quarter, payable in arrears, of the average unearned premiums and loss reserves for pre-termination business in-force during such quarter. At our option, we may seek competitive quotes for run-off services, and in such case the run-off fee will be adjusted accordingly (up or down). \nIn addition, under the services agreement with Watford Re, Watford Re pays a designated employee fee equal to the product of (i) the retained percentage under the outward retrocession agreement from Watford Re to ARL and (ii) a specified fixed amount per annum per designated employee in respect of the services of the employees that Arch makes available to Watford Re. The amount of this fee is credited against the underwriting fee otherwise due under the Watford Re services agreement. Under the services agreements with WSIC, WIC and WICE, our subsidiary reimburses AUL or AUI, as applicable, based on a factor of the compensation of employees made available to our subsidiary. In addition, under each of the services agreements, we are required to reimburse AUL or AUI, as applicable, for certain other expenses described in the applicable services agreement, including the out-of-pocket expenses incurred directly in connection with or pursuant to AUL or AUIs, as applicable, performance of services pursuant to, and exercise of its duties under, the applicable services agreements. \nOur services agreements with AUL or AUI, as applicable, and investment management agreements with HPS Investment Partners, LLC (formerly known as Highbridge Principal Strategies, LLC), which manages our non-investment grade portfolio, as well as accounts in our investment grade portfolio (HPS), contain a provision that each of AUL or AUI, as applicable, HPS and we must agree to any amendment of the underwriting guidelines or investment guidelines, as applicable. \nArch shares a portion of its fees received under the above described services agreements with HPS pursuant to a separate fee sharing agreement related to the services provided by Arch and HPS to WatfordRe. \nPursuant to the fee sharing agreement, Arch and HPS each share in the combined fee revenues of the two parties with respect to the services that they provide to Watford Re. The revenues generated by our underwriting portfolio and investment portfolios are in part affected by market cycles and the market cycles that affect insurance and reinsurance do not necessarily correspond to the market cycles that impact our credit-focused assets and other investments. The fee sharing agreement is consistent with our total return driven business model and serves to diminish Arch and HPSs reliance on their respective markets cycles. The fee sharing arrangement also provides an alignment of interest benefit by encouraging and rewarding collaborative efforts by allowing both Arch and HPS to participate in the revenue generated by the components of our business that are managed by the other. \nThe fee sharing agreement covers fees earned by each of Arch and HPS for services performed prior to the earlier of (i) the termination of Watford Res services agreement with Arch or (ii) the termination of Watford Res investment management agreement with HPS. There is no set term for the fee sharing agreement. The fee sharing agreement provides a tail period for payment of any \n32 applicable fees after the termination of the services agreement or investment management agreement and will no longer be in effect after all payment obligations are satisfied by Arch and HPS. The fee sharing agreement may be amended or terminated in writing by the parties thereto. \nWith the exception of the right to consent to any proposed amendment, we have no rights under the fee sharing agreement. We are a party to the fee sharing agreement solely to ensure the continuity of the agreed fee sharing arrangement between HPS and Arch should either HPSs or Archs relationship with us terminate. In particular, in the event Watford Res services agreement with Arch or investment management agreement with HPS is terminated, we have agreed to require any successor of Arch or HPS, as applicable, to agree to offer substantially the same terms and conditions as set forth in the fee sharing agreement. Arch or HPS, as applicable, may accept or decline this offer in its discretion. We have no other obligations under the fee sharing agreement. We pay each of Arch and HPS the fees due under the services agreement and investment management agreement, as applicable, and the fee sharing agreement does not affect the total amount of fees that we pay; \nOther than as described in this report, there is no other formal contract or other arrangement governing the relationship or activities between Arch and HPS in relation to our operations. For example, as discussed above, our services agreements with and investment management agreements with Arch and HPS, respectively, contain provisions that each must agree to any amendment of the others underwriting guidelines or investment guidelines, as applicable. Furthermore, the Common Shareholders Agreement provides that Arch-appointed directors may not vote upon certain matters related to the investment management agreement with HPS. \nPursuant to separate guarantee agreements, ACGL has guaranteed the performance of AUL under the services agreement among AUL, Watford Holdings and Watford Re, and Arch Capital Group (U.S.) Inc., a Delaware holding company indirectly wholly-owned by ACGL, has guaranteed the performance of AUI under the services agreement between AUI and WIC and under the services agreement between AUI and WSIC. \n### Underwriting Guidelines \nEach of the services agreements between AUL or AUI, as applicable, and our operating subsidiaries contains underwriting guidelines with respect to the business to be incepted by the applicable operating subsidiary pursuant to such services agreement. In each case, the underwriting guidelines do not apply to certain excluded business as described in the applicable services agreement. Any amendments to the underwriting guidelines require the written consent of Arch and HPS. \nWatford Re \nThe underwriting guidelines relating to Watford Re require that the PML arising from natural catastrophes be modeled for each peak peril and peak zone in Watford Res portfolio consistent with the modeling approach then used by affiliates of AUL in their reinsurance business. The modeled PML for a 1-in-250 year occurrence for each peak peril and peak zone is targeted to not exceed 10% of Watford Res total capital. In the event Watford Re has any business sourced other than through AUL, that business will not be included in the modeled PML provided by AUL and will need to be modeled separately. Modeled PML arising from any man-made realistic disaster scenario ( \nRDS \n) is targeted to not exceed 10% of Watford Res total capital except for pandemic, nuclear, biological, chemical and radiological terrorism, terrorism and credit political risks where the target limit is 15% of Watford Res total capital. For each line of business, the RDS used to monitor our portfolio will be the same as the RDS used by affiliates of AUL to monitor their reinsurance portfolios. The largest known aggregate limit exposed per original name insured will be monitored for each line of business in Watford Res portfolio, with a soft limit of 5% of Watford Res total capital. \nThe underwriting guidelines applicable to Watford Re permit all lines of business written or targeted by the Arch insurance and reinsurance companies and permitted to be written pursuant to Watford Res Bermuda insurance license and permit Watford Re to assume business on both a proportional and non-proportional basis, write both treaty and facultative reinsurance and write insurance business. \n### WSIC, WIC and WICE \nThe underwriting guidelines relating to WSIC, WIC and WICE require that the probable maximum loss (the PML) arising from natural catastrophes be modeled for each peak peril and peak zone in the applicable companys portfolio consistent with the modeling approach then used by affiliates of AUI or AUL, as applicable, in their reinsurance business. The modeled PML, net of all reinsurances, for a 1-in-250 year occurrence for each peak<|endoftext|>Shareholders is granted a prorated portion of the Annual Grant, typically granted to such director on the date of the first regularly-scheduled Board meeting attended by such director, with the value of the award prorated to reflect the number of regularly-scheduled Board meetings remaining until the next annual general meeting of shareholders (including the then-current meeting), divided by the total number of regularly-scheduled Board meetings during such year (each such grant, a Pro-Rata Annual Grant). In addition, each newly appointed non-employee director is granted an initial award for joining the Board (each, a New Director Grant), typically granted to such director on the date of the first regularly scheduled Board meeting attended by such director, with an award value equal to 1.5 times the approved award value of the Annual Grant. \n### Vesting terms \nPer our non-employee director equity grant procedures,Annual Grants and Pro-Rata Annual Grants vest in full on the one-year anniversary of the applicable grant date, and New Director Grants vest in three equal annual installments, commencing on the one-year anniversary of the grant date. \n### No changes to award values in 2020 \nEach year, at or prior to the Companys annual general meeting of shareholders, the Compensation Committee recommends to the Board for its approval equity award values and terms for the Annual Grant and any New Director Grant for such year. \nIn May 2020, following review of our 2019 target equity compensation value of $375,000 for the Annual Grant and $562,500 for the New Director Grant and determination that such equity compensation values were aligned to and competitive with our peer group companies, the Compensation Committee recommended to the Board that no changes be made to the non-employee director equity award values for 2020. The Board subsequently approved this recommendation. \n### Changes to grant timing due to COVID-19 \nIn light of the uncertainty in May 2020 regarding the extent of the impacts that the COVID-19 pandemic would have on macroeconomic market conditions and on the Companys business, the Compensation Committee recommended to the Board, and the Board approved, division of the Annual Grant for 2020 into two separate grants, the first of which was granted on the date of the Companys 2020 annual general meeting of shareholders (the typical date for the Annual Grant) and equaled 50% of the total approved value of the Annual Grant, and the second of which was to be delayed until the fourth quarter of 2020 and was to equal up to the remaining 50% of the total approved value of the Annual Grant, subject to downward adjustment at the Compensation Committees discretion if the Compensation Committee determined that the Companys circumstances at such time warranted any reduction to the approved value. In December 2020, based on the recommendation of the Compensation Committees independent compensation consultant and the Compensation Committees assessment of the Companys circumstances, the Compensation Committee recommended, and the Board approved, the grant of the second portion of the Annual Grant, with an award value equal to the full remaining 50% of the total approved value of the Annual Grant. \nEquity mix and share number calculation methodology \nBoth the May 2020 and the December 2020 portions of the Annual Grant consisted of 50% restricted stock unit awards and 50% stock options, with the number of shares underlying each restricted stock unit award calculated utilizing a 30-day trading average ending 21days before the date of applicable grant (the Average Share Price), and the number of shares underlying each stock option calculated utilizing the Average Share Price and the Black-Scholes valuation model. \nOur non-employee directors are not granted any equity other than the Annual Grant (or Pro-Rata Annual Grant, as applicable) each year and a one-time New Director Grant upon joining the Board. For a description of our share ownership and holding guidelines for our directors, see the section entitled \nShare Ownership and Holding Guidelines on page 31 on this Amendment. \n### Reimbursement of Expenses and Insurance \nWe reimburse each non-employee director for necessary business expenses incurred in the performance of his or her Board service and extend coverage to each non-employee director under our travel accident and directors and officers indemnity insurance policies. \nConflicts of Interest \nIndependent directors do not receive consulting, advisory or other compensatory fees from the Company if the receipt of such fees would result in disqualifying the director as an independent director in accordance with the applicable provisions of the Nasdaq Rules and the Exchange Act and the rules promulgated thereunder. To the extent practicable or required by applicable rule or regulation, independent directors who are affiliated with the Companys service providers, partners or collaborators will undertake to ensure that their compensation from such providers, partners or collaborators does not include amounts connected to payments by the Company. \n2020 Director Compensation Table \nEach of David W. Anstice AO, Robert A. Breyer, Shane M. Cooke, Wendy L. Dixon, Ph.D., Richard B. Gaynor, M.D., PaulJ. Mitchell, Nancy L. Snyderman, M.D., Frank Anders Wilson and Nancy J. Wysenski served as non-employee directors during all of 2020. David A. Daglio, Jr. and Brian P. McKeon were appointed to the Board on December 9, 2020 and served as non-employee directors from such date through the end of 2020. \nRichardF. Pops, our CEO, became Chairman of the Board on September16, 2011 and was an employee during all of 2020. As an employee, Mr.Pops does not receive cash or equity compensation for his service on the Board. \nThe following table presents and summarizes the compensation of our non-employee directors for service during 2020. \n* Numbers may not sum due to rounding. \nNotes to Director Compensation Table \n(1) \nThe amounts in column (b) represent fees earned by our non-employee directors during 2020 for services as a director, including annual cash retainer fees for service on the Board and additional cash retainer fees for service on a standing committee of the Board or for service as a chair of a standing committee of the Board. The annual cash retainer fees for service on the Board for Messrs. Daglio and McKeon were prorated based on the date of their appointment to the Board. \n(2) \nThe amounts in column (c) reflect the aggregate grant date fair value of restricted stock unit awards granted in 2020, excluding estimates of forfeitures, if any, as computed in accordance with ASC 718. Each then-current non-employee director was granted a restricted stock unit award in the amount of 6,104 shares on May 20, 2020, which had a grant date fair value of $16.85 per share, and a restricted stock unit award in the amount of 5,578 shares on December 2, 2020, which had a grant date fair value of $18.82 per share. All of these restricted stock unit awards were granted under the 2018 Plan and vest in full one year from the date of grant, or earlier upon termination of a directors service relationship with the Company. Each of our non-employee directors, with the exception of Messrs. Daglio and McKeon, held outstanding restricted stock unit awards as of December 31, 2020 for an aggregate of 11,682 ordinary shares; Messrs. Daglio and McKeon did not hold any outstanding restricted stock unit awards as of December 31, 2020. \n(3) \nThe amounts in column (d) reflect the aggregate grant date fair value of stock options granted during 2020, as computed in accordance with ASC 718. Each then-current non-employee director was granted a non-qualified stock option to purchase 12,823 ordinary shares on May 20, 2020, which had an estimated grant date fair value of $8.04 per share, and a non-qualified stock option to purchase 11,509 ordinary shares on December 2, 2020, which had an estimated grant date fair value of $8.96 per share. All of these stock options were granted under the 2018 Plan, vest in full one year from the date of grant or earlier upon termination of a directors service relationship with the Company, and expire upon the earlier of ten years from the date of grant or three years following termination of a directors service relationship with the Company. There can be no assurance that the stock options will be exercised or that the value realized upon their exercise will equal their grant date fair value. \n(4) \nAssumptions used in the calculation of the fair value of the option awards granted on May 20, 2020 are as follows: option exercise price, $16.85; expected term, 6.1 years; volatility, 51%; interest rate, 0.45%; dividend yield, zero. Assumptions used in the calculation of the fair value of the option awards granted on December 2, 2020 are as follows: option exercise price, $18.82; expected term, 6.2 years; volatility, 50%; interest rate, 0.59%; dividend yield, zero. Our non-employee directors each held outstanding stock options as of December 31, 2020 for the following aggregate number of ordinary shares: Mr. Anstice, 216,032 shares; Mr. Breyer, 211,432 shares; Mr. Cooke, 481,607 shares; Mr. Daglio, 0 shares; Dr. Dixon, 251,032 shares; Dr. Gaynor, 97,332 shares; Mr. McKeon, 0 shares; Mr. Mitchell, 216,032 shares; Dr. Snyderman, 122,032 shares; Mr. Wilson, 97,332 shares; and Ms. Wysenski, 207,282 shares. \n### Item12. \n\n\nThe following table provides information as of December 31, 2020 about: the number of ordinary shares subject to issuance upon exercise of outstanding options and vesting of outstanding restricted stock units under equity compensation plans adopted by us; the weighted-average exercise price of outstanding options under equity compensation plans adopted by us; and the number of ordinary shares available for future issuance under our 2018 Plan. \n(1) \nThis excludes 5,555,262 ordinary shares issued as time-vesting restricted stock unit awards and 498,984 ordinary shares issued as performance-vesting restricted stock unit awards, all of which are subject to forfeiture until such awards vest in full. \n(2) \nRepresents the weighted-average exercise price of our outstanding stock options under our equity compensation plans. This does not include outstanding restricted stock unit awards under our equity compensation plans as such awards do not have an exercise price. \n### Ownership of the Companys Ordinary Shares \nThe following table and notes provide information about the beneficial ownership of our ordinary shares as of April 1, 2021 by: each of the Companys current directors and director nominees; the Companys Chief Executive Officer; each of the Companys four other named executive officers, as set forth in the \nSummary Compensation Table on page 35 of this Amendment; and all of the Companys current directors and executive officers as a group. \nAccording to SEC rules, the Company has included in the column Number of Issued Ordinary Shares all shares over which the person has sole or shared voting or investment power, and the Company has included in the column Number of Ordinary Shares Issuable all shares that the person has the right to acquire within 60days after April 1, 2021 through the exercise of any stock option, vesting of any stock award or other right. All shares that a person has a right to acquire within 60days of April 1, 2021 are deemed outstanding for the purpose of computing the percentage beneficially owned by the person, but are not deemed outstanding for the purpose of computing the percentage beneficially owned by any other person. \nUnless otherwise indicated, each person has the sole power (except to the extent authority is shared by spouses) to invest and vote the shares listed opposite the persons name. The Companys inclusion of shares in this table as beneficially owned is not an admission of beneficial ownership of those shares by the person listed in the table. The business address of each of the Companys current non-employee directors and nominees is Connaught House, 1Burlington Road, Dublin 4, Ireland, D04 C5Y6. The business address of each of the Companys current executive officers is 852Winter Street, Waltham, MA 02451. \nOwnership by Directors and Executive Officers \n* \nRepresents less than 1% of the Companys outstanding ordinary shares. \n(1) \nShares that can be acquired through stock options exercisable and restricted stock unit awards vesting by May 31, 2021, which is 60 days from April 1, 2021. \n(2) \nApplicable percentage of ownership as of April<|endoftext|>Of premiums under COBRA for a period of six months, payable 12 months after the executives termination of employment, provided, among other things, that the executive has not become eligible for coverage under the group health plans of a successor employer; \nand \n\n### Change in Control \nIf a named executive officers employment is terminated before the expiration of the stated term of the relevant employment agreement.in accordance with the terms and conditions thereof, either (i)by DSM without cause or (ii)by the executive for good reason, in each case during the two year period beginning on the date of a consummation of a change in control, then the executive is entitled to receive the following payments and benefits subject to the execution, delivery and non-revocation of a general release of claims: \n24 months payment of the executives base salary in a single lump-sum cash amount, payable on the 60 th day following the termination date; \n\nPayment of a single lump-sum cash amount equal to the cost of premiums under COBRA for a period of 18 months following the termination date, payable on the 60 th day following the termination date; \nand \n\nUnder the employment agreement of Mr.Sukhrani, we provide the following payments and benefits to them under the following circumstances following termination of employment: \n### Resignation or Other Termination of Employment \n\n12 months payment of the executives base salary, payable over the course of up to one year; \nReimbursement of premiums to continue the executives group health, dental and vision insurance under the Companys plans under COBRA, until the earlier of (a)the date that is 12 months following the date of termination of such executive and (b)the date the executive is eligible for coverage under the group health plans of a successor employer; \nand \n\n### Change in Control \nIf a named executive officers employment is terminated before the expiration of the stated term of the relevant employment agreement in accordance with the terms and conditions thereof, either (i)by DSM without cause or (ii)by the executive for good reason, in each case during the two year period beginning on the date of a consummation of a change in control, then the executive is entitled to receive the following payments and benefits subject to the execution, delivery and non-revocation of a general release of claims: \n12 months payment of the executives base salary in a single lump-sum cash amount, payable on the 60 th day following the termination date; \n\nPayment of a single lump-sum cash amount equal to the cost of premiums under COBRA for a period of 12 months following the termination date, payable on the 60 th day following the termination date; \nand \n\nA change in control under the employment agreements of all of the named executive officers includes any of the following events: \nAny person becomes the beneficial owner of 35% or more of either (i)the then-outstanding common stock of the Company or (ii)the combined voting power of the then-outstanding voting securities of the Company entitled to vote generally in the election of directors, subject to certain exceptions; \nA majority of the Directors are not individuals who, (i)as of the effective date of the executives employment agreement, are Directors, or (ii)became a Director subsequent to the effective date of the executives employment agreement, whose election, nomination for election by the shareholders or appointment was approved by majority vote of the then incumbent Directors (either by a specific vote or by approval of the proxy statement of the Company in which such individual is named as a nominee for Director without objection to such nomination); \nCertain business combinations of the Company, subject to certain exceptions; and \nApproval by the shareholders of a complete liquidation or dissolution of the Company. \n### Severance Tax Matters \nUnder certain circumstances, the Company may cause a lump-sum payment and possibly accelerate the vesting and payment of certain long-term incentive awards in connection with a change in control (as defined in the employment agreements) and such payment could be deemed an excess parachute payment under the golden parachute tax provisions of Code section 280G. We do not provide any tax gross-ups in the event change in control payments are subject to Section280G excise taxes. Instead, our executives will be entitled to a payment which is equal to the greater of either (i)the change in control payment after cutting back sufficient payouts to avoid the excise tax; or (ii)the full change in control payment after imposition of the excise tax. \nRetirement Benefits \n401(k)Savings Plan \nThe Companys 401(k)plan is available to all DSM employees, including the Companys named executive officers, who meet the plans eligibility requirements. The 401(k)plan is a defined contribution plan, which permits employees to make contributions up to the statutory limits. The Company matches employee contributions on a one-to-one basis up to 6% of total eligible compensation. Employee contributions and the Companys matching contributions are immediately and fully vested when made. \n\n### Equity Compensation Plans Table \nThe following table shows information relating to the number of shares authorized for issuance under our equity compensation plan as of December31, 2020. \nEquity Incentive Plan \nIn connection with the Transactions, the Companys board of directors adopted the Equity and Incentive Compensation Plan (the Equity Plan). The material terms of the Equity Plan are as follows: \n### Purpose: \nThe purpose of the Equity Plan is to attract and retain non-employee directors, employees and certain consultants and to provide those persons incentives and rewards for service and/or performance. \nAdministration; Effectiveness: \nThe Equity Plan is administered by the compensation committee of the Board of Directors. The compensation committee has the authority to determine eligible participants in the Equity Plan and to interpret and make determinations under the Equity Plan. Any interpretation or determination by the compensation committee under the Equity Plan will be final and conclusive. The compensation committee may delegate all or any part of its authority under the Equity Plan to any subcommittee thereof and may delegate its administrative duties or powers to one or more of the Companys officers, agents or advisors. \nShares Available for Awards Under the Equity Plan: \nSubject to adjustment and certain share counting rules, as further described in the Equity Plan, the number of Diamond S common shares available for awards under the Equity Plan shall be, in the aggregate, 3,989,000 shares, with such shares subject to adjustment to reflect any split or combination of Diamond S common shares. The available shares may be shares of original issuance, treasury shares or a combination of the foregoing. The Equity Plan also limits the maximum aggregate value at grant for awards to non-employee directors in any calendar year to $350,000. \n### Share Counting: \nThe aggregate number of Diamond S common shares available to be awarded under the Equity Plan will be reduced by one share for every one share subject to awards of option rights or appreciation rights granted under the Equity Plan and two shares for every one share subject to all other types of awards granted under the Equity Plan. If an award granted under the Equity Plan is cancelled or forfeited, expires, is settled for cash or is unearned, the shares subject to such award will, to the extent of such cancellation, forfeiture, expiration, cash settlement or unearned amount, again be available for issuance at the rate of one share for every one share subject to awards of option rights or appreciation rights and at the rate of two shares for every one share subject to all other types of awards. \nTypes of Awards Under the Equity Plan: \nPursuant to the Equity Plan, the Company may grant stock options, appreciation rights, restricted stock, restricted stockunits, performance shares, performanceunits, cash incentive awards and certain other awards based on or related to Diamond S common shares. Each grant of an award under the Equity Plan will be evidenced by an award agreement, which will contain such terms and provisions as the compensation committee may determine, consistent with the Equity Plan. Those terms and provisions include the number of Diamond S common shares subject to each award, vesting terms and provisions that apply upon events such as the retirement, death, disability of the participant or in the event of a change in control. A brief description of the types of awards which may be granted under the Equity Plan is set forth below. \n### Stock Options: \nStock options granted under the Equity Plan may be either incentive stock options (as defined in Section422 of the Code) or non-qualified stock options. Incentive stock options may only be granted to employees. Except with respect to substitute awards, incentive stock options and non-qualified stock options must have an exercise price per share that is not less than the fair market value of a Diamond S common share on the date of grant. The term of a stock option may not extend more than tenyears after the date of grant. Each grant will specify the form of consideration to be paid in satisfaction of the exercise price. \nAppreciation Rights: \nAn appreciation right is a right to receive an amount equal to 100%, or such lesserpercentage as the compensation committee may determine, of the spread between the base price and the fair market value of a Diamond S common shares on the date of exercise. An appreciation right may be paid in cash, Diamond S common shares or any combination thereof. Except with respect to substitute awards, the base price of an appreciation right may not be less than the fair market value of a Diamond S common share on the date of grant. The term of an appreciation right may not extend more than tenyears from the date of grant. \n### Restricted Stock: \nRestricted stock constitutes an immediate transfer of the ownership of Diamond S common shares to the participant in consideration of the performance of services, entitling such participant to dividend, voting and other ownership rights, subject to a substantial risk of forfeiture and restrictions on transfer determined by the compensation committee for a period of time determined by the compensation committee or until certain management objectives specified by the compensation committee are achieved. Each such grant or sale of restricted stock may be made without additional consideration or in consideration of a payment by the participant that is less than the fair market value per share of Diamond S common shares on the date of grant. Any grant of restricted stock will require all dividends paid thereon during the period of any restrictions to be automatically deferred until the vesting of such restricted stock and/or reinvested in additional shares of restricted stock. \nRestricted Stock Units: \nRestricted stockunits constitute an obligation to deliver Diamond S common shares, cash or a combination thereof, to the participant in the future in consideration of the performance of services, but subject to the fulfillment of such conditions (which may include the achievement of management objectives) during the restriction period applicable to such restricted stockunits as the compensation committee may specify. During the restriction period applicable to such restricted stockunits, the participant will have no right to transfer any rights under the award and will have no rights of ownership in the Diamond S common shares underlying the restricted stockunits and no right to vote them. Rights to dividend equivalents may be extended to and made part of any restricted stock unit award at the discretion of, and on the terms determined by, the compensation committee; provided, that dividend equivalents will be deferred until and paid contingent upon the vesting of such restricted stockunits. Each grant of restricted stockunits will specify that the amount payable with respect to such restricted stockunits will be paid in cash, Diamond S common shares or a combination of the two. \nCash Incentive Awards; Performance Shares and Performance Units: \nA performance share is a bookkeeping entry that records the equivalent of one Diamond S common share, and a performance unit is a bookkeeping entry that records a unit equivalent to $1.00 or such other value, as determined by the compensation<|endoftext|>Cash, equal to the aggregate amount then on deposit in the trust account including interest earned on the funds held in the trust account and not previously released to us to pay our taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. \n\nIf we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our sponsor, directors, officers, advisors or their affiliates may purchase shares or public warrants or a combination thereof in privately negotiated transactions or in the open market either prior to or following the completion of our initial business combination, although they are under no obligation to do so. \n\n\n\n\n\nOur public stockholders will be entitled to receive funds from the trust account only upon the earliest to occur of: (i) our completion of an initial business combination, and then only in connection with those shares of Class A common stock that such stockholder properly elected to redeem, subject to the limitations described herein, (ii) the redemption of any public shares properly submitted in connection with a stockholder vote to amend our amended and restated certificate of incorporation (A) to modify the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial business combination by May 23, 2021, or (B) with respect to any other provision relating to stockholders rights or pre-initial business combination activity and (iii) the redemption of our public shares if we are unable to complete an initial business combination by May 23, 2021, subject to applicable law and as further described herein. \n\nSince the net proceeds of our initial public offering and the sale of the private placement warrants are intended to be used to complete an initial business combination with a target business that has not been identified, we may be deemed to be a blank check company under the United States securities laws. \n\nIf we are unable to complete our initial business combination, our public stockholders may receive only approximately $10.15 (as of December 31, 2020) per share on our redemption of our public shares, or less than such amount in certain circumstances, and our warrants will expire worthless. \nWe have encountered and expect to continue to encounter competition from other entities having a business objective similar to ours, including private investors (which may be individuals or investment partnerships), other blank check companies and other entities competing for the types of businesses we intend to acquire. In certain circumstances, our public stockholders may receive less than $10.15 (as of December 31, 2020) per share upon our liquidation. \nIf the net proceeds of our initial public offering and the sale of the private placement warrants not being held in the trust account are insufficient, it could limit the amount available to fund our search for a target business or businesses and complete our initial business combination and we will depend on loans from our sponsor or management team to fund our search for an initial business combination, to pay our taxes and to complete our initial business combination. \nOf the net proceeds of our initial public offering and the sale of the private placement warrants, only approximately 314,696 (as of December 31, 2020) is available to us outside the trust account to fund our working capital requirements. Consequently, our public stockholders may only receive approximately $10.15 (as of December 31, 2020) per share on our redemption of our public shares, and our warrants will expire worthless. \n\nEven if our due diligence successfully identifies certain risks, unexpected risks may arise, and previously known risks may materialize in a manner not consistent with our preliminary risk analysis. \n\nMarcum LLP, our independent registered public accounting firm, and the underwriter of our initial public offering, will not execute agreements with us waiving such claims to the monies held in the trust account. \nOur sponsor has agreed that it will be liable to us if and to the extent any claims by a third party for services rendered or products sold to us, or a prospective target business with which we have entered into a written letter of intent, confidentiality or similar agreement or business combination agreement, reduce the amount of funds in the trust account to below the lesser of (i) $10.00 per public share and (ii) the actual amount per public share held in the trust account as of the date of the liquidation of the trust account, if less than $10.00 per share due to reductions in the value of the trust assets, less taxes payable, provided that such liability will not apply to any claims by a third party or prospective target business who executed a waiver of any and all rights to the monies held in the trust account (whether or not such waiver is enforceable) nor will it apply to any claims under our indemnity of the underwriter of our initial public offering against certain liabilities, including liabilities under the Securities Act. Therefore, it is unlikely that our sponsor would be able to satisfy those obligations. \n\n\n\n\n\n\n\n\n\n\n\n\n\n(ii) the redemption of any public shares properly submitted in connection with a stockholder vote to amend our amended and restated certificate of incorporation (A) to modify the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial business combination by May 23, 2021 or (B) with respect to any other provision relating to stockholders rights or pre-initial business combination activity; or (iii) absent an initial business combination by May 23, 2021, our return of the funds held in the trust account to our public stockholders as part of our redemption of the public shares. If we are unable to complete our initial business combination, our public stockholders may receive only approximately $10.10 (as of December 31, 2019) per share on the liquidation of our trust account and our warrants will expire worthless. \n\nHowever, it is our intention to redeem our public shares as soon as reasonably possible following May 23, 2021 in the event we do not complete our initial business combination and, therefore, we do not intend to comply with the foregoing procedures. \nHowever, because we are a blank check company, rather than an operating company, and our operations are limited to searching for prospective target businesses to acquire, the only likely claims to arise would be from our vendors (such as lawyers, investment bankers and auditors) or prospective target businesses. Furthermore, if the pro rata portion of our trust account distributed to our public stockholders upon the redemption of our public shares in the event we do not complete our initial business combination by May 23, 2021 is not considered a liquidating distribution under Delaware law and such redemption distribution is deemed to be unlawful (potentially due to the imposition of legal proceedings that a party may bring or due to other circumstances that are currently unknown), then pursuant to Section 174 of the DGCL, the statute of limitations for claims of creditors could then be six years after the unlawful redemption distribution, instead of three years, as in the case of a liquidating distribution. \n\nPursuant to an agreement entered into concurrently with the issuance and sale of the securities in our initial public offering, our initial stockholders and their permitted transferees can demand that we register the private placement warrants, the shares of Class A common stock issuable upon conversion of the founder shares and exercise of the private placement warrants held, or to be held, by them and holders of warrants that may be issued upon conversion of working capital loans may demand that we register such warrants or the Class A common stock issuable upon exercise of such warrants. \n\nWe are not limited to completing an initial business combination in any industry or geographical region, although we will not, under our amended and restated certificate of incorporation, be permitted to effectuate our initial business combination with another blank check company or similar company with nominal operations. \n\nAlthough we intend to focus on identifying companies in sectors where we have experience, we will consider an initial business combination outside of our managements area of expertise if an initial business combination candidate is presented to us and we determine that such candidate offers an attractive business combination opportunity for our company or we are unable to identify a suitable candidate in this sector after having expanded a reasonable amount of time and effort in an attempt to do so. We also cannot assure you that an investment in our units will not ultimately prove to be less favorable to investors than a direct investment, if an opportunity were available, in an initial business combination candidate. \n\n\n\n\nSubject to certain exceptions, we are not required to obtain a fairness opinion, and consequently, you may have no assurance from an independent source that the price we are paying for the business is fair to our company from a financial point of view. \nUnless we complete our initial business combination with an affiliated entity or our board cannot independently determine the fair market value of the target business or businesses, we are not required to obtain an opinion from an independent investment banking firm or from another independent entity that commonly renders valuation opinions that the price we are paying is fair to our company from a financial point of view. \nIf we are unable to complete our initial business combination, our public stockholders may receive only approximately $10.10 (as of December 31, 2020) per share, or less than such amount in certain circumstances, on the liquidation of our trust account and our warrants will expire worthless. \nIn certain circumstances, our public stockholders may receive less than $10.15 per share on the redemption of their shares. \n\nincreased vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, and execution of our strategy; \nWe may only be able to complete one business combination with the proceeds of our initial public offering and the sale of the private placement warrants which will cause us to be solely dependent on a single business which may have a limited number of services and limited operating activities. \nOf the net proceeds from our initial public offering and the sale of the private placement warrants, $290,984,644 (as of December 31, 2020) is available to complete our initial business combination and pay related fees and expenses (which excludes up to $10,812,500 for the payment of deferred underwriting commissions). \n\n\n\n\n\n\n\n\n\nOur amended and restated certificate of incorporation does not provide a specified maximum redemption threshold, except that we will only redeem our public shares so long as (after such redemption) our net tangible assets will be at least $5,000,001 either immediately prior to or upon consummation of our initial business combination and after payment of underwriters fees and commissions (such that we are not subject to the SECs penny stock rules) or any greater net tangible asset or cash requirement which may be contained in the agreement relating to our initial business combination. \n\nTo the extent we seek to amend our organizational documents in a way that would be deemed to fundamentally change the nature of any securities offered through this registration statement, we would register, or seek an exemption from registration for, the affected securities. \nThe provisions of our amended<|endoftext|>An ownership change, as defined in Section 382. \nThe Company considers any undistributed foreign subsidiaries earnings to be indefinitely reinvested and, accordingly, no related provision for U.S. federal or state income taxes has been provided. This has not changed subsequent to the one-time transition tax under the Tax Act as discussed above. Upon distribution of the foreign earnings in the form of dividends or otherwise, the company could be subject to both U.S. income taxes subject to an adjustment for foreign tax credits and withholding taxes in the various countries. As of December 31, 2020, the cumulative amount of unremitted earnings of the Company's foreign subsidiaries was approximately $26.0million. The unrecognized deferred tax liability for these earnings was approximately $1.9million, consisting primarily of foreign withholding taxes. \n-37- \nRIMINI STREET, INC. \n### \nfederal jurisdiction, the State of California and various other state and foreign jurisdictions. The Companys federal and state tax years for 2007 and forward are subject to examination by taxing authorities, due to unutilized net operating losses. All foreign jurisdictions tax years are also subject to examination. The Company does not have any unrecognized tax benefits to date. \nNOTE 10 COMMITMENTS AND CONTINGENCIES \n### Finance leases \nThe Company has entered into various financing lease agreements for certain computer equipment. The lease terms range from 12 months to 60 months with annual interest rates ranging from 7% to 8%. As of December31, 2020, the future annual minimum lease payments under financing lease obligations are as follows (in thousands): \nAs of December31, 2020 and 2019, the carrying values of leased equipment (included as a component of property and equipment) in the consolidated balance sheets, are as follows (in thousands): \n### Series A Preferred Stock Dividends \nIn connection with the issuances of Series A Preferred Stock for the Initial Private Placement, the March 2019 Private Placement and the June 2019 Private Placement, the Company is obligated to pay Cash Dividends and issue additional shares of Series A Preferred Stock in settlement of PIK Dividends. For the remaining period through July 19, 2023 that the Series A Preferred Stock is expected to be outstanding, estimated Cash Dividends and PIK Dividends required to be declared are as follows (in thousands): \n____________________ \n(1) \nAmounts shown assume there are no conversions to Common Stock and include the Series A Preferred Stock repurchases on October 30, 2020 and January 5, 2021 for the remaining period through July 19, 2023. \n-38- \nRIMINI STREET, INC. \n### \nRetirement Plan \nThe Company has defined contribution plans for both its U.S. and foreign employees. For certain of these plans, employees may contribute up to the statutory maximum, which is set by law each year. The plans also provide for employer contributions. The Companys matching contribution to these plans totaled $2.7 million, $2.6 million and $2.1 million for the years ended December31, 2020, 2019 and 2018, respectively. \n### Rimini I Litigation \nIn January 2010, certain subsidiaries of Oracle Corporation (together with its subsidiaries individually and collectively, Oracle) filed a lawsuit, \nOracle USA, Inc. et al. v. Rimini Street, Inc. et al. \n(United States District Court for the District of Nevada) (the District Court) (Rimini I), against the Company and its Chief Executive Officer, Seth Ravin, alleging that certain of the Companys processes (Process 1.0) violated Oracles license agreements with its customers and that the Company committed acts of copyright infringement and violated other federal and state laws. The litigation involved the Companys business processes and the manner in which the Company provided services to its clients. \nAfter completion of jury trial in 2015 and subsequent appeals, the final outcome of Rimini I was that Mr. Ravin was found not liable for any claims and the Company was found liable for only one claim: innocent infringement, a jury finding that the Company did not know and had no reason to know that its former support processes were infringing. The jury also found that the infringement did not cause Oracle to suffer lost profits. The Company was ordered to pay a judgment of $124.4million in 2016, which the Company promptly paid and then pursued appeals. With interest, attorneys fees and costs, the total judgment paid by the Company to Oracle after the completion of all appeals was approximately $89.9million. A portion of such judgment was paid by the Companys insurance carriers. \n### Proceeds from U.S. Supreme Court Decision \nThe total judgment paid by the Company and its insurance carriers reflects a reduction of approximately $12.8million that the Company had previously paid to Oracle (plus interest of $0.2million), representing an award of non-taxable expenses to Oracle that was eventually overturned by unanimous decision of the U.S. Supreme Court in March 2019. As mandated by the U.S. Supreme Court, $13.0million (the principal amount plus post-judgment interest) was refunded to the Company by Oracle in April 2019. A portion of the funds received by the Company will be shared on a pro rata basis with an insurance company that had paid for part of the judgment and a portion of Riminis defense costs. This reimbursement will reflect a deduction of the costs of the Companys past and pending appeal and remand proceedings. As a result of the U.S. Supreme Court decision, the Company recognized a recovery of the non-taxable expenses for $12.8million and interest income of $0.2million for the year ended December 31, 2019, excluding any contractual amounts due to the insurance company. The Company recognized costs of $1.1million for the year ended December 31, 2020, as the Company revised its current estimate of the amounts owed to the insurance company (for portions of all previously-paid judgments refunded to the Company on appeal, including the proceeds from the U.S. Supreme Court Decision) to $5.5million, which was paid in September 2020. \nInjunction \nFollowing post-trial motions, the District Court entered a permanent injunction prohibiting the Company from using certain processes. In August 2019, the United States Court of Appeals for the Ninth Circuit Court of Appeals affirmed the permanent injunction issued by the District Court, while also correcting certain legal errors that narrowed the scope of the injunction. The injunction prohibits Rimini from using support processes that had been found in Rimini I to innocently infringe certain Oracle copyrights, which Rimini ceased using no later than July 31, 2014. \nOn July 10, 2020, Oracle filed a motion to show cause contending that the Company is in contempt of the injunction. The Company is opposing the motion. The matter is now fully briefed to the District Court, with no known timeline for a ruling. At this time, the Company does not have sufficient information regarding possible damages for the contempt asserted by Oracle. Because the Company believes that it has complied with the injunction and that an award for damages and/or attorneys fees is not probable, no accrual has been made as of December 31, 2020. If the District Court grants Oracles motion to show cause, and if the Company is later found to be in contempt of the injunction, Oracle may seek equitable, punitive, and compensatory relief, the outcome of which may have a material adverse effect on the Companys business and financial condition. \n-39- \nRIMINI STREET, INC. \n### \nRimini II Litigation \nIn October 2014, the Company filed a separate lawsuit, \n### Rimini Street Inc. v. Oracle Intl Corp. \n, in the District Court against Oracle seeking a declaratory judgment that the Companys revised support practices, in use since at least July 2014, do not infringe certain Oracle copyrights (Rimini II). The Companys operative complaint asserts declaratory judgment, tort, and statutory claims. Oracles operative counterclaim asserts declaratory judgment and copyright infringement claims and Lanham Act, breach of contract, and business tort violations. \nOn September 15, 2020, the District Court issued an order resolving the parties motions for summary judgment. It found infringement of 17 Oracle PeopleSoft copyrights for work the Company performed for a set of gap customers that were supported by processes litigated in Rimini I, and that became the Company's customers after Rimini I was filed. The District Court also found infringement of four Oracle PeopleSoft copyrights involving support of two specific Company clients, described by the District Court as limited cases and involving limited circumstance[s]. There was no finding of infringement on any other Oracle copyrights at issue. \nThe order also resolved several of the non-copyright claims asserted by the parties: (i) allowing the Companys claim for injunctive relief against Oracle for unfair competition in violation of the California Business & Professions Code 17200 et seq. to proceed to trial; (ii) granting summary judgment for Oracle on the Companys affirmative claims for damages under the Nevada and California unfair and deceptive trade practices statutes; and (iii) holding that Oracle had the right to revoke the Companys access to its websites. The Court also reiterated that the Company has the legal right to provide aftermarket support for Oracles enterprise software. \nThe parties filed their joint pretrial order in Rimini II in December 2020. Also in December 2020, Oracle filed a motion to realign the parties and bifurcate trial, asking the District Court to (i) realign the parties, with Oracle designated as plaintiff and the Company and Mr. Ravin designated as the defendants in the case caption and at trial, and (ii) bifurcate the trial with a jury trial phase proceeding, first, followed by a separate bench phase on the parties equitable claims for unfair competition and Oracles claim for an accounting. In January 2021, the Company filed a motion to modify the order of proof and for an advisory jury verdict, asking the District Court to (i) modify the order of proof in the case so that, at trial, Oracle will present its case-in-chief first, followed by the Companys case-in-chief, (ii) not bifurcate the parties unfair competition claims or Oracles accounting claim from the other claims, (iii) empanel an advisory jury to make findings of fact with respect to the parties unfair competition claims and Oracles accounting claim; and (iv) hold a single jury trial. \nAs of this date, no damages of any kind have been awarded by the District Court in Rimini II. Damages, if any, will be a decision for the Rimini II jury. The Company reserves all rights, including appellate rights, with respect to the District Court and jury rulings and findings in Rimini II. There is currently no trial date scheduled, and while the Company does not expect a trial to occur in this matter earlier than the first half of 2022, the trial could occur earlier or later than that. \nAt this time, the Company does not have sufficient information regarding possible damages exposure for the counterclaims asserted by Oracle. \nAs to the claims asserted by Oracle, in Rimini I, the jury awarded damages in the form of a fair market value license of $35.4million for the 93 copyrighted works at issue, which the Company has paid. The parties dispute the relevance of that award for Rimini II, and the Court has not yet resolved that dispute. The Company maintains that zero damages should be awarded in Rimini II. A jury will ultimately determine what amount, if any, of damages to award. Both parties have sought injunctive relief in addition to monetary damages in this matter, and the Company has reserved its rights to appeal regarding the possible recovery of damages by the Company in connection with the Companys claims against Oracle. The Company also believes that an award for damages payable to Oracle is not probable, so no accrual has been made as of December 31, 2020. However, as with any jury trial, the ultimate outcome may be different from our best estimates and could have a material adverse impact on our financial results and our business. \n### Other Litigation \nFrom time to time, the Company may be a party to litigation and subject to claims incident to the ordinary course of business. Although the results of litigation and claims cannot be predicted with certainty, the Company currently believes that the final outcome of these ordinary course matters will not have a<|endoftext|>Supplemented by the First Supplemental Indenture, dated as of August 22, 2019, by and among the Company, the guarantors party thereto and the Trustee (the First Supplemental Indenture and, together with the Base Indenture, the Indenture). Under the Exchange Agreement, as partial consideration for the Exchange Transaction, the Company paid to Ascribe an amount in cash equal to, $1.5 million, representing the accrued (but unpaid) interest, from and including the most recent date to which interest has been paid pursuant to the terms of the Notes and the Indenture but excluding the date of the closing of the C&J Transaction, on the aggregate principal amount of the Ascribe Senior Notes. \nIn consideration of providing the a make-whole payment to Seller, the Company paid Ascribe $1 million in cash at the closing of the C&J Transaction. On March 31, 2021, the Company negotiated a settlement of the Make-Whole Reimbursement obligation with Ascribe in exchange for issuing additional Senior Notes to Ascribe with an aggregate par value of $47.5million. Refer to the Company's Annual Report on Form 10-K for the period ended December31, 2020, filed with the SEC on March 31, 2021 for further discussion on the make-whole payment and reimbursement. \n### Stockholders Agreement & Governance \nIn connection with the Exchange Agreement, the Company and Ascribe entered into a Stockholders Agreement. As contemplated by the Stockholders Agreement, simultaneously with the closing of the transactions contemplated by the Exchange Agreement, the Board was reconstituted from six directors to seven directors, comprised of (i) three Class I directors with terms to expire in 2020 (the Class I Directors), (ii) two Class II directors with terms to expire in 2021 (the Class II Directors) and (iii) two Class III directors with terms to expire in 2022 (the Class III Directors). Additionally, effective as of the closing of the C&J Transaction, each of Messrs. Timothy H. Day and Samuel E. Langford resigned from the Board and (a) Lawrence First was appointed as a Class I Director, (b) Derek Jeong was appointed as a Class II Director and (c) Ross Solomon was appointed as a Class III Director. Pursuant to the terms of the Stockholders Agreement, following the closing of the C&J Transaction and until the Board Rights Termination Date (as defined below), Ascribe is entitled to designate for nomination for election to the Board all members of the Board, provided that such designations must be made in a manner to ensure that at all times the Board is comprised of at least two independent directors. The Board Rights Termination Date means the earlier to occur of (A) the date on which Ascribe Affiliated Entities (as defined below), collectively, no longer beneficially own 25% of the fully-diluted common equity of the Company (including the Series A Preferred Stock) and (B) the date on which Ascribe and its affiliates, collectively, no longer constitute the largest holder of fully-diluted common equity of the Company (including the Series A Preferred Stock). The Ascribe Affiliated Entities will be comprised of (x) Ascribe and each investment fund which Ascribe or its affiliates controls or for which Ascribe or its affiliates act as a manager or investment advisor and (y) each other person (including portfolio companies) in which person(s) described in clause (x) of this sentence holds a majority of the outstanding equity or voting securities. \nDirector Independence \nQuintana, Jackson and Kern. Quintana, Jackson and Kern are non-employee directors, based on information provided by the directors. \nITEM 14. \n### Independent Auditor and Fees \nKPMG LLP has billed the Company and its subsidiaries fees as set forth in the table below for (i) the audits of the Companys 2020 and 2019 annual financial statements and (ii) all other services provided by KPMG LLP (All Other Fees). \n___________ \n1. All Other Fees in 2020 consists of fees related to a comfort letter. All other fees in 2019 consisted of fees related to the adoption of ASC Topic 842 - Leases, and out of scope work related to an acquisition. There were no fees billed by KPMG in 2020 or 2019 that would constitute Audit-Related Fees or Tax Fees. \n\nThe Audit Committee of the Board has adopted policies regarding the pre-approval of auditor services. The Audit Committee historically approves at its May meeting all services provided by the independent public accountants. All additional services must be pre-approved on a case-by-case basis. The Audit Committee reviews the actual and budgeted fees for the independent public accountants at its first and fourth meetings. All of the services provided by KPMG LLP during fiscal 2020 were pre-approved by the Audit Committee. \nPART IV \nITEM 15. \n\n(a) (1) and (a) (2) No financial statements or schedules are filed as part of this report on Form10-K/A. \n(3) Exhibits \nThe information required by this Section (a)(3) of Item 15 is set forth on the exhibit index following this page. \n### EXHIBIT INDEX \nThe exhibits required to be filed by Item 15 are set forth in, and filed with or incorporated by reference in, the Exhibit Index of the Original Form 10-K. The Exhibit Index to this Form 10-K/A sets forth the additional exhibits required to be filed with this Form 10-K/A. \nExhibit No. \nDescription \n2.1* \nFirst Amended Joint Prepackaged Chapter 11 Plan of Basic Energy Services, Inc. and its affiliated Debtors, dated December 7, 2016 (Incorporated by reference to Exhibit 2.1 to Form 8-K (SEC File No. 001-32693) filed on December 12, 2016) \n2.2* \nFindings of Fact, Conclusions of Law, and Order Approving the Debtors Joint Prepackaged Chapter 11 Plan of Basic Energy Services, Inc. and its Affiliated Debtors, dated December 9, 2016 (Incorporated by reference to Exhibit 99.1 to Form 8-K (SEC File No. 001-32693) filed December 12, 2016) \n2.3* \nPurchase Agreement, dated as of March 9, 2020, by and among the Company, Ascribe III Investments LLC, Basic Energy Services, Inc., NexTier Holding Co. and C&J Well Services, Inc. (Incorporated by reference to Exhibit 2.3 to the Companys Annual Report on Form 10-K (SEC File No. 001-32693) filed on March 13, 2020) \n3.1* \nSecond Amended and Restated Certificate of Incorporation of Basic Energy Services, Inc. (Incorporated by reference to Exhibit 3.1 to the Companys Registration Statement on Form 8-A12B (SEC File No. \n3.2* \nCertificate of Amendment to the Second Amended and Restated Certificate of Incorporation of Basic Energy Services, Inc. (Incorporated by reference to Exhibit 3.1 to the Companys Current Report on Form 8-K (SEC File No. 001-32693) filed on May 12, 2020) \n3.3* \nCertificate of Designations (Incorporated by reference to Exhibit 3.1 to Form 8-K (SEC File No. \n3.4* \nSecond Amended and Restated Bylaws of Basic Energy Services, Inc. (Incorporated by reference to Exhibit 3.2 to the Companys Registration Statement on Form 8-A12B (SEC File No. \n4.1* \nSpecimen Stock Certificate representing Common Stock of the Company (Incorporated by reference to Exhibit4.1 of the Companys Registration Statement on Form 8-A12B (SEC File No. \n4.2* \nWarrant Agreement between Basic, as issuer, and American Stock Transfer & Trust Company, LLC, as warrant agent, dated as of December 23, 2016. (Incorporated by reference to Exhibit 4.1 to Form 8-A12G (SEC File No. \n4.3* \nRegistration Rights Agreement, dated as of December 23, 2016, between Basic and certain stockholders (Incorporated by reference to Exhibit 10.1 of the Companys Registration Statement on Form 8-A12B (SEC File No. \n4.4* \nIndenture, dated as of October 2, 2018, by and among Basic Energy Services, Inc., the subsidiary guarantors party thereto and UMB Bank, N.A., as trustee and collateral agent (Incorporated by reference to Exhibit 4.1 of the Companys Current Report on Form 8 K (SEC File No. 001 32693) filed on October 9, 2018) \n4.5* \nForm of 10.75% Senior Secured Note due 2023 (included as Exhibit A in Exhibit 4.4) \n4.6* \nFirst Supplemental Indenture, dated as of August 22, 2019, by and among Agua Libre Midstream LLC, Agua Libre Holdco LLC, Agua Libre Asset Co LLC, Basic Energy Services, Inc., the subsidiary guarantors party thereto and UMB Bank, N.A., as trustee and collateral agent (Incorporated by reference to Exhibit 4.6 to the Companys Quarterly Report on Form 10-Q (SEC File No. \n4.7* \nSecond Supplemental Indenture, dated as of April 1, 2020, by and among C&J Well Services, Inc., KVS Transportation, Inc, Indigo Injection #3, LLC, Basic Energy Services, Inc., the subsidiary guarantors party thereto and UMB Bank, N.A., as trustee and collateral agent (Incorporated by reference to Exhibit 4.7 to the Companys Quarterly Report on Form 10-Q (SEC File No. 001-32693) filed on August 7, 2020). \n4.8 \nDescription of Securities \n10.1* \nBasic Energy Services, Inc. Management Incentive Plan, effective as of December 23, 2016 (Incorporated by reference to Exhibit 10.1 to the Company's Registration Statement on Form S-8 (SEC File No. 333-215319) filed on December 23, 2016) \n10.2* \nBasic Energy Services, Inc. Non-Employee Director Incentive Plan (Incorporated by reference to Exhibit 10.1 to the Companys Registration Statement on Form S-8 (SEC File No. 333-218224), filed on May 25, 2017). \n10.3* \nFirst Amendment to the Basic Energy Services, Inc. Non-Employee Director Incentive Plan (Incorporated by reference to Exhibit 10.2 to the Companys Registration Statement on Form S-8 (SEC File No. 333-231519) filed on May 15, 2019) \n10.4* \nBasic Energy Services, Inc. 2019 Long Term Incentive Plan (Incorporated by reference to Exhibit 10.1 to the Companys Registration Statement on Form S-8 (SEC File No. 333-231521) filed on May 15, 2019) \n10.5* \nForm of Time-Based Restricted Stock Unit Award Agreement (Incorporated by reference to Exhibit 10.9 of the Companys Current Report on Form 8-K (SEC File No. \n10.6* \nForm of Time-Based Stock Option Award Agreement (Incorporated by reference to Exhibit 10.10 of the Companys Current Report on Form 8-K (SEC File No. \n10.7* \nForm of Performance-Based Restricted Stock Unit Award Agreement (Incorporated by reference to Exhibit 10.1 to Form 8-K (SEC File No. 001-32693), filed on February 28, 2017) \n10.8* \nForm of Performance-Based Stock Unit Award Agreement 001-32693) filed on February 14, 2018) \n10.9* \nForm of Key Employee Retention Bonus agreement (Incorporated by reference to Exhibit 10.5 of the Companys Quarterly Report on Form 10-Q (SEC File No. \n10.10* \nForm of Key Employee Incentive Bonus agreement (Incorporated by reference to Exhibit 10.6 of the Companys Quarterly Report on Form 10-Q (SEC File No. \n10.11* \nForm of Performance-Based Stock Option Award Agreement (Incorporated by reference to Exhibit 10.2 to Form 8-K (SEC File No. \n10.12* \nForm of Phantom Share Award Agreement (Incorporated by reference to Exhibit 10.3 to Form 8-K (SEC File No. \n10.13* \nForm of Non-Employee Director Stock Award Agreement and Notice (Incorporated by reference to Exhibit 10.3 of the Companys Quarterly Report on Form 10-Q (SEC File No. 001-32693), filed on July 31, 2017) \n10.14* \nForm of Restricted Stock Award Agreement (LTIP) (Incorporated by reference to Exhibit 10.3 to the Companys Current Report on Form 8-K (SEC File No. \n10.15* \nForm of Performance-Based Phantom Share Award Agreement (LTIP) (Incorporated by reference to Exhibit 10.4 to the Companys Current Report on Form 8-K (SEC File No. \n10.16* \nForm of Time-Based Phantom Share Award Agreement (LTIP) (Incorporated by reference to Exhibit 10.5 to the Companys Current Report on Form 8-K (SEC File No. \n10.17* \nForm of Non-Employee Director Time-Based Restricted Stock Unit Award Agreement (Incorporated by reference to Exhibit 10.6 to the Companys Current Report on Form 8-K (SEC File No. \n10.18* \nAmended and Restated Employment Agreement of James F. Newman, effective as of November 24, 2008 (Incorporated by reference to Exhibit 10.27 of the Companys Annual Report on Form 10-K (SEC File No. 001-32693) filed on March 1, 2010) \n10.19* \nAmendment to Amended and Restated Employment Agreement of James F. Newman, effective as of November 1, 2013. (Incorporated by reference to Exhibit 10.1 of the Companys Current Report on Form 8-K (SEC File No. 001-32693), filed on December 2, 2013) \n10.20* \nEmployment Agreement of Douglas B. Rogers, effective as of March 16, 2009. (Incorporated by reference to Exhibit 10.28 of the Companys Annual Report on Form 10-K (SEC File No. 001-32693), filed on March 1, 2010) \n10.21* \nForm of Amendment to Employment Agreement, dated as of October 24, 2016 (Incorporated by reference to<|endoftext|>UNITED STATES \n\nWASHINGTON, D.C. 20549 \n### FORM 10-K/A \n(Amendment No. 1) \n\n### For the fiscal year ended \nDecember 31, 2020 \nCommission file number \n000-56234 \n### CENTENNIAL GROWTH EQUITIES INC. \n\nCOLORADO \n90-0292940 \n(State or Other Jurisdiction of \n(I.R.S. Employer \n### Incorporation or Organization) \nIdentification No.) \n11065 East Kilarea Ave. #180 \n### Mesa, Arizona 85209 \nPhone: 303-725-7935 \n(Address of Principal Executive Offices, Zip Code & Telephone Number) \n\n### None \nSecurities registered pursuant to section 12(g) of the Act: \nCommon Stock, $0.001 par value \nIndicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. \n### Yes [ ] No [X] \nIndicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act. \nYes [ ] No [X] \nIndicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. \n### Yes [X] No [ ] \nIndicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). \nYes [ ] No [X] \nSee the definitions of large accelerated filer, accelerated filer, smaller reporting company, and emerging growth company in Rule 12b-2 of the Exchange Act. \n### Large accelerated filer [ ] \nAccelerated filer [ ] \nNon-accelerated filer [X] \n### Smaller reporting company [X] \nEmerging growth company [X] \nIf an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act [ ] \nIndicate by check mark whether the registrant has filed a report on and attestation to its managements assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. [ ] \nIndicate by a check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). \n### Yes [X] No [ ] \nThe aggregate market value of the voting and non-voting shares of the Companys Common Stock held by non-affiliates: The stock of the Company is not traded on any exchange at this time. \nThe number of shares outstanding of the issuers Common Stock as of March 18, was 13,203,000. \n### EXPLANATORY NOTE \n1 on Form 10-K/A (the Amendment) is to amend the Annual Report on Form 10-K of CENTENNIAL GROWTH EQUITIES INC. (the Company) as filed with the Securities and Exchange Commission (the SEC) on March 24, 2021 (the Original Filing) without the date of Report of Independent Registered Public Account Firm. \nThis Amendment is being filed solely to provide date of Report of Independent Registered Public Account Firm. This Amendment does not otherwise modify, amend or update in any way the disclosures contained in the Original Filing. Accordingly, this Form 10-K/A should be read in conjunction with the Original Filing and the Companys other filings made with the SEC after the date of the Original Filing. \nCENTENNIAL GROWTH EQUITIES INC. \n\nThis 2020 Annual Report on Form 10-K, including the sections entitled Managements Discussion and Analysis of Financial Condition and Results of Operations and Business, contains forward-looking statements that include information relating to future events, future financial performance, strategies, expectations, competitive environment, regulation and availability of resources. These forward-looking statements include, without limitation, statements regarding: proposed new products or services; our statements concerning litigation or other matters; statements concerning projections, predictions, expectations, estimates or forecasts for our business, financial and operating results and future economic performance; statements of managements goals and objectives; trends affecting our financial condition, results of operations or future prospects; our financing plans or growth strategies; and other similar expressions concerning matters that are not historical facts. Words such as may, will, should, could, would, predicts, potential, continue, expects, anticipates, future, intends, plans, believes and estimates, and similar expressions, as well as statements in future tense, identify forward-looking statements. \nForward-looking statements should not be read as a guarantee of future performance or results and will not necessarily be accurate indications of the times at, or by which, that performance or those results will be achieved. Forward-looking statements are based on information available at the time they are made and/or managements good faith belief as of that time with respect to future events and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. We assume no obligation to update forward-looking statements to reflect actual results, changes in assumptions or changes in other factors affecting forward-looking information, except to the extent required by applicable securities laws. If we do update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements. \n### Part I \nWith respect to this discussion, the terms we us our and the Company refer to and its consolidated subsidiary. \nITEM 1. BUSINESS \n### Background: \nwas incorporated in the State of Colorado on June 6, 2000 for the purpose of conducting business in the area of real estate, including the purchase and sale of all types of real estate, remodeling, building, refurbishing all types of real estate, the development of land for real estate development, the purchase and sale of land assets and to operate a construction business in connection with the above described activities with the extent of the laws of the State of Colorado. Our address is 11069 East Kilarea Ave. #180, Mesa, Arizona 85209. Telephone 303-725-7935. \nOn January 26, 2005, the Company merged into another Colorado company, Piper and Murphy Real Estate Investments, Inc. On March 21, 2005, the Company changed its name to Piper and Murphy Real Estate, Inc. and on July 14, 2005, it changed its name again to \nOn August 20, 2006, Mr. Phillip E. \nMr. Ray was appointed as a Director, President and Secretary Treasurer of the Company and Mrs. Alice Ray, the wife of Mr. Ray, was appointed as a director and Secretaryof the Company. \nOn February 19, 2020, the Company created a subsidiary, Venture Growth Equities, Inc., a Colorado corporation, of which 100 shares of common stock was issued to Centennial Growth Equities, thus making it a wholly owned subsidiary of the Company. \n\nOn April 20, 2020, the Company filed an Amendment and Restatement to its Articles of Incorporation with the State of Colorado. The Amendment authorized 90,000,000 shares of Common Stock, par value $0.001 and 10,000,000 shares of Preferred Stock, par value $0.001. \nAs of December 31, 2020, there were 13,203,000 shares issued and outstanding. \n### Operations: \n\nAs a part of the program, the Company is designing a lightweight travel, camping and emergency trailer, which encompasses a number of extra features that will make it unique in the industry. \nThe trailer, unlike most trailers, is a one-wheel (swivel-wheel) trailer that is versatile, capable of being towed by any size of vehicle, from a large van to a small Volkswagen Bug or other small cars. It is designed to be very different from camper trailers that are presently on the market. Not to be a sleeper trailer, and yet, with the adaption of a specially made tent attachment, can accommodate sleeping arrangements. There will be several different models. \nA single wheel trailer is a trailer that has only one wheel supporting it with a rigid attachment to the vehicle. Unlike traditional trailers with a ball pivot, the single swivel wheel trailer always tracks with the tow vehicle, acting more like an extension of the vehicle. \nThe trailer is usually fitted with a two-power hitch, which is attached to the tow vehicle at a standard Class-III or Class-IV, 2x2 receiver on the vehicle. \nWith the swivel wheel, the trailer does not swing from side to side and does not fishtail or jackknife like most trailers. When backing and turning, the trailer stays straight with the tow vehicle and the wheel swivels around to the direction of the motion. \nIn one model of the trailer, there will be an assortment of emergency type of items such as the following: \n1. \nOur emergency kit containing 17 very important items for travel, camping and emergency use \n2. \nFirst Aid Kit containing 299 items for camping or emergency or when traveling \n3. \nWater purifier kit small and convenient but excellent for camping or emergency or travel \n4. \nEmergency Reflectors - 3 large reflectors for emergency use \n5. \nFolding shovel/pick a small but convenient folding shovel with spade. \n6. \nHatchet with saw and fire starter an important camping and emergency item \n7. \nCamp Table lightweight and strong 3-Fold N Half Aluminum Table \n8. \nFolding Camp chairs - 2each-lightweight but compact and strong 2 in each trailer \n9. \nPortable camp toilet /camping commode for camping and emergency use \n10. \nCollapsible Water bucket for camping and emergency use. Folds to 2 and holds up to 3 gallons \n11. \nWaterproof folding Toilet Paper Storage Cylinder Case for keeping toilet paper handy and dry. \n12. \nTarp - Large Multi-Purpose, waterproof, heavy duty poly tarp \n13. \nPortable battery powered shower This battery powered shower for showering from a bucket of water. \n14. \nEmergency blankets a pack of 4 emergency thermal blanks for emergency use \n15. \nReusable Emergency Sleeping Bag A small thermal waterproof survival sleeping bag \n16. \nTire repair kit - for the repair of a tire that leaks. \n17. \nSurvival Gear Tube Tent A compact, lightweight waterproof tent for emergency use. \n18. \nDuct Tape a roll of duct tape which can have multiple uses. \n19. \nMess Kit an 11-piece kit with plates, cups, eating utensils and pan. \nThe Company has researched possible venders for components for the trailer and all items that would be included in the basic model of the trailer. \n### Covid-19 Pandemic. \nWe do not believe that the Covid-19 pandemic will have a material on theoperations of the Company. \nCompetition \nThere are many different camp trailers, work trailers, emergency kits, etc. which we consider competition. However, none offers the same diverse options that the Company intends to offer through the Model SW-A1 trailer. \nThere are many types and models of small camping trailers manufactured and sold in the US and throughout the world. Most of these trailers have some type of sleeping accommodations, either inside the trailer or creating sleeping quarters with a pop up or fold out system, usually for two people. \nA tent trailer is one where the tent itself takes up the entire trailer bed, thus allowing for little else to be transported in the trailer. Other camping trailers are designed to be small sleep trailers only. \nA number of companies make tent trailers that pop up out of a trailer bed, while others make small sleeping trailers like the Tear Drop models. Lees-ure Lite, out of British Columbia, is a good example. They make a variety of pop-up tent two-wheel trailers. After extensive research, we could find nothing that competed directly with our Model SW-A1 type of trailer. \nManagement is not aware of any trailers that are similar to the Model SW-A1 trailer. \nThere is no assurance that we will be able to compete with the existing trailer and emergency kit manufacturers and new event centers that may be built in the future. \nMany of our current and potential competitors may have advantages over us including: \nLonger operating histories and greater market presence, \n### Better name recognition, \nAccess to larger customer bases, \nEconomies of scale and cost structure advantages, and \nGreater sales and marketing, programming, distribution, technical, financial and other resources. \nThese<|endoftext|>Us (other than our independent registered public accounting firm), or a prospective target business with which we have discussed entering into a transaction agreement, reduce the amounts in the trust account to below the lesser of (i)$10.00 per public share and (ii)the actual amount per public share held in the trust account as of the date of the liquidation of the trust account if less than $10.00 per share, due to reductions in the value of the trust assets, in each case net of the interest that may be withdrawn to pay our taxes, if any, provided that such liability will not apply to any claims by a third party or prospective target business that executed a waiver of any and all rights to seek access to the trust account nor will it apply to any claims under our indemnity of the underwriters of our initial public offering against certain liabilities, including liabilities under the Securities Act. In the event that an executed waiver is deemed to be unenforceable against a third party, our sponsor will not be responsible to the extent of any liability for such third party claims. However, we have not asked our sponsor to reserve for such indemnification obligations, nor have we independently verified whether our sponsor has sufficient funds to satisfy their indemnity obligations and we believe that our sponsors only assets are securities of our company. \nIn the event that the proceeds in the trust account are reduced below the lesser of (i)$10.00 per public share and (ii)the actual amount per public share held in the trust account as of the date of the liquidation of the trust account if less than $10.00 per share, due to reductions in the value of the trust assets, in each case net of the interest which may be withdrawn to pay our taxes, if any, and our sponsor asserts that it is unable to satisfy its indemnification obligations or that they have no indemnification obligations related to a particular claim, our independent directors would determine whether to take legal action against our sponsor to enforce its indemnification obligations. \nWe will have access to up to approximately $1,000,000 from the proceeds of our initial public offering and the sale of the private placement warrants with which to pay any such potential claims (including costs and expenses incurred in connection with our liquidation, currently estimated to be no more than approximately $100,000). In the event that we liquidate and it is subsequently determined that the reserve for claims and liabilities is insufficient, stockholders who received funds from our trust account could be liable for claims made by creditors, however such liability will not be greater than the amount of funds from our trust account received by any such stockholder. \nIf the corporation complies with certain procedures set forth in Section280 of the DGCL intended to ensure that it makes reasonable provision for all claims against it, including a \n\n\n\nFurthermore, if the prorata portion of our trust account distributed to our public stockholders upon the redemption of our public shares in the event we do not complete our initial Business Combination within 24months from the closing of our initial public offering, is not considered a liquidating distribution under Delaware law and such redemption distribution is deemed to be unlawful (potentially due to the imposition of legal proceedings that a party may bring or due to other circumstances that are currently unknown), then pursuant to Section174 of the DGCL, the statute of limitations for claims of creditors could then be six years after the unlawful redemption distribution, instead of three years, as in the case of a liquidating distribution. If we do not complete our initial Business Combination within 24months from the closing of our initial public offering, we will: (i)cease all operations except for the purpose of winding up, (ii)as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account including interest earned on the funds held in the trust account that may be released to us to pay our taxes, if any (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders rights as stockholders (including the right to receive further liquidating distributions, if any) and (iii)as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. Accordingly, it is our intention to redeem our public shares as soon as reasonably possible following our 24thmonth and, therefore, we do not intend to comply with those procedures. \nFurther, our sponsor may be liable only to the extent necessary to ensure that the amounts in the trust account are not reduced below (i)$10.00 per public share or (ii)such lesser amount per public share held in the trust account as of the date of the liquidation of the trust account, due to reductions in value of the trust assets, in each case net of the amount of interest withdrawn to pay taxes and will not be liable as to any claims under our indemnity of the underwriters of our initial public offering against certain liabilities, including liabilities under the Securities Act. \nIf we file a bankruptcy or winding-up petition or an involuntary bankruptcy or winding-up petition is filed against us that is not dismissed, the proceeds held in the trust account could be subject to applicable bankruptcy or insolvency law, and may be included in our bankruptcy estate and subject to the claims of third parties with priority over the claims of our stockholders. Additionally, if we file a bankruptcy or winding-up petition or an involuntary bankruptcy or winding-up petition is filed against us that is not dismissed, any distributions received by stockholders could be viewed under applicable debtor/creditor and/or bankruptcy or insolvency laws as either a preferential transfer or a fraudulent conveyance. \nOur public stockholders will be entitled to receive funds from the trust account only (i)in the event of the redemption of our public shares if we do not complete an initial Business Combination within 24months from the closing of our initial public offering, (ii)in connection with a stockholder vote to amend our amended and restated certificate of incorporation (A)to modify the substance or timing of our obligation to allow redemption in connection with our initial Business Combination or to redeem 100% of our public shares if we do not complete an initial Business Combination within 24months from the closing of our initial public offering or (B)with respect to any other provisions relating to the rights of holders of our ClassA common stock, or (iii)if they redeem their respective shares for cash upon the completion of the initial Business Combination. Public stockholders who redeem their shares of our ClassA common stock in connection with a stockholder vote described in clause(ii) in the preceding sentence shall not be entitled to funds from the trust account upon the subsequent completion of an initial Business Combination or liquidation if we have not completed an initial Business Combination within 24months from the closing of our initial public offering, with respect to such shares of our ClassA common stock so redeemed. In the event we seek stockholder approval in connection with our initial Business Combination, a stockholders voting in connection with the business combination alone will not result in a stockholders redeeming its shares to us for an applicable prorata share of the trust account. \n### Competition \n\nEmployees \nThese individuals are not obligated to devote any specific number of hours to our matters but they devote as much of their time as they deem necessary to our affairs and intend to continue doing so until we have completed our initial Business Combination. The amount of time they devote in any time period may vary based on whether a target business has been selected for our initial Business Combination and the stage of the initial Business Combination process we are in. \n### Legal Proceedings \nThere is no material litigation, arbitration or governmental proceeding currently pending against us or any members of our management team in their capacity as such, and we and the members of our management team have not been subject to any such proceeding in the 12 months preceding the date of this prospectus. \n\nOur units, ClassA common stock and warrants are registered under the Exchange Act and we have reporting obligations, including the requirement that we file annual, quarterly and current reports with the SEC. In accordance with the requirements of the Exchange Act, this Report contains audited financial statements and reported on by our independent registered public accountants. \nIn all likelihood, these financial statements will need to be prepared in accordance with, or reconciled to, accounting principles generally accepted in the United States of America (GAAP), or international financial reporting standards as issued by the International Accounting Standards Board (IFRS), depending on the circumstances, and the historical financial statements may be required to be audited in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB). There is no assurance that any particular target business identified by us as a potential Business Combination candidate will have financial statements prepared in accordance with GAAP or that the potential target business will be able to prepare its financial statements in accordance with the requirements outlined above. \n\n\nAs such, we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section404 of the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. \n\nWe will remain an emerging growth company until the earlier of (1)the last day of the fiscal year (a)following September18, 2025 (the fifth anniversary of the completion of our initial public offering), (b) in which we have total annual gross revenue of at least $1.07billion, or (c)in which we are deemed to be a large accelerated filer, which means the market value of our shares of ClassA common stock that are held by non-affiliates exceeds $700million as of the prior June 30th, and (2)the date on which we have issued more than $1.0billion in non-convertible debt during the prior three-year period. \nItem1A. \n### Risk Factors. \nYou should consider carefully all of the risks described below, together with the other information contained in this Report, before making a decision to invest in our units. \nRisk Factor Summary \nAn investment in or ownership of our securities involves a high degree of risk. The occurrence of one or more of the events or circumstances described under Item 1A. Risk Factors, alone or in combination with other events or circumstances, may materially adversely affect our business, financial condition, liquidity and results of operations. \n\n\n\nThe requirement that we complete an initial Business Combination within 24 months after the closing of our initial public offering may give potential target businesses leverage over us in negotiating a Business Combination and may limit the time we have in which to conduct due diligence on potential Business Combination targets as we approach our dissolution deadline, which could undermine our ability to complete our initial Business Combination on terms that would produce value for our stockholders. \nWe may not be able to complete an initial Business Combination within 24 months after the closing of our initial public offering, in which case we would cease all operations except for the purpose of winding up and<|endoftext|>"},"task":{"kind":"string","value":"{\"file\": \"/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz\"}"}}},{"rowIdx":84,"cells":{"text":{"kind":"string","value":"<|endoftext|>Determined, or recommended to our board of directors for determination, by a compensation committee comprised solely of independent directors; and the requirement for an annual performance evaluation of the nominating/corporate governance and compensation committees. \nWe currently rely on these exemptions. We do not have a majority of independent directors. Each of our governance and nominating committee and compensation committee currently consists entirely of independent directors but such committees will not be subject to annual performance evaluations. Accordingly, you will not have the same protections afforded to stockholders of companies that are subject to all of the corporate governance requirements. \nThe Parthenon Stockholders and the Continuing LLC Members control us and their interests may conflict with yours in the future. \nThe Parthenon Stockholders and the Continuing LLC Members own approximately 98.7% of the combined voting power of our Class A and Class B Common Stock. Accordingly, the Parthenon Stockholders and the Continuing LLC Members, if voting in the same manner, will be able to control the election and removal of our directors and thereby determine our corporate and management policies, including potential mergers or acquisitions, payment of dividends, assets sales, amendment of our certificate of incorporation or bylaws and other significant corporate transactions for so long as the Parthenon Stockholders and the Continuing LLC Members retain significant ownership of us. This concentration of ownership may delay or deter possible changes in control of our company, which may reduce the value of an investment in our common stock. So long as the Parthenon Stockholders and the Continuing LLC Members continue to own a significant amount of our combined voting power, even if such amount is less than 50%, they will continue to be able to strongly influence or effectively control our decisions. \nIn addition, the Continuing LLC Members own 59.0% of the Holdco Units. Because they hold their ownership interest in our business through LD Holdings, rather than us, these existing unitholders may have conflicting interests with holders of our Class A Common Stock. For example, the Continuing LLC Members may have different tax positions from us which could influence their decisions regarding whether and when to dispose of assets, and whether and when to incur new or refinance existing indebtedness, especially in light of the existence of the tax receivable agreement. In addition, the structuring of future transactions may take into consideration these existing unitholders tax considerations even where no similar benefit would accrue to us. See Note 1- Description of Business, Presentation and Summary of Significant Accounting Policies Subsequent EventsTax Receivable Agreement of the Notes to Consolidated Financial Statements contained in Item 8. \nCertain of our stockholders will have the right to engage or invest in the same or similar businesses as us. \nIn the ordinary course of its business activities, Parthenon Capital and its affiliates may engage in activities where its interests conflict with our interests or those of our stockholders. Our amended and restated certificate of incorporation will provide that Parthenon Capital or any of its officers, directors, agents, stockholders, members, partners, affiliates and subsidiaries will have no duty to refrain from engaging directly or indirectly in the same or similar business activities or lines of business as us or any of our subsidiaries, even if the opportunity is one that we might reasonably have pursued or had the ability or desire to pursue if granted the opportunity to do so. No such person will be liable to us for breach of any fiduciary or other duty, as a director or officer or otherwise, by reason of the fact that such person, acting in good faith, pursues or acquires any such business opportunity, directs any such business opportunity to another person or fails to present any such business opportunity, or information regarding any such business opportunity, to us unless, in the case of any such person who is our director or officer, any such business opportunity is expressly offered to such director or officer solely in his or her capacity as our director or officer. \nWe will be required to pay, under the tax receivable agreement, the Parthenon Stockholders and certain Continuing LLC Members for certain tax benefits we may claim arising in connection with our purchase of Holdco Units and future exchanges of Holdco Units under the Holdings LLC Agreement, which payments could be substantial. \nThe Continuing LLC Members may from time to time cause LD Holdings to exchange an equal number of Holdco Units and Class B Common Stock for cash or Class A Common Stock of loanDepot, Inc. on a one-for-one basis at our election (as described in more detail in Note 1- Description of Business, Presentation and Summary of Significant Accounting Policies Subsequent EventsIPO and Reorganization of the Notes to Consolidated Financial Statements contained in Item 8. ). In addition, we purchased Holdco Units from the Exchanging Members. As a result of these transactions, we expect to become entitled to certain tax basis adjustments reflecting the difference between the price we pay to acquire Holdco Units of LD Holdings and the proportionate share of LD Holdings tax basis allocable to such units at the time of the exchange. As a result, the amount of tax that we would otherwise be required to pay in the future may be reduced by the increase (for tax purposes) in depreciation and amortization deductions attributable to our interests in LD Holdings, although the U.S. Internal Revenue Service (IRS) may challenge all or part of that tax basis adjustment, and a court could sustain such a challenge. \nWe entered into a tax receivable agreement with the Parthenon Stockholders, Parthenon affiliates owning Holdco Units and certain of the Continuing LLC Members that provides for the payment by us to such parties or their permitted assignees of 85% of the amount of cash savings, if any, in U.S. federal, state and local tax that we realize or are deemed to realize as a result of (i) the tax basis adjustments referred to above, (ii) any incremental tax basis adjustments attributable to payments made pursuant to the tax receivable agreement and (iii) any deemed interest deductions arising from payments made by us pursuant to the tax receivable agreement. While the actual amount of the adjusted tax basis, as well as the amount and timing of any payments under this agreement will vary depending upon a number of factors, including the basis of our proportionate share of LD Holdings assets on the dates of exchanges, the timing of exchanges, the price of shares of our Class A Common Stock at the time of each exchange, the extent to which such exchanges are taxable, the deductions and other adjustments to taxable income to which LD Holdings is entitled, and the amount and timing of our income, we expect that during the anticipated term of the tax receivable agreement, the payments that we may make to the Parthenon Stockholders, Parthenon affiliates owning Holdco Units and certain of the Continuing LLC Members or their permitted assignees could be substantial. Payments under the tax receivable agreement may give rise to additional tax benefits and therefore to additional potential payments under the tax receivable agreement. In addition, the tax receivable agreement will provide for interest accrued from the due date (without extensions) of the corresponding tax return for the taxable year with respect to which the payment obligation arises to the date of payment under the agreement. \nFurther, upon consummation of our initial public offering, loanDepot, Inc. acquired a significant equity interest in LD Holdings from Parthenon Blocker after a series of transactions that resulted in Parthenon Blocker merging with and into loanDepot, Inc., with loanDepot, Inc. remaining as the surviving corporation. The Company did not realize any of the cash savings in U.S. federal, state and local tax described above regarding tax basis adjustments and deemed interest deductions in relation to any Class A Common Stock received by the Parthenon Stockholders in the Reorganization Transactions. The Parthenon Stockholders or their permitted assignees, however, are entitled to receive payments under the tax receivable agreement in respect of the cash tax savings, if any, that we realize or are deemed to realize as a result of future exchanges of Holdco Units and Class B or Class C Common Stock for cash or Class A Common Stock of loanDepot, Inc. There may be a material negative effect on our liquidity if, as a result of timing discrepancies or otherwise, (i) the payments under the tax receivable agreement exceed the actual benefits we realize in respect of the tax attributes subject to the tax receivable agreement, and/or (ii) distributions to us by LD Holdings are not sufficient to permit us to make payments under the tax receivable agreement after it has paid its taxes and other obligations. For example, were the IRS to challenge a tax basis adjustment, or other deductions or adjustments to the taxable income of LD Holdings or its subsidiaries, none of the parties to the tax receivable agreement will reimburse us for any payments that may previously have been made under the tax receivable agreement, except that excess payments made to the Parthenon Stockholders, Parthenon affiliates owning Holdco Units and certain of the Continuing LLC Members or their permitted assignees will be netted against payments otherwise to be made, if any, after our determination of such excess. As a result, in certain circumstances we could make payments to the Parthenon Stockholders, Parthenon affiliates owning Holdco Units and certain of the Continuing LLC Members or their permitted assignees under the tax receivable agreement in excess of our ultimate cash tax savings. In addition, the payments under the tax receivable agreement are not conditioned upon any recipients continued ownership of interests in us or LD Holdings. \nIn certain circumstances, including certain changes of control of the Company, payments by us under the tax receivable agreement may be accelerated and/or significantly exceed the actual benefits we realize in respect of the tax attributes subject to the tax receivable agreement. \nThe tax receivable agreement provides that (i) in the event that we materially breach any of our material obligations under the agreement, whether as a result of failure to make any payment, failure to honor any other material obligation required thereunder or by operation of law as a result of the rejection of the agreements in a bankruptcy or otherwise, (ii) if, at any time, we elect an early termination of the agreement, or (iii) upon certain changes of control of the Company our (or our successors) obligations under the agreements (with respect to all Holdco Units of LD Holdings, whether or not such units have been exchanged or acquired before or after such transaction) would accelerate and become payable in a lump sum amount equal to the present value of the anticipated future tax benefits calculated based on certain assumptions. These assumptions include the assumptions that (i) we (or our successor) will have sufficient taxable income to fully utilize the deductions arising from the increased tax deductions and tax basis and other benefits subject to the tax receivable agreement, (ii) we (or our successor) will utilize any loss carryovers generated by the increased tax deductions and tax basis and other benefits in the earliest possible tax year, and (iii) LD Holdings and its subsidiaries will sell certain nonamortizable assets (and realize certain related tax benefits) no later than a specified date. As a result of the foregoing, if we materially breach a material obligation under the agreement, if we elect to terminate the agreement early, or if we undergo a change of control we would be required to make an immediate lump sum payment equal to the present value of the anticipated future tax savings, which payment may be made significantly in advance of the actual realization of such future tax savings. Additionally, the obligation to make a lump sum payment on a change of control may deter potential acquirers, which could negatively affect our stockholders potential returns. See Note 1- \nDescription of Business, Presentation and Summary of Significant Accounting<|endoftext|>Received by shareholders could be viewed under applicable debtor/creditor and/or bankruptcy or insolvency laws as either a preferential transfer or a fraudulent conveyance. \nIf, before distributing the proceeds in the Trust Account to our public shareholders, we file a bankruptcy or insolvency petition or an involuntary bankruptcy or insolvency petition is filed against us that is not dismissed, the claims of creditors in such proceeding may have priority over the claims of our shareholders and the per-share amount that would otherwise be received by our shareholders in connection with our liquidation may be reduced. \nIf, before distributing the proceeds in the Trust Account to our public shareholders, we file a bankruptcy or insolvency petition or an involuntary bankruptcy or insolvency petition is filed against us that is not dismissed, the proceeds held in the Trust Account could be subject to applicable bankruptcy or insolvency law, and may be included in our bankruptcy or insolvency estate and subject to the claims of third parties with priority over the claims of our shareholders. To the extent any bankruptcy or insolvency claims deplete the Trust Account, the per-share amount that would otherwise be received by our shareholders in connection with our liquidation may be reduced. \n\n\n\n\nTo this end, the proceeds held in the Trust Account may only be invested in United States government securities within the meaning of Section2(a)(16) of the Investment Company Act having a maturity of 185 days or less or in money market funds meeting certain conditions under Rule \n2a-7 promulgated under the Investment Company Act which invest only in direct U.S. Our securities are not intended for persons who are seeking a return on investments in government securities or investment securities. (ii)the redemption of any public shares properly tendered in connection with a shareholder vote to amend our amended and restated memorandum and articles of association (A)to modify the substance or timing of our obligation to provide holders of our ClassA ordinary shares the right to have their shares redeemed in connection with our initial Business Combination or to redeem 100% of our public shares if we do not complete our initial Business Combination within 24 months (or 27 months, as applicable) from the closing of our Initial Public Offering or (B)with respect to any other provision relating to the rights of holders of our ClassA ordinary shares; or (iii)absent our completing an initial Business Combination within 24 months (or 27 months, as applicable) from the closing of our Initial Public Offering, our return of the funds held in the Trust Account to our public shareholders as part of our redemption of the public shares. \n\n\nIf we have not consummated an initial Business Combination within 24 months (or 27 months, as applicable) from the closing of our Initial Public Offering, our public shareholders may be forced to wait beyond such 24 months (or 27 months, as applicable) before redemption from our Trust Account. \nIf we have not consummated an initial Business Combination within 24 months (or 27 months, as applicable) from the closing of our Initial Public Offering, the proceeds then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account and not previously released to us to pay our income taxes, if any (less up to $100,000 of interest to pay dissolution expenses), will be used to fund the redemption of our public shares, as further described herein. If we are required to wind up, liquidate the Trust Account and distribute such amount therein, pro rata, to our public shareholders, as part of any liquidation process, such winding up, liquidation and distribution must comply with the applicable provisions of the Companies Law. In that case, investors may be forced to wait beyond 24 months (or 27 months, as applicable) from the closing of our Initial Public Offering before the redemption proceeds of our Trust Account become available to them, and they receive the return of their pro rata portion of the proceeds from our Trust Account. \n\nWe and our directors and officers who knowingly and willfully authorized or permitted any distribution to be paid out of our share premium account while we were unable to pay our debts as they fall due in the ordinary course of business would be guilty of an offence and may be liable for a fine of $18,292.68 and imprisonment for five years in the Cayman Islands. \n\nIn accordance with Nasdaq corporate governance requirements, we are not required to hold an annual general meeting until one year after our first fiscal year end following our listing on Nasdaq. There is no requirement under the Companies Law for us to hold annual or extraordinary general meetings to appoint directors. \n\n\n\n\nWe may engage in a Business Combination with one or more target businesses that have relationships with entities that may be affiliated with our sponsor, executive officers, directors or initial shareholders which may raise potential conflicts of interest. \nIn light of the involvement of our sponsor, executive officers and directors with other entities (including Altimeter 2), we may decide to acquire one or more businesses affiliated with our sponsor, executive officers, directors or initial shareholder. Our directors also serve as officers and board members for other entities. Our Founder, sponsor, officers and directors have and may continue to sponsor, form or participate in other blank check companies similar to ours during the period in which we are seeking an initial Business Combination. Further, affiliates of our sponsor are currently sponsoring one other blank check company, Altimeter 2, incorporated for substantially the same purposes as our company. Such entity may compete with us for business combination opportunities. Although we will not be specifically focusing on, or targeting, any transaction with any affiliated entities, we may choose to pursue such a transaction if we believe it is a suitable target, including if we determined that such affiliated entity met our criteria and guidelines for a Business Combination and such transaction was approved by a majority of our independent and disinterested directors depending on the requirements of applicable law, the significance of the interests in the target and other factors. Despite our agreement to obtain, if required by applicable law or based upon the determination of our board of directors or a committee thereof, an opinion from an independent investment banking firm or another independent entity that commonly renders valuation opinions regarding the fairness to our company from a financial point of view of a business combination with one or more domestic or international businesses affiliated with our sponsor, executive officers, directors or initial shareholder, potential conflicts of interest still may exist and, as a result, the terms of the business combination may not be as advantageous to our public shareholders as they would be absent any conflicts of interest. \nMoreover, we may, at our option, pursue an Affiliated Joint Acquisition opportunity with an entity affiliated with Altimeter and/or one or more investors in funds managed by Altimeter. Any such parties may co-invest with us in the target business at the time of our initial business combination, or we could raise additional proceeds to complete the acquisition by making a specified future issuance to any such parties. \n\nIn August 2020, our sponsor paid $25,000, or approximately $0.001 per share, to cover certain of our offering and formation costs in consideration of 12,500,000 ClassB ordinary shares, par value $0.0001. Before the initial investment in the company of $25,000 by the sponsor, the company had no assets, tangible or intangible. In addition, our sponsor has purchased an aggregate of 12,000,000 private placement warrants, each exercisable to purchase one ClassA ordinary share at $11.50 per share, subject to adjustment, at a price of $1.00 per warrant ($12,000,000 in the aggregate), in a private placement that closed simultaneously with the Initial Public Offerings closing. If we do not close an initial Business Combination within 24 months (or 27 months, as applicable) from the Initial Public Offerings closing, the private placement warrants will expire worthless. This risk may become more acute as the \n24-month anniversary of the Initial Public Offerings closing nears, which is generally the deadline for our closing of an initial Business Combination. \n\nAlthough we have no commitments as of the date of this Annual Report on Form \n10-K to issue any notes or other debt securities, or to otherwise incur outstanding debt, we may choose to incur substantial debt to complete our initial Business Combination. \nWe may only be able to complete one Business Combination with the proceeds of our Initial Public Offering and the sale of the private placement warrants and forward purchase units, which will cause us to be solely dependent on a single business which may have a limited number of products or services. \nThe net proceeds from our Initial Public Offering and the sale of the private placement warrants and the sale of up to $200,000,000 of forward purchase units will provide us with up to $683,500,000 that we may use to complete our initial Business Combination (after taking into account the $17,500,000 of deferred underwriting commissions being held in the Trust Account and the expenses of our Initial Public Offering). \n\n\n\n\n\n\n\n\n\n\n\n\n\nOur amended and restated memorandum and articles of association do not provide a specified maximum redemption threshold, except that in no event will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 either prior to or upon consummation of an initial Business Combination (so that we do not then become subject to the SECs penny stock rules). \n\nAmending our amended and restated memorandum and articles of association requires at least a special resolution of our shareholders as a matter of Cayman Islands law, meaning the approval of holders of at least two-thirds of our ordinary shares who attend and vote at a general meeting of the company, and amending our warrant agreement will require a vote of holders of at least 50% of the public warrants and, solely with respect to any amendment to the terms of the private placement warrants or any provision of the warrant agreement with respect to the private placement warrants, 50% of the number of the then outstanding private placement warrants. In addition, our amended and restated memorandum and articles of association require us to provide our public shareholders with the opportunity to redeem their public shares for cash if we propose an amendment to our amended and restated memorandum and articles of association (A)that would modify the substance or timing of our obligation to provide holders of our ClassA ordinary shares the right to have their shares redeemed in connection with our initial Business Combination or to redeem 100% of our public shares if we do not complete our initial Business Combination within 24 months (or 27 months, as applicable) from the closing of our Initial Public Offering or (B)with respect to any other provision relating to the rights of holders of our ClassA ordinary shares. \n\n\n\nSection404 of the Sarbanes-Oxley Act requires that we evaluate and report on our system of internal controls beginning with our Annual Report on Form \n10-K for the year ending December31, 2021. \n\n\nAttractive deals could also become scarcer for other reasons, such as economic or industry sector downturns, geopolitical tensions, or increases in the cost of additional capital needed to close business combinations or operate targets post-business combination. \nWe may engage one or more of our underwriters or one of their respective affiliates to provide additional services to us after our Initial Public Offering, which may include acting as financial advisor in connection with an initial business combination or as placement agent in connection with a related financing transaction. Our underwriters are entitled to receive deferred commissions that will released from the trust only on a completion of an initial Business Combination. These financial incentives may cause them to have potential conflicts of interest in rendering any such additional services to us after our Initial Public Offering, including, for example, in connection with the sourcing and<|endoftext|>We also seek to utilize the expertise of our management team in analyzing software and internet technology companies and evaluating operating projections, financial projections and determining the appropriate return expectations given the risk profile of the target business. \n\nCertain of our officers and directors presently have, and any of them in the future may have, fiduciary or contractual obligations to other entities pursuant to which such officer or director is or will be required to present a business combination opportunity. \nEach of our officers has agreed not to become an officer of any other special purpose acquisition company that has publicly filed a registration statement for its initial public offering until we have entered into a definitive agreement regarding our initial business combination or we have liquidated the trust account. \n### Our Management Team \nMembers of our management team are not obligated to devote any specific number of hours to our matters but they devote as much of their time as they, in the exercise of their respective business judgement, deem necessary to our affairs until we have completed our initial business combination. \nOver the course of their careers, the members of our management team have developed a broad network of contacts and corporate relationships in the software and internet technology industries. \n\n\n\n\n\nAs such, we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-OxleyAct, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a non-bindingadvisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. \n\nWe will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following August 4, 2025, the fifth anniversary of the completion of our initial public offering, (b) in which we have total annual gross revenue of at least $1.07billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our Class A common stock that is held by non-affiliatesexceeds $700million as of the prior June 30 th \n\nWe will remain a smaller reporting company until the last day of the fiscal year in which (1) the market value of our common stock held by non-affiliatesexceeds $250million as of the end of the prior June 30 th \n, or (2) our annual revenues exceeded $100million during such completed fiscal year and the market value of our common stock held by non-affiliatesexceeds $700million as of the prior June30 th \n### Financial Position \nWith funds available for an initial business combination in the amount of $600,119,309 as of December 31, 2020, we offer a target business a variety of options such as creating a liquidity event for its owners, providing capital for the potential growth and expansion of its operations or strengthening its balance sheet by reducing its debt or leverage ratio. \n\nWe are not presently engaged in, and we will not engage in, any operations other than the pursuit of our initial business combination, for an indefinite period of time. We intend to effectuate our initial business combination using cash from the proceeds of our initial public offering and the private placement of the private placement units, the proceeds of the sale of our shares in connection with our initial business combination (pursuant to backstop agreements we may enter into following the consummation of our initial public offering or otherwise), shares issued to the owners of the target, debt issued to bank or other lenders or the owners of the target, or a combination of the foregoing. \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nUnder Nasdaqs listing rules, stockholder approval would be required for our initial business combination if, for example: we issue shares of Class A common stock that will be equal to or in excess of 20% of the number of shares of our Class A common stock then outstanding; \n\n\n\n\nAny purchases by our sponsor, officers, directors and/or their affiliates who are affiliated purchasers under Rule 10b-18under the Exchange Act will only be made to the extent such purchases are able to be made in compliance with Rule 10b-18, which is a safe harbor from liability for manipulation under Section 9(a)(2) and Rule10b-5of the Exchange Act. Our sponsor, officers, directors and/or their affiliates will not make purchases of common stock if the purchases would violate Section 9(a)(2) or Rule 10b-5of the Exchange Act. \n\n\nOur sponsor, officers and directors have entered into a letter agreement with us, pursuant to which they have agreed to waive their redemption rights with respect to any founder shares and private placement shares and any public shares held by them in connection with the completion of our initial business combination. \n\nWe will provide our public stockholders with the opportunity to redeem all or a portion of their shares of ClassA common stock upon the completion of our initial business combination either (i) in connection with a stockholder meeting called to approve the initial business combination or (ii) by means of a tender offer. \n\n\nOur initial stockholders will count toward this quorum and pursuant to the letter agreement, our sponsor, officers and directors have agreed to vote their founder shares and private placement shares and any public shares purchased during or after our initial public offering (including in open market and privately negotiated transactions) in favor of our initial business combination. \nIf a stockholder vote is not required and we do not decide to hold a stockholder vote for business or other legal reasons, we will, pursuant to our amended and restated certificate of incorporation: conduct the redemptions pursuant to Rule 13e-4and Regulation 14E of the Exchange Act, which regulate issuer tender offers, and file tender offer documents with the SEC prior to completing our initial business combination which contain substantially the same financial and other information about the initial business combination and the redemption rights as is required under Regulation 14A of the Exchange Act, which regulates the solicitation of proxies. \nUpon the public announcement of our initial business combination, we or our sponsor will terminate any plan established in accordance with Rule 10b5-1to purchase shares of our Class A common stock in the open market if we elect to redeem our public shares through a tender offer, to comply with Rule 14e-5under the Exchange Act. \n\n\n\n\n\n\n\n\n\n\nIf our initial proposed initial business combination is not completed, we may continue to try to complete an initial business combination with a different target by August 4, 2022. \n\nOur amended and restated certificate of incorporation provides that we will have until August 4, 2022 to complete our initial business combination. There will be no redemption rights or liquidating distributions with respect to our warrants, which will expire worthless if we fail to complete our initial business combination by August 4, 2022. \nOur sponsor, officers and directors have entered into a letter agreement with us, pursuant to which they have waived their rights to liquidating distributions from the trust account with respect to any founder shares and private placement shares held by them if we fail to complete our initial business combination by August 4, 2022. However, if our sponsor, officers or directors acquire public shares in or after our initial public offering, they will be entitled to liquidating distributions from the trust account with respect to such public shares if we fail to complete our initial business combination by August 4, 2022. \nOur sponsor, officers and directors have agreed, pursuant to a written agreement with us, that they will not propose any amendment to our amended and restated certificate of incorporation (i) to modify the substance or timing of our obligation to allow redemption in connection with our initial business combination or certain amendments to our charter prior thereto or to redeem 100% of our public shares if we do not complete our initial business combination by August 4, 2022 or (ii) with respect to any other provision relating to stockholders rights or pre-initialbusiness combination activity, unless we provide our public stockholders with the opportunity to redeem their shares of Class A common stock upon approval of any such amendment at a per-shareprice, payable in cash, equal to the aggregate amount then on deposit in the trust account including interest earned on the funds held in the trust account and not previously released to us to pay our taxes divided by the number of then outstanding public shares. \nWe expect that all costs and expenses associated with implementing our plan of dissolution, as well as payments to any creditors, will be funded from amounts remaining out of the approximately $949,852 held outside the trust account as of December 31, 2020, although we cannot assure you that there will be sufficient funds for such purpose. \n\nIf we were to expend all of the net proceeds of our initial public offering and the sale of the private placement units, other than the proceeds deposited in the trust account, and without taking into account interest, if any, earned on the trust account, the per-shareredemption amount received by stockholders upon our dissolution would be approximately $10.00. \nWithum, our independent registered public accounting firm, and the underwriters of our initial public offering, have not executed agreements with us waiving such claims to the monies held in the trust account. \n\n\nOur sponsor is also not be liable as to any claims under our indemnity of the underwriters of our initial public offering against certain liabilities, including liabilities under the Securities Act. We have access to the amounts held outside the trust account ($949,852 as of December 31, 2020) with which to pay any such potential claims (including costs and expenses incurred in connection with our liquidation, currently estimated to be no more than approximately $100,000). \nThe pro rata portion of our trust account distributed to our public stockholders upon the redemption of our public shares in the event we do not complete our initial business combination by August 4, 2022 may be considered a liquidating distribution under Delaware law. \nFurthermore, if the pro rata portion of our trust account distributed to our public stockholders upon the redemption of our public shares in the event we do not complete our initial business combination by August 4, 2022, is not considered a liquidating distribution under Delaware law and such redemption distribution is deemed to be unlawful (potentially due to the imposition of legal proceedings that a party may bring or due to other circumstances that are currently unknown), then pursuant to Section 174 of the DGCL, the statute of limitations for claims of creditors could then be six years after the unlawful redemption distribution, instead of three years, as in the case of a liquidating distribution. Accordingly, it is our intention to redeem our public shares as soon as reasonably possible following August 24, 2022 and, therefore, we do not intend to comply with those procedures. \nAs described above, pursuant to the obligation contained in our underwriting agreement, we have sought and will continue to seek to have all vendors, service providers, prospective target businesses or other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account. \n\nOur public stockholders will be entitled to receive funds from the trust account only upon the earlier to occur of: (i) the completion of our initial business combination, (ii) the redemption of any public shares properly tendered in connection with a stockholder vote to amend any provisions of our amended and restated certificate of incorporation (A) to modify the substance or timing of our obligation to allow redemption in connection with our initial business combination or certain amendments to our charter prior thereto or to redeem 100% of our public shares if we do not complete our initial business combination by<|endoftext|>Acted in bad faith, thereby exposing itself and our company to claims of punitive damages, by paying public stockholders from the trust account prior to addressing the claims of creditors. \n\nOur public stockholders will be entitled to receive funds from the trust account only (i) in the event of the redemption of our public shares if we do not complete our business combination by September 29, 2022, subject to applicable law, (ii) in connection with a stockholder vote to approve an amendment to our amended and restated certificate of incorporation (a) to modify the substance or timing of our obligation to redeem 100% of our public shares if we have not consummated an initial business combination by September 29, 2022 or (b) with respect to any other provisions relating to stockholders rights or pre-initialbusiness combination activity or (iii) our completion of an initial business combination, and then only in connection with those shares of our common stock that such stockholder properly elected to redeem, subject to the limitations described in this annual report. \n### Competition \nIn identifying, evaluating and selecting a target business for our business combination, we encounter intense competition from other entities having a business objective similar to ours, including other blank check companies, private equity groups and leveraged buyout funds and operating businesses seeking strategic acquisitions. Furthermore, our obligation to pay cash to our public stockholders who exercise their redemption rights will reduce the resources available to us for an initial business combination and our outstanding warrants, and the future dilution they potentially represent, may not be viewed favorably by certain target businesses. \nFacilities \nWe currently maintain our executive offices at 2929 Arch Street, Suite 1703, Philadelphia, PA 19104-2870. The cost for our use of this space is included in the $20,000 per month fee we pay to our sponsor or its affiliate for office space, utilities, and shared personnel services. \n### Employees \nThe amount of time they devote in any time period varies based on whether a target business has been selected for our initial business combination and the stage of the initial business combination process we are in. \n\n\n\n\nIf some stockholders find our securities less attractive as a result, there may be a less active trading market for our securities and the prices of our securities may be more volatile. \n\nWe will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of the initial public offering, (b) in which we have total annual gross revenue of at least $1.07 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our Class A common stock that is held by non-affiliates exceeds $700 million as of the prior June 30 th \n\nYou should consider carefully all of the risks described below, which we believe are the principal risks that we face and of which we are currently aware, and all of the other information contained in this report. If any of the events or developments described below occur, our business, financial condition or results of operations could be negatively affected. The risks described below do not include risk relating to our proposed Business Combination with PWP. For a description of such risks, please see our preliminary proxy statement on Schedule 14A filed with the Securities and Exchange Commission on February 5, 2021. \n\nOur public stockholders may not be afforded an opportunity to vote on our proposed business combination, which means we may consummate our initial business combination even though a majority of our public stockholders do not support such a combination. \nWe may not hold a stockholder vote to approve our initial business combination unless the business combination would require stockholder approval under applicable law or the rules of Nasdaq or if we decide to hold a stockholder vote for business or other legal reasons. Accordingly, we may consummate our initial business combination even if holders of a majority of the public shares do not approve of the business combination we consummate. \nIf we seek stockholder approval of our initial business combination, our sponsor, directors and officers have agreed to vote in favor of such initial business combination, regardless of how our public stockholders vote. \nUnlike many other blank check companies in which the initial stockholders agree to vote their founder shares in accordance with the majority of the votes cast by the public stockholders in connection with an initial business combination, our sponsor, officers and directors have agreed to vote their founder shares and any placement shares, as well as any public shares purchased during or after the initial public offering, in favor of our initial business combination. Our initial stockholders own shares representing 26.9% of our outstanding shares of common stock. Accordingly, if we seek stockholder approval of our initial business combination, it is more likely that the necessary stockholder approval will be received than would be the case if our sponsor, officers and directors agreed to vote their founder shares, placement shares and public shares in accordance with the majority of the votes cast by our public stockholders. \n\nSince our board of directors may consummate a business combination without seeking stockholder approval, public stockholders may not have the right or opportunity to vote on the business combination, unless we seek such stockholder vote. Accordingly, if we do not seek stockholder approval, your only opportunity to affect the investment decision regarding a potential business combination will be limited to exercising your redemption rights within the period of time (which will be at least 20 business days) set forth in our tender offer documents mailed to our public stockholders in which we describe our initial business combination. \n\nFurthermore, in no event will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 upon completion of our initial business combination (so that we are not subject to the SECs penny stock rules) or any greater net tangible asset or cash requirement which may be contained in the agreement relating to our initial business combination. Consequently, if accepting all properly submitted redemption requests would cause our net tangible assets to be less than $5,000,001 upon completion of our initial business combination or such greater amount necessary to satisfy a closing condition as described above, we would not proceed with such redemption and the related business combination and may instead search for an alternate business combination. \nThe ability of our public stockholders to exercise redemption rights with respect to a large amount of our shares may not allow us to consummate the most desirable business combination or optimize our capital structure. \nThe amount of the deferred underwriting commissions payable to the representatives will not be adjusted for any shares that are redeemed in connection with a business combination. \n\n\nThe requirement that we consummate a business combination by September 29, 2022 may give potential target businesses leverage over us in negotiating a business combination and may decrease our ability to conduct due diligence on potential business combination targets as we approach our dissolution deadline, which could undermine our ability to consummate a business combination on terms that would produce value for our stockholders. \nAny potential target business with which we enter into negotiations concerning a business combination will be aware that we must consummate our initial business combination by September 29, 2022. This risk will increase as we get closer to September 29, 2022. \nIf the net proceeds of the initial public offering and the sale of the placement units not being held in the trust account are insufficient to allow us to operate until at least September 29, 2022, we may be unable to complete our initial business combination, in which case our public stockholders may only receive $10.00 per share, or less than such amount in certain circumstances, and our warrants will expire worthless. \nThe funds available to us outside of the trust account may not be sufficient to allow us to operate until at least September 29, 2022, assuming that our initial business combination is not completed by that date. We believe that the funds available to us outside of the trust account will be sufficient to allow us to operate until at least September 29, 2022; If we are unable to complete our initial business combination, our public stockholders may receive only $10.00 per share on the liquidation of our trust account and our warrants will expire worthless. \nIf the net proceeds from the initial public offering and the sale of the placement units not being held in the trust account are insufficient, it could limit the amount available to fund our search for a target business or businesses and complete our initial business combination and we will depend on loans from our sponsor or management team to fund our search for a business combination, to pay our taxes and to complete our initial business combination. \nOf the net proceeds of the initial public offering and the sale of the placement units, $1,158,934 was available to us as of December 31, 2020 outside the trust account to fund our working capital requirements. If we are unable to complete our initial business combination because we do not have sufficient funds available to us, we will be forced to cease operations and liquidate the trust account. Consequently, our public stockholders may receive only $10.00 per share on our redemption of our public shares, and our warrants will expire worthless. \n\nIn late 2019, a novel strain of coronavirus was reported to have surfaced in Wuhan, China, which has and is continuing to spread throughout the world, including the United States. On January31, 2020, U.S. Furthermore, we may be unable to complete a business combination if continued concerns relating to COVID-19continue to restrict travel, limit the ability to have meetings with potential investors or the target companys personnel, vendors and services providers are unavailable to negotiate and consummate a transaction in a timely manner. \nWe may not be able to consummate our initial business combination by September 29, 2022, in which case we would cease all operations except for the purpose of winding up and we would redeem our public shares and liquidate, in which case our public stockholders may only receive $10.00 per share, or less than such amount in certain circumstances, and our warrants will expire worthless. \nOur amended and restated certificate of incorporation provides that we must complete our initial business combination by September 29, 2022. We may not be able to find a suitable target business and complete our initial business combination by that date. If we have not completed our initial business combination by September 29, 2022, we will: (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-shareprice, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account and not previously released to us to pay our taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. \nIf we seek stockholder approval of our initial business combination, our sponsor, directors, officers, advisors and their affiliates may elect to purchase shares from public stockholders, which may influence a vote on a proposed business combination and reduce the public float f our Class A common stock. \nIf we seek<|endoftext|>Compensation for service on the board of directors and any of its committees as provided below: an annual board membership retainer of $90,000; and an additional annual retainer for each committee on which a director serves equal to $25,000 for the committee chair and $15,000 for other members of the committee. \nGenerally, each directors aggregate annual board compensation is paid 75% in cash (in four quarterly installments) and 25% in the form of an annual grant of restricted shares of Class D common stock (D Shares) based on the then-current per share NAV at the time of issuance pursuant to the CIM Income NAV, Inc. 2018 Equity Incentive Plan (the Equity Plan), as further described below. Restricted stock awards issued pursuant to the Equity Plan will generally vest one year from the date of the grant. In addition, all directors receive reimbursement of reasonable out-of-pocket expenses incurred in connection with attendance at meetings of the board of directors. \nFor the third and fourth quarters of 2020, in order to support the Company's efforts to maintain its target liquidity, the board approved the payment of 50% of the quarterly cash installment payments to be paid to the independent directors in the form of an award of D Shares based on the then-current per share NAV at the time of issuance pursuant to the Equity Plan. \n\nThe following table sets forth certain information with respect to our director compensation during the fiscal year ended December31, 2020: \n___________________ \n(1) \nMs. Wong was elected as a member of our board of directors effective October 15, 2019. \n(2) \nRepresents the grant date fair value of the restricted D Shares issued pursuant to the Equity Plan, for purposes of Accounting Standards Codification Topic 718, \n\nEach of the independent directors received a grant of restricted D Shares on October 1, 2020, which shares will vest one year from the date of grant. The grant date fair value of the restricted shares is based on the per share estimated NAV for Class D Shares on October 1, 2020, which was $16.88. In addition, each of the independent directors received a grant of D Shares on October 1, 2020 and January 4, 2021, respectively, as payment for 50% of the board service fees for the fiscal quarters ended September 30, 2020 and December 31, 2020, respectively. \nLong Term Incentive Plan Awards to Independent Directors \nIn August 2018, in connection with the approval and implementation of a revised compensation structure of our independent directors, the board of directors approved the Equity Plan, under which 400,000 of the Companys common shares were reserved for issuance and share awards of approximately 378,000 are available for future grant at December31, 2020. Under the Equity Plan, the board of directors or a committee designated by the board of directors has the authority to grant restricted stock awards or deferred stock awards to non-employee directors of the Company. The board of directors or committee also has the authority to determine the terms of any award granted pursuant to the Equity Plan, including vesting schedules, restrictions and acceleration of any restrictions. The purpose of the Equity Plan is to help the Company: (1) align the interests of the non-employee directors compensated under the Equity Plan with the Companys stockholders; and (2) to promote ownership of the Companys equity. Pursuant to the Equity Plan, we may award restricted stock or deferred stock units. \nOn October 1,2020, the Company granted awards of approximately1,900restricted D Shares to each of the independent members of the board of directors (approximately 7,800restricted shares in aggregate) under the Equity Plan, which fully vest on October 1, 2021 based ononeyear of continuous service, representing 25% of each independent directors annual aggregate board compensation for the twelve month period beginning October 2020 (the October 2020 Restricted Stock Awards). The October 2020 Restricted Stock Awards vest on the one-year anniversary of the award date. \nThe term of the Equity Plan is ten years. The board of directors may amend or terminate the Equity Plan at any time prior to the end of its ten year term, provided that the Equity Plan will remain in effect until all awards made pursuant to the Equity Plan have been satisfied or terminated in accordance with the Equity Plan. Upon a change of control, including the dissolution, liquidation, reorganization, merger or consolidation with one or more entities as a result of which we are not the surviving corporation, or upon a sale of all or substantially all of our assets, the board of directors or a committee thereof may make provisions for any awards not assumed or substituted pursuant to the agreement effectuating the change of control, including (1) accelerating the vesting period of unvested awards, or (2) canceling any non-vested award or other awards in which the fair market value of the shares subject to the award is zero, in each case in accordance with and pursuant to the terms of the applicable award agreement and the Equity Plan. \nIn the event that our valuation, compensation and affiliate transactions committee determines that any distribution, recapitalization, stock split, reorganization, merger, liquidation, dissolution or sale, transfer, exchange or other disposition of all or substantially all of our assets, or other similar corporate transaction or event, affects the stock such that an adjustment is appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Equity Plan or with respect to an award, then the valuation, compensation and affiliate transactions committee shall, in such manner as it may deem equitable, adjust the number and kind of shares or the exercise price with respect to any award. \n\nThe valuation, compensation and affiliate transactions committee consists only of our independent directors. In addition, we do not separately compensate our executive officers. Therefore, none of our executive officers participated in any deliberations regarding executive compensation. \nDuring the fiscal year ended December31, 2020, both of our executive officers served as executive officers (and, in the case of Mr. Ressler, as a director) of other externally managed companies sponsored by our sponsor. In addition, Mr. Shemesh serves as an executive officer and director of other externally managed companies sponsored by our sponsor. Like us, such companies have a valuation, compensation and affiliate transactions committee consisting of their independent directors, and they do not separately compensate their executive officers. \n### Executive Officers \nIn addition to Richard S. Ressler, the following individual currently serves as an executive officer of the Company: \nNathan D. DeBacker, age 41, has served as our chief financial officer and treasurer since August 2016. Mr. DeBacker is senior vice president of finance & accounting at CIM Group and has served as the chief financial officer and treasurer of each of the public, non-listed REITs sponsored and managed by affiliates of CCO Group (and, prior to its acquisition by CIM Group, Cole Capital) since August 2016. He has served as chief financial officer and treasurer of CMFT since August 2016, and as chief financial officer of CMCT and CIM Real Assets & Credit Fund, a continuously-offered closed-ended interval fund managed by affiliates of CIM that seeks to invest in a mix of institutional-quality real estate and credit assets, since March 2019. Mr. DeBacker served as chief financial officer and treasurer of CCIT II from February 2018 until CCIT IIs merger with GCEAR in March 2021. He also served as chief financial officer and director of CCPT V and CCIT III since August 2016 until CCPT Vs and CCIT IIIs merger with CMFT in December 2020. Mr. DeBacker also serves as an officer of various affiliates of CIM including as vice president of CIM Income NAV Management, CMFT Management, CREI Advisors, and CCO Group since February 2018. He served as the chief financial officer of CCO Capital, CIMs FINRA registered broker-dealer, from February 2018 to December 2020. From August 2016 to February 2018, Mr. DeBacker served as senior vice president and chief financial officer, Cole REITs, of VEREIT, Inc. (VEREIT). Mr. DeBacker was the principal at CFO Financial Services, LLC, a certified public accounting firm that provided accounting, payroll, tax, forecasting and planning, business valuation and investment advisory services to individuals and business organizations, from May 2014 until August 2016. Mr. DeBacker was also registered as an investment adviser representative with Archer Investment Corporation, an investment advisory firm that partners with accountants and CPAs to provide investment management solutions for their clients, from November 2015 until August 2016. From December 2005 until May 2014, Mr. DeBacker worked at Cole Capital, the predecessor to CCO Group, and, following the merger with VEREIT, most recently served as vice president of real estate planning and analysis. From 2002 until 2005, Mr. DeBacker worked as an auditor for the independent public accounting firm of Ernst & Young LLP. Mr. DeBacker earned a Bachelor of Science degree in Accounting from the University of Arizona and is a Certified Public Accountant in Arizona. \nEach of our executive officers has stated that there is no arrangement or understanding of any kind between him and any other person relating to his appointment as an executive officer of our Company. We are also not aware of any family relationships among any of the directors or executive officers of the Company. \n### Compensation of Executive Officers \nWe have no employees. Our executive officers, including our principal financial officer, do not receive compensation directly from us for services rendered to us, and we do not intend to pay any compensation directly to our executive officers. As a result, we do not have, and our board of directors has not considered, a compensation policy or program for our executive officers. Accordingly, we have not included herein a Compensation Committee Report or a Compensation Discussion and Analysis. \nCertain of our executive officers are also officers of CIM Income NAV Management, our advisor, and/or its affiliates, and are compensated by these entities, in part, for their services to us. We pay fees to such entities under our advisory agreement and dealer manager agreement. We also reimburse CIM Income NAV Management for its provision of administrative services, including related personnel costs, subject to certain limitations. A description of the fees that we pay to our advisor and dealer manager or any affiliate thereof is found in Item 13. Certain Relationships and Related Transactions and Director Independence, below. \nITEM 12. \n\nThe following table sets forth information as of April9, 2021 regarding the beneficial ownership of our common stock by each person known by us to own 5% or more of the outstanding shares of common stock, each of our directors, and each named executive officer, and our directors and executive officers as a group. The percentage of beneficial ownership is calculated based on 15,166,431 D Shares, 13,720,459 Class T shares of common stock (T Shares), 1,058,956 Class I shares of common stock ( I Shares), and 7,577 Class S shares of common stock ( S Shares) outstanding as of April9, 2021. \n___________________ \n(1) \nThe address of each beneficial owner listed is c/oCIM Income NAV, Inc., 2398 East Camelback Road, 4th Floor, Phoenix, Arizona 85016. \n(2) \nBeneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities and shares issuable pursuant to options, warrants and similar rights held by the respective person or group which may be exercised within 60 days following April9, 2021. \n(3) \nThe reported shares are owned directly by CIM Income NAV Management. Mr. Ressler and Mr. Shemesh may be deemed to beneficially own the shares owned by CIM Income NAV Management because of their positions with CIM Group which is the sole common equity member of CCO Group which owns and controls CIM Income NAV Management. Mr. Ressler and Mr. Shemesh each disclaim beneficial ownership of the reported securities except to the extent of his indirect pecuniary interest therein, and nothing herein shall not be deemed an admission that Mr. Ressler or Mr. Shemesh is the beneficial owner<|endoftext|>Discounted Cash Flow \nOption Pricing Model \n### \nYears to Maturity \nVolatility \n### Risk-Free Rate \n\n\n10.0% (10.0%) \n5 years (5 years) \n55.0% (55.0%) \n1.69% (1.69%) \n0.0% - 24.3% (0.1%) \n-55.0% (-55.0%) \n### \n- continued \nDECEMBER 31, 2020 continued \nFAIR \nVALUE AT \n12/31/19 \nVALUATION TECHNIQUES \n(1) \nUNOBSERVABLE INPUTS \nRANGE \n(WEIGHTED AVG.) \n\n$19.0M \n\nOption Pricing Model \nRevenue Multiple \n### Years to Maturity \nVolatility \nRisk-Free Rate \n3.3x 4.0x (3.6x) \n4 years (4 years) \n50.0% (50.0%) \n1.66% (1.66%) \n\nSemiconductor \nEquipment \n$66.7M \n\nOption Pricing Model \nYears to Maturity \n### Volatility \nRisk-Free Rate \n\n0 years 5 years (0.5 years) \n40.0% -50.0% (46.1%) \n1.69% (1.69%) \n0.0% - 12.1% (9.4%) \n(1) \nAs of December 31, 2018, the Fund used Probability-Weighted Expected Return, Market Comparable Companies, and Prior Transaction approaches to value certain common stock and preferred stock investments. As of December 31, 2019, the Fund discontinued use of these approaches in certain cases in which the portfolio companies failed or realized a particular outcome. As of December 31, 2019, the Fund also added a Discounted Cash Flow approach to the valuation of certain preferred stock and common stock investments in order to utilize multiple valuation approaches to provide additional indications of value. \n### NOTE 7. FEDERAL INCOME TAXES \nBeginning in 2018, we were no longer able to qualify as a RIC under Subchapter M of the Code. The increase in value that resulted from the initial public offerings (IPOs) of Pivotal Systems and Revasum meant that we were no longer able to satisfy the diversification requirements for qualification as a RIC. As a result of this change, we were taxed as a corporation for our fiscal year ended December 31, 2018, and will continue to be taxed in that manner for future fiscal years, paying federal and applicable state corporate taxes on our taxable income, unless and until we are able to once again qualify as a RIC, based on changes in the composition of our portfolio. \nThe reorganization described in Note 1 (the formation of FVI as a fully owned subsidiary for investment activities) was structured to avoid any adverse tax consequences for the Company and its shareholders. For the fiscal years which the Company operates as a RIC, we believe Companys engaging in investment activities through FVI did not, in our view, jeopardize the Companys ability to continue to qualify as a RIC under the Code at that time when the Company was eligible to be treated as a RIC. \nThe following information is based upon the U.S. federal income tax cost of portfolio investments as of December 31, 2020. \nFEDERAL INCOME \n### TAX COST: \nGross unrealized appreciation \n$ \nGross unrealized depreciation \n(53,061,752 \n) \nNet unrealized depreciation \n$ \n(31,895,797 \n) \nFederal income tax cost, Investments \n$ \n### \n- continued \nDECEMBER 31, 2020 \nThe Company did not qualify as a regulated investment company pursuant to Subchapter M of the Internal Revenue Code, therefore it is taxed as a corporation. As a corporation, the Company is obligated to pay federal and state income tax on taxable income. The Company is currently using an estimated tax rate of 21% for Federal and 6.98% for state taxes. \nThe Companys income tax provision consists of the following as of December 31: \nSuch temporary differences are principally: (i) taxes on unrealized gains/(losses), which are attributable to the temporary difference between fair market value and tax basis, (ii) the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting and income tax purposes, and (iii) the net tax benefit of accumulated net operating losses and capital loss carryforwards. Deferred tax assets and liabilities are measured using effective tax rates expected to apply to taxable income in the years such temporary differences are realized or otherwise settled. \nComponents of the Companys deferred tax assets and liabilities as of December 31: \nFor the year ended December 31, 2020, the Company had an effective tax rate of (51.92%) and a statutory tax rate of 21% with the difference being attributed to changes in the deferred tax asset valuation account. \nFor the year ended December 31, 2019, the Company had an effective tax rate of 20.14% and a statutory tax rate of 27.98% with the difference primarily being attributable to the deferred tax benefits recognized during the year. \nTo the extent the Company has a deferred tax asset or if a portion of the deferred tax liability is offset by a tax asset resulting from net operating losses, consideration is given to whether or not a valuation allowance is required against the deferred tax asset amount. A valuation allowance is required if, based on the evaluation criterion provided by Accounting Standard Codification (ASC) 740, Income Taxes (ASC 740), it is more-likely-than-not that some portion or all of the deferred tax asset will not be realized. Among the factors considered in assessing the Companys valuation allowance are: the nature, frequency and severity of current and cumulative losses, forecasts of future profitability, the duration of the statutory carryforward periods, and the associated risks that operating and capital loss carryforwards may expire unused. Based on the Companys assessment, it has determined that in the future it is more likely than not that the Company will generate the necessary appropriate character of income within the carryforward periods to realize its deferred tax assets. \n### \n- continued \nDECEMBER 31, 2020 \nFrom time to time, and as new information becomes available, the Company will modify its forecasts, estimates or assumptions regarding its deferred tax liability or asset. \nModifications of the Companys estimates or assumptions regarding its deferred tax liability and/or asset balances and any applicable valuation allowance, changes in generally accepted accounting principles or related guidance or interpretations thereof, limitations imposed on net operating losses (if any), and changes in applicable tax law could result in increases or decreases in the Companys NAV, which could be material. Such changes could have a material impact on the Companys NAV and results of operations with respect to the Companys shareholders in the period it is recorded, even though the shareholders at such time might not have held shares in the Company at the time the deferred tax asset or liability had been established. \nThe Companys policy is to classify interest and penalties associated with underpayment of federal and state income taxes, if any, as income tax expense on its Statement of Operations. As of December 31, 2020, the Company did not have any interest or penalties associated with the underpayment of any income taxes. \nfederal jurisdiction and California. The Company has reviewed all major jurisdictions and concluded that there is no significant impact on the Companys net assets and no tax liability resulting from unrecognized tax benefits relating to uncertain tax positions expected to be taken on its tax returns. Furthermore, management of the Company is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next 12 months. \nAs of December 31, 2020, the Company had net operating loss carryforwards for federal and state of income tax purposes of $3,998,886, which may be carried forward indefinitely. \nAs of December 31, 2020, the Company had net capital loss carryforwards for federal and state income tax purposes, which may be carried forward for 5 years, as follows: \n### NOTE 8. INVESTMENT TRANSACTIONS \nInvestment transactions (excluding short-term investments) were as follows for the year ended December 31, 2020. \nPURCHASES AND SALES \nPurchases of investment securities \n$ \nProceeds from sales and maturities of investment securities \n$ \n(12,303,844 \n) \nNOTE 9. SHARE BUYBACKS \n### SHARE BUYBACKS. \nOn April 26, 2016, the Board of Directors of the Fund approved a discretionary share repurchase plan (the Plan). The Plan allowed the Fund to acquire its own shares at certain thresholds below its NAV per share, \n\n- continued \nDECEMBER 31, 2020 in accordance with the guidelines specified in Rule 10b-18 of the Securities Exchange Act of 1934, as amended (the Exchange Act). The Fund completed the repurchase plan in September 2016, having repurchased and retired a total of 272,008 shares of stock, at a total cost of approximately $2 million. \nOn November 10, 2017, the Board of Directors of the Fund approved a discretionary share purchase plan (the Plan). The Plan allowed the Fund to acquire its own shares in accordance with the guidelines specified in Rule 10b-18 of the Exchange Act. As of December 31, 2017, the Fund had repurchased and retired 128,551 shares of stock at a total cost of approximately $1.1 million. The Fund had 7,302,146 shares outstanding as of December 31, 2017. \nOn August 31, 2018, the Fund announced a plan to repurchase up to $2 million worth of SVVC stock in the open market by March 31, 2019. The Fund completed this open market repurchase plan on October 24, 2018. Through that date, the Fund repurchased 123,376 shares at an average price of $16.21 per share, for total consideration of $2.0 million. As of December 31, 2018, the Fund had 7,178,770 shares outstanding. \n### TENDER OFFERS. \nOn December 22, 2014, pursuant to our agreement with a shareholder, the Fund commenced a tender offer to purchase up to $20 million of its issued and outstanding common shares for cash at a price per share equal to 95% of the Companys NAV per share determined as of the close of ordinary trading on the NASDAQ Global Market on December 31, 2014 ($23.2702 per share). The tender offer, which expired on January 22, 2015 at 12:00 midnight, New York City time, was oversubscribed. Because the number of shares tendered exceeded the maximum amount of its offer, the Fund purchased shares from tendering shareholders on a pro-rata basis based on the number of shares properly tendered. Of the 5,044,728 shares properly tendered, the Fund purchased 859,468 shares of common stock pursuant to the tender offer. \nOn December 16, 2019, the Fund announced the commencement of a modified Dutch auction tender offer to purchase up to $2 million of its common stock at a price per share not less than $6.00 and not greater than $8.00, in $0.10 increments. The tender offer expired on February 14, 2020 and resulted in the purchase by the Fund of 285,714 shares of common stock at a price of $7.00 per share. As of February 28, 2020, the Fund had 6,893,056 shares outstanding. \nNOTE 10. INVESTMENTS IN AFFILIATES AND CONTROLLED INVESTMENTS \nUnder the 1940 Act, the Company is required to identify investments where it owns greater than 5% (but less than 25%) of the portfolio companys outstanding voting shares as an affiliate of the Company. Also, under the 1940 Act, the Company is required to identify investments where it owns greater than 25% of the portfolio companys outstanding voting shares as a controlled investment of the Company. A summary of the Companys investments in affiliates and controlled investments for the period from December 31, 2019, through December 31, 2020, is noted below: \n### \n- continued \nDECEMBER 31, 2020 \n### \n- continued \nDECEMBER 31, 2020 \n### \n- continued \nDECEMBER 31, 2020 \n### \n- continued \nDECEMBER 31, 2020 \n* \nControlled Investments. \n(1) \n### CDI CHESS Depositary Interests \nAs of December 31, 2020, Kevin Landis represented the Company and sat on the board of directors of Hera Systems, Inc.; IntraOp Medical, Inc.; Pivotal Systems, Inc.; Revasum, Inc.; Silicon Genesis Corp.; and Wrightspeed, Inc. Serving on boards of directors of portfolio companies may cause conflicts of interest. The Adviser has adopted various procedures to ensure that the Company will not be unfavorably affected by these potential conflicts. \n\n- continued \n### DECEMBER 31, 2020 \nUnconsolidated Significant Subsidiaries \nOur investments are generally in small companies in a variety of industries. In accordance with Rules 3-09 and 4-08(g) of Regulation S-X (Rule 3-09 and Rule 4-08(g), respectively), we must determine which of our unconsolidated controlled portfolio companies are considered significant subsidiaries, if any. In evaluating these investments, there are three tests utilized to determine if any of our controlled investments are considered significant subsidiaries: the investment test, the asset test, and the<|endoftext|>Of our employees and that are provided by other employers in Silicon Valley. These benefits consist of a tax-qualified defined contribution plan, which we refer to as our 401(k) plan (to which we do not make any employer contributions), health benefits, life insurance benefits, and other welfare benefits.We do not provide any special employee benefits to our Named Executive Officers other than life insurance coverage equal to two times the individuals salary, with a cap of $500,000 per person. This type of life insurance coverage is also available to each of our U.S. exempt employees. In addition, we provide our Named Executive Officers a reimbursement and gross-up for commuting expenses. Our U.S. employees who hold a non-exempt position receive life insurance coverage equal to one times the individuals salary, with a cap of $50,000 per person. \nTax Implications of Compensation Policies \n### Section 162(m) \nSection 162(m) of the Internal Revenue Code of 1986, as amended (the Code) generally places a limit of $1,000,000 on the amount of compensation we may deduct for federal income tax purposes in any one year with respect to the compensation we pay to certain of our most highly compensated officers. In order to maintain flexibility in compensating our covered employees (as determined under 162(m)) in a manner designed to promote achievement of Company goals, the Compensation Committee considers the Section 162(m) impact of its compensation decisions but does not necessarily limit executive compensation to that which is deductible under Section 162(m) of the Code. \nTaxation of Parachute Payments \nSections 280G and 4999 of the Code provide that disqualified individuals within the meaning of the Code (which generally includes certain officers, directors and employees of the Company) may be subject to additional taxes if they receive payments or benefits in connection with a change in control of the corporation that exceed certain prescribed limits. The corporation or its successor may also forfeit a deduction on the amounts subject to this additional tax. \nWe did not provide any of our executive officers, including any named executive officer, any director, or any other service provider with a gross-up or other reimbursement payment for any tax liability that the individual might owe as a result of the application of sections 280G or 4999, and we have not agreed and are not otherwise obligated to provide any individual with such a gross-up or other reimbursement as a result of the application of sections 280G and 4999. \n### Accounting Standards \nWe follow Financial Accounting Standards Board Accounting Standards Codification Topic 718, or ASC 718, for accounting for our stock options and other stock-based awards. ASC 718 requires companies to calculate the grant date fair value of their stock option grants and other equity awards using a variety of assumptions. This calculation is performed for accounting purposes. ASC 718 also requires companies to recognize the compensation cost of stock option grants and other stock-based awards in their income statements over the period that an employee is required to render service in exchange for the option or other equity award. \nEmployment Arrangements, Termination of Employment Arrangements and Change of Control Arrangements \n### Lance Rosenzweig \nMr. Rosenzweig assumed the title of President and Chief Executive Officer on August 10, 2020. In connection with his employment, we entered into an offer letter with Mr. Rosenzweig which provides for him to receive an annual base salary of $480,000. Pursuant to the terms of his offer letter, Mr. Rosenzweig received a bonus for 2020 in the form of a stock grant of 100,000 shares of common stock of the Company in January 2021, subject to applicable withholding taxes. \nThe offer letter also provides that if Mr. Rosenzweig is terminated by the Company without cause (other than for death or disability) or resigns for good reason, as such terms are defined in the offer letter, he will be entitled to receive (i) a lump sum cash severance payment equal to 50% of his then current annual base salary (or 100% of his then current annual base salary if the termination occurs more than two years after his start date), (ii) payment of COBRA premium costs for twelve months (up to the monthly amount we were paying as the employer-portion of health care premiums prior to termination of employment), and (iii) a pro-rata portion of his actual bonus for the fiscal year in which the termination occurs as determined by our Board based on actual performance for such year (with such proration being based on the number of days worked during the fiscal year of termination). Payment of the severance benefits under the offer letter is subject to Mr. Rosenzweigs execution and delivery of an effective release of claims. \n### Caroline Rook \nMs. Rook assumed the title of Chief Financial Officer on \nOctober 12, 2020 \nRook. Our arrangement with Ms. Rook provides for her to receive an annual base salary of $250,000 and an annual short-term cash incentive target of thirty percent (30%) of base salary. In addition, Ms. Rook has been granted stock options, as reflected in the outstanding equity awards table below. \n### Christine Kowalczyk \nMs. Kowalczyk assumed the title of Chief Operating Officer on August 31, 2020. Kowalczyk. Our arrangement with Ms. Kowalczyk provides for her to receive an annual base salary of $250,000 and a bonus under our Executive Incentive Compensation Plan with a target amount of thirty percent (30%) of base salary. The Executive Incentive Compensation Plan has a corporate performance component and an individual management by objectives (MBO) component. We also agreed to pay a sign-on bonus of $25,000 in cash, grossed up, payable in the first regular payroll after Ms. Kowalczyks start date. If Ms. Kowalczyk voluntarily resigns from her position within the first year of her employment, she will be required to return a pro-rata portion of the sign-on bonus. \nWe have entered into an offer letter addendum with each of Caroline Rook and Christine Kowalczyk, which among other things, specifies the severance payments and/or benefits to be provided upon termination of employment in certain circumstances. Each such offer letter addendum provides that if the executive is terminated by Support without cause (other than for death or disability) or resigns for good reason, as such terms are defined in the offer letter addendum, and executes and delivers an effective release of claims, the executive will be entitled to receive an amount equal to three (3) months of the executives then current annual base salary, payable in equal amounts on regular pay dates following the date that the release of claims becomes effective. \n### Rick Bloom \nEffective on August 10, 2020, Rick Bloom stepped down as the Companys President and Chief Executive Officer. Mr. Bloom remained the Companys Principal Accounting Officer for a transition period of sixty (60) days until October 9, 2020 (the Transition Period). Mr. Bloom continues to serve on the Companys Board of Directors. On August 10, 2020, the Company and Mr. Bloom executed a Separation and Release Agreement (the Separation Agreement). \nDuring the Transition Period, Mr. Blooms base salary remained at the same rate as it was on the August 10, 2020, and Mr. Bloom continued to be eligible for the Companys standard employee benefits (other than equity awards). Pursuant to the Separation Agreement, the Company paid Mr. Bloom $200,000 subject to required tax withholdings on August 18, 2020. In addition, in exchange for Mr. Blooms delivery of a supplemental release upon completion of the Transition Period, the Company provided Mr. Bloom with a lump sum payment equal to $6,007, which represents the cost of six (6) months of COBRA continuation coverage premiums for Mr. Bloom and his family, less the amount of premiums that Mr. Bloom would have paid if he were an active employee during such period. \n\nThe following table shows compensation information for 2020, 2019 and 2018 for our Named Executive Officers. \n\nThe following table sets forth certain information with respect to grants of plan-based awards in 2020 to our Named Executive Officers, including short-term cash incentive awards and equity awards. Stock options were granted to our Named Executive Officers in 2020 under the 2010 Stock Plan and the 2014 Inducement Award Plan. All stock options were granted with an exercise price equal to the closing price of a share of Common Stock on NASDAQ on the date of the grant. \n(1)For 2020 we defined Company and/or individual objectives for our Named Executive Officers on a quarterly basis. P ayouts were based on the achievement of EBITDA targets, adjusted for certain non-cash and non-operational activities, as approved by the Compensation Committee. \nAdditional information is reflected in the discussion of Short-Term, Performance-Based Cash Incentive Awards above. \n(2)The amounts disclosed represent the grant date fair value of awards computed in accordance with ASC Topic 718, \n\n, excluding the effect of certain forfeiture assumptions. We estimate the fair value of stock options granted using the Black-Scholes option pricing model. This pricing model requires a number of complex assumptions including volatility, expected term, risk-free interest rate, and expected dividends. For more information about the assumptions used, please refer to our audited consolidated financial statements. The grant date fair value of all RSU awards is determined by multiplying the number of units granted by the closing price of our Common Stock on the grant date. \n(3) Mr. Rosenzweig joined the Company on August 10, 2020. \n(4) This stock option grant is subject to both a service requirement and a performance requirement. The performance requirement will be satisfied either: (i) on the date as of which the average daily closing price of the Companys common stock on the Nasdaq Stock Market for the ten (10) consecutive business days through and including such date equals or exceeds $2.415 per share (the Premium Price), or (ii) the closing date of a change of control (as defined in the Stock Plan) in which the price paid per share of common stock in the transaction equals or exceeds the Premium Price. \n(5) These RSUs were granted in connection with Mr. Rosenzweigs and Mr. Blooms service on the Board, see Director Compensation below. These RSUs vest 100% after one year from the grant date subject to continued service. \n(6) Ms. Rook joined the Company on October 12, 2020. \n(7) This amount reflects Ms. Rooks target Q4 bonus, which was based on 30% of her base salary payable during such quarter, pro-rated for her period of employment during such quarter. This bonus was paid at target in March 2021, in the amount of $16,508. \n(8) Ms. Kowalczyk joined the Company on August 31, 2020. \n(9) This amount reflects Ms. Kowalczyks target Q3 bonus, which was based on 30% of her base salary payable during such quarter, pro-rated for her period of employment during such quarter. This bonus was paid at target, in the amount of $6,277. \n(10) This amount reflects Ms. Kowalczyks target Q4 bonus, which was based on 30% of her base salary payable during such quarter. This bonus was paid at target in March 2021, in the amount of $18,750. \n(11) \nEffectiveAugust 10, 2020, Mr. Bloom ceased serving as our President and Chief Executive Officer. \nOur Named Executive Officers are parties to employment contracts or arrangements with us. For more information about these agreements and arrangements, see Compensation Discussion and AnalysisEmployment Arrangements, Termination of Employment Arrangements and Change of Control Arrangements above. For more information about the compensation arrangements in which our Named Executive Officers participate and the proportion of our Named Executive Officers total compensation represented by at risk components, see Compensation Discussion and Analysis above. \nOutstanding Equity Awards at 2020 Fiscal Year-End Table \nThe following table summarizes the number of securities underlying outstanding equity awards for our Named Executive Officers as of December 31, 2020: \n\nThe following table provides information about RSU awards vested for our Named Executive Officers during 2020. No Named Executive Officers exercised stock options during 2020. \n\nWe do not maintain any nonqualified deferred compensation plans, defined benefit plans, pension plans or other plans with specified retirement benefits for our<|endoftext|>Or sell any of their Founder Shares until the earlier to occur of: (i) one year after the completion of the initial Business Combination or (ii) the date on which the Company completes a liquidation, merger, share exchange or other similar transaction after the initial Business Combination that results in all of our shareholders having the right to exchange their Class A ordinary shares for cash, securities or other property; Notwithstanding the foregoing, if (1) the closing price of the Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for share sub-divisions, share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the initial Business Combination or (2) if we consummate a transaction after the initial Business Combination which results in the Companys shareholders having the right to exchange their shares for cash, securities or other property, the Founder Shares will be released from the lock-up. \n\nSimultaneously with the closing of the Initial Public Offering, we consummated the Private Placement of 9,000,000 Private Placement Warrants, at a price of $1.50 per Private Placement Warrant, generating total proceeds of $13.5 million. \nEach whole Private Placement Warrant is exercisable for one whole share of Class A ordinary share at a price of $11.50 per share. The Private Placement Warrants will be non-redeemable except as described in Note 8 to the financial statements contained herein, and exercisable on a cashless basis so long as they are held by the Sponsor or its permitted transferees. \n\n### Related Party Loans \nOn August 19, 2020, our Sponsor agreed to loan us up to $300,000 to be used for the payment of costs related to the Initial Public Offering pursuant to a promissory note (the Note). We borrowed approximately $208,000 under the Note, and then fully repaid the Note on October 8, 2020. \nAt December 31, 2020, we had no borrowings under the Working Capital Loans. \n\nAs of December 31, 2020, the Company has a balance due to parties affiliated with our Sponsor, directors and officers of the Company of $224,750. The amounts owed are attributable to reimbursable expenses related to the Initial Public Offering process, along with a bill paid by a related party on the Company's behalf. \n\nWe agreed to pay our Sponsor a total of $10,000 per month, commencing on the date that our securities are first listed on the NYSE, for office space, secretarial and administrative support services provided to members of the management team. We incurred $30,000 in these fees for the period from the effective date we were first listed on the NYSE through December 31, 2020, respectively. These amounts were accrued and included in accrued expenses on our balance sheet as of December 31, 2020. \n\n\nThe holders of the Founder Shares, Private Placement Warrants, Class A ordinary shares underlying the Private Placement Warrants and warrants that may be issued upon conversion of Working Capital Loans (and any Class A ordinary shares issuable upon the exercise of the Private Placement Warrants and warrants that may be issued upon conversion of Working Capital Loans) are entitled to registration rights pursuant to the registration and shareholder rights agreement. \n### Underwriting Agreement \nWe granted the underwriters a 45-day option from the date of the final prospectus to purchase up to 7,500,000 additional Units at the Initial Public Offering price less the underwriting discounts and commissions. The underwriters fully exercised the over-allotment option on October 6, 2020. \nThe underwriters were entitled to an underwriting discount of $0.20 per unit, or $11.5 million in the aggregate, paid upon the closing of the Initial Public Offering. In addition, $0.35 per unit, or approximately $20.1 million in the aggregate will be payable to the underwriters for deferred underwriting commissions. \n\nGAAP. \n\n\n\nShares of Class A ordinary shares subject to mandatory redemption (if any) are classified as liability instruments and are measured at fair value. Shares of conditionally redeemable Class A ordinary shares (including Class A ordinary shares that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within our control) are classified as temporary equity. At all other times, shares of Class A ordinary shares are classified as shareholders equity. Our Class A ordinary shares features certain redemption rights that are considered to be outside of our control and subject to the occurrence of uncertain future events. Accordingly, at December 31, 2020, 50,735,576 shares of Class A ordinary shares subject to possible redemption are presented as temporary equity, outside of the shareholders equity section of the accompanying balance sheet. \n### Net Loss Per Share \nWeighted average shares were reduced for the effect of an aggregate of 1,875,000 Class B ordinary shares that were subject to forfeiture if the over-allotment option was not exercised by the underwriters. On October 6, 2020, the underwriters exercised their over-allotment option; We have not considered the effect of the warrants sold in the Initial Public Offering and Private Placement to purchase an aggregate of 20,500,000 shares of Class A ordinary shares in the calculation of diluted earnings per share, since their inclusion would be anti-dilutive under the treasury stock method. As a result, diluted per share is the same as basic loss per share for the period presented. \nOur statements of operations include a presentation of income per share for ordinary shares subject to redemption in a manner similar to the two- class method of income per share. Net income per share, basic and diluted for Class A ordinary shares is calculated by dividing the investment income earned on the Trust Account, net of applicable income franchise taxes, by the weighted average number of shares of Class A ordinary shares outstanding since the initial issuance. Net loss per share, basic and diluted for Class B ordinary shares is calculated by dividing the net income, less income attributable to Class A ordinary shares, by the weighted average number of shares of Class B ordinary shares outstanding for the period. \n\n\nWe issued 11,500,000 ordinary shares warrants to investors in our Initial Public Offering and issued 9,000,000 Private Placement Warrants. The fair value of warrants issued in connection with the Initial Public Offering were initially measured at fair value using a Monte Carlo simulation model and subsequently measured by the listed trading price of the separately traded warrants. The fair value of Private Warrants was initially and subsequently measured at fair value using a Black Scholes simulation model. \n\n\n\n\n### JOBS Act \n\n\n### Results of Operations \nItem 7A. \n\nOn October 6, 2020, the net proceeds of the Initial Public Offering, including amounts in the Trust Account, were invested in cash and may be invested in U.S. \n\nItem 8. \n\nThis information appears following Item 16 of this Report. \nItem 9. \n\nNone. \nItem 9a. \n### Controls and Procedures \n\n\n\n\n\n\n\n\n\nItem 9b. \n### Other Information \nNone. \nPart III \n### Item 10. \n\n\n### Our Founding Team \nMr. Tamas, a German citizen, worked in the technology mergers and acquisitions group at Goldman Sachs in London from 2006 to 2008 before joining DST as Partner in 2008. \nAfter leaving DST in 2013, Mr. Mr. Tamas has been a Partner at Vy Capital since founding the firm in 2013. Mr. Hering, Mr. Mr. Tamas was selected as our Chairman and to chair our board of directors because of his experience investing in and advising some of the most successful technology companies founded in the past two decades. \nMr. Hering is also a founding Partner at Vy Capital, where he has been a Partner since 2015. Mr. He co-founded Lookout, a leading global cybersecurity company, in 2007. Mr. \nMr. Hering also co-founded Coalition, a leading global cybersecurity insurance company, in 2017 and currently serves as a Co-Founder and a member of the board of directors. Mr. Hering has served on the board of directors of HackerOne since 2014 and the board of directors of Redacted, Inc., where he is also a Co-Founder, since 2015. \nMr. Mr. Mr. Hering was selected as our Chief Executive Officer and to serve on our board of directors because of his extensive experience founding, operating, and investing in technology companies across sectors. \nDaniel Schwarz serves as our Chief Operating Officer. Mr. Schwarz is the Chief Operating Officer and Director of Vy Capital since 2013. Prior to Vy Capital, Mr. Schwarz was a Director and investment advisor at UBS from 2006 to 2013 and served as the Head of Asset Management and member of the Asset Allocation Committee for a multi-billion private client bank from 1998 to 2006. Mr. Schwarz started his career at Goldman Sachs, where he traded and executed cross-asset class orders for Goldman Sachs Private Bank Zurich from 1996 to 1998. Mr. Schwarz holds graduate degrees from Kaderschule Zurich in Business Administration and Certified European Financial Analyst and Financial Asset Manager from AZEK, respectively. Mr. Schwarz was selected as our Chief Operating Officer because of his broad operational and transactional experience. \nKatja Lake serves as our Chief Financial Officer. Mrs. Prior to joining Vy Capital in 2015, Mrs. Lake was previously a Vice President at Deutsche Bank from 1995 to 2015. Mrs. Lake holds a graduate degree in Business Administration from Frankfurt School of Finance and Management. Mrs. Lake was selected as our Chief Financial Officer because of her broad operational and transactional experience. \nHugo Barra serves on our board of directors. Mr. Barra has been the Vice President of Virtual Reality at Facebook, heading the Oculus VR team, since 2017. Prior to Facebook, Mr. Barra was Vice President of Xiaomis Global division responsible for the companys products and operations in all markets outside of Mainland China from 2013 to 2017. Mr. Barra led the companys entry into 20 countries including India, Indonesia, Russia and Spain, which contributed materially to the companys $54 billion IPO in Hong Kong in 2018. \nBefore Xiaomi, Mr. Barra spent 6 years at Google from 2008 to 2013, where he served as Vice President of Android Product Management, overseeing global development of the Android operating system from its early days to the first billion users worldwide. \nDuring his college years, he interned for several years at the MIT Media Lab, and spun off speech recognition startup LOBBY7 (sold to Nuance Communications) that eventually powered the first generation of Apples Siri voice assistant. Mr. Barra received a bachelors and masters degrees in electrical engineering and computer science from the Massachusetts Institute of Technology (MIT), and a bachelors degree in management science from MITs Sloan School of Management. Mr. Barra was selected to serve on our board of directors due to his global operating expertise and for his experience in founding and leading next-generation technology businesses. \nJulie Herendeen serves on our board of directors. Ms. Herendeen has over 25 years of experience launching and scaling enduring technology brands, managing global businesses and building high performance marketing and product teams. Since 2019 Ms. Herendeen has been the chief marketing officer of PagerDuty, a pioneer in Digital Operations Management, where she helped lead the companys transition to the public markets. Ms. Herendeen has served as a director on the board of HubSpot since 2016 and also served as an advisory board member at PagerDuty from 2017 to 2019, prior to joining as Chief Marketing Officer. \nPrior to PagerDuty, Ms. Herendeen served as head of global enterprise marketing at Uber from 2017 to 2018 and vice president of marketing at Dropbox from 2014 to 2016, building the companys first global marketing team. Prior to Dropbox, Ms. Herendeen was the chief marketing officer of Lookout from 2010 to 2014. Earlier in her career, she spent five years at Yahoo from 2003 to 2008 as vice president and held various positions at Shutterfly, Netscape and Apple. Ms. Herendeen holds a masters degree in business administration from Harvard University and a bachelors degree in economics from the University of California, Berkeley. Ms. Herendeen was selected to serve on our board of directors due to her global marketing expertise, public company experience, and<|endoftext|>Operations, or incur impairment or other charges that could result in losses. Even if the due diligence successfully identified certain risks, unexpected risks may arise and previously known risks may materialize in a manner not consistent with our preliminary risk analysis. Even though these charges may be non-cash items and not have an immediate impact on our liquidity, the fact that the company reports charges of this nature could contribute to negative market perceptions about the Company or our securities. Accordingly, our stockholders could suffer a reduction in the value of their shares. Such stockholders are unlikely to have a remedy for such reduction in value unless they are able to successfully claim that the reduction was due to the breach by our officers or directors of a duty of care or other fiduciary duty owed to them, or if they are able to successfully bring a private claim under securities laws that the Proxy Statement / Prospectus relating to the business combination contained an actionable material misstatement or material omission. \nAn active market for our securities may not develop, which would adversely affect the liquidity and price of our securities. \nThe price of our securities may vary significantly due to factors specific to our business as well as to general market or economic conditions. Furthermore, an active trading market for our securities may never develop or, if developed, it may not be sustained. You may be unable to sell your securities unless a market can be established and sustained. \n\nOur securities are currently listed on Nasdaq. However, we cannot assure you that our securities will continue to be listed on Nasdaq in the future. In order to continue listing its securities on Nasdaq, we must maintain certain financial, distribution and stock price levels. Generally, we must maintain a minimum amount in stockholders equity (generally $2,500,000) and a minimum number of holders of its securities (generally 300 public holders). \nAdditionally, we are required to demonstrate compliance with Nasdaqs listing requirements, which are more rigorous than Nasdaqs continued listing requirements, in order to continue to maintain the listing of our securities on Nasdaq. For instance, our stock price would generally be required to be at least $4 per share and its stockholders equity would generally be required to be at least $5 million and we will be required to have a minimum of 300 public holders. We cannot assure you that we will be able to meet those initial listing requirements at all times. \nIf this were to occur, we could face significant material adverse consequences, including: a limited availability of market quotations for its securities; reduced liquidity for its securities; a determination that our common stock is a penny stock which will require brokers trading in the common stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities; \nOur common stock price may change significantly and you could lose all or part of your investment as a result. \nThe trading price of our common stock is likely to be volatile. The stock market recently has experienced extreme volatility. This volatility often has been unrelated or disproportionate to the operating performance of particular companies. You may not be able to resell your shares of our common stock at an attractive price due to a number of factors such as those listed in \nRisk Factors Relating to Our Operations and Business and the following: results of operations that vary from the expectations of securities analysts and investors; results of operations that vary from our competitors; changes in expectations as to our future financial performance, including financial estimates and investment recommendations by securities analysts and investors; declines in the market prices of stocks generally; strategic actions by us or our competitors; announcements by us or our competitors of significant contracts, acquisitions, joint ventures, other strategic relationships or capital commitments; any significant change in our management; changes in general economic or market conditions or trends in our industry or markets; changes in business or regulatory conditions, including new laws or regulations or new interpretations of existing laws or regulations applicable to our business; future sales of our common stock or other securities; investor perceptions of the investment opportunity associated with our common stock relative to other investment alternatives; the publics response to press releases or other public announcements by us or third parties, including our filings with the SEC; litigation involving us, our industry, or both, or investigations by regulators into our operations or those of our competitors; guidance, if any, that we provide to the public, any changes in this guidance or our failure to meet this guidance; the development and sustainability of an active trading market for our common stock; actions by institutional or activist stockholders; and other events or factors, including those resulting from pandemics, natural disasters, war, acts of terrorism or responses to these events. \nThese broad market and industry fluctuations may adversely affect the market price of our common stock, regardless of our actual operating performance. In addition, price volatility may be greater if the public float and trading volume of our common stock is low. \nIn the past, following periods of market volatility, stockholders have instituted securities class action litigation. If we were involved in securities litigation, it could have a substantial cost and divert resources and the attention of executive management from our business regardless of the outcome of such litigation. \nBecause there are no current plans to pay cash dividends on our common stock for the foreseeable future, you may not receive any return on investment unless you sell your common stock at a price greater than what you paid for it. \nWe intend to retain future earnings, if any, for future operations, expansion and debt repayment and there are no current plans to pay any cash dividends for the foreseeable future. The declaration, amount and payment of any future dividends on shares of common stock will be at the sole discretion of the board of directors. The board of directors may take into account general and economic conditions, our financial condition and results of operations, our available cash and current and anticipated cash needs, capital requirements, contractual, legal, tax and regulatory restrictions, implications of the payment of dividends by us to our stockholders or by its subsidiaries to it and such other factors as the board of directors may deem relevant. As a result, you may not receive any return on an investment in our common stock unless you sell your common stock for a price greater than that which you paid for it. \nOur stockholders may experience dilution in the future. \nThe percentage of shares of our common stock owned by current stockholders may be diluted in the future because of equity issuances for acquisitions, capital market transactions or otherwise, including, without limitation, equity awards that we may grant to its directors, officers and employees, or exercise of warrants. Such issuances may have a dilutive effect on our earnings per share, which could adversely affect the market price of our common stock. \nIf securities or industry analysts do not publish research or reports about our business, if they change their recommendations regarding our common stock or if our operating results do not meet their expectations, our common stock price and trading volume could decline. \nThe trading market for our common stock will depend in part on the research and reports that securities or industry analysts publish about us or our businesses. If no securities or industry analysts commence coverage of us or our business, the trading price for our common stock could be negatively impacted. In the event securities or industry analysts initiate coverage, if one or more of the analysts who cover us downgrade our securities or publish unfavorable research about our businesses, or if our operating results do not meet analyst expectations, the trading price of our common stock would likely decline. If one or more of these analysts cease coverage of us or fail to publish reports on us regularly, demand for our common stock could decrease, which might cause our common stock price and trading volume to decline. \nFuture sales, or the perception of future sales, by us or our stockholders in the public market could cause the market price for our common stock to decline. \nThe sale of shares of our common stock in the public market, or the perception that such sales could occur, could harm the prevailing market price of shares of our common stock. These sales, or the possibility that these sales may occur, also might make it more difficult for us to sell equity securities in the future at a time and at a price that it deems appropriate. \nAs of March 23, 2021, we have a total of 46,105,947 shares of our common stock outstanding. All shares held by public stockholders prior to the Business Combination and all of the shares issued in the Business Combination to former Old Advent stockholders are freely tradable without registration under the Securities Act, and without restriction by persons other than our affiliates (as defined under Rule 144 of the Securities Act, Rule 144), including our directors, executive officers and other affiliates. \nIn connection with the Merger, certain stockholders, who own 23,735,315 shares of our common stock, have agreed, subject to certain exceptions, not to dispose of or hedge any of their shares of our common stock or securities convertible into or exchangeable for shares of our common stock during the period from the date of the Closing continuing through the earliest of: (i) the date that is one year from the Closing Date, (ii) the last trading day when the last reported sale price of our common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for 20 trading days within any 30-trading day period commencing at least 150 days after the Closing Date, or (iii) such date on which we complete a liquidation, merger, stock exchange, reorganization or other similar transaction that results in all of the our stockholders having the right to exchange their shares of our common stock for cash, securities or other property. Similarly, our sponsor along with its permitted transferees, who own a total of 5,513,019 shares of our common stock, agreed to a substantially identical lock-up in connection with the initial public offering (and its permitted transferees are subject to such lock-up with respect to the shares of common stock transferred to such permitted transferees). \nIn addition, the shares of Advent's common stock reserved for future issuance under the 2021 Equity Incentive Plan will become eligible for sale in the public market once those shares are issued, subject to any applicable vesting requirements, lockup agreements and other restrictions imposed by law. A total of 6,915,892 shares of common stock have been reserved for future issuance under the 2021 Equity Incentive Plan. We are expected to file one or more registration statements on Form S-8 under the Securities Act to register shares of our common stock or securities convertible into or exchangeable for shares of our common stock issued pursuant to the Equity Incentive Plan. Any such Form S-8 registration statements will automatically become effective upon filing. Accordingly, shares registered under such registration statements will be available for sale in the open market. The initial registration statement on Form S-8 is expected to cover shares of our common stock. \nIn the future, we may also issue our securities in connection with investments or acquisitions. The amount of shares of our common stock issued in connection with an investment or acquisition could constitute a material portion of the then-outstanding shares of our common stock. Any issuance of additional securities in connection with investments or acquisitions may result in additional dilution to our stockholders. \nAs a public company, we are subject to additional laws, regulations and stock exchange listing standards, which impose additional costs on us and may strain<|endoftext|>As PCI coal and 83% was sold as thermal coal. \nRazorblade Surface is a surface mine currently mining the Hazard 4 and Hazard 4 Rider coal seams and located in Deane, Kentucky. Razorblade Surface is mined via contour, auger, and highwall mining methods, and the coal is stockpiled on site where it trucked to the Mill Creek Preparation Plant approximately one mile away for processing. Razorblade Surface is run as both a contractor mine and as a company run mine for coal extraction and began extracting coal in spring of 2018. Coal produced from Razorblade Surface is trucked approximately one mile to the Mill Creek Preparation Plant. The Company acquired the Razorblade Surface mine as a new, undisturbed mine, and since acquisition, the primary work completed at Razorblade Surface has been some initial engineering work and removing overburden to access the coal. Razorblade Surface mine has the estimated capacity to produce up to approximately 8,000 tons per month of coal and started production in mid-2018 with nominal coal extracted and sold as thermal coal. In 2020, Razorblade Surface produced approximately 0 tons. In 2019, Razorblade Surface produced approximately 13,433.30 tons and sold the coal at an average price of $61.45 per ton. 100% of the coal sold from Razorblade Surface in 2019 was sold as thermal coal. \nThe coal production from Deane Mining LLC was currently sold a utility located in southeast United States under a contract that expired December 2018 and extended until June 2019, along with coal sold in the spot market. Deane Mining is in discussions with various customers to sell additional production from Access Energy, Razorblade, and Wayland Surface mines, combined with other potential regional coal production, as pulverized coal injection (PCI) to steel mills, industrial coal, and thermal coal to other utilities for electricity generation. \n\nThe Mill Creek Preparation Plant is an 800 ton-per-hour coal preparation facility located in Deane, Kentucky. The associated Rapid Loader rail loadout is a batch-weight rail loadout with 110 car storage capacity and services by CSX Transportation in their Big Sandy and Elkhorn rate districts. The Mill Creek Preparation Plant is owned by Deane Mining, subject to certain restrictions present in the agreement between Deane Mining and the surface land owner, Land Resources & Royalties LLC. We are currently utilizing less than 10% of the available processing capacity of the Mill Creek Preparation Plant. \nBoth the Mill Creek Preparation Plant and the rail loadout are operational, and any work required on any of the plant or loadouts would be routine maintenance. The allocated cost of for the property at Deane Mining paid by the Company is $1,569,641. \n### Additional Permits: \nIn addition to the above mines and preparation facility, Deane Mining holds 12 additional coal mining permits that are in development, idled or in various stages of reclamation. \nBelow is a map showing the material properties at Deane Mining: \n### Wyoming County Coal LLC \nGeneral: \nLocated within Wyoming County, West Virginia, Wyoming County Coal is comprised of two idled underground mining permits and the three permits associated with the idled Pioneer Preparation Plant, the Hatcher rail loadout, and Simmons Fork Refuse Impoundment. The two idled mining permits are undisturbed underground mines that are anticipated to utilize room-and-pillar mining. The coal controlled at Wyoming County Coal (along with our other subsidiaries) has not been classified as either proven or probable as defined in the United States Securities and Exchange Commission Industry Guide 7, and as a result, do not have any proven or probable reserves under such definition and are classified as an Exploration Stage pursuant to Industry Guide 7. \n### Mines: \nThe mining permits held by Wyoming County Coal are in various stages of planning with no mines currently in production. \nPotential customers of Wyoming County Coal would include steel mills in the United States or international marketplace although no definitive sales have been identified yet. \n\nThe idled Pioneer Preparation Plant is a 350 ton-per-hour coal preparation facility located near Oceana, West Virginia. The Hatcher rail loadout associated with the Pioneer Preparation Plant is a rail loadout serviced by Norfolk Southern Corporation. The refuse from the preparation facility is trucked to the Simmons Fork Refuse Impoundment, which is approximately 1.0 mile from the Pioneer Preparation facility. The preparation plant utilizes a belt press technology which eliminates the need for pumping slurry into a slurry pond for storage within an impoundment. \nThe Company is in the initial planning phase of getting estimates on the cost to upgrade the preparation facility to a modern 350 ton per hour preparation facility, although no cost estimates have yet been received. The Company is also in the initial planning phase of getting estimates on the cost and timing of upgrading the rail load out facility to a modern batch weight load out system, although no cost estimates have yet been received. \nThe Company acquired the Pioneer Preparation Plants as an idled facility, and since acquisition, no work has been performed at the facility. Both the Pioneer Preparation Plant and the rail loadout are idled and would require an undetermined amount of work and capital to bring them into operation, which is currently in the initial phases of planning and no cost estimates have been received. The allocated cost for the property at Wyoming County Coal will pay by the Company is $22,326,101 of which $22,091,688 has been paid using shares of the Companys Class A Common stock. The remaining portion was satisfied in the form of a convertible note which was converted to company common stock in December 2020. \n### Permits: \nWyoming County Coal holds two coal mining permits that are in the initial planning phase and three permits associated with the idled Pioneer Preparation Plant, the Hatcher rail loadout, and Simmons Fork Refuse Impoundment. Any mine that is brought into production would require significant upfront capital investment and there is no assurance of the feasibility of any such new operations. As of the balance sheet date and report date, the West Virginia permit transfers have not yet been approved, and WCC has not substituted its reclamation surety bonds for the sellers bond collateral. \nBelow is a map showing the location of the idled Pioneer Prep Plant, Hatcher rail Loadout, and Simmons Fork Refuse Impoundment at Wyoming County Coal: \n### Perry County Resources LLC \nGeneral: \nLocated primarily within Perry County, Kentucky, Perry County Resources LLC is comprised of one active underground mine (the E4-2 mine) and one active coal processing facility called the Davidson Branch Preparation Plant, along with two additional idled underground mining permits. The two idled mining permits are for underground mines and have been actively mined in the past and being maintained as idled, pending any changes to the coal market that may warrant re-starting production. The coal controlled at Perry County Resources (along with our other subsidiaries) has not been classified as either proven or probable as defined in the United States Securities and Exchange Commission Industry Guide 7, and as a result, do not have any proven or probable reserves under such definition and are classified as an Exploration Stage pursuant to Industry Guide 7. \n### Mines: \nThe E4-2 mine is an underground mine in the Elkhorn 4 (aka the Amburgy) coal seam located near the town of Hazard, Kentucky. The E4-2 mine is mined via room-and-pillar mining methods using both continuous miners and continuous haulage systems, and the coal is belted directly from the mine to the raw coal stockpile at the Davidson Branch Preparation Plant less than a mile away. The E4-2 mine is currently a company-run mine, whereby the Company manages the workforce at the mine and pays all expenses of the mine. The Company acquired the E4-2 mine as an active mine, and since acquisition in September 2019, the primary work at the E4-2 mine has been rehabilitation of existing infrastructure to increase the operational efficiencies of the mine, including replacing belt structure, repairing equipment, replacing underground mining infrastructure, and installing new mining infrastructure as the mine advances due to coal extraction. The E4-2 mine has the estimated capacity to produce up to approximately 80,000 tons per month of coal. \nIn 2020, during the period of ownership by the Company, the E4-2 mine produced approximately 1,200 tons and sold the coal at an average price of $52.30. During the period of ownership by the Company, 100% of the coal sold was sold as industrial stoker. \nIn 2019, during the period of ownership by the Company, the E4-2 mine produced approximately 45,282.78 and sold the coal at an average price of $81.37. During the period of ownership by the Company, 97% of the coal sold was sold as PCI with the remaining 3% being sold as industrial stoker. \nBeginning in January 2020 through the report date, The E4-2 mine was idled due to the adverse market effects Covid-19 global pandemic. \n\nThe Davidson Branch Preparation Plant is a 1,300 ton-per-hour coal preparation facility located near Hazard, Kentucky. The associated Bluegrass 4 rail loadout is a batch-weight rail loadout with 135 car storage capacity and services by CSX Transportation in their Hazard/Elkhorn rate district. The Davidson Branch Preparation Plant is owned by Perry County Resources. We are currently utilizing less than 10% of the available processing capacity of the Davidson Branch Preparation Plant. \nBoth the Davidson Branch Preparation Plant and the rail loadout are operational, and any work required on any of the plant or loadouts would be routine maintenance. The allocated cost of for the property at Perry County Resources paid by the Company is $1,550,663. \n### Additional Permits: \nIn addition to the above mine, preparation facility, and related permits, Perry County Resources holds four additional coal mining permits that are idled or in development. Three of the idled permits were sold to an unrelated entity on March 4, 2020 for $700,000 cash and $300,000 of value for equipment. \n\n### Quest Processing LLC \nQuest Energys wholly-owned subsidiary, Quest Processing, manages the assets, operations, and personnel of the certain coal processing and transportation facilities of Quest Energys various other subsidiaries, namely the Supreme Energy Preparation Facility (of Knott County Coal LLC), and Mill Creek Preparation Facility (of Deane Mining LLC). Quest Processing LLC was the recipient of a New Markets Tax Credit loan that allowed for the payment of certain expenses of these preparation facilities. As part of that financing transaction, Quest Energy loaned ERC Mining LLC, an entity owned by members of Quest Energy, Inc.s management, $4,120,000 to facilitate the New Markets Tax Credit loan, of which is all outstanding as of December 31, 2020 and 2019, respectively. ERC Mining LLC is considered a variable interest entity and is consolidated into Quest Energys financial statements. \nERC Mining Indiana Corporation (the Gold Star Mine) \n### General: \nLocated primarily within Greene and Sullivan Counties, Indiana, ERC Mining Indiana Corporation (ERC) is currently comprised of one idled underground mine (the Gold Star Mine), one idled coal preparation plant and rail loadout. ERC sold its coal in the past as thermal coal to utilities. The Company does not plan to mine the property and purchased it for monetization of infrastructure assets and to reclaim the property which was in process during 2020. \nMines: \nThe Gold Star Mine is an underground mine in the Indiana IV (aka the Survant) coal seam located near the town of Jasonville, Indiana. Currently idled, the Gold Star Mine has been mined in the past via room-and-pillar mining methods using continuous miners, and the coal is belted directly from the mine to the raw coal stockpile at the preparation plant less than a mile away. The Company is facilitating the full reclamation and remediation of the former mine site. \n\nThe idled preparation plant is a 165 ton-per-hour coal preparation facility located near the underground mine portal. The rail loadout associated with the preparation plant is a rail loadout serviced by the Indiana Rail Road. The preparation plant has a coarse refuse and slurry impoundment. The allocated cost of for the property at Gold Star paid by the Company<|endoftext|>Of directors or compensation committee of any entity that has one or more executive officers serving on the Board or the Compensation Committee. \n\nBoard Retainer \nDirectors of the Company who are not full-time employees of the Company or any of its subsidiaries receive compensation under a compensation program effective May 1, 2020 (which remains the same as the compensation program in effect from May 1, 2019 through April 30, 2020) that includes: \nAn annual retainer fee of $120,000, in the following form: for directors who are in compliance with the ownership levels set for in the stock ownership policy described below, 50% ($60,000) is payable in cash as a cash retainer and 50% ($60,000) is payable in Company stock as a stock retainer; provided that each director has the option to receive up to 100% of their cash retainer in Company stock; and for directors who are not in compliance with the ownership levels set for in the stock ownership policy described below, 100% ($120,000) is payable in Company stock until such director becomes in compliance with the stated ownership level, at which time, that director may elect to be paid no more than 50% in cash as a cash retainer and no less than 50% in Company stock as a stock retainer. \nThe non-executive Chairs supplemental annual retainer fee is $50,000, which is paid in accordance with the first bullet above. \n### Committee Retainers \nThe annual retainer for Committee Chairs is $10,000, payable in the same form as the annual retainer fee described above. It is assumed that each director will serve on two committees with a supplemental retainer of $10,000 for any director serving on three or more committees, payable in the same form as the annual retainer fee described above. \nStock Ownership Policy \nDirectors receive their stock retainer, and any portion of their cash retainer that is elected to be paid in stock, in shares of the Companys common stock. The Company believes that director stock ownership is important and has a minimum stock ownership policy for outside directors equal to five times the annual Board member cash retainer of $60,000, or $300,000, in value. Directors must hold all of their shares (excluding shares withheld or sold to cover exercise or vesting costs, such as income taxes) until the minimum ownership level is met. The Committee reviews hardships on an individual basis, if needed. \n### Director Deferred Compensation Plan \nIn July 2020, the Committee adopted a deferred compensation plan for director compensation programs beginning on May 1, 2021. The plan allows directors to elect to receive their stock retainer in the form of time-based RSUs under the 2020 Plan in lieu of shares of Company stock. Directors are allowed to elect a settlement date for the RSUs in a deferral election form provided by the Company. \nDIRECTOR COMPENSATION PAID IN 2020 \n(1) Non-Executive Chair of the Board. \n(2)Mr. Furlong has elected to receive $35,000 of his cash compensation in the form of Company stock. \n(3)Mr. Guyaux has elected to received $35,000 of his cash compensation in the form of Company stock. \n(4)Ms. Stevenson has elected to receive $30,000 of her cash compensation in the form of Company stock. \n(5)Mr. Waters has elected to receive $21,250 of his cash compensation in the form of Company stock. \n(6)Ms. Zlatkus has elected to receive $27,500 of her cash compensation in the form of Company stock. \n(7)Represents the aggregate grant date fair value, computed in accordance with ASC 718, of awards that were granted to directors in 2020. \n(8) The compensation numbers in the above table may not correspond to the Board and Committee retainers described under Compensation of Directors due to the timing of the rotation of committee chair assignments in 2020. \nITEM 12. \n### Securities Ownership of Officers and Directors \nThe following table sets forth the beneficial ownership of the Companys common stock as of January 30, 2021 with respect to: \n(1)each director; \n(2)each of the Companys named executive officers identified in this Annual Report on Form 10-K; and \n(3)all directors and executive officers of the Company as a group. \n*Unless otherwise indicated, the address is c/o , 10 Post Office Square, Boston, MA 02109. \n**Represents less than 1% \n***Mr. DeChellis is also a director of the Company. \n(1)Beneficial share ownership is determined pursuant to Rule13d-3 under the Securities Exchange Act of 1934, as amended. Accordingly, a beneficial owner of a security includes any person who, directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise has or shares the power to vote such security or the power to dispose of such security. The amounts set forth above as beneficially owned include shares owned, if any, by spouses and relatives living in the same home as to which beneficial ownership may be disclaimed. \n(2)Percentages held by executive officers and directors individually and as a group are calculated on the basis of \n82,429,253 shares of common stock outstanding as of January 30, 2021. \n(3)Performance shares, restricted stock units and performance stock units that are not eligible to vest within 60 days of January 30, 2021 are not included as executive officers have no beneficial interest in such equity awards until either established performance criteria are met or a vesting time period has lapsed. Please see \n\n(4)Includes 119,365 shares of common stock and 42,859 exercisable options held by the Companys current executive officers not identified on this table. \nHoldings of Major Stockholders \nThe following table lists persons known by the Company to own beneficially more than five percent of the Companys outstanding shares of common stock as of December 31, 2020. \n1)This information is based solely on a Schedule 13G/A filed with the SEC on January 26, 2021 by BlackRock, Inc., in which it reported sole voting power of 11,911,001 shares and sole dispositive power of 12,038,188 shares. In this same Schedule 13G/A filing, BlackRock identified iShares Core S&P Small-Cap ETF as having the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, more than 5% of the Companys shares. \n(2)This information is based solely on a Schedule 13G/A filed with the SEC on February 10, 2021 by The Vanguard Group, in which it reported shared voting power of 90,262 shares, sole dispositive power of 8,333,666 shares and shared dispositive power of 160,201 shares. \n(3)This information is based solely on a Schedule 13G filed with the SEC on February 4, 2021 by Wellington Management Group LLP, in which it reported shared voting power of 5,760,989 shares and shared dispositive power of 5,760,989 shares. \n(4)This information is based solely on a Schedule 13G/A filed with the SEC on February 12, 2021 by Dimensional Fund Advisors LP, in which it reported sole voting power of 5,178,106 shares and sole dispositive power of 5,447,985 shares. Dimensional Fund Advisors LP, an investment adviser registered under Section 203 of the Investment Advisors Act of 1940, furnishes investment advice to four investment companies registered under the Investment Company Act of 1940, and serves as investment manager or sub-adviser to certain other commingled funds, group trusts and separate accounts (such investment companies, trusts and accounts, collectively referred to as the Funds). In certain cases, subsidiaries of Dimensional Fund Advisors LP may act as an adviser or sub-adviser to certain Funds. In its role as investment advisor, sub-adviser and/or manager, Dimensional Fund Advisors LP or its subsidiaries (collectively, Dimensional) may possess voting and/or investment power over the securities of the Company that are owned by the Funds, and may be deemed to be the beneficial owner of the shares of the Company held by the Funds. However, all securities reported are owned by the Funds. Dimensional disclaims beneficial ownership of such securities. \n\nThe following table provides information as of December 31, 2020 regarding shares of common stock that may be issued under the Companys equity compensation plans including the 2020 Plan, the 2009 Plan, the Inducement Plan, and the Companys 2001 Employee Stock Purchase Plan (as Amended and Restated as of July 24, 2019) (the ESPP). \n(1) The 2020 Plan, the 2009 Plan, and the ESPP. \n(2) The Inducement Plan. The Companys Board of Directors approved the Inducement Plan, which has not been approved by the Companys shareholders. The purpose of the Inducement Plan is to grant equity awards (stock options, restricted stock, restricted stock units, stock appreciation rights and other stock awards) to new employees as an inducement to join the Company. No award grants may be made under the Inducement Plan after June 2, 2020. No shares have been issued from the Inducement Plan since December 31, 2019. \n(3) Does not include purchase rights accruing under the ESPP because the purchase price (and therefore the number of shares to be purchased) will not be determined until the end of the purchase period. \n(4) Includes 1,525,99 shares of restricted stock that could be issued if certain performance metrics are met. \n(5) The weighted average exercise price does not include outstanding RSUs or performance awards, for which there is no exercise price. \n(6) Includes 1,495,738 shares available for future issuances under the 2020 Plan and 81,929 shares available under the ESPP. \nITEM 13. \n### Director Independence \nPursuant to the Companys Corporate Governance Guidelines established by the Board, no more than two members of the Board may be executive members, and all others must meet the definition of an independent director under NASDAQ listing standards. Under the Companys Corporate Governance Guidelines, the CEO is required to be a member of the Board. Currently, the CEO is the only member of the Board who is not independent. On an annual basis, the Governance and Executive Committee of the Board reviews the independence status of each member of the Board to determine whether any relationship is inconsistent with a determination that the director is independent. The most recent review was undertaken in January 2021 and, as a result, the Board, after such review, determined that each of the Companys non-executive directors (Mses. Kuenstner, Larson, Stevenson, and Zlatkus, and Messrs. Furlong, Guyaux, Ubias and Waters) meets the qualifications for independence in accordance with NASDAQ listing standards. \nRelated Party Transactions \nThe Company sends out annual questionnaires to its directors and executive officers regarding related party transactions. If there are any affirmative responses, the Board, which is responsible for the oversight of such transactions, reviews any such affirmative responses and considers their terms and conditions. \nThere were no related party transactions reported in 2020. \n### ITEM 14. \nAudit Fees \nThe following table presents fees for professional audit services rendered by KPMG LLP (KPMG) for the audit of the Companys annual financial statements for 2020 and 2019, and fees billed for other services rendered by KPMG. \n(1) Audit fees for 2020 and 2019 include fees billed, or expected to be billed, for the annual audit and quarterly reviews. \nKPMG audited the Companys consolidated financial statements for the year ended December31, 2020. \n### Pre-Approval Policy and Procedures \nPursuant to the Audit and Finance Committee Charter, all audit and non-audit services provided to the Company by KPMG must be pre-approved by the Audit and Finance Committee of the Board (the Audit and Finance Committee); however, this pre-approval requirement is waived with respect to the provision of non-audit services for the Company if the de minimis provisions of Section 10A(i)(1)(B) of the Exchange Act are satisfied. The authority to pre-approve non-audit services may be delegated to one or more members of the Audit and Finance Committee, who will present a report on all decisions to pre-approve an activity to the full Audit and Finance Committee at its first meeting following such decision. The Companys Internal Audit Policy provides for (a) general pre-approval of audit-related services which do not exceed certain aggregate dollar thresholds approved by the Audit and Finance Committee, and (b) specific pre-approval of all other permitted services and any proposed services which exceed these same dollar thresholds. The Audit and Finance Committee is also mindful of the relationship between fees for audit and non-audit services<|endoftext|>Mr. Roberts in 2020. \nOn March 26, 2012, the Compensation Committee approved an award of 310,000 RSUs and 190,000 restricted shares to Mr. Roberts. Each RSU represents and has a value equal to one share of our Common Stock. The 310,000 RSUs are eligible to vest over a ten year period starting in 2012 based upon the cumulative dollar amount of improvement in annual economic profit as compared to the annual economic profit for 2011. The RSUs are eligible to vest beginning in 2012 based on the following formula: cumulative improvement in economic profit divided by $200 million multiplied by 310,000. The cumulative number of RSUs that may be vested as of the end of any year may not exceed 31,000 (or 10% of the total) multiplied by the number of full calendar years that have elapsed since January 1, 2012. \nIn 2020, under the formula described above, all of the 31,000 RSUs eligible to vest were approved for vesting by the Compensation Committee in January 2021. As of the date hereof, 279,000 of the 310,000 RSUs awarded to Mr. Roberts on March 26, 2012 have vested. Vested RSUs from the March 26, 2012 award are subject to a post-vesting holding period (which will continue to apply following Mr. Roberts retirement) that will lapse in equal installments on December 31, 2022, 2023, 2024, 2025 and 2026, at which time vested RSUs will be converted to shares of common stock. \nThe 2012 grant of 190,000 restricted shares is comprised of 90,000 restricted shares that vest over a ten year period starting in 2012 and 100,000 restricted shares that vest over a five year period beginning in 2022. \nThe 90,000 restricted shares are eligible to vest beginning in 2012 based on the following formula: cumulative improvement in economic profit divided by $200 million multiplied by 90,000. The cumulative number of restricted shares that may be vested as of the end of any year may not exceed 9,000 (or 10% of the total) multiplied by the number of full calendar years that have elapsed since January 1, 2012. Any of the 90,000 restricted shares that vest will be subject to sale restrictions that will prevent the shares from being sold until such restrictions lapse. \nThe 100,000 restricted shares are eligible to vest in equal installments if economic profit exceeds $343,143,000 in 2022, 2023, 2024, 2025 and 2026. Any of the 100,000 restricted shares that vest will be distributed at the time of vesting. \nIn 2020, under the formula described above, all of the 9,000 restricted shares eligible to vest were approved for vesting by the Compensation Committee in January 2021. As of the date hereof, 81,000 of the 190,000 restricted shares awarded to Mr. Roberts have vested. The sales restrictions of the vested restricted shares will generally lapse in equal installments on December 31, 2022, 2023, 2024, 2025 and 2026; provided, however, that the sales restrictions will proportionally lapse on an earlier date in the event that the Company repurchases shares or pays a cash dividend based on the aggregate number of shares repurchased divided by the number of Company shares outstanding and/or the aggregate amount of cash paid as a dividend, divided by the fair market value of the Company, as applicable. As of the date hereof, the sales restrictions on all of the 81,000 vested restricted shares have lapsed. \nIf the Company pays a cash dividend, the amount of such dividend will be paid in additional restricted shares for any unvested restricted shares and in additional RSUs for any undistributed RSUs. The amount of such dividend will be paid in cash for any vested restricted shares. \nMr. \nThe Compensation Committee believes that the RSUs and restricted shares granted to Mr. Roberts appropriately align his compensation with the interests of shareholders as a result of the following: the financial rewards would be received only if long-term economic profit increases over time; the amount of compensation received would be proportionate to the amount of shareholder wealth created as measured by the share price; and the RSU and restricted share awards are long-term in nature, which would incentivize Mr. Roberts to take actions that will benefit shareholders longer-term. \n### Compensation Other Named Executive Officers \nBase Salaries. \nBase salaries are determined by the Compensation Committee after reviewing recommendations supplied by our Chief Executive Officer. The recommendations were based on the following factors: the performance of Credit Acceptance; an assessment of the named executive officers individual performance; market data; internal benchmarks; other non-equity and equity compensation components of the named executive officers total compensation plan; and roles and responsibilities for each named executive officer. \nIn December 2020, the Compensation Committee determined 2021 base salaries for our named executive officers other than our Chief Executive Officer. Based on the criteria stated above, the Compensation Committee approved the following base salary changes: \n(1)On April 28, 2021, in connection with Mr. Booths election and appointment as our Chief Executive Officer and President effective May 3, 2021, the Compensation Committee approved an increase in Mr. Booths annual base salary to $1,000,000. \nThe increases to base salaries approved in December 2020 were based primarily on the following factors: a change to the incentive compensation program of each named executive officer for 2021 through 2024, which eliminated annual cash awards in favor of longer-term equity awards; each named executive officers individual performance attainments for the year; and \n### Company results for 2020. \n2020 Incentive Compensation Messrs. \nThe 2017 through 2020 incentive compensation program for Messrs. attempted to balance annual and long-term Company performance and was comprised of RSU awards with a performance cycle ending in 2020 and annual cash awards. \n### RSU Awards \nOn January 30, 2017, the Compensation Committee approved awards of 7,300 RSUs each to Messrs. The RSUs vested over a four year performance period starting in 2017, based upon the compound annual growth rate of Adjusted EPS over the performance period. Vesting for each year of the performance period was determined as follows: \nYear 1 \n\n\n### Year 2 \n\n\n### Year 3 \n\n\n### Year 4 \n\n\nIn 2020, under the formula described above, the compounded annual growth rate of Adjusted EPS was greater than 5%, so 100% of the 1,825 RSUs eligible to vest for each of Messrs. were vested, respectively, upon the approval of the Compensation Committee in January 2021. As of the date hereof, all of the 7,300 RSUs awarded in January 2017 to each of Messrs. have vested. The vested RSUs are subject to a post-vesting holding period that will lapse on January 30, 2023, at which time vested RSUs will be converted to shares of common stock. No new grants of RSUs were made to the named executive officers in 2020. \n### Annual Cash Awards \nMessrs. were also eligible to earn an annual cash award based on Company performance. Company performance was measured based on the annual increase in economic profit. If annual economic profit increased from the prior year, Messrs. would receive a cash award that would be calculated using the following formula: recipients base salary multiplied by the dollar increase in annual economic profit divided by $25 million multiplied by 90%. If annual economic profit did not increase from the prior year, Messrs. would not receive a cash award. If 2020 annual economic profit had increased by $25 million, our internal target for this purpose, each of Messrs. would have received a cash award equal to $516,314. Based on the dollar increase in annual economic profit for 2020, Messrs. each earned a cash award of $1,306,758, which was paid in February 2021. \nOur reported 2018 annual economic profit included an increase related to the enactment of the Tax Cuts and Jobs Act (2017 Tax Act) in December 2017, which decreased our estimated long-term effective income tax rate. For purposes of calculating annual cash awards, annual economic profit for 2018 through 2020 included adjustments to defer the impact of the 2017 Tax Act on 2018 economic profit and recognize it ratably over the remaining performance period of the 2017 RSU awards. \n2021 Incentive Compensation Messrs. \nThe 2021 through 2024 incentive compensation program for Messrs. attempts to balance short-term and long-term Company performance and is comprised of stock option awards. \n### Stock Option Awards \nOn December 30, 2020, the Compensation Committee approved awards of 50,000 stock options each to Messrs. , which are subject to shareholder approval of the amendment and restatement of the Incentive Plan (the Amended Incentive Plan). The exercise price of the options is $333.94, which is equal to the closing market price of our common stock on the day prior to the date of the grant. Based on the terms of individual stock option grant agreements, the stock options: vest and become exercisable in four equal annual installments beginning on December 30, 2021, which is the first anniversary of the date on which the options were granted by the Board (subject to shareholder approval), based on continuous employment and expire six years from the date of the grant. \nThe Compensation Committee believes that the incentive compensation programs for Messrs. appropriately align their compensation with the interests of shareholders because: annual cash awards were received only if economic profit increased; the increase in reported 2018 economic profit related to the enactment of the 2017 Tax Act impacted annual cash awards over a longer term; \nRSU awards vested only if long-term Adjusted EPS increased over time; the amount of compensation received from RSU awards will be proportionate to the amount of shareholder wealth created, as measured by the share price upon the lapse of the post-vesting holding period on January 30, 2023; the amount of compensation received from stock option awards will be proportionate to the amount of shareholder wealth created, as measured by the appreciation in share price above the exercise price of $333.94; and the RSU and stock option awards are long-term in nature, which will incentivize Messrs. to take actions that will benefit shareholders longer-term. \nThe allocation between cash and equity compensation, and between short- and long-term incentives, was determined based on the discretion of the Compensation Committee. The ultimate allocation will depend on our future performance and future changes in our share price. We believe it is likely that a substantial percentage of the amount realized will be from long-term, equity-based incentives, which is consistent with the philosophy of the Compensation Committee that executive compensation should be linked to long-term shareholder value. Since substantial portions of the amounts to be realized by Messrs. will be restricted until January 30, 2023, or will not be fully exercisable until December 30, 2024, the Compensation Committee believes this plan creates an incentive for Messrs. to take actions and make decisions that will benefit us over a long-term time period. Such incentives are believed to be appropriate given the nature of the duties and responsibilities assigned to these executive officers. \nOn April 28, 2021, in connection with Mr. Booths election and appointment as our Chief Executive Officer and President effective May 3, 2021, the Compensation Committee approved the grant to Mr. Booth of an award under the Amended Incentive Plan, subject to shareholder approval of the Amended Incentive Plan, of 110,000 stock options that will expire ten years from the date of the grant and will vest and become exercisable in four equal annual installments from the date of the grant subject to continuous employment through the relevant vesting date. \n### Amendment and Restatement of the Incentive Plan \nThe Company has amended and restated the Incentive Plan subject to shareholder approval at our 2021 annual meeting of shareholders. The Amended Incentive Plan provides that awards will generally be subject to (i) a one-year minimum vesting requirement and (ii) double-trigger vesting of assumed or substituted awards upon a qualifying termination following a change in control if the awards are assumed or substituted. \nDeductibility of Executive Compensation \nPrior to the enactment of the 2017 Tax Act in December 2017, Section 162(m) of the Internal Revenue Code of 1986, as amended (the Code), restricted the deductibility of executive<|endoftext|>"},"task":{"kind":"string","value":"{\"file\": \"/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz\"}"}}},{"rowIdx":85,"cells":{"text":{"kind":"string","value":"<|endoftext|>These provisions provide for, among other things: the ability of New Quantum-Sis board of directors to issue one or more series of preferred stock; stockholder action by written consent only until the first time when Dr.Rothberg ceases to beneficially own a majority of the voting power of the capital stock of New Quantum-Si; advance notice for nominations of directors by stockholders and for stockholders to include matters to be considered at New Quantum-Sis annual meetings; amendment of certain provisions of the organizational documents only by the affirmative vote of (i)a majority of the voting power of the capital stock of New Quantum-Si so long as Dr.Rothberg beneficially owns shares representing a majority of the voting power of the capital stock of New Quantum-Si and (ii)at least two-thirds of the voting power of the capital stock from and after the time that Dr.Rothberg ceases to beneficially own shares representing a majority of the voting power of the voting stock of New Quantum-Si; and a dual-class common stock structure with 20 votes per share of New Quantum-Si ClassB common stock, the result of which is that upon the Business Combination, Dr.Rothberg will have the ability to control the outcome of matters requiring stockholder approval, even though Dr.Rothberg will own less than a majority of the outstanding shares of New Quantum-Sis capital stock. \nThese anti-takeover provisions as well as certain provisions of Delaware law could make it more difficult for a third party to acquire New Quantum-Si, even if the third partys offer may be considered beneficial by many of New Quantum-Sis stockholders. As a result, New Quantum-Sis stockholders may be limited in their ability to obtain a premium for their shares. If prospective takeovers are not consummated for any reason, New Quantum-Si may experience negative reactions from the financial markets, including negative impacts on the price of New Quantum-Si common stock. These provisions could also discourage proxy contests and make it more difficult for New Quantum-Sis stockholders to elect directors of their choosing and to cause New Quantum-Si to take other corporate actions that New Quantum-Sis stockholders desire. \nNew Quantum-Sis certificate of incorporation designates the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain types of actions and proceedings and the federal district courts as the sole and exclusive forum for other types of actions and proceedings, in each case, that may be initiated by New Quantum-Sis stockholders, which could limit New Quantum-Sis stockholders ability to obtain what such stockholders believe to be a favorable judicial forum for disputes with New Quantum-Si or New Quantum-Sis directors, officers or other employees. \nIf the Business Combination is consummated, New Quantum-Sis certificate of incorporation will provide that, unless New Quantum-Si consents to the selection of an alternative forum, any (i)derivative action or proceeding brought on behalf of New Quantum-Si; (ii)action asserting a claim of breach of a fiduciary duty owed by, or any other wrongdoing by, any current or former director, officer or other employee or stockholder of New Quantum-Si; (iii)action asserting a claim against New Quantum-Si or any director or officer arising pursuant to any provision of the DGCL or New Quantum-Sis certificate of incorporation or New Quantum-Sis bylaws; or (iv) action to interpret, apply, enforce, or determine the validity of any provisions in the certificate of incorporation of bylaws; or (v)action asserting a claim against New Quantum-Si or any director or officer of New Quantum-Si governed by the internal affairs doctrine, shall, to the fullest extent permitted by law, be exclusively brought in the Court of Chancery of the State of Delaware or, if such court does not have subject matter jurisdiction thereof, the federal district court of the State of Delaware. Any person or entity purchasing or otherwise acquiring an interest in any shares of New Quantum-Sis capital stock shall be deemed to have notice of and to have consented to the forum provisions in New Quantum-Sis certificate of incorporation. These choice-of-forum provisions may limit a stockholders ability to bring a claim in a judicial forum that he, she or it believes to be favorable for disputes with New Quantum-Si or New Quantum-Sis directors, officers or other employees or stockholders, which may discourage such lawsuits. We note that there is uncertainty as to whether a court would enforce these provisions and that investors cannot waive compliance with the federal securities laws and the rules and regulations thereunder. Section22 of the Securities Act creates concurrent jurisdiction for state and federal courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder. \nAlternatively, if a court were to find these provisions of New Quantum-Sis certificate of incorporation inapplicable or unenforceable with respect to one or more of the specified types of actions or proceedings, New Quantum-Si may incur additional costs associated with resolving such matters in other jurisdictions, which could materially adversely affect New Quantum-Sis business, financial condition and results of operations and result in a diversion of the time and resources of New Quantum-Sis management and board of directors. \n\n\nOur security is currently listed on Nasdaq. However, we cannot assure you that our securities will continue to be listed on Nasdaq in the future or prior to our initial business combination. \n\n\n\nHowever, because we have net tangible assets in excess of $5,000,000 and filed a Current Report on Form 8-K, including an audited balance sheet demonstrating this fact, we are exempt from rules promulgated by the SEC to protect investors in blank check companies, such as Rule 419. Among other things, this means our units are immediately tradable and we have a longer period of time to complete our business combination than do companies subject to Rule 419. \n\nFor instance, because there are no authorities that directly address instruments similar to the units we issued in our initial public offering, the allocation an investor makes with respect to the purchase price of a unit between the share of Class A common stock and the one-third of one redeemable warrant included in each unit could be challenged by the IRS or the courts. In addition, if we are determined to be a personal holding company for U.S. federal income tax purposes our taxable income would be subjected to an additional 20% federal income tax, which would reduce the net after-tax amount of interest income earned on the funds placed in our trust account. Furthermore, the U.S. of a cashless exercise of warrants included in the units we issued in our initial public offering and of a redemption of warrants for Class A common stock are unclear under current law. Finally, it is unclear whether the redemption rights with respect to our shares suspend the running of a U.S. holders holding period for purposes of determining whether any gain or loss realized by such holder on the sale or exchange of Class A common stock is long-term capital gain or loss and for determining whether any dividend we pay would be considered qualified dividends for federal income tax purposes. \n\n\n\n\n(ii) the redemption of any public shares properly submitted in connection with a stockholder vote to amend our amended and restated certificate of incorporation to modify the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial business combination by December 17, 2021; \nIf the issuance of the shares upon exercise of warrants is not registered, qualified or exempt from registration or qualification, the holder of such warrant will not be entitled to exercise such warrant and such warrant ma have no value or could potentially cause such warrants to expire worthless. \nHowever, under the terms of the warrant agreement, we will use our reasonable best efforts to file, and within 60 business days following our initial business combination to have declared effective, a registration statement under the Securities Act covering such shares and maintain a current prospectus relating to the Class A common stock issuable upon exercise of the warrants, until the expiration of the warrants in accordance with the provisions of the warrant agreement. In such an instance, our sponsor and its transferees (which may include our directors and executive officers) would be able to sell the common stock underlying their warrants while holders of our public warrants would not be able to exercise their warrants and sell the underlying common stock. \n\nOur initial stockholders own shares representing 20.0% of our issued and outstanding shares of common stock (assuming they do not purchase any units or shares in the open market). If our initial stockholders purchase any additional shares of common stock or units in the aftermarket or in privately negotiated transactions, this would increase their control. As a consequence of our staggered board of directors, only a minority of the board of directors will be considered for election at our annual meetings of stockholders prior to the consummation of our initial business combination and our initial stockholders, because of their ownership position, will have considerable influence regarding the outcome. \n\nSpecifically, the SEC Statement focused on warrants that have certain settlement terms and provisions related to certain tender offers or warrants which do not meet the criteria to be considered indexed to an entity's own stock, which terms are similar to those contained in the warrant agreement governing our Warrants. As a result of the SEC Statement, we reevaluated the accounting treatment of our Public Warrants and Private Placement Warrants, and determined that the Warrants should be reclassified as derivative liabilities measured at fair value, with changes in fair value each period reported in earnings. \nAccounting Standards Codification 815-40, Derivatives and Hedging --Contracts on an Entity's Own Equity provides for the remeasurement of the fair value of such derivatives at each balance sheet date, with a resulting non-cash gain or loss related to the change in the fair value being recognized in earnings in the statement of operations. Due to the recurring fair value measurement, we expect that we will recognize noncash gains or losses on our Warrants each reporting period and that the amount of such gains or losses could be material. \n\n\nAs described elsewhere in this Annual Report on Form 10-K/A, we identified a material weakness in our internal control over financial reporting related to the accounting for a significant and unusual transaction related to the warrants we issued in connection with our initial public offering in August 2020. \nFor a discussion of management's consideration of the material weakness identified related to our accounting for a significant and unusual transaction related to the Warrants we issued in connection with the August 2020 initial public offering, see Note 2 --Restatement of Previously Issued Financial Statements to the accompanying consolidated financial statements, as well as Part II, Item 9A: Controls and Procedures included in this Annual Report on Form 10-K/A. \n\n\n\n\n\nNone of the private placement warrants will be redeemable by us (except as described herein) so long as they are held by the sponsor, the direct anchor investors or their permitted transferees. \nIn particular, it would allow us to quickly redeem the warrants for Class A common stock, without having to negotiate a redemption price with the warrant holders, which in some situations, may allow us to more quickly and easily close a business combination. We can also redeem the warrants for common stock when the Class A common stock is trading at a price starting at $10, which is below the exercise price of $11.50, because it will provide certainty with respect to our capital structure and cash position while providing warrant holders with fair market value in the form of shares of Class A common stock. If we choose to redeem the warrants when the Class A common stock is trading at a price below the exercise price of the warrants, this could result in the warrant holders receiving fewer shares of Class A common stock than they would have received if they had chosen to wait to exercise their warrants for shares of<|endoftext|>### EXPLANATORY NOTE \n\n10-K to the Company and to we, us, and our are to , unless the context otherwise indicates. \n\n\n10-K of for the period ended December31, 2020, as filed with the on March31, 2021 (the Original Filing). \n\n\n\n\n\n815-40, \n\n(ASC \n815-40). \n\n\nThe change in accounting for the warrants did not have any impact on our liquidity, cash flows, revenues or costs of operating our business, in all of the Relevant Periods or in any of the periods included in Item 8, in this filing. \n\n### Part I, Item 1A. Risk Factors \nPart II, Item 7. \nPart II, Item 8. \n### Part II, Item 9A. Controls and Procedures \n\n12b-15 under the Securities Exchange Act of 1934, as amended, the Company is including with this Amendment No.1 currently dated certifications from our Chief Executive Officer and Chairman (Principal Executive Officer) and Chief Financial Officer (Principal Financial and Accounting Officer). \nExcept as described above, this Amendment No.1 does not amend, update or change any other disclosures in the Original Filing. In addition, the information contained in this Amendment No.1 does not reflect events occurring after the filing of the Original Filing and does not modify or update the disclosures therein, except as specifically identified above. Among other things, forward-looking statements made in the Original Filing have not been revised to reflect events, results or developments that occurred or facts that became known to us after the date of the Original Filing, other than the restatement, and such forward-looking statements should be read in conjunction with our filings with the SEC, including those subsequent to the filing of the Original Filing. \nPART I \nITEM1. \n### BUSINESS \n\n10-K/A \n(the Form \n\nWe are a Cayman Islands exempted company incorporated on August12, 2020 for the purpose of entering into a merger, share exchange, asset acquisition, share purchase, recapitalization, reorganization or similar business combination with one or more businesses or entities (a business combination). Our efforts to identify a prospective target business will not be limited to a particular industry or geographic location, although we intend to focus our search on industries that complement our management teams background, and to capitalize on the ability of our management team to identify and acquire a business, focusing on the healthcare and biopharma industry. \n\nEach unit consisted of one ClassA ordinary share, par value $0.0001 per share, and one-third of one redeemable warrant, with each warrant entitling the holder to purchase one ClassA ordinary share at a price of $11.50 per share. \nThe Private Placement Warrants are identical to the warrants sold in the IPO, except that the Private Placement Warrants are non-redeemable and may be exercised on a cashless basis, in each case, so long as they continue to be held by the initial purchaser or its permitted transferees. The purchasers of the Private Placement Warrants have agreed not to transfer, assign, or sell any of the Private Placement Warrants or the ClassA ordinary shares underlying the Private Placement Warrants (except to certain permitted transferees) until 30 days after the completion of our initial business combination and, for as long as the Private Placement Warrants are held by the underwriter or its designees or affiliates, until the expiration of the lock-up and registration rights limitations imposed by FINRA Rule 5110 and five years from the effective date of the registration statement for our IPO. \nTransaction costs to date amounted to $11,586,282, consisting of $4,000,000 of underwriting fees, $7,000,000 of deferred underwriters fee and $586,282 of other costs. \nFor further details regarding our business, see the section titled Proposed Business contained in our prospectus dated October20, 2020, incorporated by reference herein (the prospectus). \n\nGeneral \nWe intend to utilize cash derived from the proceeds of our IPO and the private placement of Private Placement Warrants, our capital stock, debt or a combination of these in effecting a business combination. Although substantially all of the net proceeds of the IPO and the private placement of Private Placement Warrants are intended to be applied generally toward effecting a business combination, the proceeds are not otherwise being designated for any more specific purposes. \nIf we pay for our initial business combination using stock or debt securities, or we do not use all of the funds released from the trust account for payment of the purchase price in connection with our business combination or for redemptions or purchases of our ordinary shares, we may apply the balance of the cash released to us from the trust account for general corporate purposes, including for maintenance or expansion of operations of acquired businesses, the payment of principal or interest due on indebtedness incurred in consummating our initial business combination, to fund the purchase of other companies or for working capital. \n\n\n\nWe are not prohibited from pursuing an initial business combination or subsequent transaction with a company that is affiliated with Sarissa Capital Management LP (Sarissa) or our sponsor, officers or directors. In the event we seek to complete our initial business combination with a company that is affiliated with Sarissa, our sponsor or any of our officers or directors, we, or a committee of independent directors, will obtain an opinion from an independent investment banking firm which is a member of FINRA or an independent valuation or accounting firm that such initial business combination or transaction is fair to our company from a financial point of view. \nAccordingly, if any of our officers or directors becomes aware of a business combination opportunity which is suitable for an entity to which such person has then-current fiduciary or contractual obligations, such person will honor such persons fiduciary or contractual obligations to present such business combination opportunity to such entity. \n\nPursuant to Nasdaq listing rules, the target business or businesses that we acquire must collectively have a fair market value equal to at least 80% of the balance of the funds in the trust account (excluding taxes payable on the income earned on the trust account) at the time of the execution of a definitive agreement for our initial business combination, although we may acquire a target business whose fair market value significantly exceeds 80% of the trust account balance. Even if the post-business combination company owns or acquires 50% or more of the voting securities of the target, our shareholders prior to the business combination may collectively own a minority interest in the post-business combination company, depending on valuations ascribed to the target and us in the business combination transaction. \nIf our board is not able to independently determine that the target business has a sufficient fair market value, we will obtain an opinion from an unaffiliated, independent investment banking firm, or another independent entity that commonly renders valuation opinions on the type of target business we are seeking to acquire, with respect to the satisfaction of such criteria. We will not be required to obtain an opinion from an independent investment banking firm, or another independent entity that commonly renders valuation opinions on the type of target business we are seeking to acquire, as to the fair market value if our board of directors independently determines that the target business complies with the 80% threshold. \n\n\n\n\nUnder Nasdaqs listing rules, shareholder approval would be required for our initial business combination if, for example: we issue (other than in a public offering for cash) ordinary shares that will either (a)be equal to or in excess of 20% of the number of ordinary shares then issued and outstanding or (b)have voting power equal to or in excess of 20% of the voting power then issued and outstanding; \nThe Companies Law (2020 Revision) of the Cayman Islands as the same may be supplemented or amended from time to time (the Companies Law) and Cayman Islands law do not currently require, and we are not aware of any other applicable law that will require, shareholder approval of our initial business combination. \n\n\nOur amended and restated memorandum and articles of association provide that we will have only until October23, 2022 to complete our initial business combination. If we do not consummate an initial business combination by October23, 2022, we will: (i)cease all operations except for the purpose of winding up; (ii)as promptly as reasonably possible, but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account and not previously released to us to pay our income taxes, if any (less up to $100,000 of interest to pay dissolution expenses), divided by the number of the then-outstanding public shares, which redemption will completely extinguish public shareholders rights as shareholders (including the right to receive further liquidation distributions, if any); There will be no redemption rights or liquidating distributions with respect to our warrants, which will expire worthless if we fail to consummate an initial business combination by October23, 2022. \nOur sponsor and each member of our management team have entered into an agreement with us, pursuant to which they have agreed to waive their rights to liquidating distributions from the trust account with respect to any founder shares they hold if we fail to consummate an initial business combination by October23, 2022 (although they will be entitled to liquidating distributions from the trust account with respect to any public shares they hold if we fail to complete our initial business combination by October23, 2022). \nOur sponsor, executive officers, directors and director nominees have agreed, pursuant to a written agreement with us, that they will not propose any amendment to our amended and restated memorandum and articles of association (A)that would modify the substance or timing of our obligation to provide holders of our ClassA ordinary shares the right to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination by October23, 2022 or (B)with respect to any other provision relating to the rights of holders of our ClassA ordinary shares, unless we provide our public shareholders with the opportunity to redeem their public shares upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account and not previously released to us to pay our income taxes, if any, divided by the number of the then-outstanding public shares. \n\nIf we were to expend all of the net proceeds of our offering and the sale of the Private Placement Warrants, other than the proceeds deposited in the trust account, and without taking into account interest, if any, earned on the trust account, the per-share redemption amount received by shareholders upon our dissolution would be $10.00. \nAlthough we will seek to have all vendors, service providers (excluding our independent registered public accounting firm), prospective target businesses and other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account for the benefit of our public shareholders, there is no guarantee that they will execute such agreements or even if they execute such agreements that they would be prevented from bringing claims against the trust account including but not limited to fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain an advantage with respect to a claim against our assets, including the funds held in the trust account. The underwriter will not execute agreements with us waiving such claims to the monies held in the trust account. In order to protect the amounts held in the trust account, our sponsor has agreed that it will be liable to us if and to the extent any claims by a vendor for services rendered or products sold to us, or<|endoftext|>Common stock. \n(9) \nMr. Kellers total includes 651,250 shares of common stock and options to purchase 545,816 shares of common stock that are exercisable within 60 days of April 28, 2021. \n(10) \nMr. Newmans total includes 12,500 shares of common stock. Mr. Newman served as Chief Business Development Officer of DropCar until his resignation at the effective time of the Merger on May 28, 2020. \n(11) \nMr. Perleys total includes options to purchase 18,179 shares of common stock that are exercisable within 60 days of April 28, 2021. \n(12) \nMr. Richardsons total includes 12,500 shares of common stock. Mr. Richardson served as Chief Executive Officer of DropCar until his resignation at the effective time of the Merger on May 28, 2020. \n(13) \nMr. Silvermans total includes 122,547 shares of common stock. \n(14) \nMr. Schiffmans total includes 81,840 shares of common stock. \n(15) \nMr. Smiths total includes options to purchase 118,162 shares of common stock that are exercisable within 60 days of April 28, 2021. \nITEM 13. \nTransactions with related persons are governed by our Corporate Code of Conduct and Ethics and Whistleblower Policy, which applies to all of our associates, as well as each of our directors and certain persons performing services for us. This code covers a wide range of potential activities, including, among others, conflicts of interest, self-dealing and related party transactions. Waiver of the policies set forth in this code will only be permitted when circumstances warrant. Such waivers for directors and executive officers, or that provide a benefit to a director or executive officer, may be made only by our Board, as a whole, or the Audit Committee and must be promptly disclosed as required by applicable law or regulation. Absent such a review and approval process in conformity with the applicable guidelines relating to the particular transaction under consideration, such arrangements are not permitted. All related party transactions for which disclosure is required to be provided herein were approved in accordance with our Corporate Code of Conduct and Ethics and Whistleblower Policy. \n\nAsset Sale \nOn December 19, 2019, DropCar and DropCar Operating entered into the Asset Purchase Agreement with DC Partners, Spencer Richardson and David Newman. DC Partners was a New York limited liability company managed by Spencer Richardson and David Newman. The Asset Purchase Agreement provided that DC Partners would purchase from DropCar Operating substantially all of the assets and certain specified liabilities of the DropCar business prior to the Merger, for a purchase price consisting of (i) the cancellation of any liabilities pursuant to the employment agreements by and between DropCar Operating and each of Mr. Richardson and Mr. Newman, respectively (except as otherwise set forth in (x) a Termination and Release Agreement to be entered into between DropCar and each of Mr. Richardson and Mr. Newman and/or (y) Section 3(h) of the employment agreements, which relates to indemnification with respect to services as a director of DropCar) and (ii) the assumption of all liabilities or obligations of DropCar (x) relating to or arising out of workers compensation claims of any employee which relate to events occurring prior to the closing of the Asset Sale Transaction and (y) arising under or relating to the assigned contracts pursuant to the Asset Purchase Agreement. On May 28, 2020, the parties to the Asset Purchase Agreement entered into Amendment No. 1 to the Asset Purchase Agreement (the Asset Purchase Agreement Amendment), which Asset Purchase Agreement Amendment (i) provided for the inclusion of up to $30,000 in refunds associated with certain insurance premiums as assets being purchased by DC Partners, (ii) amended the covenant associated with the funding of the DropCar business, such that we provided the DropCar business with additional funding of $175,000 at the closing of the transactions contemplated by the Asset Purchase Agreement and (iii) provided for a current employee of DropCar being transferred to DC Partners to provide transition services for a period of three months after the closing of the transactions contemplated by the Asset Purchase Agreement. The Asset Purchase Agreement closed on May 28, 2020, immediately following the consummation of the Merger. \n### AYRO Operating Related Party Transactions \nRoyalty Agreement \nOn March 1, 2017, AYRO Operating entered into the Outsourced CVO Services Agreement with Sustainability Initiatives, LLC (SI) that is controlled by Mr. Okonsky, a founder of AYRO Operating, and Mr. Adams, a founding board member, in its effort to accelerate the start-up of AYRO Operatings operations. In return for acceleration assistance and SI providing services of the Chief Visionary Officer role, pursuant to the agreement, AYRO Operating paid a monthly retainer of $6,000 per month. On a quarterly basis, AYRO Operating also remitted to SI a royalty of a percentage (see table below) of its revenues less the retainer amounts for the measurement quarter paid. In connection with this agreement, AYRO Operating granted 95,438 options to purchase shares of AYRO Operating common stock at an exercise price of $2.446 per share under the AYRO Operating Equity Plan, which was subsequently cancelled in December 2019. \nSI was also granted a right to nominate up to two members of AYRO Operatings board of directors. \nIn addition, on April 1, 2017, AYRO Operating and SI entered into a fee-for-service agreement, pursuant to which SI agreed to provide accounting and financial, graphics and marketing services to AYRO Operating, based on the market-standard hourly rates as set forth in the agreement. \nEffective as of January 1, 2019, AYRO Operating agreed to an amendment to the Outsourced CVO Services Agreement to reduce the royalty percentage to a flat 0.5% for all revenue levels. In connection to this amendment, AYRO Operating granted each of Mr. Okonsky and Mr. Adams an additional 190,876 options to purchase $3.48 per share, pursuant to the AYRO Operating Equity Plan, which options were fully vested as of September 30, 2019 and subsequently cancelled in December 2019. \nEffective as of October 14, 2019, AYRO Operating and SI terminated the Outsourced CVO Services Agreement, and as consideration for SI to terminate the agreement, AYRO Operating issued 231,778 shares of AYRO Operating common stock to SI (or its designees). \nIn December 2019, AYRO Operating, SI, Christian Okonsky and Mark Adams agreed to cancel (i) the options to purchase 95,438 shares of AYRO Operating common stock previously granted to SI in March 2017 and (ii) the options to purchase an aggregate of 381,752 shares of AYRO Operating common stock previously granted to Mr. Okonsky and Mr. Adams in connection with the amendment to the Outsourced CVO Services Agreement to reduce the royalty percentages, in exchange for 434,529 shares of AYRO Operating common stock. \nFor the years ended 2017, 2018, and 2019 prior to termination, AYRO Operating paid SI $60,000, $187,494 and $60,000, respectively, pursuant to the Outsourced CVO Services Agreement, and $123,538, $36,694 and $1,275, respectively, pursuant to the fee-for service agreement for accounting and financial, graphics and marketing services. \n### Consulting Agreement \nOn January 15, 2019, AYRO Operating entered into a fee-for-service-based agreement with Sustainability Consultants, LLC (SCLLC), an entity that is controlled by Mr. Adams, John Constantine and Will Steakley, who were principal stockholders of AYRO Operating, in an effort to support the strategic direction of AYRO Operating. The duties of SCLLC include (a) participating in strategic advisory conference calls with management; (b) making introductions to interested parties of strategic value; (c) advising AYRO Operating on capital structure; and (d) acting as ambassadors to promote AYRO Operating within the Central Texas community. In 2019, SCLLC received five-year warrants to purchase an aggregate of 177,924 shares of AYRO Operating common stock at a $7.33 exercise price and 67,488 shares of the AYRO Operating common stock in connection with the services rendered. \nLoan from SI \nIn January 2019, AYRO Operating received $50,000 in a short-term loan from SI. The short-term loan did not bear any interest. The amount was repaid in March 2019. \nAdams Note, Amendment, Lock-Up Agreement and Guarantee \nOn October 14, 2019, Mr. Adams, a current member of the Board, was issued a secured promissory note in the aggregate principal amount of $500,000, in exchange for funding $100,000 to AYRO Operating on or before October 15, 2019, and $400,000 on or before October 24, 2019. The note was secured by a first lien security interest in all of the assets of AYRO Operating and accrued interest at 14% per annum, until the promissory note was repaid. The note was to mature on the earlier of March 12, 2020, or the date that is three business days following the closing of a reverse merger transaction involving AYRO Operating. \nOn December 13, 2019, AYRO Operating and Mr. Adams entered into an amendment to the promissory note, extending the maturity date of the note to April 30, 2021. As consideration, AYRO Operating issued 136,340 shares of common stock to Mr. Adams. Such shares are subject to a six-month lock-up period. \nAYRO has not paid any principal on the promissory note, but has paid all accrued interest timely as per the terms of the note. As of September 30, 2020, the aggregate principal amount of $500,000 and accrued interest was fully paid. \nIn April 2020, AYRO Operating issued a secured promissory note in the aggregate amount of $600,000 to an investor of AYRO Operating, pursuant to which Mark Adams entered into a personal guaranty for up to $300,000 of amounts owing under such secured loan, and, in connection therewith, AYRO Operating agreed to grant to each of the investor and Mark Adams a number of shares of AYRO Operating common stock that will convert into two percent (2%) of the aggregate issued and outstanding shares of DropCar immediately post-Merger. The entire principal balance of the loan plus accrued interest was paid off upon closing of the Merger. \n### Cenntro Agreement \nIn April 2017, AYRO Operating entered into a Manufacturing Licensing Agreement with Cenntro, that provides for its four-wheel sub-assemblies to be licensed and sold to AYRO Operating for final manufacturing and sale in the United States. \nSupply Chain Agreements \nIn 2017, AYRO Operating executed a supply chain contract with Cenntro Automotive Group (Cenntro), our primary supplier, a manufacturer located in the Peoples Republic of China. Through our partnership with Cenntro, Cenntro acquired 19% of AYRO Operatings common stock in 2017. As of December 31, 2020, Cenntro beneficially owned approximately 4.38% of our common stock. Currently, we purchase 100% of our vehicle chassis, cabs and wheels through this supply chain relationship with Cenntro. We must sell a minimum number of units in order to maintain our exclusive supply chain contract. We were in default of the original exclusive term of the contract; however, in 2019 and 2020, the contract was amended to remove the default clause. In December 2019, Cenntro agreed to convert $1.10 million of trade accounts payable due from us to 299,948 shares of AYRO Operatings Seed Preferred Stock. The parties also agreed that any accrued interest on the trades payable as a result of this conversion would be forgiven, which resulted in a recapture of interest expense in the amount of $0.17 million in the year ended December 31, 2019. As of December 31, 2020 and 2019, the amounts outstanding to Cenntro as a component of accounts payable were $0.05 million and $0.08 million, respectively. Under a memorandum of understanding signed between us and Cenntro on March 22, 2020, upon availability of the 411x product, we agreed to purchase 300 units within the twelve months following the signing of the memorandum of understanding, and 500 units and 800 units in each of the following respective twelve-month periods. On July 9, 2020, in exchange for certain percentage discounts for raw materials, we made a $1.2 million prepayment for inventory. As of December 31, 2020 and 2019, the prepayment deposits were $0.98 million and $0.05 million. \n### Adams Loan \nIn October 2019, we borrowed $0.50 million under a bridge loan from Mark Adams, a founding board member. As an inducement for the bridge loan, we granted Mr. Adams 143,975 shares of common stock and in December 2019, we<|endoftext|>This Amendment No. 1 on Form 10-K/A (the Amendment) amends our Annual Report on Form 10-K for the year ended December 31, 2020, originally filed with the Securities and Exchange Commission on April 15, 2021 (the Original Filing). We are filing this Amendment to the Original Filing to include the information required by Part III of Form 10-K previously omitted from the Original Filing in reliance on General Instruction G (3) to Form 10-K. This Amendment hereby amends and replaces in its entirety Part III of the Original Filing. \nPart IV of the Original Filing is being amended solely to add as exhibits certain new certifications by our principal executive officer and principal financial officer in accordance with Rule 13a-14(a) promulgated by the SEC under the Securities Exchange Act of 1934. Because no financial statements have been included in this Amendment and this Amendment does not contain or amend any disclosure with respect to Items 307 or 308 of Regulation S-K, paragraphs 3, 4 and 5 of the certifications have been omitted. We are not including the certificate under Section 906 of the Sarbanes-Oxley Act of 2002 because no financial statements have been included in this Amendment. \nThe Original Filing continues to speak as of the date of the Original Filing, and we have not updated the disclosures contained therein to reflect any events which occurred at a date subsequent to the filing of the Original Filing other than as expressly indicated in this Amendment. Accordingly, this Amendment should be read in conjunction with the Original Filing and our other filings made with the SEC on or subsequent to April 15, 2021. \n### OTHER PERTINENT INFORMATION \nAll references in this Annual Report to the Company, we, us or our refer to Force Protection Video Equipment Corp. and our wholly owned subsidiary BIG Token, Inc. on a consolidated basis. All references to Common Stock or Common Shares refers to the common stock, $0.00000001 par value, of Force Protection Video Equipment Corp. All references to BIG Token, BIG Token Application or BIG Token business refers to our wholly owned subsidiary and corresponding operations that consist of a consumer based platform, technologies offer and services used to identify and reach target consumers which we purchased from SRAX, Inc. (SRAX) on February 4, 2021. \nPART II \nITEM 9B. \nOTHER INFORMATION. \nNone. \nPART III \nITEM 10. \n\nThe names of our directors and executive officers and their ages, positions, and biographies as of May 26, 2021 are set forth below. Our executive officers are appointed by, and serve at the discretion of the Board. For a description of the employment agreements and other ancillary agreements entered into between our officers and directors and the Company, please refer to the section entitled Executive Compensation below \n\nChristopher Miglino \n, age 52 is the co-founder of SRAX, our parent company and has served on our board of directors since February 2021. Since April 2010, Mr. Miglino has served as SRAXs Chief Executive Officer and a member of its board of directors. He also served as SRAXs Chief Financial Officer and principal financial and accounting officer from April 2010 until August 2015. Mr. Miglino, who has over 15 years of experience running various advertising companies, oversees all of our affairs. Some of the companies Mr. Miglino has helped launch programs for include Diet Coke, Bank of America, Nestle, General Mills, HBO, National Geographic, Target, Aflac, and Bayer. Mr. Miglino previously served as a Board member for EVmo, Inc. (fka YaYYo, Inc) [OTC: YAYO] and served on their compensation committee until January 2020. In addition, from August 2008 until March 2010, Mr. Miglino was CEO of the Lime Ad Network, a subsidiary of Gaiam, Inc. (Nasdaq: GAIA), where his responsibilities included management of interactive and innovative advertising programs for 250 green and socially conscious websites. Prior to that, from June 2004 until August 2008, Mr. Miglino was CEO of Conscious Enlightenment, where he oversaw their day to day operations in the publishing and advertising industry. From 2004 until 2008, Mr. Miglino served as a board member for Golden Bridge Yoga in Los Angeles, a studio that encompasses over 20,000 square feet of yoga spaces including a restaurant. Mr. Miglino holds a bachelors degree from the University of Southern California. Mr. Miglinos role as a co-founder of SRAX, his operational experience in SRAX as well as his professional experience in technology and advertising sectors were factors considered with his appointment to the BIG Token Board. \n### George Stella \n, age 50, joined the Company as chief revenue officer in February 2021. He was also appointed to serve as President of the Company on May 18, 2021. Prior to that, Mr. Stella served as executive vice president of SRAX, our parent company, since March 2018. George began his career in digital advertising spending 12 years at 24/7 Media as the data driven digital marketing space emerged. He then entered the digital shopper marketing space in its infancy with OwnerIQ and then HookLogic. Prior to joining SRAX, Mr. Stella served as vice president of sales, helping Yieldbot develop its digital shopper business. \nMichael Malone \n, age 39, has been our principal accounting officer since January 2021. Mr. Malone has also served as SRAXs Chief Financial Officer since December 2018. Mr. Malone has over sixteen (16) years of experience in corporate finance in public and private companies. From 2014 until December 2018, he served as Vice President Finance of Westwood One, LLC, a subsidiary of Cumulus Media, Inc. (NYSE: CMLS), an audio broadcast network in New York. Prior to that, from January 2013 through June 2014, he served as Finance Director / Controller for Cumulus Media Network, audio broadcast network, until its merger with Westwood One, LLC. Prior to that from 2012 to 2013, he worked as Director of Internal Auditing of Cumulus Media. He holds a BA in accounting from Monmouth College. \n### Daina Middleton \n, age 55, is the CEO of Britelite Immersive. She also is an advisor and board member assisting companies in increasing their growth potential. From September 2017 through September 2019, she served as the Chief Executive Officer of Ansira Partners, a PE-backed marketing technology and services firm. Prior to that, from 2016 through September 2017, she served as a principal in Larsen Consulting Group, an arm of Gryphon Investors, coaching portfolio executives. Prior to joining LCG, she ran B2B Marketing for Twitter, and was the CEO of Performics, the performance marketing arm of Publicis. Earlier in her career, she worked for Hewlett-Packard for 16 years. She joined the board of directors at Marin Software (NASDAQ: MRIN) in 2014 where she serves on the Audit/ Finance and Compensation committees. She also serves on the board of PE-backed account-based marketing firm Madison Logic. She acts as an advisor for early start ups Ad Fontes Media and MarketBeam. She is also a published author, publishing Marketing in the Participation Age: A Guide to Motivating People to Join, Share, Take Part, Connect, and Engage, and Grace Meets Grit: How to bring out the Remarkable Courageous Leader Within. She holds a bachelors degree from Oregon State University. In evaluating Ms. Middletons specific experience, qualifications, attributes and skills in connection with her appointment to the Board, the Board took into account her extensive experience in raising capital, revenue growth, leadership coaching, marketing and branding, technology, and her leadership skills throughout such industries. \nYin Woon Rani \n, age 47, has served as the chief executive officer of MilkPEP, a government administrated program that helps promote the consumption of fluid milk (best known for the Got Milk? campaign) since October 2019. Prior to that, from January 2014 June 2018, she served as VP and chief customer experience officer for the Campbell Soup Company (NYSE: CPB), where she helped modernize and lead integrated communications for the company. Prior to that, from November 2011 through March 2013, she served as president (North America) of Universal MCCann, a global media and advertising agency. She graduated from Yale University, summa cum laude and earned a Masters of Business Administration from New York University Stern, where she graduated second in her class. In evaluating Ms. Ranis specific experience, qualifications, attributes and skills in connection with her appointment to the Board, the Board took into account her extensive experience in marketing, media, technology, and her leadership skills throughout such industries. \n\nSection 16(a) of the Exchange Act requires our officers, directors, and stockholders owning more than ten percent of our common stock, to file reports of ownership and changes in ownership with the SEC and to furnish us with copies of such reports. Based solely on our review of Form 3, 4 and 5s, the following table provides information regarding any of the reports which were filed late during the fiscal year ended December 31, 2020: \nNone. \n### CORPORATE GOVERNANCE \nCommittees \nThe Board currently does not have audit, compensation or governance committees. Due to our size and limited resources and employees, the Board has determined that the functions of such committees, including the compensation committee, will be undertaken by the entire Board. Upon securing additional financing, the Board anticipates the creation of free standing committees. Executive compensation is determined by the entire board. \n### Stockholder Recommendation of Board Nominees \nWe currently do not have a formal policy on the submission of recommendations for candidates to the Board from stockholders. While the Board has not adopted a formal diversity policy or specific standards with regard to the selection of director nominees, due to the nature of our business, the Board believes it is important to consider diversity of race, ethnicity, gender, age, education, cultural background, and professional experiences in evaluating board candidates. Additionally, although the Board has not formally established any specific, minimum qualifications that must be met by each candidate for the Board or specific qualities or skills that are necessary for one or more of the members of the Board to possess, when considering a potential non-incumbent candidate, the Board will factor into its determination the following qualities of a candidate: educational background, diversity of professional experience, including whether the person is a current or former chief executive officer or chief financial officer of a public company or the head of a division of a large international organization, knowledge of our business, integrity, professional reputation, independence, and ability to represent the best interests of our stockholders. \nThe Board anticipates adopting a formal process for submission of stockholder recommendations in the future. \n### Code of Ethics \nWe are committed to maintaining the highest standards of honest and ethical conduct in running our business efficiently, serving our stockholders interests and maintaining our integrity in the marketplace. To further this commitment, we have adopted our Code of Ethics and Business Conduct, which applies to all our directors, officers and employees. A copy of our Code of Ethics and Business Conduct is attached to the Original Filing as Exhibit 14.01. If you would like to receive a copy of our Code of Ethics and Business Conduct, we will provide you a copy free of charge. \nPlease see the portion of the Annual Report entitled for directions on how to request such information. \n### Audit Committee \nWe do not have a separately designated standing audit committee or a committee performing similar functions. Our Board of Directors currently performs the functions of an audit committee. \n\nWe make our public filings with the SEC, including our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and all exhibits and amendments to these reports. Also, our executive officers, directors and holders of more than 10% of our common stock, file reports with the SEC on Forms 3, 4 and 5 regarding their ownership of our securities. These materials are available on the SECs web site, [IDX] \nYou may also read or copy any materials we file with the SEC at the SECs Public Reference Room at 100 F Street, N.E., Washington, DC 20549. You may obtain information on the operation of the Public Reference<|endoftext|>Newmark.In July 2020, Newmark paid Cantor $3.3 million based on the employees production. Newmark has agreed to allow certain of these employees to continue to provide consulting services to Cantor in exchange for a forgivable loan which was directly paid by Cantor to these employees. \nFinancial Advisor Agreement \nIn November 2018, the Audit Committee authorized Newmark to enter into an engagement agreement with CF&Co. and its affiliates to act as financial advisor in connection with one or more third-party business combination transactions as requested by Newmark on behalf of its affiliates from time to time on specified terms, conditions and fees. \n### GSE Loan and Related Party Limits \nIn February 2019, the Audit Committee of the Company authorized Newmark and its subsidiaries to originate and service GSE loans to Cantor and its affiliates (other than BGC) and service loans originated by Cantor and its affiliates (other than BGC) on prices, rates and terms no less favorable to Newmark and its subsidiaries than those charged by third parties. The authorization is subject to certain terms and conditions, including but not limited to: (i)a maximum amount up to $100.0 million per loan, (ii)a $250.0 million limit on loans that have not yet been acquired or sold to a GSE at any given time, and (iii)a separate $250.0 million limit on originated Fannie Mae loans outstanding to Cantor at any given time. \nServices Agreement with CFE Dubai \nA s the Company does not yet have a presence in Dubai, in May 2020 the Audit Committee of the Company authorized Newmark& Company Real Estate, Inc. (Newmark& Co.), a subsidiary of Newmark, to enter into an agreement with Cantor Fitzgerald Europe (DIFC Branch) (CFE Dubai) pursuant to which CFE Dubai will employ and support an individual who is a resident of Dubai in order to enhance Newmarks capital markets platform, in exchange for a fee. CFE Dubai and Newmark& Co. negotiated a Services Agreement memorializing the arrangement between the parties (the Services Agreement). The Services Agreement provides that Newmark& Co. will reimburse CFE Dubai for the individuals fully allocated costs, plus a mark-up of seven percent (7%). In addition, the Audit Committee of the Company authorized the Company and its subsidiaries to enter into similar arrangements in respect of any jurisdiction, in the future, with Cantor and its subsidiaries, provided that the applicable agreements contain customary terms for arrangements of this type and that the mark-up charged by the party employing one or more individuals for the benefit of the other is between 3% and 7.5%, depending on the level of support required for the employed individual(s). \n### Sublease to BGC \nIn May 2020, RKF Retail Holdings LLC, a subsidiary of the Company, entered into a one-year sublease to BGC U.S. OpCo of approximately 21,000 rentable square feet of excess space in New York City. In connection with this agreement, the Company received $0.8 million from BGC for the year ended December31, 2020. \nTransactions Related to Ordinary Course Real Estate Services \nOn November4, 2020, the Audit Committee of the Board of Directors authorized entities in which executive officers have a non-controlling interest to engage Newmark to provide ordinary course real estate services to them as long as Newmarks fees are consistent with the fees that Newmark ordinarily charges for these services. \n### Arrangement with View \nOn November30, 2020, we entered into an arrangement to assist View in the sale of its products and services to real estate clients in exchange for commissions. View. is a Silicon Valley-based producer of high-efficiency dynamic glass that controls light, heat, and glare, providing unobstructed views and privacy using a low voltage control system. In connection with the arrangement, View also agreed to engage us as its exclusive provider of real estate services for a period of at least five years. While View is not under common control with us, it was, at the time that the agreement was executed, the target of a merger with CF Finance Acquisition Corp. II, a special purpose acquisition company sponsored by Cantor. \n\nIn April 2021, Newmark OpCo and Cantor entered into various arrangements pursuant to which they agreed to co-sponsor a special purpose acquisition company in which certain of our executive officers are executive officers and are expected to be directors (the SPAC). Pursuant to a purchase agreement, Newmark OpCo purchased from Cantor a 75% equity interest in an entity now known as Newmark Acquisition Holdings, LLC, the sponsor of the SPAC (the Sponsor), for $18,750, with Cantor retaining the remaining 25% equity interest in the Sponsor.Pursuant to an amended and restated limited liability company agreement of the Sponsor, Newmark OpCo is the managing member of the Sponsor, and Newmark OpCo and Cantor have agreed to make additional equity contributions to the Sponsor in order to fund the obligations of the Sponsor with respect to the SPAC in proportion to their equity ownership in the Sponsor. Also, in April 2021, the Sponsor agreed to lend to the SPAC up to $300,000 without interest in order to cover expenses related to any initial public offering of the SPAC; the maturity date of the loans is the earlier of the consummation of the initial public offering of the SPAC and December31, 2021. \n### Retirement Fund Purchase \nOn April 27, 2021, a Keough retirement account held by Mr. Lutnick purchased 5,154 shares of our Class A common stock from us at the closing price of our Class A common stock on that date of $10.67 per share. The transaction was approved by our Audit Committee. \nITEM14. \n\n\n\nAudit related fees includes fees for registration statements. \n\nErnst& Young was also approved to perform reviews of our quarterly financial reports within the year ended December31, 2020 and certain other audit-related services such as accounting consultations. Pursuant to our Audit Committee Charter, the Committee will pre-approve audit services, internal control-related services and permitted non-audit services to be performed for us by Ernst& Young. \nPART IVOTHER INFORMATION \nITEM15. \n\n(a) (1)Financial Statements. The consolidated financial statements required to be filed in this Annual Report on Form 10-K/A are included in Part II, Item8 of the Original Form 10-K. \n(a) (2)Schedule I, Parent Company Only Financial Statements required to be filed with this Annual Report on Form 10-K/A are included in Item 15(a)(2) of the Original Form 10-K. All other schedules are omitted because they are not applicable or required, or the required information in the financial statements or the notes thereto. \n\n\n### EXHIBIT INDEX \nExhibit \nNumber \nExhibit Title \n2.1 \nand Newmark Partners, L.P. (incorporated by reference to Exhibit 2.1 to the Registrants Current Report on Form 8-K filed with the SEC on November 27, 2018) \n3.1 \nAmended and Restated Certificate of Incorporation of Newmark Group, Inc. (incorporated by reference to Exhibit 3.1 to the Registrants Current Report on Form 8-K filed with the SEC on December19, 2017) \n3.2 \nAmended and Restated Bylaws of Newmark Group, Inc. (incorporated by reference to Exhibit 3.2 to the Registrants Current Report on Form 8-K filed with the SEC on December19, 2017) \n4.1 \nDescription of Registrants Securities Registered under Section 12 of the Securities and Exchange Act, as amended (included as Exhibit 4.1 to the Registrants Annual Report on Form 10-K filed with the SEC on March 1, 2021) \n4.2 \nIndenture, dated as of November6, 2018, between Newmark Group, Inc. and Regions Bank, as trustee (incorporated by reference to Exhibit 4.1 to the Registrants Current Report on Form 8-K filed with the SEC on November 8, 2018) \n4.3 \nFirst Supplemental Indenture, dated as of November6, 2018, between Newmark Group, Inc. and Regions Bank, as trustee (incorporated by reference to Exhibit 4.2 to the Registrants Current Report on Form 8-K filed with the SEC on November 8, 2018) \n4.4 \nForm of Newmark Group, Inc. 6.125% Senior Notes due 2023 (incorporated by reference to Exhibit 4.2 to the Registrants Current Report on Form 8-K filed with the SEC on November 8, 2018) \n10.1 \nAmended and Restated Agreement of Limited Partnership of Newmark Holdings, L.P., dated as of December 13, 2017 (incorporated by reference to Exhibit 10.1 to the Registrants Current Report on Form 8-K filed with the SEC on December 19, 2017) \n10.2 \nAmended and Restated Agreement of Limited Partnership of Newmark Partners, L.P., dated as of December13, 2017 (incorporated by reference to Exhibit 10.2 to the Registrants Current Report on Form 8-K filed with the SEC on December19, 2017) \n10.3 \nAmendment No. 1 to Amended and Restated Agreement of Limited Partnership of Newmark Partners, L.P., dated as of March 14, 2018 (incorporated by referencetoExhibit 10.27 to the Registrants Annual Report on Form 10-K filed with the SEC on March 20, 2018) \n10.4 \nSecond Amended and Restated Limited Partnership Agreement of Newmark Partners, L.P., dated as of June 19, 2018 (incorporated by referencetoExhibit 10.2 to the Registrants Current Report on Form 8-K filed with the SEC on June 20, 2018) \n10.5 \nThird Amended and Restated Agreement of Limited Partnership of Newmark Partners, L.P., dated as of September26, 2018 (incorporated by referencetoExhibit 10.3 to the Registrants Current Report on Form 8-K filed with the SEC on September 28, 2018) \n10.6 \nand Newmark Group, Inc. (incorporated by reference as Exhibit 10.4 to the Registrants Current Report on Form 8-K filed with the SEC on December19, 2017) \n10.7 \nAdministrative Services Agreement, dated as of December 13, 2017, by and among Cantor Fitzgerald, L.P. and Newmark Group, Inc. (incorporated by reference to Exhibit 10.5 to the Registrants Current Report on Form 8-K filed with the SEC on December19, 2017) \n10.8 \nand Newmark Partners, L.P. (incorporated by referencetoExhibit 10.8 to the Registrants Current Report on Form 8-K filed with the SEC on December19, 2017) \n10.9 \nTax Receivable Agreement, dated as of December 13, 2017, by and between Cantor Fitzgerald, L.P. and Newmark Group, Inc. (incorporated by reference to Exhibit 10.8 to the Registrants Current Report on Form 8-K filed with the SEC on December19, 2017) \n10.10 \nExchange Agreement, dated as of December13, 2017, by and among Cantor Fitzgerald, L.P., BGC Partners, Inc. and Newmark Group, Inc. (incorporated by referencetoExhibit 10.10 to the Registrants Current Report on Form 8-K filed with the SEC on December19, 2017) \n10.11 \nChange of Control Agreement, dated as of December 13, 2017, by and between Newmark Group, Inc. and Howard W. Lutnick (incorporated by referencetoExhibit 10.20 to the Registrants Current Report on Form 8-K filed with the SEC on December19, 2017)* \n10.12 \nEmployment Agreement, dated as of December1, 2017, by and between Newmark Partners, L.P. and Barry M. Gosin (incorporated by reference to Exhibit 10.13 of Amendment No. \n10.13 \nLetter Agreement, effective as of December 1, 2017, by and between Barry M. Gosin and BGC Holdings, L.P. (incorporated by reference to Exhibit 10.27 of Amendment No. filed with the SEC on December 4, 2017)* \n10.14 \nLetter Agreement, effective as of December1, 2017, by and between Barry M. Gosin and Newmark Holdings, L.P. (incorporated by reference to Exhibit 10.28 of Amendment No. \n10.15 \nNewmark Group, Inc. Long-Term Incentive Plan (incorporated by referencetoExhibit 10.24 to the Registrants Current Report on Form 8-K filed with the SEC on December19, 2017)* \n10.16 \nNewmark Group, Inc. Incentive Bonus Compensation Plan (incorporated by reference to Exhibit 10.25 to the Registrants Current Report on Form 8-K filed with the SEC on December 19, 2017)* \n10.17 \nNewmark Holdings, L.P. Participation Plan (incorporated by referencetoExhibit 10.26 to the Registrants Current Report on Form 8-K filed with the SEC on December19, 2017)* \n10.18 \nAmended and Restated Credit Agreement, dated as of March 19, 2018, by and between BGC Partners, Inc. and Newmark Group, Inc. (incorporated by referencetoExhibit 10.28 to the Registrants Annual Report on Form 10-K filed with the SEC on March 20, 2018) \n10.19 \nVariable Postpaid Forward Transaction Confirmation Agreement by and between Newmark SPV I, LLC and Royal Bank of Canada, dated as of June 18, 2018 (incorporated by referencetoExhibit 10.1 to the Registrants Current Report on Form 8-K filed with the SEC on June 20, 2018) \n10.20 \nParent Agreement by and among Newmark Partners, L.P., Newmark Group, Inc. and Royal Bank of Canada, dated as of June<|endoftext|>May experience fluctuations in our operating results, which make our future results difficult to predict and could cause our operating results to fall below expectations. \nOur financial results have fluctuated in the past and we expect our financial results to fluctuate from quarter to quarter in the future. These fluctuations may be due to a variety of factors, some of which are outside of our control and may not fully reflect the underlying performance of our business. \nOur financial results in any given quarter may be influenced by numerous factors, many of which we are unable to predict or are outside of our control, including the impact of seasonality and our betting results, and the other risks and uncertainties set forth herein. In particular, our betting operations have significant exposure to, and may be materially impacted by, sporting events and seasons, which can result in short-term volatility in betting win margins and user engagement, thus impacting revenues. While we have been able to forecast revenues from our daily fantasy sports business with greater precision than for new offerings, we cannot provide assurances that consumers will engage with our DFS offerings on a consistent basis. Consumer engagement in our daily fantasy sports, sports betting and iGaming services may decline or fluctuate as a result of a number of factors, including the popularity of the underlying sports, the users level of satisfaction with our offerings, our ability to improve and innovate, our ability to adapt our offerings, outages and disruptions of online services, the availability of live sporting events, the services offered by our competitors, our marketing and advertising efforts or declines in consumer activity generally as a result of economic downturns, among others. Any decline or fluctuation in the recurring portion of our business may have a negative impact on our business, financial condition, results of operations or prospects. \nIn our iGaming product offering, operator losses are limited per stake to a maximum payout. When looking at bets across a period of time, however, these losses can potentially be significant. Our quarterly financial results may also fluctuate based on whether we may pay out any jackpots to our iGaming users during the relevant quarter. As part of our iGaming offering, we may offer progressive jackpot games. Each time a progressive jackpot game is played, a portion of the amount wagered by the user is contributed to the jackpot for that specific game or group of games. Once a jackpot is won, the progressive jackpot is reset with a predetermined base amount. While we maintain a provision for these progressive jackpots in the event we choose to offer them, the cost of the progressive jackpot payout would be a cash outflow for our business in the period in which it is won with a potentially significant adverse effect on our financial condition and cash flows. Because winning is underpinned by a random mechanism, we cannot predict with absolute certainty when a jackpot will be won. In addition, we do not insure against random outcomes or jackpot wins. \n\nWe operate in rapidly changing and competitive industries and our projections are subject to the risks and assumptions made by management with respect to our industries. Operating results are difficult to forecast because they generally depend on our assessment of the timing of adoption of future legislation and regulations by different states, which are uncertain. Furthermore, if we invest in the development of new products or distribution channels that do not achieve significant commercial success, whether because of competition or otherwise, we may not recover the often substantial up front costs of developing and marketing those products and distribution channels, or recover the opportunity cost of diverting management and financial resources away from other products or distribution channels. \nAdditionally, as described above under , our business may be affected by reductions in consumer spending from time to time as a result of a number of factors which may be difficult to predict. This may result in decreased revenue levels, and we may be unable to adopt measures in a timely manner to compensate for any unexpected shortfall in income. This inability could cause our operating results in a given quarter to be higher or lower than expected. If actual results differ from our estimates, analysts may react negatively and our stock price could be materially impacted. \nWe have a new business model, which makes it difficult for us to forecast our financial results, creates uncertainty as to how investors will evaluate our prospects, and increases the risk that we will not be successful. \nDraftKings was incorporated in 2011 and began offering the DFS products in 2012. DraftKings expanded from its DFS product offering to include Sportsbook and iGaming product offerings in 2018. Following the consummation of the Business Combination, we have a new business model and new offerings, including sports betting technology. Accordingly, it will be difficult for us to forecast our future financial results, and it will be uncertain how our new business model will affect investors perceptions and expectations of our prospects. Additionally, as the only vertically integrated U.S.-based sports betting and online gaming company, it may be difficult for investors to evaluate our business due to the lack of similarly situated competitors. Furthermore, our new business model may not be successful. You should not rely upon our historical financial results as indicators of our future financial performance, and our financial results and stock price may be volatile. \nDraftKings has a history of losses and we may continue to incur losses in the future. \nSince DraftKings was incorporated in 2011, it has experienced net losses and negative cash flows from operations. We experienced net losses of $1,231.8 million and $142.7 million in the years ended December31, 2020 and 2019, respectively. We may continue to experience losses in the future, and we cannot assure you that we will achieve profitability. We may continue to incur significant losses in future periods. We expect our operating expenses to increase in the future as we expand our operations. Furthermore, as a public company, we have incurred and expect to continue to incur additional legal, accounting and other expenses that Old DK did not incur as a private company. If our revenue does not grow at a greater rate than our expenses, we will not be able to achieve or maintain profitability. We may incur significant losses in the future for many reasons, including those described in the other risks and uncertainties described in this Annual Report. Additionally, we may encounter unforeseen expenses, operating delays, or other unknown factors that may result in losses in future periods. If our expenses exceed our revenue, our business may be negatively impacted and we may never achieve or maintain profitability. \nOur results of operations may fluctuate due to seasonality and other factors and, therefore, our periodic operating results will not be guarantees of future performance. \nOur DFS and Sportsbook operations may fluctuate due to seasonal trends and other factors. We believe that significant sporting events such as the playoffs and championship games, tend to impact, among other things, revenues from operations, key metrics and customer activity, and as such, DraftKings historical revenues generally have been highest in the fourth quarter when most of those games occur. A majority of our current sports betting and DFS revenue is and will continue to be generated from bets placed on, or contests relating to, the National Football League and the National Basketball Association, each of which have their own respective off-seasons, which may cause decreases in our future revenues during such periods. Our revenues may also be affected by the scheduling of major sporting events that do not occur annually, such as the World Cup, or the cancellation or postponement of sporting events and races, such as the postponement of the 2020 Summer Olympic Games that were supposed to take place this past summer. In addition, certain individuals or teams advancing or failing to advance and their scores and other results within specific tournaments, games or events may impact our financial performance. \n\nThe sports betting and iGaming industries are characterized by an element of chance. Accordingly, we employ theoretical win rates to estimate what a certain type of sports bet or iGame, on average, will win or lose in the long run. Net win is impacted by variations in the hold percentage (the ratio of net win to total amount wagered), or actual outcome, on our iGames and sports betting we offer to our users. We use the hold percentage as an indicator of an iGames or sports bets performance against its expected outcome. Although each iGame or sports bet generally performs within a defined statistical range of outcomes, actual outcomes may vary for any given period. In addition to the element of chance, win rates (hold percentages) may also (depending on the game involved) be affected by the spread of limits and factors that are beyond our control, such as a users skill, experience and behavior, the mix of games played, the financial resources of users, the volume of bets placed and the amount of time spent gambling. As a result of the variability in these factors, the actual win rates on our online iGames and sports bets may differ from the theoretical win rates we have estimated and could result in the winnings of our iGames or sports bets users exceeding those anticipated. The variability of win rates (hold rates) also have the potential to negatively impact our financial condition, results of operations, and cash flows. \nOur success also depends in part on our ability to anticipate and satisfy user preferences in a timely manner. As we will operate in a dynamic environment characterized by rapidly changing industry and legal standards, our products will be subject to changing consumer preferences that cannot be predicted with certainty. We will need to continually introduce new offerings and identify future product offerings that complement our existing technology, respond to our users needs and improve and enhance our existing technology to maintain or increase our user engagement and growth of our business. We may not be able to compete effectively unless our product selection keeps up with trends in the digital sports entertainment and gaming industries in which we compete, or trends in new gaming products. \n\nOur technology infrastructure is critical to the performance of our offerings and to user satisfaction. We devote significant resources to network and data security to protect our systems and data. However, our systems may not be adequately designed with the necessary reliability and redundancy to avoid performance delays or outages that could be harmful to our business. We cannot assure you that the measures we take to prevent or hinder cyber-attacks and protect our systems, data and user information and to prevent outages, data or information loss, fraud and to prevent or detect security breaches, including a disaster recovery strategy for server and equipment failure and back-office systems and the use of third parties for certain cybersecurity services, will provide absolute security. We have experienced, and we may in the future experience, website disruptions, outages and other performance problems due to a variety of factors, including infrastructure changes, human or software errors and capacity constraints. Such disruptions have not had a material impact on us; however, future disruptions from unauthorized access to, fraudulent manipulation of, or tampering with our computer systems and technological infrastructure, or those of third parties, could result in a wide range of negative outcomes, each of which could materially adversely affect our business, financial condition, results of operations and prospects. \nAdditionally, our products may contain errors, bugs, flaws or corrupted data, and these defects may only become apparent after their launch. If a particular product offering is unavailable when users attempt to access it or navigation through our offerings is slower than they expect, users may be unable to place their bets or set their line-ups in time and may be less likely to return to our products and services as often, if at all. Furthermore,<|endoftext|>Basis under which we are expected to be able to realize our assets and satisfy our liabilities in the normal course of business. \n### Summary of Cash Flow \nThe following table provides detailed information about our net cash flow for all consolidated financial statement periods presented in this report. \nOur net cash provided by operating activities was $5,408,883 for the year ended December 31, 2020, as compared to net cash used in operating activities of $1,687,947 for the year ended December 31, 2019, which included net cash used in operating activities of $2,299,215 for our successor from April 6, 2019 to December 31, 2019 and net cash provided by operating activities of $611,268 for our predecessor from January 1, 2019 to April 5, 2019. For the year ended December 31, 2020, our net loss of $21,567,837 and an increase in merchandise inventory of $3,767,151, offset by an increase in customer deposits of $17,714,914, an increase in accounts payable and accrued expenses of $7,337,081, a change in fair value of warrant liability of $2,127,656 and a loss on extinguishment of debt of $1,756,095, were the primary drivers of the net cash provided by operating activities. For the year ended December 31, 2019, our net loss of $5,603,136, offset by increases in accounts payable and accrued expenses of $1,821,629 and merchandise inventory of $1,066,627, were the primary drivers of the net cash used in operating activities. \nOur net cash used in investing activities was $113,147 for the year ended December 31, 2020, as compared to $2,200 for the year ended December 31, 2019, all of which was during the period from April 6, 2019 to December 31, 2019. The net cash used in investing activities for both years consisted entirely of purchases of property and equipment. \nOur net cash provided by financing activities was $4,144,872 for the year ended December 31, 2020, as compared to $2,772,723 for the year ended December 31, 2019, all of which was during the period from April 6, 2019 to December 31, 2019. Net cash provided by financing activities for the year ended December 31, 2020 consisted of net proceeds of $8,602,166 from our initial public offering and $642,600 in proceeds from our Paycheck Protection Program loan, offset by payments of $2,883,754 on our notes payable (including repayment of our Paycheck Protection Program loan), payments of $771,431 on our convertible notes payable, net payments on lines of credit of $1,339,430 and $105,279 in loan financing costs. For the year ended December 31, 2019, net cash provided by financing activities consisted of proceeds from note payable of $1,500,000, net borrowings from lines of credit of $1,339,430 and proceeds from convertible notes payable of $650,000, offset by repayments on notes payable $357,207 and cash paid for financing costs of $359,500. \n### Initial Public Offering \nOn August 4, 2020, we sold 1,111,200 shares of common stock in connection with our initial public offering to the underwriters at a purchase price per share of $8.325 (the offering price to the public of $9.00 per share minus the underwriters discount) for total gross proceeds of $10,000,800. After deducting the underwriting commission and expenses, we received net proceeds of approximately $8,602,166. We also issued warrants for the purchase of 55,560 shares of common stock to affiliates of the representative of the underwriters. \nThe warrants are exercisable at any time and from time to time, in whole or in part, beginning on \nJanuary 26, 2021 until July 30, 2025, at a per share exercise price equal to $11.25 (125% of the public offering price per share). \n### Term Loan \nOn August 25, 2020, we entered into a promissory note and security agreement with Arvest Bank for a loan in the principal amount of$3,500,000. As of December 31, 2020, the outstanding balance of this loan is $3,185,369, comprised of principal of $3,283,628, net of unamortized loan costs of $98,259. \nPursuant to the terms of the loan agreement, we are required to make monthly payments of $63,353 beginning on September 25, 2020 and until the maturity date, at which time all unpaid principal and interest will be due. We may prepay the loan in full or in part at any time without penalty. The loan is secured by all financial assets credited to our securities account held by Arvest Investments, Inc. \n### Contractual Obligations \nOur principal commitments consist mostly of obligations under the term loan described above, the operating leases described under Item 2 \nProperties and other contractual commitments described below. \n\nOn April 5, 2019, we entered into a management services agreementwith our manager, pursuant to which we appointed our manager to provide certain services to us for a quarterly management fee equal to $62,500. Under certain circumstances specified in the management services agreement, our quarterly fee may be reduced if similar fees payable to our manager by subsidiaries of our former parent company, 1847 Holdings LLC, or 1847 Holdings, exceed a threshold amount. \nPursuant to the management services agreement, we must also reimburse our manager for all costs and expenses which are specifically approved by our board of directors, including all out-of-pocket costs and expenses, that are actually incurred by our or its affiliates on our behalf in connection with performing services under the management services agreement. \nThe services provided by our manager include: conducting general and administrative supervision and oversight of our day-to-day business and operations, including, but not limited to, recruiting and hiring of personnel, administration of personnel and personnel benefits, development of administrative policies and procedures, establishment and management of banking services, managing and arranging for the maintaining of liability insurance, arranging for equipment rental, maintenance of all necessary permits and licenses, acquisition of any additional licenses and permits that become necessary, participation in risk management policies and procedures; and overseeing and consulting with respect to our business and operational strategies, the implementation of such strategies and the evaluation of such strategies, including, but not limited to, strategies with respect to capital expenditure and expansion programs, acquisitions or dispositions and product or service lines. \nWe expensed $250,000 and $183,790 in management fees for the years ended December 31, 2020 and 2019, respectively. \n### Earn Out Payments \nPursuant to the asset purchase agreement with Goedeker Television, it is entitled to receive the following earn out payments to the extent that our business achieves the applicable EBITDA (as defined in the asset purchase agreement) targets: \n1. \nAn earn out payment of $200,000 if the EBITDA of our business for the trailing twelve (12) month period from the closing date is $2,500,000 or greater, which target was not met; \n2. \nAn earn out payment of $200,000 if the EBITDA of our business for the trailing twelve (12) month period from the first anniversary of closing date is $2,500,000 or greater, which target we do not expect to meet; and \n3. \nAn earn out payment of $200,000 if the EBITDA of our business for the trailing twelve (12) month period from the second anniversary of the closing date is $2,500,000 or greater. We expect to meet this target and adjusted the contingent note payable in the consolidated balance sheet to the present value of the amount due. \nTo the extent the EBITDA of our business for any applicable period is less than $2,500,000 but greater than $1,500,000, we must pay a partial earn out payment to Goedeker Television in an amount equal to the product determined by multiplying (i) the EBITDA Achievement Percentage by (ii) the applicable earn out payment for such period, where the Achievement Percentage is the percentage determined by dividing (A) the amount of (i) the EBITDA of our business for the applicable period less (ii) $1,500,000, by (B) $1,000,000. For avoidance of doubt, no partial earn out payments shall be earned or paid to the extent the EBITDA of our business for any applicable period is equal or less than $1,500,000. \nTo the extent Goedeker Television is entitled to all or a portion of an earn out payment, the applicable earn out payment(s) (or portion thereof) shall be paid on the date that is three (3) years from the closing date, and shall accrue interest from the date on which it is determined Goedeker Television is entitled to such earn out payment (or portion thereof) at a rate equal to five percent (5%) per annum, computed on the basis of a 360 day year for the actual number of days elapsed. \n\nWe have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources. \nCritical Accounting Policies \nThe following discussion relates to critical accounting policies for our company. The preparation of consolidated financial statements in conformity with GAAP requires our management to make assumptions, estimates and judgments that affect the amounts reported, including the notes thereto, and related disclosures of commitments and contingencies, if any. We have identified certain accounting policies that are significant to the preparation of our consolidated financial statements. These accounting policies are important for an understanding of our financial condition and results of operation. Critical accounting policies are those that are most important to the portrayal of our financial condition and results of operations and require managements difficult, subjective, or complex judgment, often as a result of the need to make estimates about the effect of matters that are inherently uncertain and may change in subsequent periods. Certain accounting estimates are particularly sensitive because of their significance to financial statements and because of the possibility that future events affecting the estimate may differ significantly from managements current judgments. We believe the following critical accounting policies involve the most significant estimates and judgments used in the preparation of our consolidated financial statements: \n\nWe record revenue in accordance with Financial Accounting Standards Board, or FASB, Accounting Standards Codification, or ASC, Topic 606. \nWe collect the full sales price from the customer at the time the order is placed, which is recorded as customer deposits on the accompanying consolidated balance sheet. We do not incur incremental costs obtaining purchase orders from customers, however, if we did, because all our contracts are less than a year in duration, any contract costs incurred would be expensed rather than capitalized. \nThe revenue that we recognize arises from orders we receive from our customers. Our performance obligations under the customer orders correspond to each sale of merchandise that we make to customers under the purchase orders; \nControl of the delivery transfers to customers when the customer can direct the use of, and obtain substantially all the benefits from, our products, which generally occurs when thecustomer assumes the risk of loss. We deliver products to our customers in three possible ways. The first way is through a shipment of the products through a third-party carrier from our warehouse to the customer (which we refer to as a company shipment). The second way is through a shipment of the products through a third-party carrier from a warehouse other than our warehouse to the customer (which we refer to as a drop shipment) and the third way is where we deliver the products to the customer and often also install the product (which we refer to as a local delivery). In the case of a local delivery, we load the product on to our own truck and deliver and install the product at the customers location. When a product is delivered through a local delivery, risk of loss passes to the customer at the time of installation and revenue is recognized upon installation at the customers location. In the case of a company shipment and a drop shipment, the delivery to the customer is made free on board, or FOB, shipping point (whether from our warehouse or a third partys warehouse). Therefore, risk of loss and title transfers to the customer once the products are shipped (i.e., leaves our warehouse or a third-partys warehouse). Once the risk of loss has shifted to<|endoftext|>Account and not previously released to us to fund our working capital requirements (subject to an annual limit of $500,000) (less taxes payable and up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders rights as stockholders (including the right to receive further liquidating distributions, if any), and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, liquidate and dissolve, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect to our warrants, which will expire worthless if we fail to complete our initial business combination by July 21, 2022. \n### Competition \n\nEmployees \nWe currently have three executive officers: Richard Barasch, Steven Hochberg and Christopher Wolfe. \n### Available Information \n\nIn addition, the Company will provide copies of these documents without charge upon request from us in writing at 345 Park Avenue South, New York, New York 10010 or by telephone at (212) 551-1600 \n### ITEM 1A. RISK FACTORS. \nYou should consider carefully all of the risks described below, together with the other information contained in this Annual Report on Form 10-K/A, the prospectus associated with our initial public offering and the registration statement of which such prospectus forms a part, before making a decision to invest in our securities. For risk factors related to the Business Combination, see the Preliminary Proxy Statement filed by the Company on January 19, 2021. \n\nWe are a blank check company incorporated under the laws of the State of Delaware with no operating results, and we will not commence operations until completing a business combination. \n\n\n\nYou will not be provided with an opportunity to evaluate the specific merits or risks of one or more target businesses. Accordingly, your only opportunity to affect the investment decision regarding a potential business combination may be limited to exercising your redemption rights within the period of time (which will be at least 20 business days) set forth in our tender offer documents mailed to our public stockholders in which we describe our initial business combination. \n\nOur initial stockholders own shares representing approximately 20% of our outstanding common stock and have agreed to vote their shares in favor of an initial business combination. In addition, Deerfield Partners has agreed to vote the 3,360,000 public shares underlying the units they purchased in the initial public offering in favor of the initial business combination, subject to Deerfield Partners consent right as described elsewhere in this Report). Accordingly, if we seek stockholder approval of our initial business combination, the agreement by our initial stockholders and management team and Deerfield Partners (subject to its consent right) to vote in favor of our initial business combination will increase the likelihood that we will receive the requisite stockholder approval for such initial business combination. \n\nWe may seek to enter into a business combination transaction agreement with minimum cash requirement for (i) cash consideration to be paid to the target or its owners, (ii) cash for working capital or other general corporate purposes or (iii) the retention of cash to satisfy other conditions. \n\n\n\n\n\nOn January 31, 2020, U.S. This outbreak of COVID-19 has resulted in a widespread health crisis that has and may continue to adversely affect the economies and financial markets worldwide, and the business of any potential target business with which we may consummate a business combination could be materially and adversely affected. The extent to which COVID-19 impacts our search for and ability to consummate a business combination will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of COVID-19 and the actions to contain COVID-19 or treat its impact, among others. If the disruptions posed by COVID-19 or other matters of global concern continue for an extensive period of time, and result in protectionist sentiments and legislation in our target markets, our ability to consummate a business combination, or the operations of a target business with which we ultimately consummate a business combination, may be materially adversely affected. In addition, our ability to consummate a transaction may be dependent on the ability to raise equity and debt financing which may be impacted by COVID-19 and other events. \nThe requirement that we complete our initial business combination by July 21, 2022 may give potential target businesses leverage over us in negotiating a business combination and may decrease our ability to conduct due diligence on potential business combination targets, in particular as we approach our dissolution deadline, which could undermine our ability to complete our initial business combination on terms that would produce value for our stockholders. \nAny potential target business with which we enter into negotiations concerning a business combination will be aware that we must complete our initial business combination by July 21, 2022. \nWe may not be able to complete our initial business combination by July 21, 2022, in which case we would cease all operations except for the purpose of winding up and we would redeem our public shares and liquidate. \nWe may not be able to find a suitable target business and complete our initial business combination by July 21, 2022. If we have not completed our initial business combination within such time period, we will: (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account and not previously released to us to fund our working capital requirements (subject to an annual limit of $500,000) (less taxes payable and up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders rights as stockholders (including the right to receive further liquidating distributions, if any), and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, liquidate and dissolve, subject in each case, to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. \n\n\n\n\n\nSee the section of this prospectus entitled Proposed Business-Submitting Stock Certificates in Connection with Redemption Rights. \n\nOur public stockholders will be entitled to receive funds from the Trust Account only upon the earlier to occur of: (i) our completion of an initial business combination, and then only in connection with those shares of Class A common stock that such stockholder properly elected to redeem, subject to the limitations described herein, (ii) the redemption of any public shares properly tendered in connection with a stockholder vote to amend our amended and restated certificate of incorporation to modify the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial business combination by July 21, 2022 or with respect to any other material provisions relating to stockholders rights or pre-initial business combination activity, and (iii) the redemption of our public shares if we do not complete an initial business combination by July 21, 2022, subject to applicable law and as further described herein. In addition, if our plan to redeem our public shares if we do not complete an initial business combination by July 21, 2022 is not completed for any reason, compliance with Delaware law may require that we submit a plan of dissolution to our then-existing stockholders for approval prior to the distribution of the proceeds held in our Trust Account. In that case, public stockholders may be forced to wait beyond 24 months from the closing of the initial public offering before they receive funds from our Trust Account. \n\nOur units, Class A common stock and warrants are listed on The Nasdaq Capital Market (Nasdaq). Generally, we must hold an annual meeting of stockholders each year and maintain a minimum amount in stockholders equity (generally $2,500,000) and a minimum number of holders of our securities (generally 300 public holders). For instance, our share price would generally be required to be at least $4.00 per share and our stockholders equity would generally be required to be at least $5.0 million. \n\nBecause we expect that our units and eventually our Class A common stock and warrants will be listed on Nasdaq, our units, Class A common stock and warrants will qualify as covered securities under the statute. \n\nHowever, because we have net tangible assets in excess of $5,000,000 and have filed a Current Report on Form 8-K, including an audited balance sheet demonstrating this fact, we are exempt from rules promulgated by the SEC to protect investors in blank check companies, such as Rule 419. Moreover, if the initial public offering had been subject to Rule 419, that rule would have prohibited the release of any interest earned on funds held in the Trust Account to us unless and until the funds in the Trust Account were released to us in connection with our completion of an initial business combination. \n\nIf we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our amended and restated certificate of incorporation provides that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a group (as defined under Section 13 of the Exchange Act), will be restricted from seeking redemption rights with respect to more than an aggregate of 20% of the shares sold in the initial public offering without our prior consent, which we refer to as the Excess Shares. \n\nWe expect to encounter competition from other entities having a business objective similar to ours, including private investors (which may be individuals or investment partnerships), other blank check companies (including DFP) and other entities, domestic and international, competing for the types of businesses we intend to acquire. \nIf the net proceeds of the initial public offering not being held in the Trust Account are insufficient, it could limit the amount available to fund our search for a target business or businesses and complete our initial business combination, and we will depend on loans from our sponsor or management team to fund our search and to complete our business combination. \nWe believe that the funds available to us outside of the Trust Account will be sufficient to allow us to operate until July 21, 2022; \nIf we are required to seek additional capital, we would need to borrow funds from our sponsor, members of our management team or other third parties to operate or may be forced to liquidate. Prior to the completion of our initial business combination, we do not expect to seek loans from parties other than our sponsor or affiliate or an affiliate of our sponsor and we do not believe third parties would be willing to loan such funds and provide a waiver against any and all rights to seek access to the funds in our trust account. Consequently, our public stockholders may only receive an estimated $10.00 per share, on our redemption of our public shares, and our warrants will expire worthless. \n\n\n\n\nUpon redemption of our public shares, if we do not complete our initial business combination within the prescribed timeframe, or upon the exercise of a redemption right in connection with our initial business combination, we will be required to provide for payment of claims of creditors that were not waived that may be brought against us within the 10 years following redemption. Pursuant to the letter agreement the form of which is filed as an exhibit to<|endoftext|>Under statutes or judicial precedent in some jurisdictions in the United States. In particular, the Cayman Islands has a different body of securities laws as compared to the United States, and certain states, such as Delaware, may have more fully developed and judicially interpreted bodies of corporate law. In addition, Cayman Islands companies may not have standing to initiate a shareholders derivative action in a Federal court of the United States. \nWe have been advised by our Cayman Islands legal counsel, that the courts of the Cayman Islands are unlikely (1)to recognize or enforce against us judgments of courts of the United States predicated upon the civil liability provisions of the federal securities laws of the United States or any state; and (2)in original actions brought in the Cayman Islands, to impose liabilities against us predicated upon the civil liability provisions of the federal securities laws of the United States or any state, so far as the liabilities imposed by those provisions are penal in nature. In those circumstances, although there is no statutory enforcement in the Cayman Islands of judgments obtained in the United States, the courts of the Cayman Islands will recognize and enforce a foreign money judgment of a foreign court of competent jurisdiction without retrial on the merits based on the principle that a judgment of a competent foreign court imposes upon the judgment debtor an obligation to pay the sum for which judgment has been given provided certain conditions are met. For a foreign judgment to be enforced in the Cayman Islands, such judgment must be final and conclusive and for a liquidated sum, and must not be in respect of taxes or a fine or penalty, inconsistent with a Cayman Islands judgment in respect of the same matter, impeachable on the grounds of fraud or obtained in a manner, or be of a kind the enforcement of which is, contrary to natural justice or the public policy of the Cayman Islands (awards of punitive or multiple damages may well be held to be contrary to public policy). A Cayman Islands Court may stay enforcement proceedings if concurrent proceedings are being brought elsewhere. \nAs a result of all of the above, public shareholders may have more difficulty in protecting their interests in the face of actions taken by management, members of the board of directors or controlling shareholders than they would as public shareholders of a United States company. \nProvisions in our amended and restated memorandum and articles of association may inhibit a takeover of us, which could limit the price investors might be willing to pay in the future for our ClassA ordinary shares and could entrench management. \nOur amended and restated memorandum and articles of association contain provisions that may discourage unsolicited takeover proposals that shareholders may consider to be in their best interests. These provisions include two-year director terms and the ability of the board of directors to designate the terms of and issue new series of preferred shares, which may make more difficult the removal of management and may discourage transactions that otherwise could involve payment of a premium over prevailing market prices for our securities. \n### General Risk Factors \nOur warrants are accounted for as liabilities and the changes in value of our warrants could have a material effect on our financial results. \nSpecifically, the SEC Statement focused on certain settlement terms and provisions related to certain tender offers following a business combination, which terms are similar to those contained in the warrant agreement governing our warrants. As a result of the SEC Statement, we reevaluated the accounting treatment of our 11,500,000 public warrants and 6,600,000 private placement warrants, and determined to classify the warrants as derivative liabilities measured at fair value, with changes in fair value each period reported in earnings. \nAs a result, included on our balance sheet as of December 31, 2020 contained elsewhere in this Annual Report are derivative liabilities related to embedded features contained within our warrants. Accounting Standards Codification 815, Derivatives and Hedging (ASC 815), provides for the remeasurement of the fair value of such derivatives at each balance sheet date, with a resulting non-cash gain or loss related to the change in the fair value being recognized in earnings in the statement of operations. As a result of the recurring fair value measurement, our financial statements and results of operations may fluctuate quarterly, based on factors, which are outside of our control. Due to the recurring fair value measurement, we expect that we will recognize non-cash gains or losses on our warrants each reporting period and that the amount of such gains or losses could be material. \nWe have identified a material weakness in our internal control over financial reporting as of December 31, 2020. If we are unable to develop and maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results in a timely manner, which may adversely affect investor confidence in us and materially and adversely affect our business and operating results. \nFollowing this issuance of the SEC Statement, on May 4, 2021, as discussed with our independent registered public accounting firm, our management and our audit committee concluded that, in light of the SEC Statement, it was appropriate to restate our previously issued audited financial statements as of and for the period ended December 31, 2020 (the Restatement). As part of such process, we identified a material weakness in our internal controls over financial reporting. \nA material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented, or detected and corrected on a timely basis. \nEffective internal controls are necessary for us to provide reliable financial reports and prevent fraud. We continue to evaluate steps to remediate the material weakness. These remediation measures may be time consuming and costly and there is no assurance that these initiatives will ultimately have the intended effects. \nIf we identify any new material weaknesses in the future, any such newly identified material weakness could limit our ability to prevent or detect a misstatement of our accounts or disclosures that could result in a material misstatement of our annual or interim financial statements. In such case, we may be unable to maintain compliance with securities law requirements regarding timely filing of periodic reports in addition to applicable stock exchange listing requirements, investors may lose confidence in our financial reporting and our stock price may decline as a result. We cannot assure you that the measures we have taken to date, or any measures we may take in the future, will be sufficient to avoid potential future material weaknesses. \nWe may face litigation and other risks as a result of the material weakness in our internal control over financial reporting. \nFollowing the issuance of the SEC Statement, as discussed with our independent registered public accounting firm, our management and our audit committee concluded that it was appropriate to restate our previously issued audited financial statements as of December 31, 2020 and for the period ended December 31, 2020. As part of the Restatement, we identified a material weakness in our internal controls over financial reporting. \nAs a result of such material weakness, the Restatement, the change in accounting for the warrants, and other matters raised or that may in the future be raised by the SEC, we face potential for litigation or other disputes which may include, among others, claims invoking the federal and state securities laws, contractual claims or other claims arising from the Restatement and material weaknesses in our internal control over financial reporting and the preparation of our financial statements. As of the date of this Annual Report, we have no knowledge of any such litigation or dispute. However, we can provide no assurance that such litigation or dispute will not arise in the future. Any such litigation or dispute, whether successful or not, could have a material adverse effect on our business, results of operations and financial condition or our ability to complete a Business Combination. \nWe are a newly incorporated company with no operating history and no revenues, and you have no basis on which to evaluate our ability to achieve our business objective. \nWe are a newly incorporated company incorporated under the laws of the Cayman Islands with no operating results. Because we lack an operating history, you have no basis upon which to evaluate our ability to achieve our business objective of completing our initial business combination with one or more target businesses. We may be unable to complete our initial business combination. \nPast performance by our management team and their respective affiliates may not be indicative of future performance of an investment in the company. \nInformation regarding performance by our management team and their respective affiliates is presented for informational purposes only. Past performance by our management team and their respective affiliates is not a guarantee either (1)that we will be able to identify a suitable candidate for our initial business combination or (2)of success with respect to any business combination we may consummate. You should not rely on the historical record of our management team or their respective affiliates or any related investments performance as indicative of the future performance of an investment in the company or the returns the company will, or is likely to, generate going forward. \nWe may be a passive foreign investment company, or PFIC, which could result in adverse U.S. investors. \nIf we are a PFIC for any taxable year (or portion thereof) that is included in the holding period of a U.S. Holder of our ordinary shares or warrants, the U.S. Holder may be subject to adverse U.S. federal income tax consequences and may be subject to additional reporting requirements. Our PFIC status for our taxableyear ended December 31, 2020, our current taxable year, and our subsequent taxable years may depend upon the status of an acquired company pursuant to a business combination and whether we qualify for the PFIC start-up exception. Depending on the particular circumstances, the application of the start-up exception may be subject to uncertainty, and there cannot be any assurance that we will qualify for the start-up exception. Accordingly, there can be no assurances with respect to our status as a PFIC for our taxable year ended December 31, 2020, our current taxable year or any subsequent taxable year. Our actual PFIC status for any taxable year, moreover, will not be determinable until after the end of such taxable year. If we determine we are a PFIC for any taxable year, we will endeavor to provide to a U.S. Holder such information as the Internal Revenue Service (IRS) may require, including a PFIC Annual Information Statement, in order to enable the U.S. Holder to make and maintain a qualified electing fund election, but there can be no assurance that we will timely provide such required information, and such election would likely be unavailable with respect to our warrants in all cases. We urge U.S. Holders to consult their own tax advisors regarding the possible application of the PFIC rules to holders of our ordinary shares and warrants. \n\nWe are an emerging growth company within the meaning of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the JOBS Act), and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section404 of the Sarbanes-Oxley Act, 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 and shareholder approval of any golden parachute payments not previously approved. As a result, our shareholders may not have access to certain<|endoftext|>Executives. In setting executive base salaries and bonuses and granting equity incentive awards, we consider compensation for comparable positions in the market, the individual executives performance as compared to our expectations and objectives, our desire to motivate our employees to achieve short and long-term results that are in the best interests of our stockholders and a long-term commitment to our company. We do not target a specific competitive position or a specific mix of compensation among base salary, bonus or long-term incentives. Our Compensation Committee typically reviews and discusses managements proposed compensation with the Chief Executive Officer for all executives other than the Chief Executive Officer. Based on those discussions and its discretion, the Compensation Committee then determines the compensation for each executive officer. Our Compensation Committee, without members of management present, discusses and ultimately approves the compensation of our executive officers. \n### Annual Base Salary \nFor the 2021 compensation year, the base salaries for Mr. Climaco, Mr. Downs, and Dr. Silberman are $525,000, $340,000, and $200,000, respectively. \nAnnual Bonus and Non-Equity Incentive Plan Compensation \nWe seek to motivate and reward our executives for achievements relative to our corporate goals and objectives for each fiscal year. For the 2021 compensation year, the target bonus for Mr. Climaco, Mr. Downs and Dr. Silberman are 55%, 40%, and 36%, respectively, of their base salary. \nThe actual performance-based annual bonus paid is calculated by multiplying the executives annual base salary, target bonus percentage, the percentage attainment of the corporate goals established by the Board for such year. However, the Compensation Committee is not required to calculate bonuses in this manner and retains discretion in the amounts it awards and the factors it takes into consideration in determining bonus amounts. At the end of the year, the Compensation Committee reviews our performance against our goals and objectives and approves the extent to which we achieved each of our corporate goals and objectives, and, for each named executive officer, the amount of the bonus awarded. \nAs we completed our IPO in November 2019, for the 2019 compensation year we did not establish formal goals and objectives at the beginning of the year, and bonuses were awarded by our Compensation Committee in their discretion for the contributions of management towards our IPO and the pre-clinical work necessary to establish our supply of Berubicin and preparation for the submission of the Investigative New Drug application to the FDA. These actual bonus amounts are reflected in the \"Bonus\" column of the Summary Compensation Table above. \nFor the 2020 compensation year, bonuses were awarded based on our achievement of specified corporate goals, including the clinical trial progress of Berubicin, our ability to add additional candidates to our pipeline, and our ability to maintain sufficient funding. Based on the level of achievement, our Compensation Committee awarded each of our named executive officers approximately 80% of their potential bonuses for 2020. These actual bonus amounts are reflected in the Non-Equity Incentive Plans column of the Summary Compensation Table above. \nFor the 2021 compensation year, bonuses will be awarded based on our achievement of specified corporate goals, including the clinical trial progress of Berubicin, our ability to add additional candidates to our pipeline, and our ability to maintain sufficient funding. \n### Long-Term Incentives \nEach year our Compensation Committee establishes a value for the option grant payable to each of our named executive officers. For the 2020 compensation year, the fair value of the option grants awarded in February 2021 for Mr. Climaco, Mr. Downs and Dr. Silberman were $310,000, $131,000, and $42,000, respectively. We set the option exercise price, and grant date fair value based on the closing price of our common stock on Nasdaq on the date of grant. The shares underlying options typically vest in four equal annual installments. \nEmployment Agreements \n### John Climaco \nOn September 1, 2017, we entered into an employment agreement with John Climaco pursuant to which Mr. Climaco agreed to serve as our Chief Executive Officer commencing on such date for an initial term of three years. On September 1, 2020, we entered into an amendment to the employment agreement. The amendment extends the term of employment under the employment agreement for additional twelve-month periods, unless and until either the Company or Mr. Climaco provides written notice to the other party not less than sixty days before such anniversary date that such party is electing not to extend the term. If the Company provides notice of its election not to extend the term, Mr. Climaco may terminate his employment at any time prior to the expiration of the term by giving written notice to the Company at least thirty days prior to the effective date of termination, and upon the earlier of such effective date of termination or the expiration of the term, Mr. Climaco shall be entitled to receive the same severance benefits as are provided upon a termination of employment by the Company without cause. Pursuant to the amendment, the severance benefits shall be twelve months of Mr. Climacos base salary. Such severance payment shall be made in a single lump sum sixty days following the termination, provided that Mr. Climaco has executed and delivered to the Company, and has not revoked a general release of the Company. \nChristopher Downs \nOn September 14, 2019, we entered into an employment agreement with Mr. Christopher Downs pursuant to which Mr. Downs agreed to serve as our Chief Financial Officer commencing on the closing date of our IPO for an initial term of three years. The agreement provided for an initial annual base salary of $300,000, subject to adjustment each year. Under the agreement, Mr. Downs was granted a ten-year option to purchase 300,000 shares at an exercise price per share equal to the public offering price per share of the shares sold in the IPO, or $4.00 per share. The option vests in four equal installments on each of the succeeding four anniversary dates of the option grant, provided Mr. Downs is employed by us on each such vesting date. If Mr. Downs employment is terminated at our election without cause (as defined in the agreement), or by Mr. Downs for good reason (as defined in the agreement), Mr. Downs shall be entitled to receive severance payments equal to six months of Mr. Downs base salary. Mr. Downs has agreed not to compete with us until six months after the termination of his employment. \n### Other Executive Arrangements \nOn June 28, 2019, our we entered into employment letters with Drs. Silberman and Picker pursuant to which we agreed to the following compensation terms: (i) Dr. Silberman agreed to commit 50% of her time to our matters in exchange for a base salary, commencing upon the successful closing of the IPO, of $175,000; commencing at the end of 2019, an annual cash bonus target of 28% of her base salary (prorated for any partial years); and a ten-year option to purchase 125,000 shares of common stock with an exercise price of $2.00 per share vesting annually in four equal installments; and (ii) Dr. Picker agreed to commit 25% of his time to our matters in exchange for a base salary, commencing upon the successful closing of the IPO, of $91,000; commencing at the end of 2019, an annual cash bonus target of 36% of his base salary (prorated for any partial years); and a ten-year option to purchase 100,000 shares of common stock with an exercise price of $2.00 per share vesting annually in four equal installments. \nOutstanding Equity Awards \nThe following table sets forth certain information concerning our outstanding options for our named executive officers on December 31, 2020. \n\n(1)The shares underlying the options vest in equal annual installments over a four-year period (i.e., one-quarter of each grant vests on the first, second, third and fourth anniversary of the grant date). \nDirector Compensation \nThe following table sets forth the total compensation earned by our non-employee directors in 2020 (Mr. Climaco did not earn additional compensation during 2020 for his services on the Board, and his compensation is fully reflected in the Summary Compensation Table above): \n(1) Represents the full grant date fair value of the awards calculated in accordance with FASB ASC Topic 718. As of December 31, 2020, the aggregate number of shares outstanding under all options to purchase our common stock held by our non-employee directors were: Dr. Gumulka 146,559 shares; Mr. Keyes 146,559 shares; Mr. Andraczke 146,559 shares; Mr. Evans 146,559 shares. None of our non-employee directors held stock awards other than options as of December 31, 2020. \nIn March 2020, our compensation committee recommended to our Board and our Board approved the following policy for compensating non-employee members of the Board. Each independent director shall receive annual cash compensation of $35,000. In addition, the chairperson of the Audit Committee, Compensation Committee and Nominating and Governance Committee shall receive an annual compensation of $10,000, $7,000 and $5,000, respectively; the other members of such committees shall receive an annual compensation of $5,000, $3,500 and $3,000, respectively; and the lead independent director shall receive annual compensation of $10,000. In addition, we agreed to pay a one-time make-whole payment to the independent directors as follows: (i) Jeff Keyes - $6,554.79; (ii) Jerzy (George) Gumulka - $3,972.60; (iii) Carl Evans - $3,972.60; and (iv) Andrzej Andraczke - $3,376.71. \n### Item 12. \n\nThe following table sets forth information, as of April 28, 2021, regarding beneficial ownership of our common stock by: each of our directors; each of our executive officers; all directors and executive officers as a group; and each person, or group of affiliated persons, known by us to beneficially own more than five percent of our shares of common stock. \nBeneficial ownership is determined according to the rules of the SEC, and generally means that person has beneficial ownership of a security if he or she possesses sole or shared voting or investment power of that security and includes options that are currently exercisable or exercisable within 60 days. Each director or officer, as the case may be, has furnished us with information with respect to beneficial ownership. Except as otherwise indicated, we believe that the beneficial owners of common stock listed below, based on the information each of them has given to us, have sole investment and voting power with respect to their shares, except where community property laws may apply. Except as otherwise noted below, the address for each person or entity listed in the table is c/o CNS Pharmaceuticals, Inc., 2100 West Loop South, Suite 900, Houston, TX 77027. \n*Less than 1%. \n(1)Based on 25,359,059 shares of common stock outstanding as of April 28, 2021. \n(2)Consists solely of options exercisable within 60 days of April 28, 2021. \n(3)Of the amount in the table, 200,000 shares are held by Houston Pharmaceuticals, Inc. Dr. Priebe has voting and dispositive power over the shares held by Houston Pharmaceuticals, Inc. \n\nThe following table sets forth information regarding our equity compensation plans at December 31, 2020: \n(1)Represents shares of common stock issuable upon exercise of outstanding stock options and rights under our 2017 and 2020 Stock Plans. \n(2)Consists of warrants issued to the underwriter in our IPO and follow-on offering and to consultants. \n### Item 13. \n\nOn December 28, 2017, we obtained the rights to a worldwide, exclusive royalty-bearing, license to the chemical compound commonly known as Berubicin from Houston Pharmaceuticals, Inc. (HPI) in an agreement we refer to as the HPI License. Dr. Priebe controls HPI. Under the HPI License we obtained the exclusive right to develop certain patented chemical compounds for use in the treatment of cancer anywhere in the world. Our rights pursuant to the HPI License are contingent on us raising at least $7,000,000 within 12 months from the effective date of the HPI License, a date which can be extended by an additional 12 months by the payment of a nominal fee. In the HPI License we agreed to pay HPI: (i) development fees of $750,000 over a three-year period beginning after the<|endoftext|>Value of five times (5x) base salary, the CFO is expected to own shares of Frontier stock having a minimum value of three and one-half times (3.5x) base salary and each other member of the Senior Leadership Team is expected to own shares of Frontier stock having a minimum value of two and one-half times (2.5x) base salary. As a result of the Chapter 11 filing, each of our executives is, until further notice and as permitted under the guidelines, satisfying his obligations by holding 50% of Frontier stock that the executive acquired through the Frontier equity compensation programs after the date on which such executive failed to be in compliance, excluding shares sold to pay related taxes. The Compensation Committee administers these stock ownership guidelines. Other than withholding for tax purposes upon vesting of shares, none of our current NEOs sold any shares during 2020. \n### Hedging and Pledging Prohibition \nExecutives are prohibited from hedging or pledging their shares of Frontier stock. \n\nPlease see the section Former CEO Pay Decisions for an explanation of Mr. Hans separation package. \nTo attract talented executives, support retention objectives and ensure that executives perform their work with objectivity, we provide certain post-employment benefits to our NEOs. In addition, Frontier has implemented separation agreements with each of its executives (other than Mr. Han) such that they can receive severance for termination by the Company without cause or for good reason equal to one times base salary (two times the sum of base salary and target annual bonus, if such termination occurs during the six-month period prior to or one-year period following a change in control), \nThe Compensation Committee set the severance amounts based on peer group reviews. The change-in-control arrangements do not include gross-up payments for excise taxes imposed under Section 280G of the Internal Revenue Code as a result of severance payouts. \n### Clawback Policies \nSince 2010, Frontier has included in all of its equity compensation awards, including to our NEOs, a recoupment or clawback provision. This provision requires that unvested equity awards be forfeited if the Compensation Committee determines that the employee engaged in certain defined types of misconduct, including engaging in acts considered to be contrary to the best interests of Frontier, commission of felonies or other serious crimes, or engaging in any activity which constitutes gross misconduct. The provision also provides that the Compensation Committee may in its sole discretion require the employee to return all stock that vested within the 12-month period immediately prior to the misconduct, or if no longer held by the employee, to pay to Frontier any and all gains realized from such stock. \nEffective December 11, 2014, we adopted an enhanced clawback policy that is triggered if Frontier is required to restate its financial statements due to material noncompliance with any financial reporting requirement under the securities laws that was contributed to by the fraud or intentional misconduct of an executive officer, including an NEO. If the policy is triggered, the Compensation Committee will require reimbursement or forfeiture of any cash and equity incentive compensation awarded to or received by the executive officer in question during the three-year period preceding the date on which Frontier is required to prepare the restatement. The amount to be recovered would be the excess of the incentive compensation obtained by the executive officer based on the erroneous data over the amount that would have been obtained by the executive officer had it been based on the restated results, as determined by the Compensation Committee. We will review the terms of this recovery policy in light of the requirements under the Dodd-Frank Act and will make any necessary changes to be in compliance with final regulations when issued. \nTax ImplicationsDeductibility of Executive Compensation \nThe exemption from 162(m)s deduction limit for performance-based compensation has been repealed for tax years beginning after December 31, 2017. Consequently, compensation paid to our covered executive officers in excess of $1 million will not be deductible. \n\nThe Compensation Committee of our Board of Directors has submitted the following report for inclusion in this Annual Report on Form 10-K: \nOur Committee has reviewed and discussed the Compensation Discussion and Analysis contained in this Amendment No. 1 to Frontiers Annual Report on Form 10-K for the fiscal year ended December 31, 2020 with management. Based on our Committees review of and the discussions with management with respect to the Compensation Discussion and Analysis, our Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in Frontiers Annual Report on Form 10-K. \nThe foregoing report is provided by the following directors, who constitute the Committee: \n### Submitted by: \nDianna S. Ferguson, Chair \nKevin L. Beebe \n### Peter C.B. Bynoe \nSummary Compensation Table \nThe following table sets forth the compensation awarded to, earned by, or paid to our CEO, CFO and the three other most highly compensated executive officers at fiscal year-end along with an additional former employee. \n(1) \nAmounts in this column represent cash retention awards made in lieu of new restricted stock awards in 2020 and 2019. Mr. Bruhas 2019 award consists of $500,000 in a cash retention award as well as $170,000 in restricted cash which vests over three years; the second and third tranches of the $170,000 restricted cash award are to be paid after emergence from Chapter 11. \n(2) \nThe stock awards referred to in this column consist of grants of restricted shares and grants of performance units under the 2013 and 2017 Equity Incentive Plans. The amounts shown in this column represent the grant date fair value, pursuant to Financial Accounting Standards Board ASC Topic 718, of the stock awards granted in the applicable year or, with respect to multi-year performance share awards where performance conditions are set at the beginning of each year, the fair value of the shares subject to the performance conditions during a multi-year vesting period constitutes a separate grant date. For 2019, the grant date fair value for the performance unit awards granted in 2018 is calculated using only the second tranche of the grant for the 2018-2020 Measurement Period, as the grant date fair value for the first tranche was reported the previous year and the performance conditions for the third tranche were not set in 2019. With respect to the grant for the 2017-2019 Measurement Period, the grant date fair value is calculated using the third trance, as the grant date fair values for the first two tranches were reported in prior years. Further, in calculating the grant date fair value of such performance shares in the table, the target number of shares was used. Frontier uses Monte Carlo simulations to value performance share awards. The value of the 2019 disclosed performance shares at $0.89 per share assuming the highest level of operating cash flow and TSR performance will be achieved (using the methodology described above). For a discussion of valuation assumptions, see Note 12 to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2020. For additional details regarding the stock awards, see the Grants of Plan-Based Awards table below and the accompanying narrative. \n(3) \nThe amounts shown in this column represent cash awards made under the Combined AIP for 2020 and 2019 were paid as follows: 25% of annual target paid quarterly based on quarterly results. Awards are typically paid shortly after applicable quarter. The performance cash awards referred to in this column consist of grants of performance cash under the 2017 Equity Incentive Plan. The amounts shown in this column represent the grant date fair value, pursuant to Financial Accounting Standards Board ASC Topic 718, of the stock awards granted in the applicable year or, with respect to multi-year performance cash awards where performance conditions are set at the beginning of each year, the fair value of the units subject to the performance conditions during a multi-year vesting period constitutes a separate grant date. As a result, the grant date fair value for the performance cash awards granted in 2018 is calculated using only the second tranche of the grant for the 2018-2020 Measurement Period, as the grant date fair value for the first tranche was reported last year and the performance conditions for the third tranche were not set in 2019. Further, in calculating the grant date fair value of such performance cash awards in the table, the target number of units was used. Frontier uses Monte Carlo simulations to value performance cash awards. For a discussion of valuation assumptions, see Note 12 to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 20120. For additional details regarding the performance cash awards, see the Grants of Plan-Based Awards table below and the accompanying narrative. \n(4) \nThe \nAll Other Compensation column includes premiums for life insurance coverage paid for by Frontier, a 401(k) match and change in actuarial value of the frozen pension. Other than as set forth below, all perquisites and personal benefits are below the threshold for disclosure in this column: \nAmounts shown for Mr. Bruha consist of matching contributions. \nAmount shown for Mr. Nielsen consists of matching contributions. \nAmounts shown for Mr. Arndt include $6,748, $6,755 and $0 for the change in the actuarial value of his frozen pension in 2020, 2019, and 2018 and matching contributions. \nAmount shown for Mr. Maduri includes payment of $125,000 and $65,111 in 2019 and 2018 for relocation assistance, which includes household goods transfer and temporary housing, as an inducement to accept employment with Frontier. \n(5) \nMr. Han will step down as President and CEO on March 4, 2021 but will remain an employee as well as a member of the Board until our emergence \n(6) \nMr. Bruha assumed the role of EVP, Chief Financial Officer on June 3, 2019 after holding the role of Interim Chief Financial Officer since September 1, 2018. Mr. Bruhas Salary includes a monthly salary stipend of $15,000 while he was the Interim Chief Financial Officer in 2018 and 2019. \n(7) \nInformation for Messrs. Han and Nielsen is not provided for 2018 because they were not NEOs for that year. \n(8) \nMr. Maduri separated from service as of September 4, 2020. \n\nThe following table sets forth information with respect to awards granted to each of our NEOs during 2020. \n(1) \nReflects the target payout amounts of non-equity incentive plan awards payable for service in 2020 as approved by the Compensation Committee and the Bankruptcy Court. See the non-Equity Incentive Plan Compensation column of the Summary Compensation Table for Fiscal Year 2020 for the non-equity incentive plan awards earned by our NEOs in 2020. \nCash awards under our Combined Annual Incentive program for 2020 performance shown under the Estimated Possible Payouts Under Non-Equity Incentive Plan Awards columns were paid shortly after the close of the applicable quarter or year based on performance metrics and target awards set for each performance period, as described above under Compensation Discussion and Analysis2020 Combined Annual Incentive. \n\nThe following table sets forth information regarding outstanding equity awards held by each of our NEOs at year-end. Note that shares remaining from the 2018 restricted stock award will be extinguished upon emergence from bankruptcy and potential payment under the 2018-2020 performance cash plan, if any, will be determined after emergence from bankruptcy. \n(1) \nThe amounts shown in this column represent restricted shares held by the NEOs as of December 31, 2020. These typically vest on each of the anniversary of the grant date over three years. \n(2) \nThe market value of shares of common stock reflected in the table is based upon the closing price of the common stock on December 31, 2020, which was $0.11 per share. \n\nThe following table sets forth information regarding the restricted shares and performance shares that vested for each of the NEOs in 2020. No NEO acquired any shares upon the exercise of stock options in 2020. The value of restricted shares realized upon vesting is shown in footnote<|endoftext|>A result of disability), and (v) willful and material breach of any company policies. \nIn connection with the Business Combination, the Landsea Homes Board exercised its discretion under the Phantom Unit Plan to accelerate all unvested phantom stock awards and settle the outstanding phantom stock awards in a combination of cash and Common Stock as described above under Narrative Disclosure to the Summary Compensation Table-Long Term Incentive Compensation. \n### Employment Agreements \nHo, Forsum and Tenerelli provide for certain severance benefits upon the NEOs involuntary termination without cause (and not as a result of death or disability) or a voluntary resignation for good reason, which are each referred to as a covered termination: \nIn the event of a covered termination at any time other than during the 24-month period following a change in control, each NEO is eligible to receive (i) a lump sum cash amount equal to 2.0x (or, for Mr. Tenerelli, 1.0x) the sum of the NEOs base salary and target annual bonus, (ii) a pro-rata portion of the NEOs annual bonus for the year of termination based on actual performance, (iii) payment of or reimbursement for premiums to continue health coverage for 24 months (unless the NEO becomes eligible for coverage under another employers plan, at which time the reimbursements will cease), and (iv) full acceleration of any outstanding equity awards, with performance-based awards determined based on the terms of the applicable award agreement or, if the award agreement does not specify, based on the target level of performance. \nIn the event of a covered termination during the 24-month period following a change in control, each NEO is eligible to receive, in lieu of the benefits described in clause (i) above, a lump sum cash amount equal to 2.5x (or, for Mr. Tenerelli, 2.0x) the sum of the NEOs base salary and target annual bonus. Each NEO is also eligible to receive the benefits described in clauses (ii)-(iv) above. \nAdditionally, in the event of an NEOs death or disability, each NEO (or the NEOs beneficiary or estate) is eligible to receive a pro-rata portion of the NEOs target bonus for the year of termination and full acceleration of any outstanding equity awards, with performance-based awards determined based on the terms of the applicable award agreement or, if the award agreement does not specify, based on the target level of performance. All severance under the new employment agreements is subject to execution of a release of claims. Under the new employment agreements: \nCause generally means (i) material breach of the NEOs obligations under any agreement with Seller, (ii) intentional misconduct or material violation of any material written policy, (iii) material breach of any fiduciary duty, or (iv) commission of a felony or crime involving fraud, embezzlement, dishonesty or moral turpitude, subject in the case of clauses (i), (ii) and (iii) to standard notice and cure provisions. \nChange in Control generally means the occurrence of any one of the following: (i) any person becomes the beneficial owner of securities of the Company representing 50% or more of the combined voting power of the Companys then outstanding securities, (ii) the incumbent directors (and those appointed or nominated by a majority of the incumbent directors) cease to constitute a majority of the Board, (iii) consummation of a merger or consolidation of the Company, other than any merger or consolidation which would result in the holders of the voting securities of the Company continuing to represent at least 50% of the combined voting power of the surviving entity, (iv) implementation of a plan of complete liquidation or dissolution of the Company, or (v) sale of all or substantially all of the Companys assets to an entity, other than any sale to an entity where the holders of the voting securities of the Company represent at least 50% of the combined voting power of such entity. \nGood Reason generally includes any of the following arising without the NEOs prior written consent: (i) diminution in title, authority, duties or responsibilities, (ii) material reduction in base salary or target bonus, (iii) relocation of the NEOs principal office by more than 50 miles, or (iv) material breach by Seller of any material provision of the employment agreement, in each case, subject to standard notice and cure provisions. \n### Director Compensation \nLandsea Homes entered into a services agreement with each of its non-employee, independent directors, pursuant to which each director is provided a retainer to serve on the Landsea Homes Board and stipends for specific committee service, as described below: \nThe following table presents information regarding compensation paid to Landsea Homes directors for services rendered during the 2020 Fiscal Year: \n(1) \nBecause Landsea Homes only compensates its independent directors, Mr. Tian and Ms. Zhou did not receive compensation for their services as directors of Landsea Homes during the 2020 Fiscal Year. \nEach of Messrs. Frank, Hartfield and Miller also received 2.57 shares of phantom stock under the Phantom Stock Plan on January 1, 2020, which were scheduled to vest on March 1, 2023, subject to each directors continued service to Landsea Homes through such date. As described above under Narrative Disclosure to the Summary Compensation Table-Long Term Incentive Compensation, each share of phantom stock, including those held by the non-employee directors, became fully vested in connection with the Business Combination. Additionally, the nonemployee directors received settlement of their phantom equity awards in a combination of cash and shares of Common Stock. The following table sets forth the cash and Common Stock received by each non-employee director in connection with the Business Combination. \nEffective as of April 1, 2021, members of our Board (other than Mr. Tian) who are not employees of the Company shall receive the following compensation under our director compensation program. The director compensation program also provides each member of the Board with reimbursement for reasonable travel and miscellaneous expenses incurred in attending meetings and activities of the Board and its committees. \n\nOther than our CEOs, Mr. Hos, past service on the board of directors of the Seller in 2020, where directors Mr. Tian and Ms. Zhou are executive officers, no interlocking relationship exists between our Board or Compensation Committee and the board of directors or compensation committee of any other entity, nor has any interlocking relationship existed in the past. None of the members of our Compensation Committee has at any time during the prior three years been one of our officers or employees. \nItem 12. \n\nThe following table sets forth information about our Common Stock that may be issued under equity compensation plans as of December 31, 2020. Our only equity compensation plan on of December 31, 2020 was the Incentive Plan. \n(1) \nThis column reflects the total shares of our Common Stock remaining available for issuance under the Incentive Plan as of December 31, 2020. \n\nThe following table sets forth information known to the Company regarding beneficial ownership of shares of the Companys Common Stock as of April 7, 2021 by: each person known by the Company to be the beneficial owner of more than 5% of the Companys outstanding common stock; each of the Companys named executive officers and directors; \nBeneficial ownership is determined according to the rules of the SEC, which generally provide that a person has beneficial ownership of a security if he, she or it possesses sole or shared voting or investment power over that security, including options, warrants and certain other derivative securities that are currently exercisable or will become exercisable within 60 days. The percentage of beneficial ownership is based on 46,231,025 shares of Company Common Stock, 15,525,000 shares of public warrants, and 5,500,000 Private Placement Warrants issued and outstanding as of April 7, 2021. Public warrants entitle the holder to purchase one-tenth of one share of our Common Stock at $1.15 per one-tenth share ($11.50 per whole share of Common Stock), and they may only be exercised in amounts evenly divisible by ten. The Private Placement Warrants, registered under a Form S-1, entitle the holder to purchase one share of our Common Stock at a price of $11.50 per share, subject to adjustment. The public warrants and Private Placement Warrants are non-voting, but may be exercised at any time by the warrant holders. \nUnless otherwise indicated, and subject to community property laws and similar laws, the Company believes that all parties named in the table below have sole voting and investment power with respect to all shares of Common Stock beneficially owned by them, and the business address of each is 660 Newport Center Drive, Suite 300, Newport Beach, CA 92660. \n* \nLess than one percent. \n(1) \nTian may be deemed to beneficially own by virtue of his relationship to the Seller, as described in Note 6 below. Mr. Tian disclaims beneficial ownership of these shares other than to the extent of any pecuniary interest he may have therein. \n(2) \nFarhat may be deemed to beneficially own by virtue of his relationship to the Sponsor, as described in Note 7 below. Mr. Farhat disclaims beneficial ownership of these shares other than to the extent of any pecuniary interest he may have therein. \n(3) \nExcludes an additional 30,712 shares of fully vested Common Stock granted under the Landsea Homes Corporation 2020 Stock Incentive Plan that Mr. Ho beneficially owns as of April 7, 2021, but that, due to administrative error, are pending recording with the Companys transfer agent. \n(4) \nExcludes an additional 19,354 shares of fully vested Common Stock granted under the Landsea Homes Corporation 2020 Stock Incentive Plan that Mr. Forsum beneficially owns as of April 7, 2021, but that, due to administrative error, are pending recording with the Companys transfer agent. \n(5) \nAs previously disclosed, Mr. Philippe De Backer resigned as CEO and director of LFAC effective July 22, 2020. Mr. De Backers beneficial ownership is based on his Form 3 filed with the SEC on March 5, 2019. \n(6) \nAs previously disclosed, Mr. Albert Bianchinotti served as Chief Financial Officer of LFAC until January 7, 2021. Mr. Bianchinottis beneficial ownership is based on his Form 3 filed with the SEC on August 18, 2020. \n(7) \nInformation based on the Schedule 13D filed by the Seller, Landsea Green, and Ming Tian (the Landsea Parties) with the SEC on January 19, 2021. The Landsea Parties disclosed shared voting and dispositive power over 32,878,265 shares and ownership of 2,200,000 private placement warrants. The Seller is the record holder of these shares. Seller is 100% owned indirectly by Landsea Green. Mr. Tian indirectly beneficially owns approximately 57.8% of Landsea Green through his interest in Easycorps Group Limited (Easycorps), Greensheid Corporation (Greensheid), and Landsea International Holdings Limited (Landsea International). Easycorps is wholly-owned by Mr. Tian. Greensheid is wholly-owned by Landsea International, which in turn is wholly-owned by Landsea Group (together with Greensheid, Easycorps, Landsea International, and those subsidiaries of Landsea International having a beneficial ownership interest in the Seller, the Landsea Owners). Mr. Tian is the controlling shareholder of Landsea Group. As a result, each of the Landsea Owners and Mr. Tian may be deemed to be a beneficial owner of any shares deemed to be beneficially owned by the Seller. The Landsea Owners and Mr. Tian disclaim beneficial ownership of these shares other than to the extent of any pecuniary interest they may have therein. The business address for the Landsea Owners and Mr. Tian are Landsea Group Co., Ltd, Building 5, Lane 280, Linhong Road, Changning District, Shanghai, China 200335. \n(8) \nInformation based on the Schedule 13G filed by the Sponsor, Level Field Partners, LLC (LF Partners), Level Field Management, LLC (LF Management), Djemi Traboulsi, and Elias Farhat with the SEC on January 20, 2021 (the LF Parties). The LF Parties disclosed shared voting and dispositive power over 5,027,435 shares. This includes 2,227,835 shares of common stock and 2,799,600 private placement warrants. The Sponsor is the record holder of the shares reported. LF Partners is the managing member of the Sponsor. LF Management is the managing member of LF Partners. LF Management is managed by its two<|endoftext|>"},"task":{"kind":"string","value":"{\"file\": \"/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz\"}"}}},{"rowIdx":86,"cells":{"text":{"kind":"string","value":"<|endoftext|>With the Company anywhere in the world, including (among other things) serving each customer, dealing with each vendor and treating each other with integrity and respect, and behaving honestly, ethically and professionally with each customer, each vendor, each other and the Company. Article II of the Ethics Code specifically prohibits various forms of self-dealing (including dealing with relatives) and collusion and Article V of the Ethics Code generally prohibits each \"Covered Person\" (including SGRP's officers and directors) from using or disclosing the Confidential Information of the Company or any of its customers or vendors, seeking or accepting anything of value from any competitor, customer, vendor, or other person relating to doing business with the Company, or engaging in any business activity that conflicts with his or her duties to the Company, and directs each \"Covered Person\" to avoid any activity or interest that is inconsistent with the best interests of the SPAR Group, in each case except for any \"Approved Activity\" (as such terms are defined in the Ethics Code). Examples of violations include (among other things) having any ownership interest in, acting as a director or officer of or otherwise personally benefiting from business with any competitor, customer or vendor of the Company other than pursuant to any Approved Activity. Approved Activities include (among other things) any contract with an affiliated person (each an \" \n### Approved Affiliate Contract \n\") or anything else disclosed to and approved by SGRP's Board of Directors (the \" \nBoard \n\"), its Governance Committee or its Audit Committee, as the case may be, as well as the ownership, board, executive and other positions held in and services and other contributions to affiliates of SGRP and its subsidiaries by certain directors, officers or employees of SGRP, any of its subsidiaries or any of their respective family members. The Company's senior management is generally responsible for monitoring compliance with the Ethics Code and establishing and maintaining compliance systems, including those related to the oversight and approval of conflicting relationships and transactions, subject to the review and oversight of SGRP's Governance Committee as provided in Part I Sections 2, 3, 11 and 12 of the Governance Committee's Charter, and SGRP's Audit Committee as provided in Part IV Section 15 of the Audit Committee's Charter. The Governance Committee and Audit Committee each consist solely of independent outside directors (see \nDomestic Related Party Services, International Related Party Services, SBS Bankruptcy, Settlement and March 2020 Claim, Summary of Certain Related Party Transactions, Infotech Litigation and Settlement, Affinity Insurance, and Other Related Party Transactions and Arrangements \n, below). \nSGRP's Audit Committee has the specific duty and responsibility to review and approve the overall fairness to the Company and terms of all material related-party transactions. The Audit Committee receives affiliate contracts and amendments thereto for its review and approval (to the extent approval is given), and these contracts are periodically (often annually) again reviewed, in accordance with the Audit Committee Charter, the Ethics Code, the rules of the Nasdaq Stock Market LLC (\" \n### Nasdaq \n\"), and other applicable law to ensure that the overall economic and other terms will be (or continue to be) no less favorable to the Company) than would be the case in an arms-length contract with an unrelated provider of similar services (i.e., its overall fairness to the Company, including pricing, payments to related parties, and the ability to provide services at comparable performance levels). The Audit Committee periodically reviews all related party relationships and transactions described below. \nDomestic Related Party Services: \nSPAR Business Services, Inc. (\" \nSBS \n\"), SPAR Administrative Services, Inc. (\" \nSAS \n\"), and SPAR InfoTech, Inc. (\" \n### Infotech \n\"), have provided services from time to time to the Company and are related parties and affiliates of SGRP, but are not under the control or part of the consolidated Company. SBS is an affiliate because it is owned by SBS LLC which in turn is beneficially owned by Robert G. Brown. SAS is an affiliate because it is owned by William H. Bartels and certain relatives of Robert G. Brown or entities controlled by them (each of whom are considered affiliates of the Company for related party purposes). Infotech is an affiliate because it is owned principally by Robert G. Brown. \nThe Company executes its domestic field services through the services of field merchandising, auditing, assembly and other field personnel (each a \" \n### Field Specialist \n\"), and a significant portion of them are provided to the Company and engaged by independent third parties and located, scheduled, deployed and administered domestically through the services of local, regional, district and other personnel (each a \" \nField Administrator \n\"), and a significant portion of the Field Administrators are in turn are employed by other independent third parties. \nSBS provided substantially all of the Field Specialist services in the U.S.A. to the Company from 2000 to 2018 and from January 1 through July 27, 2018, and an independent vendor and licensee provided them for the balance of 2018 and for 2019 and 2020. \nDue to (among other things) the adverse determination in 2016 in the Clothier case (as defined below) that SBS had misclassified its employees as independent contractors and the ongoing proceedings against SBS (which could have had a material adverse effect on SBS's ability to provide future services needed by the Company), SBS' continued higher charges and expense reimbursement disputes, and the Company's identification of an experienced independent third party company (the \" \n### Independent Field Vendor \n\") who would provide comparable services on substantially better terms, the Company terminated the services of SBS effective July 27, 2018, and the Company has engaged that Independent Field Vendor to replace those field services previously provided by SBS (other than in California). The Company similarly terminated SAS and has engaged another independent third-party company to replace those administrative services formerly provided by SAS, effective August 1, 2018(the \" \nIndependent Field Administrator \n\"). \nSAS has not provided or been authorized to perform any services to the Company after their terminations described above effective on or before July 31, 2018. \nSee Note 6 to the Company's Condensed Consolidated Financial Statements \nCommitments and Contingencies - Legal Matters ( including \nAdvancement Claim, SBS Bankruptcy, Settlement and March 2020 Claim, \n### Infotech Litigation and Settlement, and \nSBS Field Specialist Litigation) \n, and Note 10 to the Company's Condensed Consolidated Financial Statements - \n\n(including \nDomestic Related Party Services and Disputes, ) \n, below. \n### Other Domestic Related Party Transactions \nNational Merchandising Services, LLC (\" \nNMS \n\"), is a consolidated domestic subsidiary of the Company and is owned jointly by SGRP through its indirect ownership of 51% of the NMS membership interests and by National Merchandising of America, Inc. (\" \nNMA \n\"), through its ownership of the other 49% of the NMS membership interests. Mr. Edward Burdekin is the Chief Executive Officer and President and a director of NMS and also is an executive officer and director of NMA. Ms. Andrea Burdekin, Mr. Burdekin's wife, is the sole stockholder and a director of NMA and a director of NMS. NMA is an affiliate of the Company but is not under the control of or consolidated with the Company. Mr. Burdekin also owns 100% of National Store Retail Services (\" \n### NSRS \n\"). Since September 2018, NSRS provided substantially all of the domestic merchandising specialist field force used by NMS. For those services, NMS agrees to reimburse NSRS certain costs for providing those services plus a premium ranging from 4.0% to 10.0% of certain costs. \nAlso, NMS leases office and operational space that is owned personally by Mr. Burdekin. The Lease expense is $2,000 a month. While there is no formal signed agreement, there is no expected change to the arrangement. \nOn August 10, 2019, NMS, to protect continuity of its Field Specialist nationwide, petitioned for bankruptcy protection under Chapter 11 of the United States Bankruptcy Code in the U.S. District for Nevada (the \" \n### NMS Chapter 11 Case \n\"), and as a result, the claims of NMS' creditors must now generally be pursued in the NMS Chapter 11 Case. On August 11, 2019, NSRS and Mr. Burdekin also filed for reorganization in the NMS Chapter 11 Case NMS is part of the consolidated Company. Currently the Company believes that the NMS Chapter 11 Case is not likely to have a material adverse effect on the Company, and the Company's ownership of and involvement in NMS is not likely to change as a result of the NMS Chapter 11 Case or any resulting NMS reorganization. \nResource Plus of North Florida, Inc. (\" \n### Resource Plus \n\"), is a consolidated domestic subsidiary of the Company and is owned jointly by SGRP through its indirect ownership of 51% of the Resource Plus membership interests and by Mr. Richard Justus through his ownership of the other 49% of the Resource Plus membership interests. Mr. Justus has a 50% ownership interest in RJ Holdings which owns the buildings where Resource Plus is headquartered and operates. Both buildings are subleased to Resource Plus. \nInternational Related Party Services \n### SGRP Meridian (Pty), Ltd. (\" \nMeridian \n\") is a consolidated international subsidiary of the Company and is owned 51% by SGRP, 23% by Friedshelf 401 Proprietary Limited and 26% by Lindicom Empowerment Holdings Proprietary Limited. Mr. Garry Bristow, who is an executive at SGRP Meridian and a Director of CMR Meridian, is one of the beneficial owners of both Merhold Cape Property Trust (\" \n### MCPT \n\") and Merhold Holding Trust (\" \nMHT \n\"). Mr. Adrian Wingfield, who is a Director of CMR Meridian, is one of the beneficial owners of MHT. MHT owns the building where Meridian is headquartered and also owns 32 vehicles which are leased to Meridian. MCPT provides a fleet of 173 vehicles to Meridian under a month-by-month contract. Meridian has recently made the decision to end the fleet program with MCPT and award the fleet program to an unrelated party. \nSPAR Todopromo is a consolidated international subsidiary of the Company and is owned 51% by SGRP and 49% by the following individuals: Mr. Juan F. Medina Domenzain (\" \n### JFMD \n\"), Juan Medina Staines, Julia Cesar Hernandez Vanegas, and Jorge Medina Staines. Mr. Juan F. Medina Domenzain is an officer and director of SPAR Todopromo and is also majority shareholder (90%) of CONAPAD (\" \nCON \n\") which has supplied administrative and operational consulting support to SPAR Todopromo since2016. \nJFMD, partner in SPAR Todopromo, leased a warehouse to SPAR Todopromo. The lease expires on December 31, 2021. \nSPAR BSMTis owned 51% by the Company, 39% by JK Consultoria Empresarial Ltda.-ME, a Brazilian limitada (\" \nJKC \n\"), and 10% by EILLC. In November 2020, SPAR BSMT hired Peter Brown as a consultant to provide Brazil acquisition strategy services to SPAR BSMT, with a one-time initiation fee of $30,000 Brazilian Real and a monthly fee of $15,000 Brazilian Real effective December 1, 2020; and on January 6, 2021, he resigned from the Audit Committeein accordance with Nasdaq Rules. \nJKC is owned by Mr. Jonathan Dagues Martins, a Brazilian citizen and resident (\" \nJDM \n\") and his sister, Ms. Karla Dagues Martins, a Brazilian citizen and resident. JDM is the Chief Executive Officer and President of each SPAR Brazil company pursuant to a Management Agreement between JDM and SPAR BSMT dated September 13, 2016. JDM also is a director of SPAR BSMT. Accordingly, JKC and JDM are each a related party respecting the Company. EILLC is owned by Mr. Peter W. Brown, a citizen and resident of the USA (\" \nPWB \n\") and a director of SPAR BSMT and SGRP and nephew of Robert G. Brown. See \nBrown \n, below. \nSummary of Certain Related Party Transactions: \nThe following costs of affiliates were charged to the Company (in thousands): \n(1) Represent loans from the local investors into the Company's subsidiaries (representing their proportionate share of working capital loans). The loans have no payment terms and are due on demand and as such have been classified as current liabilities in the<|endoftext|>Discretion to exempt any person or group from the penalties imposed by the Section 382 Tax Benefits Preservation Plan. \nIn the event that a person becomes an Acquiring Person, each holder of a Right, other than Rights that are or, under certain circumstances, were beneficially owned by the Acquiring Person (which will thereupon become void), will thereafter have the right to receive upon exercise of a Right and payment of the Purchase Price, and subject to the terms, provisions and conditions of the Section 382 Tax Benefits Preservation Plan, a number of shares of the Common Stock having a market value of two times the Purchase Price. \n### Note 6. Stock-Based Compensation \nEquity Compensation Plan \nWe adopted the amended and restated 2010 Equity and Performance Incentive Plan (the 2010 Plan), effective as of May 19, 2010. Under the 2010 Plan, the number of shares of Common Stock that may be issued will not exceed in the aggregate 1,666,666 shares of Common Stock plus the number of shares of common stock relating to prior awards under the 2000 Omnibus Equity Incentive Plan that expire, are forfeited or are cancelled after the adoption of the 2010 Plan, subject to adjustment as provided in the 2010 Plan. Pursuant to approval from our shareholders, the number of shares of common stock that may be issued under the 2010 Plan was increased by 750,000 shares of common stock in May 2013 and 333,333 shares in June 2016. No grants will be made under the 2010 Plan after the tenth anniversary of its effective date. At the 2020 Annual Meeting, our stockholders approved the amendment and restatement of the 2010 Plan (such plan, after the amendment and restatement is now the Third Amended and Restated 2010 Equity and Performance Incentive Plan, referred to herein as the Restated Plan). The purpose of amending the 2010 Plan was (i) to increase the number of shares of common stock available for issuance under the Restated Plan by 2,000,000 shares, (ii) to extend the term of the 2010 Plan, which otherwise would have expired on May 19, 2020, so that the Restated Plan will continue until terminated by the Board in its discretion, and (iii) to eliminate obsolete provisions while adding other provisions consistent with certain compensation and governance best practices. As of December 31, 2020, approximately 4.0 million shares remain available for grant under the Restated Plan. \nWe adopted the 2014 Inducement Award Plan (the Inducement Plan), effective as of May 13, 2014. Under the Inducement Plan, the number of shares of common stock that may be issued will not exceed in the aggregate 666,666 shares of common stock. As of December 31, 2020, approximately 0.2 million shares remain available for grant under the Inducement Plan. \n\nEffective May 15, 2011, our Board and stockholders approved an ESPP and reserved 333,333 shares of our common stock for issuance. The ESPP was established to advance our interests and our stockholders' interests by providing an incentive to attract, retain and reward eligible employees and by motivating such persons to contribute to our growth and profitability. At the 2020 Annual Meeting of stockholders, our stockholders approved a proposal amending and restating the 2011 ESPP to (i) increase the maximum number of shares of common stock available for future issuance under the ESPP by 1,000,000 shares, (ii) extend the term, which otherwise would have expired on May 15, 2021, so that the ESPP will continue until terminated by the Board in its discretion, and (iii) make certain other administrative changes. \nThe ESPP consists of six-month offering periods during which employees may enroll in the plan. Shares of common stock may be purchased under the ESPP at a price established by the Compensation Committee of the Board of Directors, provided that the price may not be less than eighty-five percent (85%) of the lesser of (a) the fair market value of a share of stock on the offering date of the offering period or (b) the fair market value of a share of stock on the purchase date. As of December 31, 2020, approximately 1.1 million shares remain available for issuance under the ESPP. \n### Stock-Based Compensation \nWe recorded the following stock-based compensation expense of $0.6 million and $0.3 million, respectively, for the fiscal years ended December 31, 2020 and 2019 as follows (in thousands): \nThe fair value of our stock-based awards was estimated using the following weighted average assumptions for the years ended December 31, 2020 and 2019: \n### Stock Options \nThe following tables represent stock option activity for the years ended December 31, 2020 and 2019: \nA summary of additional information related to the options outstanding as of December 31, 2020 under the 2010 and 2014 Plans are as follows: \nAs of December 31, 2020, $1.1 million of unrecognized compensation cost related to existing options was outstanding, which is expected to be recognized over a weighted average period of 3.0 years. \n### Restricted Stock Units \nThe following table represents RSU activity for the years ended December 31, 2020 and 2019: \nAs of December 31, 2020, $0.2 million of unrecognized compensation cost related to RSUs was outstanding, which is expected to be recognized within one year. \n### Note 7. Income Taxes \nThe components of our income before income taxes are as follows (in thousands): \nThe provision for income taxes from continuing operations consisted of the following (in thousands): \nThe reconciliation of the Federal statutory income tax rate to our effective income tax rate is as follows (in thousands): \n\n(1) \nOf this amount, $554,000 relates to the Indian subsidiaries unremitted earnings deferred tax liability. The net deferred income tax liabilities are recorded in other long-term liabilities in the accompanying balance sheet. \n### ASC 740, \nIncome Taxes \n, provides for the recognition of deferred tax assets if realization of such assets is more likely than not to occur. Based on managements review of both the positive and negative evidence, which includes our historical operating performance, reported cumulative net losses since inception and difficulty in accurately forecasting results, we have concluded that it is not more likely than not that we will be able to realize all of our U.S. deferred tax assets. Therefore, we have provided a full valuation allowance against U.S. deferred tax assets. \nBased on managements review of both positive and negative evidence, which includes the historical operating performance of our Canadian subsidiary, we have concluded that it is more likely than not that we will be able to realize a portion of the Canadian deferred tax assets. Therefore, we have a partial valuation allowance on Canadian deferred tax assets. There is no valuation allowance against our Indian deferred tax assets. We reassess the need for a valuation allowance on a quarterly basis. \nBased on managements review discussed above, the realization of deferred tax assets is dependent on improvements over present levels of pre-tax income. Until we are consistently profitable in the U.S., we will not realize our deferred tax assets. \nBeginning in 2018, the Tax Cuts and Jobs Act of 2017 (Tax Act) provides a 100% deduction for dividends received from 10-percent owned foreign corporations by U.S. corporate shareholders, subject to a one-year holding period. Although dividend income is now exempt from U.S. federal tax in the hands of the U.S. corporate shareholders, companies must still apply the guidance of ASC 740-30-25-18 to account for the tax consequences of outside basis differences and other tax impacts of their investments in non-U.S. subsidiaries. Deferred income taxes have not been provided on the cumulative undistributed earnings of foreign subsidiaries except for a change in assertion at December 31, 2017 for Support.com India Private Ltd. The amount of cumulative undistributed Indian subsidiarys earnings at December 31, 2017 for which we are changing our assertion under ASC 740-30-25 was $2.67 million. Under the Tax Act, all foreign subsidiaries accumulated earnings through December 31, 2020 has been included in U.S. taxable income. As such, the only tax related to the Indian subsidiary remittance would be a dividend distribution tax of $554,000 as of December 31, 2020. \nThe net valuation allowance decreased by approximately $2.6 million and $0.4 million during the years ended December 31, 2020 and 2019, respectively. As of December 31, 2020, we had Federal and state net operating loss carryforwards of approximately $145.6 million and $80.3 million, respectively. The Federal net operating loss and credit carryforwards will expire at various dates beginning in 2021 through 2040, if not utilized. Approximately $22.5 million of Federal net operating loss carryforward is expected to expire in 2021. The state net operating loss carryforwards will expire at various dates beginning in 2021 through 2040, if not utilized. \nWe also had Federal and state research and development credit carryforwards of approximately $2.8 million and $2.4 million, respectively. The federal credits expire in varying amounts between 2021 and 2031. The state research and development credit carryforwards do not have an expiration date. \nUtilization of net operating loss carryforwards and credits may be subject to substantial annual limitation or could be lost due to the ownership change limitations provided by the Internal Revenue Code of 1986, as amended and similar state provisions. The annual limitation may result in the expiration of net operating losses and credits before utilization. \nASC 740-10 clarifies the accounting for uncertainties in income taxes by prescribing guidance for the recognition, de-recognition and measurement in financial statements of income tax positions taken in previously filed tax returns or tax positions expected to be taken in tax returns, including a decision whether to file or not to file in a particular jurisdiction. ASC 740-10 requires the disclosure of any liability created for unrecognized tax benefits. The application of ASC 740-10 may also affect the tax bases of assets and liabilities and therefore may change or create deferred tax liabilities or assets. \n\nThe total amount of unrecognized tax benefits that, if recognized, would affect our tax rate, are $0.1 million and $0.1 million as of December 31, 2020 and 2019, respectively. \nOur policy is to include interest and penalties related to unrecognized tax benefits within the provision for (benefit from) income taxes. As of December 31, 2020 and 2019, we had $0.1 million and $0.1 million, respectively, accrued for payment of interest and penalties related to unrecognized tax benefits. \nAs of December 31, 2020, it is reasonably possible that the balance of unrecognized tax benefits could significantly change within the next twelve months. However, an estimate of the range of reasonably possible adjustments cannot be made at this time. \nWe file federal, state and foreign income tax returns in jurisdictions with varying statutes of limitations. Due to our net operating loss carryforwards, our income tax returns generally remain subject to examination by federal and most state authorities. In our foreign jurisdictions, the 2009 through 2020 tax years remain subject to examination by their respective tax authorities. \nWe are required to make periodic filings in the jurisdictions where we are deemed to have a presence for tax purposes. We have undergone audits in the past and have paid assessments arising from these audits. Our India entity was issued notices of income tax assessment pertaining to the 2004 2009 fiscal years. The notices claimed that the transfer price used in our inter-company agreements resulted in understated income in our Indian entity. During the fourth quarter of 2020, the Company re-evaluated the probability of its tax position and partially released the ASC 740-10 reserve related to India transfer pricing for several assessment years that were settled with the Indian tax authorities in November and December of 2020. As of December 31, 2020, the ASC 740-10 reserve for India transfer pricing totals $0.1 million. As a result of this settlement, the Company no longer records an ASC 740-10 reserve related to fiscal years 2004-2005 and 2005-2006. \nWe may be subject to other income tax assessments in the future. We evaluate estimated expenses that could arise from those assessments in accordance with ASC 740-10 \nWe consider such factors as the degree of probability of an unfavorable outcome<|endoftext|>### EXPLANATARY NOTE \nTiga Acquisition Corp. 1), or this Amendment, to amend our Annual Report on Form 10-K for the period ended December 31, 2020, originally filed with the Securities and Exchange Commission, or the SEC, on March 30, 2021, or the Original Filing, to restate (i) our financial statements as of December 31, 2020 and (ii) our financial data as of December 31, 2020 included in this Amendment, including describing the restatement and its impact on previously reported amounts. \nThe restatement results from the Companys prior accounting for its outstanding warrants issued in connection with its initial public offering in November 2020 and the forward purchase agreement (as defined below) as components of equity instead of as liabilities. \nUpon review of the Staff Statement on Accounting and Reporting Considerations for Warrants Issued by Special Purpose Acquisition Companies (SPACs) promulgated by the SEC on April 12, 2021, the Companys management further evaluated the warrants and the forward purchase agreement under Accounting Standards Codification (ASC) Subtopic 815-40, Contracts in Entitys Own Equity. Based on managements evaluation, the Companys audit committee, in consultation with management, concluded that the Companys warrants and the forward purchase agreement do not meet the criteria to be classified in stockholders equity. \n\n\n\nPart II, Item 7. \nPart II, Item 8. \n### Part II, Item 9A. Controls and Procedures \n\n\nii \nThe Company has not amended its previously filed Current Reports on Form 8-K or Quarterly Reports on Form 10-Q for the periods affected by the restatement. \n\n\n\n\niii our public securities potential liquidity and trading the lack of a market for our securities; or our financial performance. \nThese risks and uncertainties include, but are not limited to, those factors described under the heading Risk Factors beginning on page 8. \niv \n### PART I \nReferences in this report to we, us or the Company refer to Tiga Acquisition Corp. References to our management or our management team refer to our officers and directors, and references to the Sponsor refer to Tiga Sponsor LLC, a Cayman limited liability company. References to our initial shareholders refer to the holders of our Class B ordinary shares (the Founder Shares). \nITEM 1. \nBUSINESS. \n### Introduction \nWe are a blank check company incorporated on July 27, 2020 as a Cayman Islands exempted company formed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses. \nOn November 27, 2020, we consummated our initial public offering (the Public Offering) of 27,600,000 units, including the issuance of 3,600,000 units as a result of the underwriters exercise of their over-allotment option in full. The units were sold at an offering price of $10.00 per unit, generating gross proceeds, before expenses, of $276,000,000. \nPrior to the consummation of the Public Offering, on July 27, 2020, the Sponsor received 5,750,000 Founder Shares in exchange for a capital contribution of $25,000, or $0.004 per share. \nSimultaneously with the consummation of the Public Offering, we consummated the private sale of an aggregate of 10,280,000 warrants, each exercisable to purchase one Class A ordinary share at $11.50 per share, to the Sponsor at the time of the Public Offering at a price of $1.00 per warrant, generating gross proceeds, before expenses, of approximately $10,280,000 (the Private Placement). The warrants sold in the Private Placement, or the private placement warrants, are identical to the warrants included in the units sold in the Public Offering, except that, so long as they are held by their initial purchasers or their permitted transferees, (i) they will not be redeemable by the Company, (ii) they (including the Class A ordinary shares issuable upon exercise of these warrants) may not, subject to certain limited exceptions, be transferred, assigned or sold until 30 days after the Company completes its initial business combination, (iii) they may be exercised by the holders on a cashless basis and (iv) they will be entitled to registration rights. \nUpon the closing of the Public Offering and the Private Placement, $278,760,000 was placed in a trust account with Continental Stock Transfer & Trust Company acting as trustee (the Trust Account). Except with respect to interest earned on the funds held in the Trust Account that may be released to the Company to pay its taxes, if any, the funds held in the Trust Account will not be released from the Trust Account until the earliest of (a) the completion of our initial business combination; (b) the redemption of any public shares properly tendered in connection with a shareholder vote to amend our memorandum and articles of association (i) to modify the substance or timing of our obligation to allow redemption in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination by November 27, 2021, unless extended at our sponsors option, or (ii) with respect to any other provisions relating to shareholders rights or pre-initial business combination activity; and (c) the redemption of all of our public shares if we have not completed our business combination by November 27, 2021, unless extended at our sponsors option (up to two times, each by an additional 6 months, for a total of up to 24 months (or until November 27, 2023) to complete a business combination) (the Contractual Redemption Date), subject to the sponsor purchasing additional private placement warrants, subject to applicable law. \nAfter the payment of underwriting discounts and commissions (excluding the deferred portion of $9,660,000 in underwriting discounts and commissions, which amount will be payable upon consummation of our initial business combination if consummated) and approximately $556,649 in expenses relating to the Public Offering, $1,843,237 of the net proceeds of the Public Offering and Private Placement was not deposited into the Trust Account and was retained by us for working capital purposes. As of December 31, 2020, there was $278,774,646 million in investments and cash held in the Trust Account and $1,144,776 of cash held outside the Trust Account available for working capital purposes. \nOn January 14, 2021, we announced that, commencing January 14, 2021, holders of the 27,600,000 units sold in the Public Offering may elect to separately trade the shares of Class A common stock and the warrants included in the units. Those units not separated continued to trade on the New York Stock Exchange (the NYSE) under the symbol TINV.U and the shares of Class A common stock and warrants that were separated trade under the symbols TINV and TINV WS, respectively. \n\nGeneral \n\n\n\nWe have not selected any specific business combination target and we may pursue an initial business combination target in any industry or geographic area. \nThe fair market value of the target or targets will be determined by our board of directors based upon one or more standards generally accepted by the financial community, such as a discounted cash flow valuation or the value of comparable businesses. If our board of directors is not able independently to determine the fair market value of the target business or businesses, we will obtain an opinion from an independent investment banking firm, or another independent entity that commonly renders valuation opinions, with respect to the satisfaction of such criteria. We do not currently intend to purchase multiple businesses in unrelated industries in conjunction with our initial business combination, although there is no assurance that will not be the case. \n\n\n\n\nWe will provide our public shareholders with the opportunity to redeem all or a portion of their Class A ordinary shares upon the completion of our initial business combination at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account calculated as of two business days prior to the consummation of the initial business combination, including interest earned on the funds held in the Trust Account and not previously released to us to pay our taxes (less up to $100,000 of interest to pay dissolution expenses and net of taxes payable), divided by the number of then outstanding public shares, subject to certain limitations. \n\n\n\n\n\n\n\n\n\nNotwithstanding the foregoing redemption rights, if we seek shareholder approval of our initial business combination and we do not conduct redemptions in connection with our business combination pursuant to the tender offer rules, our amended and restated memorandum and articles of association provide that a public shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a group (as defined under Section 13 of the Exchange Act), will be restricted from redeeming its shares with respect to more than an aggregate of 15% of the shares sold in the Public Offering, without our prior consent. Absent this provision, a public shareholder holding more than an aggregate of 15% of the shares sold in the Public Offering could threaten to exercise its redemption rights against a business combination if such holders shares are not purchased by us or our management at a premium to the then-current market price or on other undesirable terms. By limiting our shareholders ability to redeem to no more than 15% of the shares sold in the Public Offering, we believe we will limit the ability of a small group of shareholders to unreasonably attempt to block our ability to complete our initial business combination, particularly in connection with a business combination with a target that requires as a closing condition that we have a minimum net worth or a certain amount of cash. However, we would not be restricting our shareholders ability to vote all of their shares (including all shares held by those shareholders that hold more than 15% of the shares sold in the Public Offering) for or against our initial business combination. Our initial shareholders and officers have, pursuant to a letter agreement, and the forward purchaser has, pursuant to the forward purchase agreement, entered into with us, waived their right to have any founder shares or public shares redeemed in connection with our initial business combination. Unless any of our other affiliates acquires founder shares through a permitted transfer from our sponsor, and thereby becomes subject to the letter agreement, no such affiliate is subject to this waiver. However, to the extent any such affiliate acquires public shares in this offering or thereafter through open market purchases, it would be a public shareholder and subject to the 15% limitation in connection with any such redemption right. \n\nOur amended and restated memorandum and articles of association provide that we will have only until November 27, 2021 to complete our initial business combination unless extended at the option of our sponsor. If we have not completed an initial business combination by November 27, 2021, prior to the applicable Contractual Redemption Date if extended at our Sponsors option or during any Extension Period, we will: (i) cease all operations except for the purpose of winding up; (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account including interest earned on the funds held in the trust account and not previously released to us to pay our taxes, if any (less up to $100,000 of interest to pay dissolution expenses and net of taxes payable), divided by the number of the then outstanding public shares, which redemption will completely extinguish public shareholders rights as shareholders (including the right to receive further liquidation distributions, if any), subject to applicable law; and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders and our board of directors, liquidate and dissolve, subject in each case, to our obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect to our warrants, which will expire worthless if we do not complete an initial business combination<|endoftext|>Except if the warrants may be exercised on a cashless basis and such cashless exercise is exempt from registration under the Securities Act. \nNone of the private placement warrants will be redeemable by us (except as set forth under Description of SecuritiesWarrantsPublic Stockholders WarrantsRedemption of warrants for ClassA common stock) so long as they are held by our Sponsor or their permitted transferees. \nOur warrants and Founder Shares may have an adverse effect on the market price of our Class A common stock and make it more difficult to effectuate our business combination. \nWe issued warrants to purchase 10,500,000 shares of our Class A common stock in the Public Offering and simultaneously, we issued private placement warrants to purchase an aggregate of 6,250,000 shares of Class A common stock at $11.50 per share. Our Initial Stockholders currently own an aggregate of 13,125,000 Founder Shares. In addition, if our Sponsor makes any working capital loans, up to $1,500,000 of such loans may be converted into warrants, at the price of $2.00 per warrant at the option of the lender. Our public warrants are also redeemable by us for Class A common stock. \nTo the extent we issue shares of Class A common stock to effectuate a business combination, the potential for the issuance of a substantial number of additional shares of Class A common stock upon exercise of these warrants and conversion rights could make us a less attractive acquisition vehicle to a target business. Any such issuance will increase the number of issued and outstanding shares of our Class A common stock and reduce the value of the shares of our Class A common stock issued to complete the business combination. \nThe private placement warrants are identical to the warrants sold as part of the units in our Public Offering except that, so long as they are held by our Sponsor or its permitted transferees, (i) they will not be redeemable by us, (ii) they (including the Class A common stock issuable upon exercise of these warrants) may not, subject to certain limited exceptions, be transferred, assigned or sold by our Sponsor until 30 days after the completion of our initial business combination and (iii) they may be exercised by the holders on a cashless basis and (iv) are subject to registration rights. \n\nWe have established the components of the units in this way in order to reduce the dilutive effect of the warrants upon completion of a business combination since the warrants will be exercisable in the aggregate for one-fifth of the number of shares compared to units that each contain a warrant to purchase one whole share, thus making us, we believe, a more attractive merger partner for target businesses. \nOur warrants are being accounted for as liabilities and are being recorded at fair value upon issuance with changes in fair value each period reported in our earnings. The changes in value of our warrants could have an adverse effect on the market price of our Class A common stock, an adverse effect on our financial results and/or make it more difficult for us to consummate an initial business combination. \nIn light of the SEC Staff Statement and guidance in ASC 815-40, the Companys management evaluated the terms of its warrants issued in connection with its initial public offering, including the Private Placement Warrants and the public warrants, and concluded that the Companys warrants include provisions that, based on the SEC Staff Statement, preclude the warrants from being classified as components of equity. As described in our financial statements included in Part II, Item 8, of this Annual Report on Form 10-K/A, we are accounting for these warrants as a derivative liability and are recording that liability at fair value upon issuance and are recording any subsequent changes in fair value as of the end of each period for which earnings are reported, as we determine based upon a valuation report obtained from our independent third party valuation firm. The impact of changes in fair value on earnings may have an adverse effect on the market price of our Class A common stock and/or our financial results. \nAdditionally, in connection with our evaluation of the Companys warrants in connection with the SEC Staff Statement, our management reassessed the effectiveness of its disclosure controls and procedures for the Affected Periods (as defined below) concluded that, due to the industry-wide issues and related insufficient risk assessment of the underlying accounting for certain instruments, our disclosure controls and procedures were not effective. Further, we have determined that our insufficient risk assessment of the underlying accounting for certain financial instruments to be a material weakness in our internal controls over financial reporting. Any required remediation measures may be time consuming and costly and there is no assurance that such measures will ultimately have the intended effects. \nWe have restated our financial statements as of December 31, 2020 and for the period from June 25, 2020 (inception) through December 31, 2020, as well as our financial data as of August 10, 2020, which may lead to additional risks and uncertainties, including loss of investor confidence and negative impacts on our stock price. \nOn May 9, 2021, we concluded that the Companys prior accounting for its outstanding warrants incorrectly reflected them as components of equity instead of as liabilities, and as a result thereof, our previous financial statements as of December 31, 2020 and for the period from June 25, 2020 (inception) through December 31, 2020, as well as our financial data as of August 10, 2020 (collectively, the Affected Periods), should no longer be relied upon. As a result, we restated our financial statements for the Affected Periods. The issues identified were all noncash and did not impact our cash flows or cash for the Affected Periods or the year ended December 31, 2020. As a result of the foregoing matters, we may become subject to additional risks and uncertainties, including, among others, unanticipated costs for accounting and legal fees, the increased possibility of legal proceedings, shareholder lawsuits, governmental agency investigations, and inquiries by the Nasdaq Stock Market or other regulatory bodies, which could cause investors to lose confidence in our reported financial information and could subject us to civil or criminal penalties, shareholder class actions or derivative actions. If any such actions occur, they will, regardless of the outcome, consume a significant amount of managements time and attention and may result in additional legal, accounting, insurance and other costs. If we do not prevail in any such proceedings, we could be required to pay damages or settlement costs. In addition, the restatement and related matters could impair our reputation. Each of these occurrences could have a material adverse effect on our business, results of operations, financial condition and stock price. \nThe determination of the offering price of our units and the size of the Public Offering is more arbitrary than the pricing of securities and size of an offering of an operating company in a particular industry. \nPrior to the Public Offering, there has been no public market for any of our securities. Factors considered in determining the size of the Public Offering \n, prices and terms of the units, including the ClassA common stock and warrants underlying the units, include: the history and prospects of companies whose principal business is the acquisition of other companies; our prospects for acquiring an operating business; our capital structure; \nAlthough these factors were considered, the determination of our offering price is more arbitrary than the pricing of securities of an operating company in a particular industry since we have no historical operations or financial results. \n\nThese financial statements may be required to be prepared in accordance with, or be reconciled to, accounting principles generally accepted in the United States of America, or GAAP, or international financing reporting standards, or IFRS, depending on the circumstances and the historical financial statements may be required to be audited in accordance with the standards of the Public Company Accounting Oversight Board (United States), or PCAOB. \n\n\n\nWe will remain a smaller reporting company until the last day of the fiscal year in which (1)the market value of our ClassA common stock held by non-affiliates exceeds $250million as of the end of the prior June 30th, or (2)our annual revenues exceeded $100million during such completed fiscal year and the market value of our ClassA common stock held by non-affiliates exceeds $700million as of the prior June 30th. \n\nSection 404 of the Sarbanes-Oxley Act requires that we evaluate and report on our system of internal controls beginning with our Annual Report on Form 10-K for the year ending December31, 2021. \nProvisions in our second amended and restated certificate of incorporation and Delaware law may inhibit a takeover of us, which could limit the price investors might be willing to pay in the future for our Class A common stock and could entrench management. \nOur second amended and restated certificate of incorporation will contain provisions that may discourage unsolicited takeover proposals that stockholders may consider to be in their best interests. These provisions include a staggered board of directors and the ability of the board of directors to designate the terms of and issue new series of preferred stock, and the fact that prior to the completion of our initial business combination only holders of shares of our Class F Common Stock, which have been issued to our Sponsor, are entitled to vote on the appointment of directors, which may make the removal of management more difficult and may discourage transactions that otherwise could involve payment of a premium over prevailing market prices for our securities. \n\n\n\nIf we take advantage of Nasdaqs controlled company standards, we would be exempt from various corporate governance requirements. \nNasdaq listing rules generally define a Controlled Company as any company of which more than 50% of the voting power for the election of directors is held by an individual, a group or another company. Prior to the vote on our initial business combination, only holders of the Founder Shares will have the right to vote on the election of directors. More than 50% of the Founder Shares will be held by our Sponsor. Accordingly, prior to the vote on our initial business combination, we would likely satisfy the definition of being a controlled company. As indicated herein, we will not use the related exemptions to Nasdaqs governance rules under the controlled company standards. However, if we were to change our intentions and take advantage of the controlled company standards, we would be exempt from various corporate governance requirements such as the requirement to have a majority of independent directors and to have nominating/corporate governance and compensation committees comprised entirely of independent directors. \nfederal income tax purposes. \nA U.S. federal income tax purposes in a given taxable year if (i)at any time during the last half of such taxable year, five or fewer individuals (without regard to their citizenship or residency and including as individuals for this purpose certain entities such as certain tax exempt organizations, pension funds and charitable trusts) own or are deemed to own (pursuant to certain constructive ownership rules) more than 50% of the stock of the corporation by value and (ii)at least 60% of the corporations adjusted ordinary gross income, as determined for U.S. \nThus, no assurance can be given that we will not become a PHC following the Public Offering or in the future. \n\nIf we effect our initial business combination with a company but with operations or opportunities outside of the United States, we would be subject to any special considerations or risks associated with companies operating in an international setting, including any of the following: higher costs and difficulties inherent in managing cross-border business operations and complying with different commercial and legal requirements of overseas markets; tariffs and trade barriers; rates of inflation; employment regulations; \n\nITEM 2. \n### PROPERTIES \nOur executive offices are located at 9800 Wilshire Blvd, Beverly Hills, California 90212 and our telephone number is (310) 209-3010. Commencing on<|endoftext|>Combination by June4, 2022, our return of the funds held in the trust account to our public shareholders as part of our redemption of the public shares. \n\n\nIf we are unable to consummate our initial business combination by June4, 2022, our public shareholders may be forced to wait beyond June4, 2022 before redemption from our trust account. \nIf we are unable to consummate our initial business combination by June4, 2022, the funds then on deposit in the trust account, including interest earned on the funds held in the trust account (less taxes payable and up to $100,000 of interest income to pay dissolution expenses), will be used to fund the redemption of our public shares, as further described herein. In that case, investors may be forced to wait beyond June4, 2022 before the redemption proceeds of our trust account become available to them, and they receive the return of their pro rata portion of the funds from our trust account. We have no obligation to return funds to investors prior to the date of our redemption or liquidation unless we consummate our initial business combination prior thereto and only then in cases where investors have sought to redeem their \nClassA ordinary shares. \n\n\n\n\n\nIf the issuance of the ClassA ordinary shares upon exercise of the warrants is not registered, qualified or exempt from registration or qualification under the Securities Act and applicable state securities laws, holders of warrants will not be entitled to exercise such warrants, except on a cashless basis as described herein, and such warrants may have no value and expire worthless. \n\n\n\n\n\n\n\n\nPursuant to an agreement entered into concurrently with the issuance and sale of the securities in our IPO, our initial shareholders and their permitted transferees can demand that we register the ClassA ordinary shares into which founder shares are convertible, holders of our private placement warrants and their permitted transferees can demand that we register the private placement warrants and the ClassA ordinary shares issuable upon exercise of the private placement warrants, and holders of securities that may be issued upon conversion of working capital loans may demand that we register such units, shares, warrants or the ClassA ordinary shares issuable upon exercise of such warrants. \n\nOur management team has extensive experience in identifying and executing strategic investments globally and has done so successfully in a number of sectors, including the technology and telecommunications sectors. \nPast performance by our management team, including investments and transactions in which they have participated and businesses with which they have been associated, may not be indicative of future performance of an investment in the Company. \nInformation regarding our management team, including investments and transactions in which they have participated and businesses with which they have been associated, is presented for informational purposes only. Any past experience and performance by our management team, and the businesses with which they have been associated, is not a guarantee that we will be able to successfully identify a suitable candidate for our initial business combination, that we will be able to provide positive returns to our shareholders, or of any results with respect to any initial business combination we may consummate. You should not rely on the historical experiences of our management team, including investments and transactions in which they have participated and businesses with which they have been associated, as indicative of the future performance of an investment in us or as indicative of every prior investment by each of the members of our management team. \n\n\n\n\nWe are not required to obtain an opinion from an independent investment banking firm or from a valuation, accounting or appraisal firm, and consequently, you may have no assurance from an independent source that the price we are paying for the business is fair to our shareholders from a financial point of view. \n\n\nUpon the completion of our IPO, there were 177,000,000 and 14,250,000 authorized but unissued ClassA ordinary shares and ClassB ordinary shares, respectively, available for issuance which amount does not take into account shares reserved for issuance upon exercise of outstanding warrants or shares issuable upon conversion of the ClassB ordinary shares. Upon the completion of our IPO, there were no preference shares issued and outstanding. \nThe issuance of additional ordinary or preference shares: may significantly dilute the equity interest of investors in our IPO; \n\n\n\n\ninvestors. \nHolder of our ClassA ordinary shares or warrants, the United States Holder may be subject to adverse U.S. Our PFIC status for our current and subsequent taxable years may depend on the status of an acquired company pursuant to a business combination and whether we qualify for the PFIC start-up exception. We urge U.S. \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nWe intend to have one employee other than our executive officers. \n\nFollowing the completion of our IPO and until we consummate our initial business combination, we intend to engage in the business of identifying and combining with one or more businesses. \n\n\n\n\n\n\nSince our sponsor, officers and directors will lose their entire investment in us if our initial business combination is not completed (other than with respect to public shares they may acquire during or after our IPO), a conflict of interest may arise in determining whether a particular business combination target is appropriate for our initial business combination. \nOn September28, 2020, our sponsor paid $25,000 to cover certain expenses on our behalf in exchange for the issuance of 7,187,500 founder shares, or approximately $0.003 per share. This risk may become more acute as the deadline following the closing of the IPO nears, which is the deadline for our completion of an initial business combination if we do not get an extension by shareholder vote. \n\nAlthough we have no commitments as of the date of this Annual Report to issue any notes or other debt securities, or to otherwise incur outstanding debt following this Annual Report, we may choose to incur substantial debt to complete our initial business combination. \nWe may only be able to complete one business combination with the proceeds of our IPO and the sale of the private placement warrants, which will cause us to be solely dependent on a single business which may have a limited number of products or services. The net proceeds from our IPO and the private placement of warrants provided us with $224,250,000 that we may use to complete our initial business combination (after taking into account $8,050,000 of deferred underwriting commissions being held in the trust account). \n\n\n\n\n\n\n\n\n\n\n\nIn addition, our amended and restated memorandum and articles of association require us to provide our public shareholders with the opportunity to redeem their public shares for cash if we propose an amendment to our amended and restated memorandum and articles of association (A)to modify the substance or timing of our obligation to allow redemption in connection with our initial business combination or to redeem 100% of our public shares if we do not complete an initial business combination by June4, 2022 or (B)with respect to any other material provisions relating to shareholders rights or pre-initial business combination activity. To the extent any of such amendments would be deemed to fundamentally change the nature of the securities offered through our IPO, we would register, or seek an exemption from registration for, the affected securities. \n\nOur amended and restated memorandum and articles of association provide that any of its provisions related to pre-business combination activity (including the requirement to deposit proceeds of our IPO and the private placement of warrants into the trust account and not release such amounts except in specified circumstances, and to provide redemption rights to public shareholders as described herein) may be amended if approved by special resolution, under Cayman Islands law which requires the affirmative vote of a majority of at least two-thirds of the shareholders who attend and vote at a general meeting of the company, and corresponding provisions of the trust agreement governing the release of funds from our trust account may be amended if approved by holders of 65% of our ordinary shares who attend and vote at a general meeting of the company. Our initial shareholders, who collectively beneficially owned 20% of our ordinary shares upon the closing of our IPO, will participate in any vote to amend our amended and restated memorandum and articles of association and/or trust agreement and will have the discretion to vote in any manner they choose. \nOur sponsor, officers and directors have agreed, pursuant to a written agreement with us, that they will not propose any amendment to our amended and restated memorandum and articles of association (A)to modify the substance or timing of our obligation to allow redemption in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination by June4, 2022 or (B)with respect to any other material provisions relating to shareholders rights or pre-initial business combination activity, unless we provide our public shareholders with the opportunity to redeem their ClassA ordinary shares upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account and not previously released to us to pay our taxes, divided by the number of then outstanding public shares. \n\nThe letter agreement may be amended without shareholder approval (although releasing the parties from the restriction not to transfer the founder shares for 185 days following the closing of our IPO will require the prior written consent of the underwriters). \n\nWe intend to target businesses with enterprise values that are greater than we could acquire with the net proceeds of our IPO and the sale of the private placement warrants. \n\nUpon closing our IPO, our initial shareholders owned 20% of our issued and outstanding ordinary shares. \n\n\n\nIf (i)we issue additional ordinary shares or equity-linked securities for capital raising purposes in connection with the closing of our initial business combination at an issue price or effective issue price of less than $9.20 per ClassA ordinary share (with such issue price or effective issue price to be determined in good faith by the board of directors and, in the case of any such issuance to the initial shareholders or their affiliates, without taking into account any founder shares held by the initial shareholders or such affiliates, as applicable, prior to such issuance) (the Newly Issued Price), (ii)the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of our initial business combination, and (iii)the volume weighted average trading price of the ClassA ordinary shares during the 10 trading day period starting on the trading day prior to the day on which the company consummates its initial business combination (such price, the Market Value) is below $9.20 per share, then the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value and the Newly Issued Price, and the $10.00 and $18.00 per share redemption trigger prices will be adjusted (to the nearest cent) to be equal to 100% and 180% of the higher of the Market Value and the Newly Issued Price, respectively. \n\n\n\n\nWe issued warrants to purchase 11,500,000 ClassA ordinary shares as part of the units offered in our IPO and, simultaneously with the closing of our IPO, we issued in a private placement an aggregate of 8,900,000 warrants, at $1.00 per warrant. \n\n\n\n\n\n\n\n\n### S-K. \nWe will remain a smaller reporting company until the last day of any fiscal year for so long as either (1)the market value of our ordinary shares held by non-affiliates did not exceed $250million as of the prior June30, or (2)our annual revenues did not exceed $100million during such completed fiscal year and the market value of our ordinary shares held by non-affiliates did not exceed $700million as of the prior June 30. \n\n\n10-K for the period ending December31, 2021. \nFederal courts may be limited.<|endoftext|>That is held by non-affiliatesexceeds $700million as of the prior June 30 th \n, and (ii)the date on which we have issued more than $1.0billion in non-convertibledebt securities during the prior three-yearperiod. \nWe will remain a smaller reporting company until the last day of the fiscal year in which (i)the market value of our ordinary shares held by non-affiliatesexceeds $250million as of the end of that years second fiscal quarter or (ii)our annual revenues exceeded $100million during such completed fiscal year and the market value of our ordinary shares held by non-affiliatesexceeds $700million as of the end of that years second fiscal quarter. \n\nWe intend to effectuate our initial business combination using cash from the proceeds of our Initial Public Offering and the private placement of the Private Placement Warrants, our shares, debt or a combination of the foregoing. \nIf our initial business combination is paid for using equity or debt securities, or not all of the funds released from the Trust Account are used for payment of the consideration in connection with our business combination or used for redemptions of purchases of our ClassA ordinary shares, we may apply the balance of the cash released to us from the Trust Account for general corporate purposes, including for maintenance or expansion of operations of the post-transactioncompany, the payment of principal or interest due on indebtedness incurred in completing our initial business combination, to fund the purchase of other companies or for working capital. \n\nWe may need to obtain additional financing to complete our initial business combination, either because the transaction requires more cash than is available from the proceeds held in the Trust Account or because we become obligated to redeem a significant number of our public shares upon completion of the business combination. In the case of an initial business combination funded with assets other than the Trust Account assets, our tender offer documents or proxy materials disclosing the business combination would disclose the terms of the financing and, only if required by applicable law, we would seek shareholder approval of such financing. \n\nThese sources may also introduce us to target businesses in which they think we may be interested on an unsolicited basis. We have agreed to pay Tortoise Capital Advisors, L.L.C., an affiliate of our Sponsor, a total of $10,000 per month for office space, utilities, secretarial support and administrative services and to reimburse our Sponsor for any out-of-pocketexpenses related to identifying, investigating and completing an initial business combination. \n\nIf any of our officers or directors becomes aware of a business combination opportunity that falls within the line of business of any entity to which he or she has pre-existingfiduciary or contractual obligations, he or she may be required to present such business combination opportunity to such entity prior to presenting such business combination opportunity to us. Any such entity may co-investwith us in the target business at the time of our initial business combination, or we could raise additional proceeds to complete the acquisition by issuing to such entity a class of equity or equity-linkedsecurities. \n\nThe NYSE rules require that our initial business combination must occur with one or more target businesses that together have an aggregate fair market value of at least 80% of the net assets held in the Trust Account (net of amounts disbursed to management for working capital purposes and excluding the amount of any deferred underwriting discount held in the Trust Account) at the time of the agreement to enter into the initial business combination. \nIn any case, we will only complete an initial business combination in which we own or acquire 50% or more of the outstanding voting securities of the target or otherwise acquire an interest in the target sufficient for the post-transactioncompany not to be required to register as an investment company under the Investment Company Act. If we own or acquire less than 100% of the equity interests or assets of a target business or businesses, the portion of such business or businesses that are owned or acquired by the post-transactioncompany is what will be valued for purposes of the NYSEs 80% of net assets test. \n\n\n\n\n\n\nAlthough we intend to closely scrutinize the management of a prospective target business when evaluating the desirability of effecting our business combination with that business, our assessment of the target businesss management may not prove to be correct. \n\n\n\nUnder the NYSEs listing rules, shareholder approval would be required for our initial business combination if, for example: we issue Class A ordinary shares that will be equal to or in excess of 20% of the number of our Class A ordinary shares then outstanding (other than in a public offering); any of our directors, officers or substantial shareholders (as defined by the NYSE rules) has a 5% or greater interest, directly or indirectly, in the target business or assets to be acquired and if the number of ordinary shares to be issued, or if the number of ordinary shares into which the securities may be convertible or exercisable, exceeds either (a) 1% of the number of ordinary shares or 1% of the voting power outstanding before the issuance in the case of any of our directors or officers or (b) 5% of the number of ordinary shares or 5% of the voting power outstanding before the issuance in the case of any substantial shareholders; \n\nIn the event we seek shareholder approval of our business combination and we do not conduct redemptions in connection with our business combination pursuant to the tender offer rules, our Sponsor, directors, officers, advisors or their affiliates may purchase shares or public warrants in privately negotiated transactions or in the open market either prior to or following the completion of our initial business combination. If they engage in such transactions, they will not make any such purchases when they are in possession of any material non-publicinformation not disclosed to the seller or if such purchases are prohibited by Regulation M under the Exchange Act. \nWe do not currently anticipate that such purchases, if any, would constitute a tender offer subject to the tender offer rules under the \nExchange Act or a going-privatetransaction subject to the going-privaterules under the Exchange Act; \nThe purpose of any such purchases of shares could be to (i)vote such shares in favor of the business combination and thereby increase the likelihood of obtaining shareholder approval of the business combination or (ii)to satisfy a closing condition in an agreement with a target that requires us to have a minimum net worth or a certain amount of cash at the closing of our business combination, where it appears that such requirement would otherwise not be met. \nIn addition, if such purchases are made, the public float of our ordinary shares or public warrants may be reduced and the number of beneficial holders of our securities may be reduced, which may make it difficult to maintain or obtain the quotation, listing or trading of our securities on a national securities exchange. \nOur Sponsor, officers, directors and/or their affiliates anticipate that they may identify the shareholders with whom our Sponsor, officers, directors or their affiliates may pursue privately negotiated purchases by either the shareholders contacting us directly or by our receipt of redemption requests submitted by shareholders (in the case of ClassA ordinary shares) following our mailing of proxy materials in connection with our initial business combination. Our Sponsor, officers, directors, advisors or any of their affiliates will select which shareholders to purchase shares from based on the negotiated price and number of shares and any other factors that they may deem relevant, and will only purchase shares if such purchases comply with Regulation M under the Exchange Act and the other federal securities laws. \n\n\nWe will provide our public shareholders with the opportunity to redeem all or a portion of their ClassA ordinary shares upon the completion of our initial business combination at a per-shareprice, payable in cash, equal to the aggregate amount on deposit in the Trust Account as of two business days prior to the consummation of the initial business combination including interest earned on the funds held in the Trust Account and not previously released to us to pay our income taxes, divided by the number of then outstanding public shares, subject to the limitations described herein. The per-shareamount we will distribute to investors who properly redeem their shares will not be reduced by the deferred underwriting discounts and commissions we will pay to the underwriters of our Initial Public Offering. Our Sponsor, officers and directors have entered into a letter agreement with us, pursuant to which they have agreed to waive their redemption rights with respect to any Founder Shares held by them and any public shares held by them in connection with the completion of our business combination. \n\nHowever, the proposed business combination may require (i)cash consideration to be paid to the target or its owners, (ii)cash to be transferred to the target for working capital or other general corporate purposes or (iii)the retention of cash to satisfy other conditions in accordance with the terms of the proposed business combination. \n\nIf we structure a business combination transaction with a target business in a manner that requires shareholder approval, we will not have discretion as to whether to seek a shareholder vote to approve the proposed business combination. \nIf we hold a shareholder vote to approve our initial business combination, we will, pursuant to our amended and restated memorandum and articles of association: conduct the redemptions in conjunction with a proxy solicitation pursuant to Regulation 14A under the Exchange Act, which regulates the solicitation of proxies, and not pursuant to the tender offer rules, and file proxy materials with the SEC. \n\nIf we seek shareholder approval, we will complete our initial business combination only if we obtain the approval of an ordinary resolution under Cayman Islands law, being the affirmative vote of a majority of the ordinary shares, represented in person or by proxy and entitled to vote thereon, voted and who vote at a general meeting. A quorum for such meeting will consist of the holders present in person or by proxy of shares of the Company representing a majority of the voting power of all outstanding shares of the company entitled to vote at such meeting. Our initial shareholders will count toward this quorum and have agreed to vote their Founder Shares and any public shares purchased during or after our Initial Public Offering in favor of our initial business combination. For purposes of seeking approval of the majority of our outstanding ordinary shares voted, abstentions and non-voteswill have no effect on the approval of our initial business combination once a quorum is obtained. As a result, in addition to our initial shareholders Founder Shares, we would need 12,937,501, or 37.5%, of the 34,500,000 public shares sold in our Initial Public Offering to be voted in favor of the business combination (assuming all outstanding shares are voted) in order to have our initial business combination approved, subject to any higher consent threshold as may be required by Cayman Islands or other applicable law. These quorum and voting thresholds, and the voting agreements of our initial shareholders, may make it more likely that we will consummate our initial business combination. Each public shareholder may elect to redeem its public shares irrespective of whether it votes for or against the proposed transaction. \nIf we conduct redemptions pursuant to the tender offer rules of the SEC, we will, pursuant to our amended and restated memorandum and articles of association: conduct the redemptions pursuant to Rule 13e-4 and Regulation 14E under the Exchange Act, which regulate issuer tender offers, and file tender offer documents with the SEC prior to completing our initial business combination which contain substantially the same financial and other information about the initial business combination and the redemption rights as is required under Regulation 14A under the Exchange Act, which regulates the solicitation of proxies. \nUpon the public announcement of our business<|endoftext|>Rights unless those rights are provided pursuant to a contract. This means that generally our shareholders do not have the legal right to purchase shares in a new issue before they are offered to third parties. However, pursuant to the terms and provisions of the share purchase agreement, or the Share Purchase Agreement, dated December 23, 2019, Ivy has a right to purchase any future equity securities offered by us, except with respect to certain exempt issuances as set forth in the Share Purchase Agreement. As a result, our shareholders could experience dilution of their ownership interest by reason of our raising additional funds through the issuance of Ordinary Shares. \n\nWe have never declared or paid cash dividends on our Ordinary Shares, and we do not anticipate paying cash dividends in the foreseeable future. Any return to investors is expected to come, if at all, only from potential increases in the price of our Ordinary Shares. The payment of any dividends by the Company is solely at the discretion of our Board and based on the conditions set forth in the Israeli Companies Law, 1999, or the Companies Law. \n### Risks Related to Conducting Business in Israel \nProvisions of Israeli law may make it easy for our shareholders to demand that we convene a shareholders meeting, and/or allow shareholders to convene a shareholder meeting without the consent of our management, which may disrupt our managements ability to run our company. \nSection 63(b) of the Companies Law may allow any one or more of our shareholders holding at least 5% of our voting rights to demand that we convene an extraordinary shareholders meeting. Also, in the event that we choose not to convene an extraordinary shareholders meeting pursuant to such a request, Sections 64-65 of the Companies Law provide, among others, that such shareholders may independently convene an extraordinary shareholders meeting within three months (or under courts ruling) and require us to cover the costs, within reason, and as a result thereof, our directors might be required to repay us such costs. If our shareholders decide to exercise these rights in a way inconsistent with our managements strategic plans, our managements ability to run our company may be disrupted, and this process may entail significant costs to us. \nSecurity, political and economic instability in the Middle East may harm our business. \nWe are incorporated under the laws of the State of Israel, and our principal offices and research and development facilities are located in Northern Israel. Accordingly, security, political and economic conditions in the Middle East in general, and in Israel in particular, may directly affect our business. Any armed conflicts, political instability, terrorism, cyberattacks or any other hostilities involving Israel or the interruption or curtailment of trade between Israel and its present trading partners could affect adversely our operations. Ongoing and revived hostilities in the Middle East or other Israeli political or economic factors, could harm our operations and solution development and cause any future sales to decrease. \nFurthermore, some countries, as well as certain companies and organizations, participate in a boycott of Israeli firms and others doing business with Israel or with Israeli companies. Restrictive laws, policies or practices directed towards Israel or Israeli businesses could have an adverse impact on the expansion of our business. In addition, we could be adversely affected by the interruption or curtailment of trade between Israel and its trading partners, a significant increase in the rate of inflation, or a significant downturn in the economic or financial condition of Israel. \nIn addition, Israel is experiencing a level of unprecedented political instability. The Israeli government has been in a transitionary phase since December 2018, when the Israeli Parliament, or the Knesset, first resolved to dissolve itself and call for new general elections. Since then, Israel held general elections three times in April and September of 2019 and in March of 2020. A fourth election took place on March 23, 2021. The Knesset has not passed a budget for the year 2021, and certain government ministries, which may be critical to the operation of our business, are without necessary resources and may not receive sufficient funding moving forward. In the event that the current political stalemate is not resolved during 2021, our ability to conduct our business effectively may be adversely affected. \nFinally, many Israeli citizens are obligated to perform several days, and in some cases more, of annual military reserve duty each year until they reach the age of 40 (or older, for reservists who are military officers or who have certain occupations) and, in the event of a military conflict, may be called to active duty. In response to increases in terrorist activity, there have been periods of significant call-ups of military reservists. It is possible that there will be military reserve duty call-ups in the future. Our operations could be disrupted by such call-ups, which may include the call-up of members of our management. Such disruption could materially adversely affect our business, prospects, financial condition and results of operations. \nThe Israeli government programs in which we currently participate, and the Israeli tax benefits we are currently entitled to, require us to meet several conditions, and they may be terminated or reduced in the future. This could increase our costs and/or our taxes. \nWe are entitled to certain tax benefits under Israeli government programs, largely as a result of the Approved Enterprise status granted to some of our capital investment programs by the Israeli Ministry of Finance, and due to eligibility of tax benefits under the Preferred Enterprise routes. These benefits include tax exemption or reduced tax rates. Without such benefits, our taxable income would be taxed at the regular corporate tax rate (23% in 2020). To maintain our eligibility for these tax benefits, we must continue to meet conditions, including making specified investments in property, plant, and equipment and maintaining a certain minimum level of export sales. We cannot assure that we will continue to be eligible for these tax benefits at the same rate or at all. The termination or reduction of these programs and tax benefits could increase our taxes, once we become profitable, and could have a material adverse effect on our business. \nBecause we received grants from the Israeli Innovation Authority, we are subject to ongoing restrictions relating to our business. \nIn the past, we have received royalty-bearing grants from the Israeli Innovation Authority (formerly the Office of the Chief Scientist of the Israeli Ministry of Economy), or the IIA, for research and development of certain of our products. We are obligated to pay royalties with respect to the grants that we received. In addition, the terms of the IIA grants limit our ability to manufacture products or transfer technologies outside of Israel if such products or technologies were developed using know-how developed with or based upon IIA grants. Pursuant to the Israeli Encouragement of Research and Development in the Industry Law, we and any non-Israeli who becomes a holder of 5% or more of our share capital are generally required to notify the IIA and such non-Israeli shareholder is required to undertake to observe the law governing the grant programs of the IIA, the principal restrictions of which are the transferability limits described above. \nThe terms of grants we received from the Israeli government for certain of our research and development activities may require us, in addition to the payment of royalties, to satisfy specified conditions in order to manufacture products or transfer technologies outside of Israel. We may also be required to pay penalties in addition to repayment of the grants. \nOur research and development efforts, during the period between 1999 and 2006, were financed in part through royalty-bearing grants that we received from the IIA. As of December 31, 2020, we received a total of approximately $7 million from the IIA. The total amount of grants received as of December 31, 2020, net of royalties paid, was approximately $3.4 million (including accrued interest). With respect to such grants, we are committed to pay the IIA royalties at a rate of 3.5%-3% from our sales, up to the total amount of grants received, linked to the dollar and bearing interest at an annual rate of LIBOR applicable to dollar deposits. Even following full repayment of the IIA grants, we are required to comply with the requirements of the Israeli Encouragement of Industrial Research and Development Law, 5744-1984, and related regulations, or the Research Law. When a company develops know-how, technology or products using IIA grants, the terms of these grants and the Research Law restrict the transfer of such know-how, and the transfer of manufacturing or manufacturing rights of such products, technologies or know-how outside of Israel, without the prior approval of the IIA. Therefore, if aspects of our technologies are deemed to have been developed with IIA funding, the discretionary approval of an IIA committee would be required for any transfer to third parties outside of Israel of IIA-supported know-how or manufacturing or manufacturing rights related to those aspects of such technologies, and may result in payment of increased royalties (both increased royalty rates and increased royalties ceilings) and/or payment of additional amounts to the IIA. We may not receive such approvals. Furthermore, the IIA may impose certain conditions on any arrangement under which it permits us to transfer technology or development out of Israel (including for the purpose of manufacturing). Licensing IIA-supported technologies may, under certain circumstances, be considered a transfer of know-how and therefore may require approval as aforementioned. \nThe transfer of IIA-supported technology, manufacturing or manufacturing rights or know-how outside of Israel may involve the payment of additional amounts depending upon the value of the transferred technology or know-how, the amount of IIA support, the time of completion of the IIA-supported research project and other factors up to a maximum of six times the amount of the grants received. These restrictions and requirements for payment may impair our ability to sell our technology assets outside of Israel or to outsource or transfer development or manufacturing activities with respect to any product or technology outside of Israel. \nFurthermore, the consideration available to our shareholders in a transaction involving the transfer outside of Israel of technology or know-how developed with IIA funding (such as a merger or similar transaction) may be reduced by any amounts that we are required to pay to the IIA. \nOur obligations and limitations pursuant to the Research Law are not limited in time and may not be terminated by us at will. \nIt may be difficult to enforce a U.S. judgment against us, our officers and directors or to assert U.S. securities law claims in Israel. \nWe are incorporated in Israel. Some of our executive officers are not residents of the United States, and a substantial portion of our assets is located outside of the United States. Therefore, it may be difficult for an investor, or any other person or entity, to enforce a U.S. court judgment based upon the civil liability provisions of the U.S. federal securities laws in an Israeli court against us or any of these persons or to affect service of process upon these persons in the United States. Additionally, it may be difficult for an investor, or any other person or entity, to enforce civil liabilities under U.S. federal securities laws in original actions instituted in Israel. \nProvisions of Israeli law may delay, prevent or make undesirable an acquisition of all or a significant portion of our shares or assets. \nThe Companies Law regulates acquisitions of shares through tender offers, requires special approvals for transactions involving shareholders holding 25% or more of a companys capital, and regulates other matters that may be relevant to these types of transactions. These provisions of Israeli law could have the effect of delaying or preventing a change in control and may make it more difficult for a third party to acquire us, even if doing so would be beneficial to our shareholders. These provisions may limit the price<|endoftext|>By a number of factors, including events described in the risk factors set forth in this Annual Report and in our other reports filed with the SEC from time to time, as well as our operating results, financial condition and other events or factors. Any of the factors listed below could have a material adverse effect on your investment in our securities. Factors affecting the trading price of our securities may include: announcements by us or our competitors regarding technical developments and levels of performance achieved by our or their battery technologies; announcements by us regarding the timing of our production objectives, including regarding QS-0 and QS-1; announcements by us or Volkswagen regarding developments in our relationship with Volkswagen; our ability to bring our products and technologies to market on a timely basis, or at all; our operating results or development efforts failing to meet the expectation of securities analysts or investors in a particular period; actual or anticipated fluctuations in our quarterly financial results or the quarterly financial results of companies perceived to be similar to it; changes in the markets expectations about our operating results or the EV industry; success of competitors actual or perceived development efforts; changes in financial estimates and recommendations by securities analysts concerning the Company or the battery industry in general; operating and share price performance of other companies that investors deem comparable to the Company; disputes or other developments related to proprietary rights, including patents, litigation matters and our ability to obtain intellectual property protection for our technologies; the volume of shares of Class A Common Stock available for public sale; the level of demand for our stock, including the amount of short interest in our Class A Common Stock; sales of substantial amounts of the shares of Class A Common Stock by our directors, executive officers or significant stockholders or the perception that such sales could occur; the expiration of contractual lock-up agreements with our executive officers, directors and stockholders, which we have entered into, a significant portion of which expire in May 2021, and any future agreements we may enter into in the future from time to time; \nThe stock market in general, and the NYSE in particular, have experienced price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of the particular companies affected. A loss of investor confidence in the market for retail stocks or the stocks of other companies which investors perceive to be similar to the Company could depress our share price regardless of our business, prospects, financial conditions or results of operations. \nFollowing certain periods of volatility in the market price of our securities, we may become subject of securities litigation. We have experienced, and may in the future experience additional litigation following periods of volatility. This type of litigation may result in substantial costs and a diversion of managements attention and resources. \nAdditionally, the volatility of the stock directly impacts the fair value of the Assumed Common Stock Warrants; hence, continued volatility in our stock price could result in a corresponding volatility in the fair value of the liability associated with the Assumed Common Stock Warrants. \nShort sellers may engage in manipulative activity that could drive down the market price of our Class A Common Stock. \nShort selling is the practice of selling securities that the seller does not own but rather has borrowed or intends to borrow from a third party with the intention of later buying lower priced identical securities to return to the lender. Accordingly, it is in the interest of a short seller of our Class A Common Stock for the price to decline. Some short sellers publish, or arrange for the publication of, opinions or characterizations regarding which may create negative market momentum. Issuers, like us, whose securities have historically had limited trading volumes and/or have been susceptible to relatively high volatility levels can be particularly vulnerable to such short seller attacks. No assurances can be made that similar declines in the market price of our Class A Common Stock will not occur in the future, in connection with the activities of short sellers. \nSales of substantial amounts of our Class A Common Stock in the public markets, or the perception that such sales could occur, could reduce the price that our Class A Common Stock might otherwise attain. \nSales of a substantial number of shares of our Class A Common Stock in the public market after our March 2021 Public Offering or in connection with the expiration of certain lock-up contractual agreements in May 2021, or the perception that such sales could occur, could adversely affect the market price of our Class A Common Stock and may make it more difficult for you to sell your Class A Common Stock at a time and price that you deem appropriate. As of April 29, 2021, we have approximately \n259,611,491 shares of Class A Common Stock and 146,362,452 shares of Class B Common Stock outstanding. All of the shares of Class A Common Stock sold in the March 2021 Public Offering are freely tradable without restrictions or further registration under the Securities Act, except for any shares sold to any of our affiliates as defined in Rule 144 under the Securities Act. \nIn connection with the Business Combination Agreement and the transactions contemplated by the Business Combination Agreement, certain holders of the Companys securities entered into a Registration Rights and Lock-Up Agreement, and certain other lock-up agreements, pursuant to which they agreed to certain restrictions on the transfer of QuantumScape securities. \nIn addition, in connection with the March 2021 Public Offering, (i) we agreed that, without the prior written consent of Goldman Sachs & Co. LLC and Morgan Stanley & Co. LLC on behalf of the underwriters and subject to certain exceptions, we will not offer, sell, or agree to sell, directly or indirectly, any Company securities for a period of 90 days from the date of the final prospectus relating to the March 2021 Public Offering, and (ii) each of our directors and executive officers agreed with the underwriters, subject to certain exceptions, not to dispose of or hedge any shares of our common stock or securities convertible into or exchangeable for shares of our common stock during the period from the date of such agreement continuing through May 21, 2021, except with the prior written consent of Goldman Sachs & Co. LLC and Morgan Stanley & Co. LLC. \nCertain stockholders are entitled to require us to register shares owned by them for public sale in the United States, and we have filed a Registration Statement on Form S-1 (Registration No. 333-251433) (the Resale S-1), which the SEC has previously declared effective, to register those shares. However, such Resale S-1 must be amended in connection with the restatement and the SEC will need to declare the amended Resale S-1 effective. In addition, we have filed a registration statement to register shares reserved for future issuance under our equity compensation plans. Subject to there being effective registration statements covering the sales of such shares, the satisfaction of applicable exercise periods and expiration of the lock-up agreements referred to above, the shares issued upon exercise of outstanding stock options and settlement of outstanding restricted stock units will be available for immediate resale in the United States in the open market. \nPurchasers of our Class A Common Stock in our March 2021 Public Offering incurred immediate and substantial dilution. \nInvestors who purchased Class A Common Stock in our March 2021 Public Offering paid a price per share that substantially exceeds the book value of our tangible assets after subtracting our liabilities. This dilution is due to the substantially lower price paid by our investors who purchased shares prior to our March 2021 Public Offering as compared to the price offered to the public in our March 2021 Public Offering, and any previous exercise of stock options granted to our service providers. In addition, as of March 31, 2021, options to purchase shares of our Class A Common Stock and warrants to purchase shares of our Class A Common Stock were outstanding, as set forth elsewhere in this Report and the exercise of any of these options or warrants would result in additional dilution. As a result of this dilution, investors who purchased shares in our March 2021 Public Offering may receive less than the purchase price they paid in our March 2021 Public Offering, if anything, in the event of our liquidation. \nWe have broad discretion in the use of the net proceeds from our March 2021 Public Offering and may not use them effectively. \nOur management has broad discretion in the application of the net proceeds from our \nMarch 2021 \nP ublic \n### O ffering \n, including to provide sufficient funding to build the larger version of QS-0, to fund QS-0 operating expenses, to fund our share of the equity portion of the joint ventures costs of building the QS-1 Expansion, net of debt intended to be incurred by the joint venture, and for working capital and general corporate purposes, and we may spend or invest these proceeds in a way with which our stockholders disagree. Because of the number and variability of factors that will determine our use of the net proceeds from our March 2021 \nP ublic \nO ffering \n, our ultimate use of such proceeds may vary substantially from our currently intended use. \nThe failure by our management to apply these proceeds effectively could harm our business, and we may invest such proceeds in a manner that does not produce income or that loses value, which may negatively impact the market price of our common stock. \nOur business model of manufacturing solid-state batteries is capital-intensive, and we may not be able to raise additional capital on attractive terms, if at all, which could be dilutive to stockholders. If we cannot raise additional capital when needed, our operations and prospects could be materially and adversely affected. \nThe development, design, manufacture and sale of batteries is a capital-intensive business, which we currently finance through joint venture arrangements and other third-party financings. As a result of the capital-intensive nature of our business, we can be expected to continue to sustain substantial operating expenses without generating sufficient revenues to cover expenditures. Over time, we expect that we will need to raise additional funds, including through entry into new or extending existing joint venture arrangements, through the issuance of equity, equity-related or debt securities or through obtaining credit from financial institutions to fund, together with our principal sources of liquidity, ongoing costs such as research and development relating to our batteries, the construction of large factories, any significant unplanned or accelerated expenses, and new strategic investments. We cannot be certain that additional capital will be available on attractive terms, if at all, when needed, which could be dilutive to stockholders, and our financial condition, results of operations, business and prospects could be materially and adversely affected. \nThe dual class structure of our Common Stock has the effect of concentrating voting control with the current holders of ClassB Common Stock. This will limit or preclude the ability of other stockholders to influence corporate matters, including the outcome of important transactions, including a change in control. \nShares of ClassB Common Stock have 10 votes per share, while shares of ClassA Common Stock have one vote per share. Although no one holder or group of holders has control of more than 30% of the voting power of our capital stock, as of April29, 2021 the holders of the ClassB Common Stock control approximately 84% of the voting power of our capital stock and therefore collectively control matters submitted to our stockholders for approval, including the election of directors, amendments of our organizational documents and any merger, consolidation, sale of all or substantially all of our assets or other major corporate transactions. Even though these holders are not party to any agreement that requires them to vote together, they may have interests that<|endoftext|>Approved by the Companys foreign subsidiary during July and December of 2019, with the cash distribution to the noncontrolling interest of $ \n137,000 and $ \n, respectively, paid during those respective months. \nIt should be noted that from time to time, the Board may elect to pay special dividends, in addition to or in lieu of the regular quarterly dividends, depending upon the financial condition of the Company. Special dividends are indicated in the above schedule as \n(S) \n### The Board approved and granted a total of \n2,500 restricted stock unit awards (the Awards) to be allocated to the existing non-employee directors of the Company. The Awards were approved by the shareholders of the Company at the annual meeting on June 11, 2019, and distributed on June 20, 2019. A Form S-8 registration statement, and the restricted stock unit award agreements, were filed with the SEC on December 13, 2018 ( \n2,000 units) and May 24, 2019 ( \n500 units). The related director compensation cost of approximately $ \n217,000 was recognized during June 2019. \nOn April 4, 2014, the Board authorized an extension of its stock repurchase program without expiration, up to a maximum amount of $ \nThe original program established in December 2007 authorized the purchase of up to $ \n5,000,000 of its common stock. The purchases may be made from time-to-time in the open market or in privately negotiated transactions, depending on market and business conditions. The Board retained the right to cancel, extend, or expand the share buyback program, at any time and from time-to-time. Since inception, the Company has purchased a total of \n61,811 shares for approximately $ \n, or approximately $ \n15 per share, which were held as treasury shares. The Company has not made any stock repurchases since 2014; however, as stated above, there were \n2,500 shares distributed from treasury to non-employee directors during June 2019. \n7. \n### INCOME TAXES \nIncome tax expense consisted of the following: \nSCHEDULE OF COMPONENTS OF INCOME TAX EXPENSE (BENEFIT) \n### Pre-tax income included foreign income of $ \n, $ \n3,330,000 and $ \n3,123,000 in 2020, 2019 and 2018, respectively. \nTotal income tax expense differed from statutory income tax expense, computed by applying the U.S. federal income tax rate of 21% to earnings before income tax, as follows: \nSCHEDULE OF EFFECTIVE INCOME TAX RATE RECONCILIATION \nA deferred income tax (expense) benefit results from temporary timing differences in the recognition of income and expense for income tax and financial reporting purposes. The components of and changes in the net deferred tax assets (liabilities) which give rise to this deferred income tax (expense) benefit for the years ended December 31, 2020 and 2019 are as follows: \n### SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES \nManagement believes it is more likely than not that the Company will have sufficient taxable income when these timing differences reverse and that the deferred tax assets will be realized with the exception of a carryover of foreign operating losses. Due to the uncertainty of future income in the foreign subsidiary, the Company has recognized a valuation allowance related to the foreign operating losses carrying forward. \nThe Company is currently subject to audit by the Internal Revenue Service for the calendar years ended 2017 through 2019. The Company and its Subsidiaries state income tax returns are subject to audit for the calendar years ended 2016 through 2019. \nAs of December 31, 2020, the Company had no liability for unrecognized tax benefits related to various federal and state income tax matters. \n8. \n### LEASES \nIn the U.S., the Company owns its two main operating facilities located in Exton, Pennsylvania. In addition to the owned facilities, the Company also has operations in other locations that are leased, as well as other leased assets. In conjunction with the new guidance for leases, as defined by the FASB with ASU 2016-02, \nLeases \n(Topic 842), the Company has described the existing leases, which are all classified as operating leases, pursuant to the below. \nIn the U.S., the Company leases a facility in Houston, Texas, which currently provides manufacturing, stocking and sales operations, with the lease term running through October 2024. \nAdditionally, the Company leases its corporate office space in Middletown, Connecticut, with the lease term expiring in June 2022 \nIn the U.K., the Company leases a facility in Banbury, England, which serves manufacturing, warehousing, and other operational functions. \nThe lease in Banbury was effective April 1, 2006 and has a \n15-year term ending in March 2021, and currently being negotiated for renewal \nIn addition to property rentals, the Company also has lease agreements in place for various fleet vehicles and equipment with various lease terms. \nIn the December 31, 2020 consolidated balance sheet, the Company has recorded right-of-use assets of $ \n, and a lease liability of $ \n, of which $ \n247,000 is reported as a current liability. The respective weighted average remaining lease term and discount rate are approximately \n2.41 years and \n2.81% \nRent expense for operating leases was approximately $ \n, $ \n298,000 and $ \n377,000 for the years ended December 31, 2020, 2019 and 2018, respectively. \nFuture minimum lease payments, inclusive of interest, under non-cancelable leases as of December 31, 2020 is as follows: \nSCHEDULE OF FUTURE MINIMUM RENTAL PAYMENTS FOR OPERATING LEASES \n9. \n### EMPLOYEE BENEFIT PLANS \nDefined Contribution and 401(K) Plans \nThe Company maintains a qualified non-contributory profit-sharing plan (the Plan) covering all eligible employees. There were $ \n, $ \n380,000 and $ \n361,000 of contributions accrued for the Plan in 2020, 2019 and 2018 respectively, which were charged to expense in those respective years. \nContributions to the Plan are defined as three percent ( \n3% \n) of gross wages up to the current Old Age, Survivors, and Disability (OASDI) limit and six percent ( \n6% \n) of the excess over the OASDI limit, subject to the maximum allowed under the Employee Retirement Income Security Act (ERISA). Participants vest over six years. \nThe Company also maintains a savings and retirement plan qualified under Internal Revenue Code Section 401(k) for all employees. Employees are eligible to participate in the Plan the first day of the month following date of hire. Participants may elect to have up to fifty percent ( \n50% \n) of their compensation withheld, up to the maximum allowed by the Internal Revenue Code. After completing one year of service, the Company contributed an additional amount equal to \n50% of all employee contributions, up to a maximum of \n6% of an employees gross wages. \nContributions are funded on a current basis. Contributions to the Plan charged to expense for the years ended December 31, 2020, 2019 and 2018 were $ \n, $ \n276,000 and $ \n, respectively. The participants Company contribution vests ratably over six years. \n10. \n\nCommitments: \nUnder a number of indemnity agreements between the Company and each of its officers and directors, the Company has agreed to indemnify each of its officers and directors against any liability asserted against them in their capacity as an officer or director, or both. The Companys indemnity obligations under the indemnity agreements are subject to certain conditions and limitations set forth in each of the agreements. Under the terms of the Agreement, the Company is contingently liable for costs which may be incurred by the officers and directors in connection with claims arising by reason of these individuals roles as officers and directors. The Company has obtained directors and officers insurance policies to fund certain obligations under the indemnity agreements. \nThe Company has salary continuation agreements with current and/or past employees. These agreements provide for monthly payments to each of the employees or their designated beneficiary upon the employees retirement or death. \n### The payment benefits range from $ \n1,000 per month to $ \n3,000 per month with the term of such payments limited to 15 years after the employees retirement. \nThe agreements also provide for survivorship benefits if the employee dies before attaining age 65, and severance payments if the employee is terminated without cause; the amount of which is dependent on the length of company service at the date of termination. The net present value of the retirement payments associated with these agreements is $ \n499,000 at December 31, 2020, of which $ \n436,000 is included in Other Long Term Liabilities, and the remaining current portion of $ \n63,000 is included in Other Liabilities, associated with the applicable retirement benefit payments over the next twelve months. The December 31, 2019 liability of $ \n492,000 had $ \n480,000 reported in Other Long Term Liabilities, and a current portion of $ \n12,000 in Other Liabilities. \nThe Company has obtained and is the beneficiary of life insurance policies with respect to current and/or past employees. The cash surrender value of such policies (included in Other Long Term Assets) amounts to $ \n1,556,000 at December 31, 2020 and $ \n1,417,000 at December 31, 2019. \nIn addition to the above, the Company has other contractual employment and or change of control agreements in place with key employees, as previously disclosed and noted in the Exhibit Index to this Form 10-K. Obligations related to these arrangements are currently indeterminable due to the variable nature and timing of possible events required to incur such obligations. \nAs disclosed in detail in Note 8, under the caption Leases, the Company has several lease obligations in place that will be paid out over time. Most notably, the Company leases a facility in Banbury, England that serves the manufacturing, warehousing and distribution functions. \nLastly, as provided earlier in Item 7 under the Tabular Disclosure of Contractual Obligations and Off-Balance Sheet Arrangements, the Company has numerous purchase obligations in place for the forthcoming year, largely related to the Companys core material inventory components, totaling $ \n### Contingencies: \nThe Claims relate to potential lightning damage to our flexible gas piping products, which impact legal and product liability related expenses. The Company does not believe the Claims have legal merit, and therefore has commenced a vigorous defense in response to the Claims. It is possible that the Company may incur increased litigation costs in the future due to a variety of factors, including a higher number of Claims, higher legal costs, and higher insurance deductibles or retentions. \nIn September 2017, a putative class action case was filed against the Company and other parties in Missouri state court. The Company successfully removed the case to federal court, and in August 2020, the court granted the defendants joint summary judgement motion, and dismissed the case. The parties have fully resolved the plaintiffs appeal of that decision, and the case has been dismissed by the plaintiffs, thus concluding the matter. \nThe Company was made aware of a potential legal liability regarding a legal dispute in the U.K., in which the Companys subsidiary, Omega Flex Limited (OFL), was the claimant. After withdrawing the claim, the court determined that OFL was responsible for the defendants costs (including a portion of its attorneys fees). The Company reached an initial agreement during the fourth quarter and made a payment of \n320,000 accordingly. A nominal liability remains at December 31, 2020 approximating any outstanding amounts that may potentially be due as part of the final arrangement. \nThe Company has in place commercial general liability insurance policies that cover most Claims, which are subject to deductibles or retentions, ranging primarily from $ \n25,000 to $ \n2,000,000 per claim (depending on the terms of the policy and the applicable policy year), up to an aggregate amount. Litigation is subject to many uncertainties and management is unable to predict the outcome of the pending suits and claims. The potential liability for a given claim could range from zero to a maximum of $ \n, depending upon the circumstances, and insurance deductible or retention in place for the respective claim year. The aggregate maximum exposure for all current open Claims as of December 31, 2020 is estimated to not exceed approximately $ \n, which represents the potential costs that may be incurred over time for the Claims within the applicable insurance<|endoftext|>Actual results of operations would have been for the periods indicated, nor does it purport to represent the Company's future results of operations. \nThe following table summarizes on an unaudited pro forma basis the Company's results of operations for the years ended May 31, 2019: \nNet revenue \n$ \nNet loss \n(367,097) \nNet loss per share - basic and diluted \n$ \n(0.00) \nWeighted average number of shares of common stock outstanding - basic and diluted \nCANNABIS SUISSE CORP. \n(Formerly Geant Corp.) \n\nMAY 31, 2020 and 2019 \nThe calculations of pro forma net revenue and pro forma net loss give effect to the business combination for the period from June 1, 2018 until the respective closing dates for (i) the historical net revenue and net income (loss), as applicable, of the acquired businesses, and (ii) incremental depreciation and amortization for the business combination based on the fair value of property, equipment and identifiable intangible assets acquired and the related estimated useful lives. \nNOTE 5 \n### PROPERTY AND EQUIPMENT \nFor the years ended May 31, 2020 and 2019 the Company recognized depreciation expense in the amount of $20,071 and $5,503, respectively. \nNOTE 6 \n\n\n\nThe Company implemented a new accounting policy according to the ASC 842, \n### Leases \n, on June 1, 2019 on a modified retrospective basis and did not restate comparative periods. Under the new policy, the Company recognized approximately $146,243 lease liability as well as right-of-use asset for all leases (with the exception of short-term leases) at the commencement date. Lease liabilities are measured at present value of the sum of remaining rental payments as of May 31, 2020, discounted at the incremental borrowing rate. A single lease cost is recognized over the lease term on a generally straight-line basis. All cash payments of operating lease cost are classified within operating activities in the statement of cash flows. \nAs of May 31, 2020 and 2019, the right-of use asset and lease liabilities are as follows: \nCANNABIS SUISSE CORP. \n(Formerly Geant Corp.) \n\nMAY 31, 2020 and 2019 \nLease cost and other information \n### Year ended \nMay 31, 2020 \nMay 31, 2019 \nOperating lease cost \n$ \n$ \nWeighted average remaining lease term - Operating leases (years) \n- \nWeighted average discount rate \n3% \n- \nRequired future principal payments under the Company s lease obligation are set forth below: \nYear ending May 31 \n### NOTE 7 - BANK INDEBTEDNESS \nOn March 26, 2020, due to COVID-19 the Company's Subsidiary, Cannabis Suisse LLC, entered into a loan agreement with a bank for CHF60,000. The loan carries an interest rate of 0.5% per year. The term of the loan is 5 years. The state acts as the guarantor for this loan. Accrued interest on this loan was $0 as of May 31, 2020. \nNOTE 8 \n\nIn addition, the Company s president has agreed to provide production space in Sri Lanka at no charge for the production of goods through December 2020. \nThe Company received $359,147 and $200,000 as advances from the Company s secretary, Cecillia Jensen, as of May 31, 2020 and 2019, respectively. \nThe Company received $3,622 as a long-term loan as of May 31, 2020 and 2019. This loan is interest-free. \nThe Company's cash in the amount of $10,040 as of May 31, 2020, was held by the Company's Secretary. The balance is included in related party receivable on the consolidated balance sheets. \nNOTE 9 \n### COMMON STOCK \nOn January 23, 2019, the Company effected a forward split of the outstanding common stock on a one (1) for twenty (20) basis. \nAll share figures have been retroactively restated to reflect the stock split. \nOn February 20, 2019, the Company filed a Certificate of Amendment to its Articles of Incorporation with the Nevada Secretary of State which increased the Company s authorized shares of common stock from 75,000,000 to 250,000,000. \nAlso, during the year ended May 31, 2019, the Company had 32,600,000 shares of common stock returned. On March 8, 2019, a total of 22,600,000 shares related to the cancellation of restricted shares were returned to reduce the director s percentage of shares. On May 31, 2019, 10,000,000 shares were returned to be issued for the acquisition of Cannabis Suisse LLC. \nCANNABIS SUISSE CORP. \n(Formerly Geant Corp.) \n\nMAY 31, 2020 and 2019 \nA total of 10,000,000 shares of restricted stock were issued in the name of Cecillia Merige Jensen in accordance with the material definitive agreement dated May 31, 2019. Suneetha Nandana Silva Sudusinghe, the President of the Company, on behalf of the Company entered into a Stock Transfer Agreement with Cecillia Merige Jensen. Following the terms of the Agreement, the Company acquired all the issued and outstanding capital stock of Cannabis Suisse LLC. In exchange, Ms. Jensen received 10,000,000 shares of common stock of the Company. \nNOTE 10 \n### REPORTABLE SEGMENTS \nReportable Segments \nThe Company follows segment reporting in accordance with ASC Topic 280, \n### Segment Reporting \nAs a result of the business combination with Cannabis Suisse LLC in May 2019 as discussed in Note 4, the Company has changed its operating segments to consist of the Cannabis Suisse LLC segment and the Cannabis Suisse Corp segment. After the Cannabis Suisse LLC business combination, the Company's CEO began assessing performance and allocating resources based on the financial information of these two reporting segments. \nThe Cannabis Suisse Corp segment produces the paper made from elephant dung for making various stationery products and subsequent selling thereof. The Cannabis Suisse LLC segment is involved in cannabis cultivation and distribution in Switzerland of recreational tobacco products and medical CBD oils. \nNet revenue by reporting segment for the years ended May 31, 2020 and 2019, is as follows: \nGross profit by reporting segment for the years ended May 31, 2020 and 2019, is as follows: \nAssets by reporting segment as of May 31, 2020 and 2019, is as follows: \nNOTE 11 \n### INCOME TAXES \nThe Company adopted the provisions of uncertain tax positions as addressed in ASC 740-10-65-1. As a result of the implementation of ASC 740-10-65-1, the Company recognized no increase in the liability for unrecognized tax benefits. \nCANNABIS SUISSE CORP. \n(Formerly Geant Corp.) \n\nMAY 31, 2020 and 2019 \nThe Company has no tax position at May 31, 2020 for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility. The Company does not recognize interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses. No such interest or penalties were recognized during the period presented. The Company had no accruals for interest and penalties at May 31, 2020. The Company s utilization of any net operating loss carry forward may be unlikely as a result of its intended activities. \nThe valuation allowance at May 31, 2020 was $95,651. The net change in valuation allowance during the year ended \nMay 31, 2020 was $81,737.In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred income tax assets will not be realized.The ultimate realization of deferred income tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible.Management considers the scheduled reversal of deferred income tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. \nBased on consideration of these items, management has determined that enough uncertainty exists relative to the realization of the deferred income tax asset balances to warrant the application of a full valuation allowance as of May 31, 2020 and 2019. All tax years since inception remains open for examination only by taxing authorities of US Federal and state of Nevada. \nThe Company has a net operating loss carryforward for tax purposes totaling $455,482 at May 31, 2020, expiring through fiscal year 2036. There is a limitation on the amount of taxable income that can be offset by carryforwards after a change in control (generally greater than a 50% change in ownership). \nThe components of the Company s deferred tax asset and reconciliation of income taxes computed at the new statutory rate of 21% to the income tax amount recorded as of May 31, 2020 and 2019 are as follows: \nThe change in the valuation allowance during the years ended May 31, 2020 and 2019 was $81,737 and $4,774, respectively. \n### May 31, 2020 \nMay 31, 2019 \nFederal income tax benefit attributed to: \nNet operating loss from continuing operations \n$ \n$ \nValuation allowance \n(95,651) \n(13,914) \nNet benefit \n$ \n- \n$ \n- \n### NOTE 12 - CONCENTRATION OF CREDIT RISK \nFinancial instruments that potentially subject the Company to concentration of credit risk consist principally of cash deposits. Accounts at each institution are insured by the Federal Deposit Insurance Corporation ( \nFDIC \n) up to $250,000. The Company did not have cash in excess of FDIC insured limit as of May 31, 2020 and 2019. \nNOTE 13 \n### SUBSEQUENT EVENTS \nIn accordance with SFAS 165 (ASC 855), \nSubsequent Events the Company has analyzed its operations subsequent to May 31, 2020 to the date these consolidated financial statements were issued, and has determined that it does not have any other material subsequent events to disclose in these consolidated financial statements. \nItem 9. \nOn April 12, 2019, Cannabis Suisse Corp. (theRegistrant) was notified that Fruci & Associates II, PLLC (Fruci & Associates) has resigned as the Registrants independent registered public accounting firm due to the Registrants expansion into additional foreign markets and a change in the Registrants focus. \nDuring the engagement period (September 3, 2018 to April 12, 2019) (i) there have not been disagreements between Cannabis Suisse Corp. and Fruci & Associates on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure which, if not resolved to the satisfaction of Fruci & Associates would have caused Fruci & Associates to make reference to the matter in a report on the Registrants financial statements; and (ii) there have not been reportable events as the term described in Item 304(a)(1)(v) of Regulation S-K. \nThe Company engaged Accell Audit & Compliance, PA (Accell) to serve as the Registrants independent registered public accounting firm for the years ended May 31, 2020 and 2019. \n### Item 9A(T) Controls and Procedures \nManagement s Report on Internal Controls over Financial Disclosure Controls and Procedures \nThe Company s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America. Under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer, the Company conducted an evaluation of the effectiveness of the Company s internal control over financial reporting as of May 31, 2020 using the criteria established in \nInternal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (\"COSO\"). \nA material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company s annual or interim financial statements will not be prevented or detected on a timely basis. In its assessment of the effectiveness of internal control over financial reporting as of May 31, 2020, the Company determined that there were control deficiencies that constituted material weaknesses, as described below. \n\nWhile not being legally obligated to have an audit committee, it is the management s view that such a committee, including a financial expert member, is an utmost important entity level control over the Company s financial statements. Currently the Board of Directors acts in the capacity of the Audit Committee, and does not include a member that is considered to be independent of management to provide the necessary oversight over management s activities. \n### We did not maintain appropriate cash controls \nAs of May 31, 20 \n, the Company has not maintained sufficient internal controls over financial reporting<|endoftext|>See the definitions of large accelerated filer, accelerated filer \n, smaller reporting company and emerging growth company in Rule 12b-2 of the Exchange Act: \nLOVARRA \nANNUAL REPORT ON FORM 10-K \n### PART I \nItem 1. Description of Business \nWe are a development-stage company, incorporated on January 29, 2018 in the state of Nevada, with a fiscal year end of December 31. We are intending to develop, market and sell a subscription-based income/expense tracking application service. The management is also discussing providing a secure physical wallet that only opens once an expenditure/earning is reflected in the application. Our operations have been limited to researching the marketplace for our proposed income/expense application product possibly connected to a physical wallet and the issues entailed in developing these products, as well as the preliminary design and development of our website. We have not yet implemented our business model or undertaken development of our proposed income/expense product nor the possible physical wallet. To date, we have generated no revenues from our operations. There can be no assurances that our efforts to develop our proposed income/expense service will succeed, or that we will be able to market our proposed income/expense service or the potential physical wallet, if developed. \n### The Application \nOur proposed LOVARRA Application (LOVARRA) will be an expense and earnings tracker with all necessary features. The functionality of our future product shall include but will not be limited the following functionality: \nGENERAL: \n### Tracking both expenses and income. \nSupport for multiple accounts and transfers between them. \nAll entries, accounts, tags, parties and groups can be edited or deleted at any time. \n### Photo and file attachments. \nPasscode protection to hide your financial data from unwanted eyes. \nRecurring entries, both expenses and earnings, with rich frequency options. \nHistory to view and adjust your previous entries. \n### Tags to organize your entries the way you like. \nAbility to specify vendors/payees and clients/payers (parties). \nGroups to separate your regular expenses from business or holiday trips. \nTime of entries is recorded as well. \n### REPORTS: \nInstant reports for any period of time and kind of expenses. \nTimeline bar graph reports for days, weeks and months, with whatever filter you set. \nStructure of expenses and income, split by tags, parties, accounts or groups, in percentages and absolute amounts, for any report filter. \nDaily, weekly and monthly averages. \nReports for particular hours. \n### Instant account balances. \nReport filter presets - switch between your favorite reports with just a tap. \nMULTIPLE CURRENCIES: \n### Full support for over 160 world currencies. \nQuick toggle between the currencies you are using most often. \nCurrency conversion, with both automatically retrieved and user-defined exchange rates. \nAdjustable exchange rates update mode to reduce traffic fees (automatic, Wi-Fi only, manual). \n### EXPORT AND IMPORT: \nAbility to analyze your entries in a spreadsheet using CSV export. \nBackup and restore your data and settings over Wi-Fi or Email. \nDefault email address to speed-up exporting via Email. \n### Why physical wallet? \nIn future, once we start generating revenues, we plan on developing a physical wallet with a lock on it. The lock will open via Bluetooth at a moment a user makes an entry to the application. That way we will exclude a chance for an expense or an income occur and stay unrecorded, thus, significantly increasing the efficiency of the users budget planning and monitoring of their monies. The scope of the project is huge, and we expect it to take at least 12 months to be completed. \n### Monetization of the project: \nWe plan on providing one-month free trial for users to look-and-feel its usage comfort and enjoy its design. After that, users will be offered to purchase in-app subscriptions for 6/12/24 months. They will be able to pay simply using a credit/debit card that has been previously linked to the App. \nFurther, when the business is successful and as the physical wallets are developed, they will be available for sale on our website or purchased through the App. \nThe wallets will be delivered to their new owners with a promo-code of one-year App subscription. \nMonetization from in-app advertisements will also be one of our income sources. We also maintain website at lovarra.com \n\nWe have no employees other than Vadim Rata, our president and director, and Nicolai Moldovanu, our secretary, treasurer and director. Neither Mr. Rata nor Mr. Moldovanu is employed elsewhere so they have the flexibility and willingness to devote all of their time to working on our company and are not paid a salary or compensation. \nWe presently do not have pension, health, annuity, insurance, stock options, profit sharing, or similar benefit plans; There are presently no personal benefits available to our directors for time spent as directors. \n### Item 1A. Risk Factors \nNot applicable to our Company. \nItem 1B. Unresolved Staff Comments \nNot applicable to our Company. \n### Item 2. Description of Property \nNot applicable to our Company. \nItem 3. Legal Proceedings \n\n### Item 4. Mine Safety Disclosures \nNot applicable to our Company. \nPART II \nItem 5. \nShares of Lovarra common stock are traded on OTC Markets under the ticker LOVA. \nNone of our issued and outstanding common stock is eligible for sale pursuant to Rule 144 under the Securities Act of 1933. Rule 144, as currently in effect, allows a person who has beneficially owned shares of a company's common stock for at least twelve months to sell within any three-month period a number of shares that does not exceed the greater of: \n1. One percent of the number of shares of the subject company's common stock then outstanding; or, \n2. The average weekly trading volume of the subject company's common stock during the four calendar weeks preceding the filing of a notice on Form 144 with respect to the sale. \nSales of common stock under Rule 144 are also subject to manner of sale provisions, notice requirements, and the subject company must be current in its public information filings. \nUnder Rule 144(k), a person who is not one of the subject company's affiliates at any time during the twelve months preceding a sale, and who has beneficially owned the shares proposed to be sold for at least two years, is entitled to sell shares without complying with the manner of sale, public information, volume limitation or notice provisions of Rule 144. \nWe registered 5,000,000 shares of our common stock under the Securities Act of 1933, as amended, for sale. As of December 31, 2020, there were 31 holders of record of our common stock \nWe have not declared any dividends on our common stock since the inception of our company. There is no restriction in our articles of incorporation or bylaws that will limit our ability to pay dividends on our common stock. However, we do not anticipate declaring and paying dividends to our shareholders in the near or foreseeable future. \nThe Company has 70,000,000 shares of common stock authorized with a par value of $0.001 per share. \nOn April 20, 2018, the Company issued 4,500,000 shares of common stock to a director for cash proceeds of $4,500 at $0.001 per share. \n\nThere were 5,731,000 shares of common stock issued and outstanding as of December 31, 2020. \n### Item 6. Selected Financial Data \nNot applicable to our companies. \nItem 7. \nThe following discussion should be read in conjunction with our audited financial statements and the related notes that appear elsewhere in this registration statement and prospectus. \n\nOur audited financial statements are stated in U.S. dollars and are prepared in accordance with U.S. (US GAAP). \n### Company Overview \nWe are a development-stage company that intends to provide subscription-based, highly secure expense and earnings tracking application service for personal and corporate use. We have recently commenced business operations and have not generated any revenues to date. \nRESULTS OF OPERATION \nFor the year ended December 31, 2020, the Company has a net loss of $26,022. \n\nRevenue \nDuring the year ended December 31, 2020 and 2019, the Company has not earned any revenue. \n### Operating Expenses \nDuring the year ended December 31, 2020, we incurred total expenses and professional fees of $26,022 compared to $11,113 during the year ended December 31, 2019. General and administrative and professional fee expenses incurred generally related to corporate overhead, financial and administrative contracted services, such as legal and accounting and increase was due to legal and accounting expenses relating to our 10-Q and 10-K filing statements with the SEC. During the year, we also incurred $11,000 of DTC costs. \nNet Loss \nOur net loss for the year ended December 31, 2020 was $26,022 compared to net loss of $11,113 during the year ended December 31, 2019. \n\nAs of December 31, 2020, our total assets were $5,382 compared to $137 in total assets as of December31, 2019. The increase in assets is connected with the cash proceeds that came from the issuance of common stock to our shareholders. \nAs of December 31, 2020 and, 2019, our liabilities were $20,225 and $7,365, respectively. The increase is due to additional funds contributed by our President and Director for operations. \nStockholders deficit was $14,843 as of December 31, 2020, compared to stockholders deficit of $7,228 as of December 31, 2019.The difference was due to operations during the year ended December 31, 2020 which was supported by cash funding from our President and Director as opposed to the issuance of common shares and cash proceeds from our shareholders. \n\nFor the year ended December 31, 2020, net cash flows used in operating activities were $13,820 compared to $6 during the year ended December 31, 2019. \n\nCash provided by financing activities during the year ended December 31, 2020 was $18,407 compared to $50 as of December 31, 2019. Financing for the current year was provided by the issuance of 1,231,000 shares of common stock to our shareholders. \n\n\nExisting working capital, further advances and debt instruments, and anticipated cash flow are expected to be adequate to fund our operations over the next twelve months. In connection with our business plan, management anticipates additional increases in operating expenses and capital expenditures relating to: (i) acquisition of inventory; and (iii) marketing expenses. \n\n\nItem 7A. \n### Not applicable to our company. \nItem 8. \nLOVARRA \n### Financial Statements \n\n(expressed in U.S. dollars) \n### Index \n\n### Condensed Balance Sheets \nCondensed Statements of Operations and Comprehensive Loss \n### Condensed Statements of Stockholders \nEquity (Deficit) \n\n\n\nTo the Board of Directors and Stockholders of Lovarra \n\nWe have audited the accompanying balance sheets of Lovarra (the \nCompany \n) as of December 31, 2020 and 2019, and the related statements of operations and comprehensive loss, stockholders equity (deficit), and cash flows for the years then ended and related notes (collectively, the financial statements \n). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as at December 31, 2020 and 2019, and the results of their operations and cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America. \n### Explanatory Paragraph Regarding Going Concern \nAs discussed in Note 1 to the financial statements, the Company has no revenues, and has incurred operating losses and negative cash flows from operations since inception. As at December 31, 2019, the Company has a working capital deficit of $14,843 and an accumulated deficit of $37,750. These factors raise substantial doubt about the Company s ability to continue as a going concern. Management s plans in regard to these matters are also discussed in Note 1 to the financial statements. \n### Basis for Opinion \nOur responsibility is to express an opinion on the Company s financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ( \n### PCAOB \n) and are required to be independent with respect to the Company in accordance with the U.S. \nAs part of our audits, we are required to obtain an understanding of the Company s internal controls over financial reporting, but not for the purpose of expressing an opinion<|endoftext|>Directors. \n\nSubject to phase-in rules and certain limited exceptions, Nasdaq rules and Rule 10A-3 of the Exchange Act require that the audit committee of a listed company be comprised solely of independent directors. \nAudit Committee \nMr. Zurita, Ms. Blechman and Ms. Chan serve as members of our audit committee, and Mr. Zurita chairs the audit committee. Under the Nasdaq listing standards and applicable SEC rules, we are required to have at least three members of the audit committee, all of whom must be independent, subject to certain phase-in provisions. Mr. Zurita and Ms. Blechman meet the independent director standard under Nasdaq listing standards and under Rule10-A-3(b) (1)of the Exchange Act. We intend to appoint one additional independent director to our audit committee to replace Ms. Chan within one year following the initial public offering pursuant to the Nasdaq phase-in provisions for initial public offerings. \nZurita qualifies as an audit committee financial expert as defined in applicable SEC rules. \nobtaining and reviewing a report, at least annually, from the independent registered public accounting firm describing (i)the independent registered public accounting firms internal quality-control procedures, (ii)any material issues raised by the most recent internal quality-control review, or peer review, of the audit firm, or by any inquiry or investigation by governmental or professional authorities within the preceding five years respecting one or more independent audits carried out by the firm and any steps taken to deal with such issues and (iii)all relationships between the independent registered public accounting firm and us to assess the independent registered public accounting firms independence; \n### Compensation Committee \nMr. Zurita and Ms. Blechman serve as members of our compensation committee. Under the Nasdaq listing standards and applicable SEC rules, we generally would be required to have at least two members of the compensation committee, all of whom must be independent, subject to certain limited exceptions set forth under the rules of Nasdaq. Mr. Zurita and Ms.Blechman are each independent and Mr. Zurita chairs the compensation committee. \n\n\n### Director Nominations \nThe directors who participate in the consideration and recommendation of director nominees are Mr. Zurita and Ms. Blechman, and upon selection of an additional independent director will include such additional director. In accordance with Rule 5605 of the Nasdaq rules, each of Mr. Zurita and Ms. Blechman is independent. \nThe board of directors also considers director candidates recommended for nomination by our stockholders during such times as they are seeking proposed nominees to stand for election at the next annual meeting of stockholders (or, if applicable, a special meeting of stockholders). However, prior to our initial business combination, holders of our public shares will not have the right to recommend director candidates for nomination to our board of directors. \n\n### Code of Ethics \nWe have filed a copy of our Code of Ethics and our audit and compensation committee charters as exhibits to the Registration Statement. \n\nItem 11. \n### Executive Compensation \n\nExcept as described below, to date, no compensation of any kind, including any finders fee, reimbursement, consulting fee or monies in respect of any payment of a loan, has been or will be paid by us to our officers and directors, or, other than as described herein, to the sponsor or any affiliate of the sponsor or officers, prior to, or in connection with any services rendered in order to effectuate, the consummation of our initial business combination (regardless of the type of transaction that it is). However, either the sponsor will transfer up to 15,000 founder shares to each of our independent directors or we will pay cash fees to such directors, at our discretion. In December 2020, our sponsor transferred 15,000 founder shares to each of Mr. Zurita and Ms. Blechman. We pay an amount equal to $10,000 per month to the sponsor for office space, administrative and shared personnel support services. In addition, our officers and directors will be reimbursed for any out-of-pocket expenses incurred in connection with activities on our behalf such as identifying potential target businesses and performing due diligence on suitable business combinations. Our audit committee will review on a quarterly basis all payments that were made to the sponsor, our officers or directors, or our or their affiliates. Other than quarterly audit committee review of such payments, we do not have nor do we expect to have any additional controls in place governing our reimbursement payments to our directors and officers for their out-of-pocket expenses incurred in connection with identifying and consummating an initial business combination. We will pay CF&Co. \n\n\n### Item 12. \n\nThe following table sets forth information regarding the beneficial ownership of our common stock as of March 31, 2021 based on information obtained from the persons named below, with respect to the beneficial ownership of common stock, by: each person known by us to be the beneficial owner of more than 5% of our outstanding common stock; \nIn the table below, percentage ownership is based on 63,500,000 shares of our common stock, consisting of (i) 51,000,000 shares of our Class A common stock and (ii) \n12,500,000 shares of our Class B common stock, issued and outstanding as of March 31, 2021. On all matters to be voted upon, except for the election of directors of the board, holders of the shares of Class A common stock and shares of Class B common stock vote together as a single class. \nThe following table does not reflect record or beneficial ownership of the private placement warrants as these warrants are not exercisable within 60days of the date of this Amendment. \n* less than 1% \n(1) \nUnless otherwise noted, the business address of each of the following entities or individuals is c/o CF Acquisition Corp. IV, 110 East 59 th \nStreet, New York, NY 10022. \n(2) \nInterests shown consist of founder shares, classified as shares of ClassB common stock, which shares are convertible into shares of ClassA common stock on a one-for-one basis, subject to adjustment, as described in Exhibit 4.5 Description of Registered Securities, and with respect to the interests held after the initial public offering, 1,000,000 ClassA shares issuable pursuant to a private placement. Excludes shares underlying the FPA, as such shares may not be voted or disposed of by the sponsor within 60days of the date of this Amendment. \n(3) \nThe sponsor is the record holder of such shares. Cantor is the sole member of the sponsor. Mr.Lutnick, our Chairman and Chief Executive Officer, is the trustee of CFGMs sole stockholder. As such, each of Cantor, CFGM and Mr.Lutnick may be deemed to have beneficial ownership of the common stock held directly by the sponsor. Excludes shares underlying the FPA, as such shares may not be voted or disposed of by the sponsor within 60 days of the date of this Amendment. \nThe sponsor and our officers and directors are deemed to be our promoters as such term is defined under the federal securities laws. \n\nNone. \n### Changes in Control \nNone. \nItem 13. \n\nIn January 2020, the sponsor purchased an aggregate of 11,500,000 founder shares for an aggregate purchase price of $25,000. On September23, 2020, we effectuated a 1.25-for-1 stock split. On November 3, 2020, the sponsor returned to us, at no cost, an aggregate of 2,875,000 founder shares, which we cancelled, resulting in an aggregate of 11,500,000 founder shares outstanding and held by the sponsor. Louis Zurita and Ms. On December22, 2020, we effectuated a 1.125-for-1 stock split. \nOn December 28, 2020, 437,500 founder shares were forfeited by the sponsor so that the founder shares represent 20% of the Companys issued and outstanding shares after the initial public offering (not including the shares of Class A common stock underlying the private placement units), resulting in an aggregate of 12,500,000 founder shares outstanding and held by the sponsor and independent directors of the Company. \nThe founder shares (including the ClassA common stock issuable upon conversion thereof in connection with our initial business combination) may not, subject to certain limited exceptions, be transferred, assigned or sold by the holder for a period of time as set forth in the letter agreement among us, the sponsor and our directors and officers. \nThe sponsor has committed, pursuant to the FPA, to purchase, in a private placement for gross proceeds of $15,000,000 to occur concurrently with the consummation of our initial business combination, 1,500,000 of our units and 375,000shares of ClassA common stock. The funds from the sale of units may be used as part of the consideration to the sellers in the initial business combination or for working capital in the post-transaction company. \nThe sponsor, pursuant to a written agreement, purchased an aggregate of 1,000,000 private placement units for a purchase price of $10.00 per unit in a private placement that occurred simultaneously with the closing of the initial public offering. \nThe private placement units and the units issuable pursuant to the FPA are identical to the units sold in the initial public offering except that the private placement warrants included therein and the warrants underlying the units issuable pursuant to the FPA, so long as they are held by the sponsor or its permitted transferees, (i)will not be redeemable by us, (ii)may not (including the ClassA common stock issuable upon exercise of these warrants), subject to certain limited exceptions, be transferred, assigned or sold by the sponsor until 30 days after the completion of our initial business combination, (iii)may be exercised by the holders on a cashless basis, (iv)will be entitled to registration rights and (v)for so long as they are held by the sponsor, will not be exercisable more than five years from the effective date of the Registration Statement in accordance with FINRA Rule 5110(g). The private placement units (including the private placement shares, the private placement warrants and the shares of ClassA common stock issuable upon exercise thereof) and the units issuable pursuant to the FPA (including the shares of ClassA common stock and the warrants underlying such units, and the shares of ClassA common stock issuable upon exercise of such warrants) may not, subject to certain limited exceptions, be transferred, assigned or sold by the holder until 30 days after the completion of our initial business combination. \nIf any of our officers or directors becomes aware of a business combination opportunity which is suitable for one or more entities to which he or she has fiduciary, contractual or other obligations or duties, he or she will honor these obligations and duties to present such business combination opportunity to such entities first, and only present it to us if such entities reject the opportunity and he or she determines to present the opportunity to us. \nWe are not prohibited from pursuing an initial business combination with a business that is affiliated with the sponsor, its affiliates, or our officers or directors, including an Affiliated Joint Acquisition. In the event we seek to complete our initial business combination with a business that is affiliated with the sponsor, its affiliates or our officers or directors, we, or a committee of independent directors, will obtain an opinion from an independent investment banking firm or another independent firm that commonly renders valuation opinions that our initial business combination is fair to our stockholders from a financial point of view. Any such Affiliated Joint Acquisition or specified future issuance would be in addition to, and would not include, the forward purchase securities issued pursuant to the FPA. \nOther than as described below, no compensation of any kind, including any finders fee, reimbursement, consulting fee or monies in respect of any payment of a loan, will be paid by us to the sponsor, officers and directors, or any affiliate of the sponsor or officers, prior to, or in connection with any services rendered in order to effectuate, the consummation of an initial business combination (regardless of the type of transaction that it is). Louis Zurita and Ms. Upon election of any addition independent director, either our sponsor will transfer up to 15,000 founder shares to such director or we will pay cash<|endoftext|>"},"task":{"kind":"string","value":"{\"file\": \"/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz\"}"}}},{"rowIdx":87,"cells":{"text":{"kind":"string","value":"<|endoftext|>Incorporation (A)to modify the substance or timing of our obligation to redeem 100% of our Public Shares if we do not complete our initial business combination within 18 months from the closing of the Initial Public Offering or (B)with respect to any other provision relating to stockholders rights or pre-initial business combination activity. \n\nOur amended and restated certificate of incorporation provides that any of its provisions related to pre-initial business combination activity (including the requirement not release such amounts held in the Trust Account except in specified circumstances, and to provide redemption rights to public stockholders as described herein and including to permit us to withdraw funds from the Trust Account such that the per share amount investors will receive upon any redemption or liquidation is substantially reduced or eliminated) may be amended if approved by holders of 65% of our common stock entitled to vote thereon, and corresponding provisions of the trust agreement governing the release of funds from our Trust Account may be amended if approved by holders of 65% of our common stock entitled to vote thereon. Our Sponsor, which owns shares representing 19.7% of the common stock outstanding, will participate in any vote to amend our amended and restated certificate of incorporation and/or trust agreement and will have the discretion to vote in any manner they choose. \nOur Sponsor, officers and directors have agreed, pursuant to a written agreement with us, that they will not propose any amendment to our amended and restated certificate of incorporation (i)to modify the substance or timing of our obligation to redeem 100% of our Public Shares if we do not complete our initial business combination within 18 months from the closing of the Initial Public Offering or (ii)with respect to any other provision relating to stockholders rights or pre-initial business combination activity, unless we provide our public stockholders with the opportunity to redeem their shares of ClassA common stock upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, divided by the number of then outstanding Public Shares. These agreements are contained in a letter agreement, dated as of November17, 2020, that we have entered into with our Sponsor, officers and directors. \n\nThe SEC Staff Statement regarding the accounting and reporting considerations for warrants issued by SPACs focused on certain accounting and reporting considerations related to warrants of a kind similar to those issued by the Company at the time of the Initial Public Offering and the exercises by the underwriters of their over-allotment option in November2020. In response to the SEC Staff Statement, we reevaluated the accounting treatment of our Public Warrants and Private Placement Warrants, and determined to classify the warrants as derivative liabilities measured at fair value, with changes in fair value each period reported in earnings. \nAs a result, included on our balance sheet as of December31, 2020 contained elsewhere in this Annual Report on Form10-K are derivative liabilities related to embedded features contained within our warrants. \n\nWe have not selected any specific business combination target, but intend to target businesses larger than we could acquire with the net proceeds of the Initial Public Offering and the Private Placement. If we are unable to complete our initial business combination, our public stockholders may receive only approximately $10.25 per share plus any pro rata interest earned on the funds held in the Trust Account and not previously released to us to pay our franchise and income taxes on the liquidation of our Trust Account and our warrants will expire worthless. If we are unable to complete our initial business combination, our public stockholders may only receive approximately $10.25 per share on the liquidation of our Trust Account, and our warrants will expire worthless. Furthermore, as described in the risk factor entitled , under certain circumstances our public stockholders may receive less than $10.25 per share upon the liquidation of the Trust Account. \n\nIn connection with the Initial Public Offering, we issued Public Warrants to purchase 5,223,675 shares of our ClassA common stock as part of the units offered and Private Placement Warrants to purchase an aggregate of 5,817,757 shares of ClassA common stock. The Sponsor currently owns an aggregate of \nFounder Shares. The Founder Shares are convertible into shares of ClassA common stock on a one-for-one basis, subject to adjustment. In addition, if the Sponsor or its affiliates, or any of our officers or directors, makes any working capital loans, up to $2,500,000 of such loans may be converted into private placement-equivalent warrants at a price of $1.00 per warrant (which, for example, would result in the holders being issued 2,500,000 warrants if $2,500,000 of notes were so converted), at the option of the lender. \nTo the extent we issue shares of ClassA common stock to effectuate an initial business combination, the potential for the issuance of a substantial number of additional shares of ClassA common stock upon conversion of these rights or exercise of these warrants could make us a less attractive business combination vehicle to a target business. \nThe Private Placement Warrants are identical to the warrants sold as part of the units in the Initial Public Offering except that, so long as they are held by the Sponsor or its permitted transferees, (i)they will not be redeemable by us, (ii)they (including the ClassA common stock issuable upon exercise of these warrants) may not, subject to certain limited exceptions, be transferred, assigned or sold by our Sponsor until 30 days after the completion of our initial business combination and (iii)they may be exercised by the holders on a cashless basis. \n\n\n(i) we issue additional shares of ClassA common stock or equity-linked securities for capital raising purposes in connection with the closing of our initial business combination at a Newly Issued Price of less than $9.50 per share; \n\nThis provision may make us less attractive to potential target business than other SPACs that do not have such provision and may make it more difficult for us to consummate an initial business combination with a target business. \n\nIf we seek stockholder approval of our initial business combination, our Sponsor, directors, officers, advisors and their respective affiliates may elect to purchase shares or warrants from public stockholders, which may influence a vote on a proposed initial business combination and reduce the public float of our ClassA common stock. \n\n\n\n\nPursuant to the letter agreement dated as of November17, 2020, the Sponsor, officers and directors have agreed to vote their Founder Shares, as well as any Public Shares purchased during or after the Initial Public Offering (including in open market and privately negotiated transactions), in favor of our initial business combination. As a result, in addition to our initial stockholders Founder Shares would need only 4,009,171, or 40.10%, of the 10,000,000 Public Shares sold in the Initial Public Offering to be voted in favor of an initial business combination in order to have our initial business combination approved. The Sponsor owns shares representing approximately 20% of our outstanding shares of common stock immediately following the completion of the Initial Public Offering. Accordingly, if we seek stockholder approval of our initial business combination, the agreement by the Sponsor to vote in favor of our initial business combination will increase the likelihood that we will receive the requisite stockholder approval for such initial business combination. \n\nIn the event that the proceeds in the Trust Account are reduced below the lesser of (i)$10.25 per share and (ii)the actual amount per share held in the Trust Account as of the date of the liquidation of the Trust Account if less than $10.25 per share due to reductions in the value of the trust assets, in each case net of the interest which may be withdrawn to pay taxes, and our Sponsor asserts that it is unable to satisfy its obligations or that it has no indemnification obligations related to a particular claim, our independent directors would determine whether to take legal action against our Sponsor to enforce its indemnification obligations. \n\n\n\nThe grant of registration rights to our Sponsor may make it more difficult to complete our initial business combination, and the future exercise of such rights may adversely affect the market price of our ClassA common stock. \nPursuant to the registration rights agreement dated as of November17, 2020, entered into by and between us and our Sponsor in connection with the Initial Public Offering, our Sponsor and its permitted transferees can demand that we register the Private Placement Warrants, the Private Placement Warrants, the shares of ClassA common stock issuable upon exercise of the Private Placement Warrants and upon conversion of the Founder Shares held, or to be held, by it and holders of securities that may be issued upon conversion of working capital loans may demand that we register such warrants or the ClassA common stock issuable upon conversion or exercise of such warrants. \nThe Sponsor may exert a substantial influence on actions requiring a stockholder vote, potentially in a manner that you do not support. \nThe Sponsor owns shares representing 19.7% of our issued and outstanding shares of common stock. Accordingly, it may exert a substantial influence on actions requiring a stockholder vote, potentially in a manner that you do not support, including amendments to our amended and restated certificate of incorporation and approval of major corporate transactions. In addition, our board of directors, whose members were elected by the Sponsor, is divided into two classes, each of which will generally serve for a term of two years with only one class of directors being elected in each year. If there is an annual meeting, as a consequence of our staggered board of directors, only a minority of the board of directors will be considered for election and the Sponsor, because of its ownership position, will have considerable influence regarding the outcome. Accordingly, the Sponsor will continue to exert control at least until the completion of our initial business combination. \n\n\n\n\nHowever, because we had net tangible assets in excess of $5,000,000 upon the completion of the Initial Public Offering and the Private Placement and filed a Current Report on Form8-K, including an audited balance sheet demonstrating this fact, we are exempt from rulespromulgated by the SEC to protect investors in blank check companies, such as Rule419. Moreover, if the Initial Public Offering were subject to Rule419, that rulewould prohibit the release of any interest earned on funds held in the Trust Account to us unless and until the funds in the Trust Account were released to us in connection with our completion of an initial business combination. For a more detailed comparison of our offering to offerings that comply with Rule419, please see the section of this prospectus entitled Proposed Business Comparison of This Offering to Those of Blank Check Companies Subject to Rule419. \n\n\nIf the issuance of the shares upon exercise of the warrants is not registered, qualified or exempt from registration or qualification, the holder of such Warrant will not be entitled to exercise such warrant and such warrant may have no value and expire worthless. \nHowever, under the terms of the warrant agreement, we have agreed that as soon as practicable, but in no event later than 15 business days after the closing of our initial business combination, we will use our best efforts to file with the SEC a registration statement for the registration under the Securities Act of the shares of ClassA common stock issuable upon exercise of the warrants and thereafter will use our best efforts to cause the same to become effective within 90 days following our initial business combination and to maintain a current prospectus relating to the ClassA common stock issuable upon exercise of the warrants, until the expiration of the warrants in accordance with the provisions of the warrant agreement. Notwithstanding the above, if our ClassA common stock is at the time of any exercise of a warrant not listed on a national securities exchange such that<|endoftext|>Real estate. From 1986 to 1995, he was engaged in residential New York City real estate for his own account and as general counsel to various real estate acquisition firms. From December 2014 to October 2016, Mr. DAlleva was Chairman of the Board of Warren Resources, Inc. a publicly traded energy Company which was reorganized in 2016. From 1983 to 1985, he served as Executive Vice President, Director and General Counsel of Swanton Corporation which engaged in energy, retail and financial services businesses. From 1980 to 1983, he was Associate Counsel for Damson Oil Corporation. From 1977 to 1980, he was an associate with Simpson, Thatcher & Bartlett specializing in securities and corporate law. \nMr. DAlleva received a Bachelor of Arts degree Summa Cum Laude from Fordham University in 1974 and earned his Juris Doctor degree with honors from Yale University in 1977. \n### Richard J. Berman \nAdvisory Board Member of the Company since October 30, 2017. \nRichard Bermans business career spans over 35 years of venture capital, senior management, and merger & acquisitions experience. Mr. Berman is a well-respected and seasoned professional, senior executive and public Company Board member with extensive experience in many business sectors including finance, technology, retail, bioscience, and real estate. \nMr. Berman has served as a director or officer of more than a dozen public and private companies. In 2016 he joined the advisory Board of Medifirst, while in 2014 he was elected Chairman of MetaStat Inc. From 2006-2011, he was Chairman of National Investment Managers, a Company with $12 billion in pension administration assets. Mr. Berman is a director of three public healthcare companies: Advaxis, Inc., Caladrius Biosciences, Inc., and Cryoport Inc. \nFrom 2002 to 2010, he was a director of Nexmed Inc where he also served as Chairman/CEO in 2008 and 2009 (now called Apricus Biosciences, Inc.). From 1998-2000, he was employed by Internet Commerce Corporation (now Easylink Services) as Chairman and CEO and was a director from 1998 to 2012. Previously, Mr. Berman worked at Goldman Sachs; was Senior Vice President of Bankers Trust Company, where he started the M&A and Leveraged Buyout Departments; created the largest battery Company in the world in the 1980s by merging Prestolite, General Battery and Exide to form Exide Technologies (XIDE); helped to create what is now Soho (NYC) by developing five buildings; and advised on over $4 billion of M&A transactions in over 300 deals. \nHe is a past Director of the Stern School of Business of NYU where he obtained his BS and MBA. He also has US and foreign law degrees from Boston College and The Hague Academy of International Law, respectively. \nResignations of officer and Board directors (last 5 years) \n### Former Officers and Directors: \nJose Armando Acosta Crespo Former President, Chief Executive & Financial Officer and Secretary. \nMr. Crespo served as President, Chief Executive Officer, Chief Financial Officer, Secretary and sole Director from inception (September 2014) until June 27, 2017 when Angelo Ponzetta was appointed \nFrom November 2010 to February 2012, Mr. Crespo was the Director of Technology in Santo Domingo, Dominican Republic for Servicio de Transacciones Seguras STS, a high-tech solutions Company. In November of 2012, he formed and developed DIACO Business SRL dba DIACO Events, a private and corporate event management and event planning services firm. From August 2013 to November 2014, Mr. Acosta worked for an IT Department as a Continuous Improvement & Project Manager Consultant in Santo Domingo, Dominican Republic for Nearshore Call Center Services, a BPO Company in the call center industry. \nMr. Acosta holds a Bachelors Degree in Business Administration from the Instituto Tecnologico of Santo Domingo INTEC. \n### Kirk Kimerer Former Chief Marketing Officer. \nKirk Kimerer served as Chief Marketing Officer from October 2017 until August 2018. Due to the delays with the Companys original planned acquisitions and as part of the Companys continued efforts to reduce costs and benefit shareholders, the board of directors and Mr. Kimerer decided in August 2018 to temporarily eliminate the position of Chief Marketing Officer until such time as the Company has substantial retail operations. Mr. Kimerer is pursuing his other interests while he still a friend to the Company. \nDaniel Wong Former 12 Hong Kong Ltd Chief Operating & Technology Officer. \nMr. Wong was appointed on Jan. 1, 2018 as the Chief Operating and Technology Officer of 12 Hong Kong, Ltd under an unspecified term on an at will basis agreement with 12 Hong Kong, Ltd with an annual Salary of $150,000 U.S. Mr. Wong was terminated by mutual agreement in June 2018. \nStefan Gugisberg Former 12 Europe A.G. Chief Executive Officer. \nMr. Stefan Gugisberg was appointed on November 1, 2017 as the Chief Executive Officer of 12 Europe A.G. (now defunct), with an annual salary of $144,000 U.S. Mr. Gugisberg was terminated by mutual agreement effective October 31, 2018. A package to terminated Mr. Gugisberg employment included total compensation of CHF 43,924 or approximately USD $48,593 to be paid in instalments. \nTo our knowledge, during the last five years none of our directors and executive officers (including those of our subsidiaries) has: \nYes \nHad a bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time, \nIn September 2019, the Company completed a bankruptcy and liquidation of its wholly-owned subsidiary, 12 Europe A.G., of which Angelo Ponzetta was a Board Member. \nOn March 6, 2020, the Company filed a Chapter 11 Subsection V bankruptcy filing on its Red Wire Group LLC subsidiary. Angelo Ponzetta managing member. \nNo \nBeen convicted in a criminal proceeding or been subject to a pending criminal proceeding, excluding traffic violations and other minor offenses, \nNo \nBeen subject to any order, judgment or decree, not subsequently reversed suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities, \nNo \nBeen found by a court jurisdiction of contempt (in a civil action), the SEC, or the Commodities Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended or vacated. \n### Board Composition and Committees \nOther than the formation of a non-voting Advisory Board no committees of the Board of directors have been formed. \nAudit Committee \nWe have not yet appointed an audit committee and our board of directors currently acts as our audit committee. At the present time, we believe that the members of the board of directors are collectively capable of analyzing and evaluating our financial statements and understanding internal controls and procedures for financial reporting. We do look for oversight advice from our Advisory Board as well. Our Company, however, recognizes the importance of good corporate governance and intends to appoint an audit committee comprised entirely of independent directors, including at least one financial expert upon completing an acquisition of an operating Company. \n### Advisory Board of Directors: \nOn October 30, 2017, the Company has created an Advisory Board of Directors to bring additional experience and strategic contacts to the Company. In October 2017, the Company appointed Richard Berman. In June 2018, the Company appointed Dominck DAlleva. The Company is actively interviewing other qualified candidates for future consideration. \n\nSection 78.138 of the NRS provides that a director or officer will not be individually liable unless it is proven that (i) the directors or officers acts or omissions constituted a breach of his or her fiduciary duties, and (ii) such breach involved intentional misconduct, fraud or a knowing violation of the law. \nSection 78.7502 of NRS permits a Company to indemnify its directors and officers against expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred in connection with a threatened, pending or completed action, suit or proceeding if the officer or director (i) is not liable pursuant to NRS 78.138 or (ii) acted in good faith and in a manner the officer or director reasonably believed to be in or not opposed to the best interests of the corporation and, if a criminal action or proceeding, had no reasonable cause to believe the conduct of the officer or director was unlawful. \nSection 78.751 of NRS permits a Nevada Company to indemnify its officers and directors against expenses incurred by them in defending a civil or criminal action, suit or proceeding as they are incurred and in advance of final disposition thereof, upon receipt of an undertaking by or on behalf of the officer or director to repay the amount if it is ultimately determined by a court of competent jurisdiction that such officer or director is not entitled to be indemnified by the Company. Section 78.751 of NRS further permits the Company to grant its directors and officers additional rights of indemnification under its articles of incorporation or bylaws or otherwise. \nSection 78.752 of NRS provides that a Nevada Company may purchase and maintain insurance or make other financial arrangements on behalf of any person who is or was a director, officer, employee or agent of the Company, or is or was serving at the request of the Company as a director, officer, employee or agent of another Company, partnership, joint venture, trust or other enterprise, for any liability asserted against him and liability and expenses incurred by him in his capacity as a director, officer, employee or agent, or arising out of his status as such, whether or not the Company has the authority to indemnify him against such liability and expenses. \nOur Articles of Incorporation provide that no director or officer of our Company will be personally liable to our Company or any of its stockholders for damages for breach of fiduciary duty as a director or officer; provided, however, that the foregoing provision shall not eliminate or limit the liability of a director or officer (i) for acts or omissions which involve intentional misconduct, fraud or knowing violation of law, or (ii) the unlawful payment of dividends. In addition, our bylaws permit for the indemnification and insurance provisions in Chapter 78 of the NRS. \nInsofar as indemnification by us for liabilities arising under the Securities Act may be permitted to our directors, officers or persons controlling our Company pursuant to provisions of our articles of incorporation and bylaws, or otherwise, we have been advised that in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable. In the event that a claim for indemnification by such director, officer or controlling person of us 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 offered, we will, unless in the opinion of our counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by us is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. \nAt the present time, there is no pending litigation or proceeding involving a director, officer, employee, or other agent of ours in which indemnification would be required or permitted. We are not aware of any threatened litigation or proceeding, which may result in a claim for such indemnification. \nFurther, in the normal course of business, we may have in our contracts indemnification clauses, written as either mutual where each party will indemnify, defend, and hold each other harmless against losses arising from a breach of representations or covenants, or out of intellectual property infringement or other claims made against certain parties; or single where we have agreed to hold certain parties harmless against losses etc. \n### ITEM 11. EXECUTIVE COMPENSATION \nOverview of Compensation Program \nWe currently have not appointed members to serve on a Compensation Committee of the Board of Directors. Until a formal committee is established, our entire Board of Directors<|endoftext|>Issued concurrently with the closing of our initial business combination. \n4) \nAccording to a Schedule 13G filed with the SEC on February 17, 2021 by Sculptor Capital LP (Sculptor), which serves as the principal investment manager to a number of private funds and discretionary accounts (the Accounts) and thus may be deemed to be the beneficial owner of the ordinary shares held in the Accounts managed by Sculptor. Sculptor Capital Holding Corporation (SCHC) serves as the sole general partner of Sculptor. As such, SCHC may be deemed to control Sculptor and, therefore, may be deemed to be the beneficial owner of the ordinary shares. Sculptor Capital Management, Inc. (SCU) is the sole shareholder of SCHC, and may be deemed to be the beneficial owner of the ordinary shares. Each of Sculptor, SCHC and SCU share voting and dispositive power over all the shares; each of Sculptor Master Fund, Ltd. and Sculptor Special Funding, LP share voting and dispositive power with respect to 1,573,744 of the shares; and Sculptor Enhanced Master Fund, Ltd. shares voting power with respect to 211,544 of the shares. The business address of this shareholder is 9 West 57th Street, New York, New York 10019. \n5) \nAccording to a Schedule 13G filed with the SEC on February 16, 2021 by HGC Investment Management Inc. (HCG), which serves as the investment manager to HGC Arbitrage Fund LP (the Fund), with respect to the ordinary shares held by HCG on behalf of the Fund. The business address of this shareholder is 66 Adelaide, Suite 601, Toronto, Ontario M5V 1R9, Canada. \n6) \nAccording to a Schedule 13G filed with the SEC on February 10, 2021 by Polar Asset Management Partners Inc., which serves as the investment advisor to Polar Multi-Strategy Master Fund (PMSMF) and certain managed accounts (together with PMSMF, the Polar Vehicles) with respect to the ordinary shares directly held by the Polar Vehicles. The business address of this shareholder is 01 Bay Street, Suite 1900, PO Box 19, Toronto, Ontario M5H 2Y4, Canada. \n7) \nAccording to a Schedule 13G/A filed with the SEC on February 8, 2021 by Integrated Core Strategies (US) LLC, on behalf of itself, Riverview Group LLC, ICS Opportunities, Ltd., Millennium International Management LP, Millennium Management LLC, Millennium Group Management LLC and Israel Englander (collectively, the reporting persons). The reporting persons beneficially own an aggregate of 2,463,219 ordinary shares. Each of Millennium Management LLC, Millennium Group Management LLC and Israel Englander share voting and dispositive power with respect to all of the shares; Integrated Core Strategies (US) LLC and Riverview Group LLC share voting and dispositive power with respect to 313,219 and 1,150,000 of the shares, respectively; and each of ICS Opportunities, Ltd. and Millennium International Management LP share voting and dispositive power with respect to 1,000,000 shares. The business address of the reporting persons is 666 Fifth Avenue, New York, NY 10103. \nITEM 13. \n\nOn June 8, 2020, our sponsor purchased 6,250,000 founder shares for a capital contribution of $25,000, or approximately $0.004 per share. as a result, 937,500 founder shares held by our sponsor were forfeited and cancelled, effective as of September 19, 2020. \nSimultaneously with the consummation of our initial public offering, our sponsor purchased 6,750,000 private placement warrants at a price of $1.00 per warrant, generating gross proceeds of $6,750,000. Each private placement warrant is exercisable for one ordinary share at $11.50 per share. Our sponsor will be permitted to transfer the private placement warrants held by it to certain permitted transferees, including our officers and directors and other persons or entities affiliated with or related to it, but the transferees receiving such securities will be subject to the same agreements with respect to such securities as the sponsor. Otherwise, these private placement warrants will not, subject to certain limited exceptions, be transferable or saleable until 30 days after the completion of our initial business combination. \nThe purchase under the forward purchase agreement is required to be made regardless of whether any ordinary shares are redeemed by our public shareholders. \n\nIf any of our officers or directors (other than our independent directors) becomes aware of an initial business combination opportunity that falls within the line of business of any entity to which he or she has then current fiduciary or contractual obligations, he or she may be required to present such business combination opportunity to such entity prior to presenting such business combination opportunity to us. Our executive officers and directors currently have certain relevant fiduciary duties or contractual obligations that may take priority over their duties to us. \n\nOther than as described above, no compensation of any kind, including finders and consulting fees, will be paid to our sponsor, executive officers and directors, or any of their respective affiliates, for services rendered prior to or in connection with the completion of an initial business combination. Our audit committee reviews on a quarterly basis all payments that were made to our sponsor, officers, directors or our or their affiliates. \nOn June 10, 2020, our sponsor agreed to loan us up to $200,000 to be used for the payment of costs related to our initial public offering pursuant to a promissory note. Our sponsor loaned us a total of $191,100 pursuant to the promissory note. These loans were non-interest bearing, unsecured and were due at the earlier of December 31, 2020 or the closing of our initial public offering. We fully repaid the balance of the note of $191,000 in full on August 12, 2020. \n\n\nOn August 5, 2020, we entered into a registration rights agreement with the sponsor with respect to the private placement warrants issued in connection with our initial public offering, warrants issuable upon conversion of working capital loans (if any) and the ordinary shares issuable upon exercise of the foregoing. \nIn connection with the proposed business combination, Pubco, our sponsor and the three Holders will enter into the New Registration Rights Agreement, pursuant to which, among other things, subject to certain requirements and customary conditions, including with regard to the number of demand rights that may be exercised, the Holders may demand at any time or from time to time, that Pubco file a registration statement with the SEC to register the securities of Pubco held by such Holders. \n### Related Party Policy \n\nOur Code of Ethics requires us to avoid, wherever possible, all conflicts of interests, except under guidelines or resolutions approved by our board of directors (or the appropriate committee of our board) or as disclosed in our public filings with the SEC. We filed our Code of Ethics as an exhibit to the registration statement for our initial public offering. \nOur audit committee, pursuant to its written charter, is responsible for reviewing and approving related party transactions to the extent we enter into such transactions. A form of the audit committee charter that we plan to adopt prior to the consummation of our initial public offering was filed as an exhibit to the registration statement for our initial public offering. \n\nTo further minimize conflicts of interest, we have agreed not to consummate an initial business combination with an entity that is affiliated with any of our sponsor, officers or directors unless we, or a committee of independent directors, have obtained an opinion from an independent investment banking firm that is a member of FINRA or from an independent accounting firm that our initial business combination is fair to our company from a financial point of view. Furthermore, no finders fees, reimbursements or cash payments will be made to our sponsor, officers or directors, or our or their affiliates, for services rendered to us prior to or in connection with the completion of our initial business combination, other than the following payments, none of which will be made from the proceeds of our initial public offering held in the trust account prior to the completion of our initial business combination: \nRepayment of up to an aggregate of $200,000 in loans that we may draw down made to us by our sponsor to cover offering-related and organizational expenses; \nPayment to an affiliate of our sponsor of up to $10,000 per month for office space, utilities, secretarial support and administrative services; \nand \nRepayment of loans which may be made by our sponsor or an affiliate of our sponsor or certain of our officers and directors to finance transaction costs in connection with an intended initial business combination, the terms of which have not been determined nor have any written agreements been executed with respect thereto; but up to $1,500,000 of such loans may be convertible into warrants at a price of $1.00 per warrant at the option of the lender. If we do not complete a business combination, the loans may not be repaid. \n\n### Director Independence \nOur board of directors has determined that each of Per Brilioth, Verdi Israelyan and Clifford Tompsett qualifies as an independent director as defined in the Nasdaq listing standards and applicable SEC rules. \nITEM 14. \n\n### Audit Fees \nDuring the period from June 3, 2020 (inception) through December 31, 2020, fees for our independent registered public accounting firm were $71,070 for the services Withum performed in connection with our initial public offering, the audit of our December 31, 2020 financial statements included in this report, review of the financial information included in our quarterly reports on Form 10-Q for the second and third quarter of 2020 and other required filings with the SEC. \nAudit-Related Fees \nDuring the period from June 3, 2020 (inception) through December 31, 2020, our independent registered public accounting firm did not render assurance and related services related to the performance of the audit or review of consolidated financial statements. \n### Tax Fees \nWe did not pay Withum for tax compliance, tax advice and tax planning the period from June 3, 2020 (inception) through December 31, 2020. \nAll Other Fees \nWe did not pay Withum for other services during the period from June 3, 2020 (inception) through December 31, 2020. \n### Pre-Approval Policy \n\nPART IV \nITEM 15. \n(a) \n\n(1) \n\n(2) \n\nNone. \n(3) \n### Exhibits: \n\n\n* \nFiled herewith. \n** \nFurnished herewith. \n*** \nPreviously filed. \n(1) \n001-39428), filed with the SEC on February 1, 2021. \n(2) \n001-39428), filed with the SEC on August 11, 2020. \n(3) \nIncorporated by reference to an exhibit to the Registrants Form S-1 (File No. 333-239972), filed with the SEC on July 21, 2020, as amended. \n### ITEM 16. FORM 10-K SUMMARY \nNone \nKISMET ACQUISITION ONE CORP \n\n\n\n### Kismet Acquisition One Corp \n\nWe have audited the accompanying balance sheet of Kismet Acquisition One Corp (the Company) as of December 31, 2020, the related statements of operations, changes in shareholders equity and cash flows for the period from June 3, 2020 (inception) through December 31, 2020, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020, and the results of its operations and its cash flows for the period from June 3, 2020 (inception) through December 31, 2020, in conformity with accounting principles generally accepted in the United States of America. \n\n\n\n\n### Basis for Opinion \n\n\n\n/s/ WithumSmith+Brown, PC \n\n### New York, New York \nJune 7, 2021 \nKISMET ACQUISITION ONE CORP \n### BALANCE SHEET \n\nKISMET ACQUISITION ONE CORP \n### STATEMENT OF OPERATIONS \n\nKISMET ACQUISITION ONE CORP \n\nFor the Period from June 3, 2020 (inception) through December 31, 2020 (As Restated) \n\nKISMET ACQUISITION ONE CORP \n### STATEMENT OF CASH FLOWS \n\nKISMET ACQUISITION ONE CORP \n\n\nKismet Acquisition One Corp (the Company) was newly incorporated in the British Virgin Islands on June 3, 2020 as a business company with limited liability and formed for the purpose of acquiring, engaging in a share exchange, share reconstruction and amalgamation, contractual control arrangement with, purchasing all or substantially all of the assets of, or engaging in any other similar initial business combination with one or more businesses or entities (Business Combination). \nAll activity for the period from June 3, 2020 (inception)<|endoftext|>Shares or warrants our initial stockholders, directors, officers, advisors or their affiliates may purchase in such transactions, subject to compliance with applicable law and Nasdaq rules. If they engage in such transactions, they will not make any such purchases when they are in possession of any material non-public information not disclosed to the seller or if such purchases are prohibited by RegulationM under the Exchange Act. \n\nTo the extent that our sponsor, officers, directors, advisors or their affiliates enter into a private purchase, they would identify and contact only potential selling stockholders who have expressed their election to redeem their shares for a prorata share of the trust account or vote against our initial business combination, whether or not such stockholder has already submitted a proxy with respect to our initial business combination. \nAny purchases by our sponsor, officers, directors and/or their affiliates who are affiliated purchasers under Rule10b-18 under the Exchange Act will be made only to the extent such purchases are able to be made in compliance with Rule10b-18, which is a safe harbor from liability for manipulation under Section9(a)(2)and Rule10b-5 of the Exchange Act. Our sponsor, officers, directors and/or their affiliates will not make purchases of common stock if the purchases would violate Section9(a)(2)or Rule10b-5 of the Exchange Act. \n\nAs of December31, 2020, the amount in the trust account was approximately $10.00 per public share. \n\n\nAsset acquisitions and stock purchases would not typically require stockholder approval while direct mergers with our company where we do not survive and any transactions where we issue more than 20% of our outstanding shares of common stock or seek to amend our amended and restated certificate of incorporation would require stockholder approval. \nThe requirement that we provide our public stockholders with the opportunity to redeem their public shares by one of the two methods listed above is contained in provisions of our amended and restated certificate of incorporation and will apply whether or not we maintain our registration under the Exchange Act or our listing on Nasdaq. \n\nAs a result, in addition to our initial stockholders founder shares, we would need only 9,375,001, or 37.5% of the 25,000,000 public shares sold in our initial public offering to be voted in favor of an initial business combination in order to have our initial business combination approved (assuming all outstanding shares are voted and the over-allotment option is not exercised). We intend to give not less than 10days nor more than 60days prior written notice of any such meeting, if required, at which a vote shall be taken to approve our initial business combination. \n\n\n\nWe intend to require our public stockholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in street name, to, at the holders option, either deliver their stock certificates to our transfer agent or deliver their shares to our transfer agent electronically using the DWAC System, prior to the date set forth in the proxy materials or tender offer documents, as applicable. \n\n\n\n\nAs described above, we intend to require our public stockholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in street name, to, at the holders option, either deliver their stock certificates to our transfer agent or deliver their shares to our transfer agent electronically using the DWAC System, prior to the date set forth in the proxy materials or tender offer documents, as applicable. \n\n\n\nIf our initial proposed initial business combination is not completed, we may continue to try to complete an initial business combination with a different target until December22, 2022. \n\nOur amended and restated certificate of incorporation provides that we will have only until December22, 2022 to complete our initial business combination. If we are unable to complete our initial business combination within such period, we will: (i)cease all operations except for the purpose of winding up, (ii)as promptly as reasonably possible but not more than 10 business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account including interest earned on the funds held in the trust account and not previously released to us to pay our taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders rights as stockholders (including the right to receive further liquidating distributions, if any), and (iii)as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, liquidate and dissolve, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect to our warrants, which will expire worthless if we fail to complete our initial business combination within the required time period. \nOur sponsor, officers and directors have entered into a letter agreement with us, pursuant to which they have waived their rights to liquidating distributions from the trust account with respect to any founder shares held by them if we fail to complete our initial business combination by December22, 2022. However, if our sponsor, officers or directors acquire public shares in or after our initial public offering, they will be entitled to liquidating distributions from the trust account with respect to such public shares if we fail to complete our initial business combination within the allotted time period. \nOur sponsor, officers and directors have agreed, pursuant to a written agreement with us, that they will not propose any amendment to our amended and restated certificate of incorporation to (A)modify the substance or timing of our obligation to provide for the redemption of our public shares in connection with an initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination by December22, 2022 or (B)with respect to any other material provisions relating to stockholders rights or pre-initial business combination activity, unless we provide our public stockholders with the opportunity to redeem their shares of ClassA common stock upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account including interest earned on the funds held in the trust account and not previously released to us to pay our taxes, divided by the number of then outstanding public shares. \nWe expect that all costs and expenses associated with implementing our plan of dissolution, as well as payments to any creditors, will be funded from amounts remaining out of the approximately $1,300,000 held outside the trust account as of December31, 2020, although we cannot assure you that there will be sufficient funds for such purpose. \nUnder Section281(b)of the DGCL, our plan of dissolution must provide for all claims against us to be paid in full or make provision for payments to be made in full, as applicable, if there are sufficient assets. \nAlthough we seek to have all vendors, service providers, prospective target businesses and other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account for the benefit of our public stockholders, such parties may not execute such agreements or even if they execute such agreements, they may not be prevented from bringing claims against the trust account, including, but not limited to, fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain advantage with respect to a claim against our assets, including the funds held in the trust account. Withum, our independent registered public accounting firm, and the underwriters of the offering will not execute agreements with us waiving such claims to the monies held in the trust account. \nPursuant to the letter agreement, our sponsor has agreed that it will be liable to us if and to the extent any claims by a third party for services rendered or products sold to us, or a prospective target business with which we have entered into a written letter of intent, confidentiality or similar agreement or business combination agreement, reduce the amount of funds in the trust account to below the lesser of (i)$10.00 per public share and (ii)the actual amount per public share held in the trust account as of the date of the liquidation of the trust account, if less than $10.00 per share due to reductions in the value of the trust assets, less taxes payable; \n\nWe have access to the amounts held outside the trust account ($1,334,998 as of December31, 2020) with which to pay any such potential claims (including costs and expenses incurred in connection with our liquidation, currently estimated to be no more than approximately $100,000). \nThe prorata portion of our trust account distributed to our public stockholders upon the redemption of our public shares in the event we do not complete our initial business combination by December22, 2022 may be considered a liquidating distribution under Delaware law. \nFurthermore, if the prorata portion of our trust account distributed to our public stockholders upon the redemption of our public shares in the event we do not complete our initial business combination by December22, 2022, is not considered a liquidating distribution under Delaware law and such redemption distribution is deemed to be unlawful (potentially due to the imposition of legal proceedings that a party may bring or due to other circumstances that are currently unknown), then pursuant to Section174 of the DGCL, the statute of limitations for claims of creditors could then be sixyears after the unlawful redemption distribution, instead of threeyears, as in the case of a liquidating distribution. If we are unable to complete our initial business combination by December22, 2022, we will: (i)cease all operations except for the purpose of winding up, (ii)as promptly as reasonably possible but not more than 10 business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account and not previously released to us to pay our taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders rights as stockholders (including the right to receive further liquidating distributions, if any), and (iii)as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, liquidate and dissolve, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. \nAs described above, pursuant to the obligation contained in our underwriting agreement, we seek to have all vendors, service providers, prospective target businesses or other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account. Further, our sponsor may be liable only to the extent necessary to ensure that the amounts in the trust account are not reduced below (i)$10.00 per public share or (ii)such lesser amount per public share held in the trust account as of the date of the liquidation of the trust account, due to reductions in value of the trust assets, in each case net of the amount of interest released to us to pay taxes and will not be liable as to any claims under our indemnity of the underwriters of our initial public offering against certain liabilities, including liabilities under the Securities Act. \n\nOur public stockholders will be entitled to receive funds from the trust account only upon the earlier to occur of: (i)the completion of our initial business combination, (ii)the redemption<|endoftext|>As our Vice President since 2013, Assistant Treasurer since 2007, as Assistant Treasurer of the managing general partner of Gould Investors from 2012 through 2013, as Treasurer from 2013, as Vice President and Treasurer of BRT Apartments Corp. since 2013, and as its Assistant Treasurer from 2009 through 2013. Mr. \n### Justin Clair. \nMr. Clair has been employed by us since 2006, served as Assistant Vice President from 2010 through 2014, as Vice President from 2014 through 2019, and as Senior Vice President - Acquisitions, since 2019. \nItem \n1A. Risk Factors. \nSet forth below is a discussion of certain risks affecting our business. The categorization of risks set forth below is meant to help you better understand the risks facing our business and is not intended to limit your consideration of the possible effects of these risks to the listed categories. Any impacts from the realization of any of the risks discussed, including our financial condition and results of operations, may, and likely will, adversely affect many aspects of our business. In addition to the other information contained or incorporated by reference in this Form10-K, readers should carefully consider the following risk factors: \n\nThe COVID-19 pandemic and the governmental and non-governmental responses thereto have adversely impacted, and may in the future, adversely impact our business, income, cash flow, results of operations, financial condition, liquidity, prospects, ability to service our debt obligations, or our ability to pay cash dividends to our stockholders. \nOur ability to lease our properties and collect rental revenues and expense reimbursements, and the ability of our tenants to fulfill their obligations to us, is dependent in part upon national, regional and local economic conditions. The pandemic and the measures taken to combat it caused a significant economic slowdown and high levels of unemployment. The slowdown and the other disruptions resulting directly and indirectly from the pandemic adversely impacted our and many of our tenants financial condition and results of operations. In particular, tenants in the retail, restaurant, theater and health and fitness sectors, experienced severe financial distress and obtained rent relief from us. During 2020, we (i) wrote-off $1.1 million of unbilled rent receivables with respect to Regal Cinemas, a tenant that operates theaters at two of our properties, as collections of such receivables were deemed less than probable, (ii) abated $1.4 million of base rent with respect to 12 tenants at 13 properties, including $676,000 and $500,000 of base rent owed by Regal Cinemas and LA Fitness, respectively, (iii) did not collect and did not accrue $928,000 of rent from Regal Cinemas and (iv) deferred $3.5 million of base rent payments. As a result of, among other things, these write-offs and abatements, our rental income, net, decreased by 2.3% to $81.9 million, from $83.8 million in 2019, and our cash flow from operations decreased by 3.0% to $35.1 million from $36.2 million in 2019. \nAt December 31, 2020, $3.0 million of deferred rent is owed by 34 tenants at 43 properties. Approximately 92.7%, 6.9% and 0.4% of such deferred rent is due in 2021, 2022 and 2023, respectively. Four tenants account for $1.6 million, or 52.4%, of the $3.0 million of deferred rent ( i.e \n, Haverty Furniture, Famous Footwear, LA Fitness, and Barnes and Noble, owe 26.3%, 10.3%,9.6% and 6.2% of the deferred rent, respectively). The failure to pay deferred rent will adversely impact our cash flow, net income, liquidity and ability to pay dividends. \nIf the pandemic and economic slowdown continue for an extended period, among other things, (i) tenants, and in particular, tenants in the retail, restaurant, theater and health and fitness sectors, may be unable to satisfy their obligations to us (including obligations under deferral arrangements or extended leases) and will seek additional rent relief, may choose not to renew their leases or only renew on terms less favorable to us, (ii) it is more likely that tenants that to date have only been minimally impacted will be significantly and adversely effected, (iii) the amounts tenants at challenged properties pay us may be insufficient, without an accommodation from the mortgage lender, to pay our debt service obligations with respect to such properties, (iv) the mortgage lenders for challenged properties may be unwilling or unable to allow for accommodations or further accommodations with respect to our debt service obligations at such properties, (v) the trend toward e-commerce at the expense of the bricks and mortar commerce in which we are engaged will continue to grow at an accelerating rate, (vi) it will be more difficult to obtain equity and debt financing, and (vii) it will be more difficult to acquire properties to grow our business and dispose of underperforming assets. Our business, income, cash flow, results of operations, financial condition, liquidity, prospects, ability to service our debt, and ability to pay cash dividends to our stockholders, will be adversely effected upon the occurrence of any one or more of the foregoing. \nWe have, and may pay, all or a portion of dividends in our own stock, in which case stockholders may be required to pay tax in excess of the cash they receive. \nTo improve our liquidity and capital resource position in light of the economic dislocations caused by the pandemic, we paid approximately $6.8 million, or 18.7%, of the dividends we declared in 2020 in stock. These stock dividends were taxable to our stockholders in the same manner cash dividends were taxed. If the economic dislocations resulting from the pandemic continue, we may, to the extent we are required to pay dividends to maintain our REIT status, distribute taxable dividends that are payable all or in part in our stock. Taxable stockholders receiving such dividends will be required to include the full amount of the dividend as income to the extent of our current and accumulated earnings and profits for federal income tax purposes. As a result, a U.S. stockholder may be required to pay tax with respect to such dividends in excess of the cash dividend received. If a U.S. stockholders, we may be required to withhold U.S. tax with respect to such dividends, including in respect of all or a portion of such dividend that is payable in stock. In addition, the issuance of stock in lieu of cash dividend may be dilutive and may result in a reduction in earnings per share and other per sharemetrics used to evaluate us. Finally, the trading price of our stock would experience downward pressure if a significant number of our stockholders sell shares of our stock in order to pay taxes owed on dividends. \n\nIf we are unable to re-rent properties upon the expiration of our leases or if our tenants default or seek bankruptcy protection, our rental income will be reduced and we would incur additional costs. \nSubstantially all of our rental income is derived from rent paid by our tenants. From 2021 through 2023, leases with respect to 58 tenants that account for 35.2% of our 2021 contractual rental income, expire, including leases with two tenants ( i.e \n, Haverty Furniture and the City of New York) at 12 properties that account for 7.0% and 1.8% of 2021 contractual rental income, respectively. From 2024 through 2025, leases with respect to 34 tenants that account for 14.9% of our 2021 contractual rental income, expire. If our tenants, and in particular, our significant tenants, (i)do not renew their leases upon the expiration of same, (ii)default on their obligations or (iii)seek rent relief, lease renegotiation or other accommodations, our revenues could decline and, in certain cases, co-tenancy provisions ( i.e., a tenants right to reduce their rent or terminate their lease if certain key tenants vacate a property) may be triggered possibly allowing other tenants at the same property to reduce their rental payments or terminate their leases. At the same time, we would remain responsible for the payment of the mortgage obligations with respect to the related properties and would become responsible for the operating expenses related to these properties, including, among other things, real estate taxes, maintenance and insurance. In addition, we may incur expenses in enforcing our rights as landlord. Even if we find replacement tenants or renegotiate leases with current tenants, the terms of the new or renegotiated leases, including the cost of required renovations or concessions to tenants, or the expense of the reconfiguration of a tenants space, may be less favorable than current lease terms and could reduce the amount of cash available to meet expenses and pay dividends. If tenants facing financial difficulties default on their obligation to pay rent or do not renew their leases at lease expiration, our results of operations, cash flow and financial condition may be adversely affected. \nTraditional retail tenants account for 32.4% of our 2021 contractual rental income and the competition that such tenants face from e-commerce retail sales could adversely affect our business. \nApproximately 32.4% of our 2021 contractual rental income is derived from retail tenants, including 9.0% from tenants engaged in selling furniture ( i.e \n, Haverty Furniture accounts for 7.0% of 2021 contractual rental income) and 3.0% from tenants engaged in selling office supplies ( i.e \n, Office Depot, a tenant at five properties, of which one property is currently closed but for which the tenant continues to pay rent, accounts for 3.0% of 2021 contractual rental income). Because e-commerce retailers may be able to provide customers with better pricing and the ease, comfort and safety of shopping from their home or office, our retail tenants face increasing competition from e- commerce retailers, which competition may continue to accelerate as a result of the pandemic. The accelerating growth of e-commerce sales decreases the need for traditional retail outlets and reduce retailers space and property requirements. This would adversely impact our ability to rent space at our retail properties and increase competition for retail tenants thereby reducing the rent we would receive at these properties and adversely affect our results of operations, cash flow and financial condition. \nApproximately 25.2% of our 2021 contractual rental income is derived from fivetenants. The default, financial distress or failure of any of these tenants, or such tenants determination not to renew or extend their lease, could significantly reduce our revenues. \nHaverty Furniture, FedEx, LA Fitness, Northern Tool and L-3 Harris Technologies account for approximately 7.0%, 5.2%, 4.7%, 4.3% and 4.0%, respectively, of our 2021 contractual rental income. The default, financial distress (including that experienced by Haverty Furniture and LA Fitness) or bankruptcy of any of these or other significant tenants or such tenants determination not to renew or extend their lease (including a possible determination by Haverty Furniture not to renew their lease which expires in 2022), could significantly reduce our revenues, would cause interruptions in the receipt of, or the loss of, a significant amount of rental income and would require us to pay operating expenses (including real estate taxes) currently paid by the tenant. This could also result in the vacancy of the property or properties occupied by the defaulting or non-renewing tenant, which would significantly reduce our rental revenues and net income until the re-rental of the property or properties and could decrease the ultimate sale value of the property. \nWrite-offs of unbilled rent receivables and intangible lease assets will reduce our net income, total assets and stockholders equity and may result in breaches of financial covenants under our credit facility. \nAt December 31, 2020, the aggregate of our unbilled rent receivable and intangible lease assets is $40.1 million; three tenants ( i.e \n, FedEx, Northern Tools and Famous Footwear) account for 24% of such sum. We are required to assess the collectability of our unbilled rent receivables and the remaining useful lives of our intangible lease assets. Such assessments take into consideration, among other things, a tenants payment history, financial condition, and the likelihood of collectability of future rent. If we determine, based on our assessment, that the collectability of a tenants unbilled rent receivable is not probable or that the useful life of a tenants intangible lease<|endoftext|>### Explanatory Note \n(the Company, our, us or we) is filing this Amendment No. 1 on Form 10-K/A (this Form 10-K/A) to its Annual Report on Form 10-K for the fiscal year ended December 31, 2020 (the Original Form 10-K) that was filed with the Securities and Exchange Commission (SEC) on February 26, 2021 for the sole purpose of including the information required by Part III of Form 10-K. This Part III information was previously omitted from the Original Form 10-K in reliance on General Instruction G(3) to Form 10-K, which permits the information in Part III to be incorporated in Form 10-K by reference to the Companys definitive proxy statement if such statement is filed no later than 120 days after the end of our fiscal year. The Company does not intend to file its definitive proxy statement for its 2021 Annual General Meeting of Shareholders within 120 days of December 31, 2020, as it intends to delay its 2021 Annual General Meeting of Shareholders to a later date within the 2021 fiscal year. \nAs required by Rule 12b-15, in connection with this Form 10-K/A, the Companys Principal Executive Officer and Principal Financial Officer are providing Rule 13a-14(a) certifications included herein. \nExcept as explicitly set forth herein, this Form 10-K/A does not purport to modify or update the disclosures in, or exhibits to, the Original Form 10-K or to update the Original Form 10-K to reflect events occurring after the date of such filing. \n### PART III \n\nOur Board of Directors \nOur bye-laws provide for a classified Board of Directors, with members of each class serving staggered three-year terms. We have two directors in Class I whose term ends at our 2021 annual general meeting of shareholders, four directors in Class II whose term ends at our 2022 annual general meeting of shareholders and three directors in Class III whose term ends at our 2023 annual general meeting of shareholders. At each annual meeting, successors to the class of directors whose term expires at that annual general meeting of shareholders will be elected for a term of three years. \nThe names of our directors, and certain information about them as of March 19, 2021, are set forth below. \nThe following biographical information is furnished as to each director. \nChristopher L. Harris has served as one of our directors since November 2018. Mr. Harris served as a director and the Chief Executive Officer of Montpelier Re Holdings Ltd., a property and casualty reinsurer, from 2008 until 2015. From 2002 to 2008, Mr. Harris held executive officer positions with increasing responsibilities at Montpelier Re Holdings Ltd. Additionally, Mr. Harris has served since 2018 as a director of Bermuda Fire & Marine, a company that offers insurance and investment products and is traded on the Bermuda Stock Exchange. Mr. Harris has served since 2020 as a director of Catalina Holdings (Bermuda) Ltd., a company that acquires and manages non-life insurance reinsurance companies and portfolios in run-off. Mr. Harris served from 2016 to 2018 as a member of the board of directors of a subsidiary of Hiscox Ltd., an insurer and reinsurer traded on the London Stock Exchange, and as Chairman of the Board of Blue Capital Reinsurance Holdings from 2013 to 2015. Mr. Harris received a B.S. in Mathematics from the University of North Texas and an M.B.A. from Northcentral University. Mr. Harris is a Fellow of the Casualty Actuarial Society, a Chartered Property and Casualty Underwriter and a CFA. \nWe believe that Mr. Harris qualifications to serve on our Board of Directors include his extensive experience in insurance, reinsurance and risk management, his prior service as an executive officer and director in the insurance industry, as well as his experience with capital markets transactions and investment management. \nPatricia H. Roberts has served as one of our directors since July 2019. She retired in 2012 from her dual position as President and Chairman of General Star Management Company and President and Chairman of Genesis Management and Insurance Services Corporation, two wholly-owned subsidiaries of General Reinsurance Corporation (GenRe). Ms. Roberts began working at GenRe in 1977 and held positions with increasing levels of responsibility. Ms. Roberts served on the Navigators Group Inc. (Navigators) board from 2014 until 2019 when Navigators was sold to Hartford Financial Services Group. Ms. Roberts holds a Bachelor of Science degree in Business Administration from George Mason University, and received her CPCU (Chartered Property Casualty Underwriter) designation in 1985. \nWe believe Ms. Robertss qualifications to serve on our Board of Directors include her management experience at GenRe, her knowledge of the insurance and reinsurance industry, her operational and strategic expertise and her experience as a public company board member. \nJanet Cowell has served as one of our directors since May 2016. Ms. Cowell serves as the President and Chief Executive Officer of Dix Park Conservancy in Raleigh, North Carolina. Ms. Cowell served as Treasurer of the State of North Carolina from 2009 through 2016 and Chief Executive Officer of Girls Who Invest from 2018 through 2020. Before that, Ms. Cowell served as a member of the North Carolina State Senate from 2004 to 2008. Prior to that, she served as a member of the Raleigh City Council from 2001 to 2004, and before that she worked as a business consultant with Sibson & Co. and a securities analyst with HSBC Bank and Lehman Brothers. Ms. Cowell has served as a director of ChannelAdvisor Corporation, an e-commerce cloud platform company, since 2016. Ms. Cowell has served as the independent chair of IFMs Global Infrastructure Fund Investor Advisor Committee since January 2019. Ms. Cowell received a B.A. from the University of Pennsylvania, an M.B.A. from the Wharton School of Business and an M.A. from the Lauder Institute. Ms. Cowell is also a level 1 CFA. \nWe believe that Ms. Cowells qualifications to serve on our Board of Directors include her financial knowledge and significant investment and management experience. \nJerry R. Masters has served as one of our directors since December 2014. Mr. Masters is currently a private investor. From 1991 to 2000, Mr. Masters held various executive positions within the financial organization at Microsoft Corporation, last serving as Senior Director, a role in which he was responsible for external and internal financial reporting, budgeting and forecasting. From 1980 to 1991, Mr. Masters was a CPA with Deloitte & Touche LLP, where he was a firm-designated insurance specialist. From 2005 until 2014, Mr. Masters served on the board of directors of TransMontaigne Partners LP, a publicly traded oil pipeline and terminal company, as chairman of the Audit and Compensation Committees. Mr. Masters is also chairman of the board of directors of Sandhills State Bank. Mr. Masters majored in Accounting and holds a B.S. in business administration from the University of Nebraska. \nWe believe Mr. Masters qualifications to serve on our Board of Directors include his financial and accounting knowledge and extensive financial management experience and executive management experience, including overseeing external and internal financial reporting at a large corporation. \nOllie L. Sherman, Jr. has served as one of our directors since May 2016. Mr. Sherman retired as a Managing Principal with Towers Watson in 2010. At Towers Watson, Mr. Sherman functioned as a consulting actuary and practice manager for the companys property and casualty division for over 25 years. Prior to joining Towers Watson, Mr. Sherman was employed by the Travelers Insurance Company for ten years where he had overall responsibility for countrywide workers compensation pricing. Mr. Sherman graduated from the University of Virginia with a B.S. in applied mathematics, and he is a Fellow of the Casualty Actuarial Society. \nWe believe that Mr. Shermans qualifications to serve on our Board of Directors include his extensive experience as a consulting actuary in property and casualty insurance. \nSundar Srinivasan has served as one of our directors since November 2018, and previously served on our Board from 2007 to 2012. Since 2016, Mr. Srinivasan has served as the Chief Executive Officer of Emerald Lake Safety, a pharmaceutical research company which he founded. Mr. Srinivasan also served from 2013 to 2016 as the managing partner of Brookline Advisors LLC, an investment advisory firm advising major institutional investors. From 2003 to 2012, Mr. Srinivasan served as a portfolio manager at Elliott Associates, a multi-strategy investment fund, and prior to that, as a Vice President of Investment Banking at Morgan Stanley, where he specialized in financial institutions. Mr. Srinivasan also previously served as a management consultant at Oliver Wyman. From 2008 to 2009, Mr. Srinivasan served as Chairman of the Board of the general partner of Blue Knight Energy Partners (formerly known as Semgroup Energy Partners, L.P.), a company providing support services for companies engaged in the production, distribution and marketing of crude oil and asphalt product. From 2004 to 2005, Mr. Srinivasan served as Chairman of the Board of Dice, Inc., a company engaged in online technology recruiting and career development. From 2005 to 2008, he was also the Chairman of the Board of Answer Financial, a large personal lines insurance agency. \nWe believe that Mr. Srinivasans qualifications to serve on our Board of Directors include his extensive investment management and investment banking experience and knowledge of financial institutions and of the Company based upon his prior service on our Board. \nJ. Adam Abram has served as Non-Executive Chairman of the Board since November 2020. He previously served as Chief Executive Officer and Executive Chairman of the Board from August 2019 through November 2020 and from September 2014 through December 2017. Mr. Abram was Non-Executive Chairman of the Board from January 2018 to August 2019 and from October 2012 through September 2014. Mr. Abram was a founder of James River Group, Inc., our principal subsidiary, and he served as the Executive Chairman, President and Chief Executive Officer of James River Group, Inc. from its inception in 2002 through 2007 and from March 2008 until October 2012. From 2002 through 2007, and from March 2008 until October 2012, Mr. Abram also periodically served in different roles at various operating units. Mr. Abram served as lead independent director of the Yadkin Financial Corporation (Yadkin), a bank holding company, from July 2014 until its acquisition by F. N. B. Corporation in March 2017 and, prior to that, as the Chairman of the Board of VantageSouth Bancshares, Inc., a bank holding company, and its subsidiary bank, VantageSouth Bank, from November 2011 until its acquisition by Yadkin in July 2014. He also served as Chairman of Piedmont Community Bank Holdings, Inc., a bank holding company, from the time he co-founded it in 2009 until it was also acquired by Yadkin in July 2014. Mr. Abram received his B.A. from Harvard University. \nWe believe Mr. Abrams qualifications to serve on our Board of Directors include his extensive experience as an executive officer and director in the insurance industry, experience as a founder of several financial services and other companies and his detailed knowledge of the Company gained from his service as Chairman of the Board and former Chief Executive Officer of the Company. \nFrank DOrazio has served as our Chief Executive Officer and a director since November 2020. Mr. DOrazio formerly served as Corporate Chief Operating Officer and Chief of Staff of Allied World Assurance Company Holding, Ltd. (Allied World), a global provider of property, casualty and specialty insurance and reinsurance, from March 2019 through January 2020. Prior to that, Mr. DOrazio served as President, Underwriting and Global Risk of Allied World from December 2014 through February 2019. From September 2009 to December 2014, Mr. DOrazio served as the President Bermuda and International Insurance of Allied World Ltd. From June 2003, when Mr. DOrazio joined Allied World, through September 2009, Mr. DOrazio held leadership roles with increasing responsibility in the companys general casualty business and in underwriting. Before joining Allied World, Mr. DOrazio worked for the retail insurance market arm of Munich-American Re-Insurance from August 1994 to May 2003, where he held a succession of underwriting and management positions. Prior to that<|endoftext|>The short-term maturity of these instruments. There were no transfers of financial instruments between Levels 1, 2, and 3 during the years ended December 31, 2019 and 2018. \n### Foreign Currency Risk \nNONE. \nConcentration of Credit Risk \nConcentration of credit risk is the risk of loss in the event that certain counterparties are unable to fulfill its obligations to the Company. The Company limits its exposure to credit loss on its cash by placing its cash with high credit quality financial institutions.The Company does not have any cash in excess of federally insured limits. \n### Liquidity Risk \nLiquidity risk is the risk that the Companys cash flows from operations will not be sufficient for the Company to continue operating and discharge is liabilities. The Company is exposed to liquidity risk as its continued operation is dependent upon its ability to obtain financing, either in the form of debt or equity, or achieving profitable operations in order to satisfy its liabilities as they come due. \nMarket Risk \nMarket risk is the risk that fluctuations in the market prices of minerals will impact the Companys future cash flows. The Company is exposed to market risk on the price of gold, which will determine its ability to build and achieve profitable operations, the amount of exploration and development work that the Company will be able to perform, and the number of financing opportunities that will be available. Management believes that it would be premature at this point to enter into any hedging or forward contracts to mitigate its exposure to specific market price risks. \n11. Segmented reporting \nThe Company only has one reportable segment, its acquisition, exploration and development of mineral property interests in United States. All of the mineral properties are located in United States. \n12. Subsequent events \nIn accordance with FASB ASC 855-10, Subsequent Events, the Company has analyzed its operations subsequent to September 30, 2020 to the date these consolidated financial statements were issued and has determined that it does not have any material subsequent events to disclose in these consolidated financial statements. \nITEM 9. \nDuring the Companys two most recent fiscal years, and since then, no independent accountant who was previously engaged as the Companys principal accountant to audit the Companys financial statements has resigned or declined to stand for re-election or been dismissed. \n### ITEM 9A. - CONTROLS AND PROCEDURES \n(a) \n\nWe have not yet adopted disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e)) that are designed to assure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commissions rules and forms, so as to ensure that such information is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, and to allow timely decisions regarding required disclosures. As a result, as of the end of the period covered by this report, we cannot represent that we have effective disclosure controls and procedures as of the date of filing this Form 10-K due to limited accounting and reporting personnel, inadequate accounting policies and procedures, and a lack of segregation of duties due to limited financial resources and the size of our company. We will need to adopt such disclosure controls and procedures prior to commencement of material operations. Consistent therewith, on an on-going basis we will evaluate the adequacy of our controls and procedures. \n(b) \n\nThere were no changes in our internal controls over financial reporting that occurred during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting. \n\nThis annual report does not include a report of managements assessment regarding internal control over financial reporting or an attestation report of the Companys registered public accounting firm due to a transition period established by rules of the Securities and Exchange Commission for newly public companies. \n### ITEM 9B. - OTHER INFORMATION \nNone. \nPART III \nITEM 10. \nThe name, age and titles of our executive officer and director are as follows: \nMr. Jimmy Ramirez (Ramirez) is our President, Treasurer, Secretary and Director. \nMr. Ramirez is a businessman. During the past five (5) years, Mr. Ramirez has been President and CEO of Global Mortgage Banking, a broker of commercial and residential mortgages; President of Paralegals & Documents, Inc., a business providing paralegal and documentation services; President of Gateway Gold & Minerals, Inc. the owner of the mining properties which was acquired by the Company in 2019; President of Trans-Capital Resources, Ltd., a Belize company that is developing a crypto-currency platform and The Class Ring Company, Inc. which provides high schools with class rings, caps and gowns, announcements and recognition products. \nFranklin Ogele, Esq. is our Vice President, General Counsel and Chief Financial Officer. Franklin Ogele is an attorney and businessman. \n### During the past five (5) years, \nMr. Ogele has practiced law with Franklin Ogele, P.A. a securities law firm. Additionally, during and since the past five (5) years, Mr. Ogele has served as President of Phoenix Realty, Inc. and Summit Terminal LLC, both real estate companies and BlackBook Capital Inc., a former FINRA member firm. \nFranklin is admitted to practice law in New York & New Jersey and the US Southern District Court of New York & New Jersey Federal Court. Mr. Ogele also currently serves director and officer of the following companies: Safety First Healthcare Corp, New Africa Petroleum and Emerging Opportunities Corp. \n### Term of Office \nOur officers are appointed by our Board of Directors and hold office until removed by the Board, as described under employment agreements. During the past five years, Franklin Ogele has served as a director of a company with a class of securities registered pursuant to Section 12 of the Exchange Act. \nFamily Relationships \nThere are no family relationships between any of our directors or executive officers and any other directors or executive officers. \n### Significant Employees \nAs of the date hereof, the Company has no employees other than its officers. \n\nDuring the past ten years, Mr. Ramirez has not been the subject to any of the following events: \nRamirez was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time. \n\nRamirez involvement in any type of business, securities or banking activities. \n\n\n\nor ii. or iii. or \n8.Was the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act (15 U.S.C. 1(a)(29), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member. \nExcept as disclosed below, during the past ten years, Mr. Ogele has not been the subject to any of the following events: \nOgele was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time. \n\nOgele involvement in any type of business, securities or banking activities. \n\n\n\nor ii. or iii. or \nFranklin Ogele is the President of Phoenix Realty, Inc. and a Member of Summit Terminal LLC which sought Chapter 11 Bankruptcy protection in 2019 in regard to certain real estate transaction. Phoenix Realty, Inc. had provided corporate guarantee in connection with the purchase by Summit Terminal LLC of certain property in Myrtle Beach, South Carolina. Phoenix Realty, Inc. and Summit Terminal LLC, sought protection under Chapter 11 of the Bankruptcy Code to protect the equity in the property. Franklin Ogele believes the matter will be resolved with refinancing of the property. See In Re: Phoenix Realty, Inc./ Summit Terminal LLC, United States Bankruptcy Court, District of New Jersey, See In Re Phoenix Realty, Inc., and In Re: Summit Terminal LLC Docket Nos. 19-23949 (SLM) and 19-2394, United States Bankruptcy Court, District of New Jersey, dismissed and refiled as In Re: In the Matter of Summit Terminal LLC, United States Bankruptcy Court, District of South Carolina, Docket No. 20-00093-jw. \nIn June 2018, Mr. Ogele, in connection with his role as Chief Compliance Officer of BlackBook Capital, Inc., a former FINRA member firm, entered into an Acceptance Waiver and Consent Letter with FINRA pursuant to which Mr. Ogele was fined $5,000.00 and suspended for 45 days in any principal capacity beginning June 4, 2018 through July 18, 2018 in regard to alleged failure on the part of Mr. Ogele to properly supervise a registered stockbroker of BlackBook Capital. Mr. Ogele had withdrawn his registration as an associated person of a broker-dealer in or about June 2016, prior to the FINRA action. \n\nBased upon review of Schedule 13-G filings, Jimmy Ramirez and Franklin Ogele filed amended Form 13-G to properly disclose their respective holdings in the Company on November 18 2020. \n### Code of Ethics \nWe have not adopted a Code of Ethics that applies to our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. The Company intends to adopt a Code of Ethics in due course. \nNominees to the Board of Directors \nDuring the Companys 2019 fiscal year, there were no material changes to the procedures by which security holders may recommend nominees to the Board of Directors. \n### Audit Committee \nThe Board is of the opinion that such committees are not necessary since the Company is an early development stage company and has only two directors, and to date, such directors have been performing the functions of such committees. \nITEM 11. - EXECUTIVE COMPENSATION \n\n\nWe currently do not have any executive compensation or benefits, such as health or life insurance. We may reimburse Mr. Ramirez and Mr. Ogele for any out-of-pocket expenses that they incur on our behalf. In the future, we may approve payment of salaries for officers and directors, but currently, no such plans have been approved. \nThe following tables set forth certain information about compensation paid, earned or accrued for services by our Executive Officer year ended December 31, 2019 and December 31, 2018: \n\nNon-Equity \nStock \n### Incentive \nAll Other \nName and Principal's \n### Salary \nBonus \nOption Awards \n### Plan Compensation \nCompensation \nPosition \nPeriod \n$ \n$ \n$ \n$ \n$ \n### Jimmy Ramirez \n### Pres/Director \n### Franklin Ogele, Snr \n### VP/GC/CFO \nMr. Ramirez and Mr. Ogele devote as many hours per week to manage the affairs of the Company at no salary. \n### Director Compensation \nThe following table sets forth director compensation for the period ended December 31, 2019 and December 31, 2018: \nFees Earned \n### Non-Equity \nDeferred \nOr Paid \n### Stock \nIncentive Plan \nCompensation \n### All Other \nName in Cash \n### Awards \nCompensation \nEarnings \n### Compensation \nTotal \n($) \n($) \n($) \n($) \n($) \n($) \nJimmy Ramirez \n-0- \n-0- \n-0- \n-0- \n-0- \n-0- \nFranklin Ogele \n-0- \n-0- \n-0- \n-0- \n-0- \n-0- \nEmployment Agreements \nNONE \nITEM 12. - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS \nThe following table lists, as of the date of this Annual Report, the number of shares of common stock of our Company that are beneficially owned by (i) each person or entity known to our Company to be the beneficial owner of more than 5% of the outstanding common stock; Information relating to beneficial ownership of common stock by our principal shareholders and management is based upon information furnished by each person using \"beneficial ownership\" concepts under the rules of the SEC. Under SEC rules, more than one person may be deemed to be a beneficial owner of the same securities, and a person may be deemed to be a beneficial owner of securities as to which he or she may not have any pecuniary beneficial interest. \nThe percentages below are calculated based on 133,333,333 shares of our common stock issued and outstanding and held by Jimmy Ramirez and Franklin Ogele as of the date of this prospectus. We do not have any outstanding options, warrants or other securities exercisable for or convertible into shares of our common stock. \nITEM 13. \nAs<|endoftext|>Incentive and non-qualified stock options under the Company's stock option plans. Such awards are designed to assist in the retention of key executives and management personnel and to create an incentive to create shareholder value over a sustained period of time. The Company believes that stock options are a valuable tool in compensating and retaining employees. During the year ended December 31, 2020, the Committee granted stock options to the Company's executive officers. All such grants were awarded on June 1, 2020, and all carry exercise prices equal to the market price for the Company's common stock at the date of grant. The terms of such options are described below, under the caption \"Grants of Plan-Based Awards in Last Fiscal Year.\" The numbers of shares made subject to each of the option grants were based on various factors relating to the responsibilities of the individual officers and to the extent of previous grants to such individuals. \nBecause the exercise price of all options granted is equal to or above the fair market value of the Company's common stock on the date of grant, the option holders may realize value only if the stock price appreciates from the price on the date the options were granted. This design is intended to focus executives on the enhancement of shareholder value over the long term. \n### Other Elements \nThe Company also maintains certain broad-based employee benefit plans, such as medical and dental insurance, and a qualified defined contribution retirement savings plan (401(k) plan), in which executive officers are permitted to participate. Such officers participate on the same terms as non-executive personnel who meet applicable eligibility criteria, and are subject to any legal limitations on the amounts that may be contributed or the benefits that may be payable under the plans. The Company does not maintain any form of defined benefit pension or retirement plan in which executive officers may participate, nor does it maintain any form of supplemental retirement savings or supplemental deferred compensation plan. \nExercise of Discretion \nIn exercising its discretion as to the level of executive compensation and its components, the Committee considers a number of factors. Members of the Committee conduct informal surveys of compensation paid to comparable executives within and without the consumer finance industry. The Committee finds these data useful primarily in evaluating the overall level of compensation paid or to be paid to the Company's executive officers. The Committee noted that the Company met and exceeded its budget objectives for the year. Operational factors considered included individual and group management goals; indicators of the performance and credit quality of the Company's servicing portfolio, including levels of delinquencies and charge-offs; and indicators of successful management of personnel, including employee stability. All of such factors are assessed with reference to the judgment of the Committee as to the degree of difficulty of achieving desired outcomes. With respect to payment of annual bonuses and grants of stock options, the Committee also takes note of factors relating to the degree of the Company's success over the most recent year. \n### Specific Objectives and Evaluation \nIn the December 2019 and January 2020 the compensation committee designated specific objectives with respect to the chief executive officer to be accomplished within the year 2020, and fixed weights to be associated with each such objective. The chief executive officer proposed to the committee specific annual objectives with respect to each other executive officer of the company, which the committee, after making certain modifications, approved. These objectives and the Committees administration of the annual incentive bonus element of compensation are discussed in detail below, under the heading - Grants of Plan-Based Awards in Last Fiscal Year - Executive Management Bonus Plan. \nGrants of Options \nThe Committee's award of stock options to the Company's officers in June 2020 included option grants to the chief executive officer and the other named executive officers. In determining the appropriate level of such grant, the Committee considered the long-term performance of the chief executive officer and the desirability of providing significant incentive for future performance, as well as the desirability of ensuring that officer's continued retention by the Company, and the various factors noted above with respect to option grants generally. These grants and the Committees administration of the long-term incentive element of compensation are discussed in detail below, under the heading -Grants of Plan-Based Awards in Last Fiscal Year Equity Incentives. \n### Stock Ownership, Hedging and Pledging \nOur board of directors and compensation committee have considered whether to establish a minimum stock ownership goal for members of our senior management. We have elected not to do so, considering that such a policy would either be strict and mandatory, in which case it would undermine the compensatory objectives of our equity compensation plans, or would be merely hortatory, in which case it could be expected to have little effect. Weve also noted that the multiyear vesting terms of the equity incentives granted under our plans have the effect of aligning our executives individual personal financial incentives with the future price performance of the Companys stock. \nAs part of our comprehensive compliance policy, we remind all company executive officers of the mandatory legal prohibition on selling short company shares. We also prohibit company executive officers from entering into transactions that would have the effect of causing those individuals to benefit from a decline in the price of the company stock, such as the purchase of put options. We prohibit such hedging transactions but we do not find it appropriate to prohibit our executive officers from pledging their shares of company stock as security for a loan. We believe that the beneficial incentives of owning company stock remain substantially the same with or without such a pledge. \n### Summary of Compensation \nThe following table summarizes all compensation earned during the three fiscal years ended December 31, 2020 by the Company's chief executive officer, its chief financial officer, and the other three most highly compensated individuals (such five individuals, the \"named executive officers\") who were serving in such position or as executive officers at any time in 2020. It lists their names, the principal positions in which they served in those years, and each component of compensation paid with respect to those years. \nSummary Compensation Table \n(1) \nRepresents the dollar value of accrued for financial accounting purposes in connection with the grant of such options, computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718 and SFAS 123R. Value was estimated using a Black-Scholes option pricing model for the years 2020 and 2019, and using a binomial model for 2018. For the year 2020 the weighted average fair value per option was $1.33, based on assumptions of 4.11 years expected life, expected volatility of 72.10%, and a risk-free rate of 0.26%. For the year 2019 the weighted average fair value per option was $1.11, based on assumptions of 4.11 years expected life, expected volatility of 37.13%, and a risk-free rate of 1.53%. For the year 2018 the weighted average fair value per option was $1.09, based on assumptions of 4.11 years expected life, expected volatility of 33.93%, and a risk-free rate of 2.75%. In all cases, we assumed a dividend yield of 0.0%. \n(2) \nAmounts in this column represent premiums paid by the Company for group life insurance. \nin Last Fiscal Year \nEquity Incentives \nIn the year ended December 31, 2020, we did not grant any stock awards or stock appreciation rights to any of our named executive officers. We granted options to substantially all of our management level employees on June 1, 2020. The option grants noted in the tables above and below were awarded to the named executive officers as part of those grants. We also granted awards under our Executive Management Bonus Plan, which were evaluated and paid out after the end of the year. The amounts paid are shown in the table above (Summary Compensation Table) as Non-Equity Incentive Plan Compensation. \nIn the June 2020 grant, the chief executive officer received an option to purchase 240,000 shares of the Company's common stock at the market closing price ($2.47 per share) on the date of grant, with such right to purchase to become exercisable in increments of 25% on each of the first through fourth anniversaries of the grant date, and to expire on the seventh anniversary. Each of the other executive officers of the Company received a grant at that time on the same terms. Mr. Fritz and Mr. Lavin received such grants with respect to 90,000 shares and 150,000 shares, respectively, and the other named executive officers of the Company each received such a grant with respect to 80,000 shares. \nThe table below provides information regarding the awards granted to the named executive officers in 2020. \n\nThe target and maximum figures appearing in the table above represent the maximum cash payout under the individual executives Executive Management Bonus Plan awards as of the date the incentive was fixed. The actual payout to each individual named in the table above has been determined and paid prior to the date of this proxy statement. That amount was in each case materially less than the maximum (approximately 44% of the maximum, in the case of the chief executive). The respective actual payments are described below, and appear above in the Summary Compensation Table under the heading Non-Equity Plan Compensation. Because each non-equity incentive plan award has been settled and paid, the future payout under such awards as of the date of this report is in each case zero. The grant date fair value figures appearing in the table above, which are the computed fair values of stock option awards, are computed as described in note 1 to the Summary Compensation Table. \n### Executive Management Bonus Plan \nThe Executive Management Bonus Plan award granted to the chief executive officer, Mr. Bradley, called for him to meet as many as possible of seven separate operational and financial objectives within the year 2020. The Compensation Committee assigned to each of those objectives a value as a percentage of base salary. The objectives and their weightings were as follows: to meet the Companys quarterly budgeted earnings (25% each quarter, total of 100%), to raise $70 million or more of debt capital (50%), to renew, extend or replace one or more warehouse credit facilities (50%, pro rata if less than a two-year revolving term), to acquire a material new servicing portfolio (100%), to execute four rated securitization transactions (40% each, 160% total), to increase the Companys annual originations of receivables to each of three targets (60% in the aggregate, creditable in increments of 20% for reaching aggregate amounts of $800 million, $900 million, and $1.0 billion), and to cause the Companys common stock to trade in excess of each of four targets (80% in the aggregate, creditable in increments of 20% for reaching prices of $5.00, $5.50, $6.00 and $6.50 per share). \nThe total of the seven weightings is 600%; accordingly, the target and maximum possible value to that officer of the award was 600% of his base salary for 2020. \nIn a series of meetings, the committee evaluated the chief executives performance in comparison to the goals. The Compensation Committee determined that the budget objective was met in all four quarters of 2020, and credited the chief executive with the maximum value, or 100%. The Company did not raise new capital, nor acquire a material portfolio, and the Committee found no credit was earned in those respects. \nThe Committee also determined that the December renewal of a warehouse line was on beneficial terms and for a full two years, and credited the chief executive with the full 50% designated for that objective. \nThe Committee noted that the Company had executed three rated securitizations during the year, representing creditable performance of 120%. It determined that our originations volume was less than the minimum target. The Committee considered applying an allowance to the originations volume target, in light<|endoftext|>Quarter while Brevan Howard, Transtrend and Welton finished the quarter negative. Brevan Howard and Welton were positive for the year while Transtrend finished the year negative. \n### Frontier Global Fund \nThe Frontier Global Fund Class 1 NAV lost 0.04% for the twelve months ended December 31, 2019, net of fees and expenses; The Frontier Global Fund Class 1AP NAV gained 3.01% for the twelve months ended December 31, 2019, net of fees and expenses; the Frontier Global Fund Class 2 NAV gained 3.02% for the twelve months ended December 31, 2019, net of fees and expenses. \nFor the twelve months ended December 31, 2019, the Frontier Global Fund recorded net gain on investments of $617,083, net investment loss of $495,011, and total expenses of $495,009, resulting in a net decrease in owners capital from operations attributable to controlling interests of $122,072. The NAV per Unit, Class 1, decreased from $131.57 at December 31, 2018 to $131.52 as of December 31, 2019. The NAV per Unit, Class 1AP, increased from $149.92 at December 31, 2018 to $154.43 as of December 31, 2019. The NAV per Unit, Class 2, increased from $187.17 at December 31, 2018, to $192.82 as of December 31, 2019. Total Class 1 subscriptions and redemptions for the year were $0 and $3,388,723, respectively. Total Class 1AP subscriptions and redemptions for the year were $0 and $0, respectively. Total Class 2 subscriptions and redemptions for the year were $0 and $93,395, respectively. Ending capital, at December 31, 2019, was $4,471,980 for Class 1, $33,047 for Class 1AP and $343,217 for Class 2. \n\n\nTwo of the six sectors traded in The Frontier Global Fund was profitable in Q4 2019. \n\n### Frontier Heritage Fund \nThe Frontier Heritage Fund Class 1 NAV lost 2.30% for the twelve months ended December 31, 2019, net of fees and expenses; The Frontier Heritage Fund Class 1AP NAV gained 2.12% for the twelve months ended December 31, 2019, net of fees and expenses; the Frontier Heritage Fund Class 2 NAV gained 0.70% for the twelve months ended December 31, 2019, net of fees and expenses. For the twelve months ended December 31, 2019, the Frontier Heritage Fund recorded net gain on investments of $158,123, net investment loss of $210,792, and total expenses of $210,786, resulting in a net decrease in owners capital from operations of $19,974, after non-controlling interest of $32,695. The NAV per Unit, Class 1, decreased from $99.83 at December 31, 2018, to $97.54 as of December 31, 2019. The NAV per Unit, Class 1AP, increased from $111.78 at December 31, 2018, to $114.15 as of December 31, 2019. The NAV per Unit, Class 2, increased from $152.53 at December 31, 2018, to $153.59 as of December 31, 2019. Total Class 1 subscriptions and redemptions for the twelve months were $0 and $995,044, respectively. Total Class 2 subscriptions and redemptions for the twelve months were $0 and $112,654, respectively. Ending capital, at December 31, 2019, was $2,295,623 for Class 1, $8,333 for Class 1AP and $522,057 for Class 2. \nThe Frontier Heritage Fund invests in one or more swaps.\n\nThe incentive fees payable to the underlying commodity trading advisor(s) comprising the index referenced in the swaps is 15% of new net trading profits on a monthly or quarterly basis.To the extent that there are embedded management and incentive fees incurred in a swap investment, the Managing Owner waives any management and incentive fees to which it is otherwise entitled.Themanagement and incentive fees embedded in a swap may be higher or lower than the management and incentive fees that would otherwise be charged to a Series by the Managing Owner. \nAs of December 31, 2019, the management fee embedded in swaps owned by Frontier Heritage Fund was 1.00% per annum, and the managing owner has waived the entire management fee due to it from those Series in respect of such Series investment in swaps. \nBased on an analysis of the management fees charged toFrontier Heritage Fund, the effective management fee rate of the Series were lower than the management fee rate otherwise payable to the Managing Owner. For the period ended December 31, 2019, the effective management fee rate ofFrontier Heritage Fundwas 2.19%, compared to a management fee payable to the Managing Owner of 2.50%. For the year ended December 31, 2019, the management and incentive fees embedded in gains (losses) from trading companies owned by Frontier Heritage Fund was $4,835. \n\n\nTwo of the six sectors traded in the Frontier Heritage Fund were profitable in Q4 2020. Energies and Stock Indices were positive while Metals, Currencies, Agriculturals and Stock Indices were negative for the quarter. \nInterest Rates were positive YTD while Metals, Energies, Currencies, Agriculturals and Stock Indices were negative YTD. \nIn terms of major CTA performance, none finished positive for the quarter, while Aspect, Brevan Howard and Welton finished the quarter negative. Aspect and Welton were positive for the year while Brevan Howard and Winton finished negative. \nResults of Operations for the Twelve Months Ended December 31, 2018 \nThe returns for each Series and Class of Units for the twelve months ended December 31, 2018 can be found in our annual report on Form 10-K for the fiscal year ended December 31, 2019, located within Part II, Item 7. \nItem7A. \n\nThe Trust is a speculative commodity pool. The market sensitive instruments, which are held by the Trading Companies or Galaxy Plus entities in which the Series are invested, are acquired for speculative trading purposes, and all or a substantial amount of the Series assets are subject to the risk of trading loss. Unlike an operating company, the risk of market sensitive instruments is integral, not incidental, to the Series main line of business. \nMarket movements result in frequent changes in the fair market value of each Trading Companys open positions and, consequently, in each Series of the Trusts earnings and cash flow. The Trading Companies and Galaxy Plus entities and consequently the Series market risk is influenced by a wide variety of factors, including the level and volatility of exchange rates, interest rates, equity price levels, the market value of financial instruments and contracts, the diversification effects among the open positions and the liquidity of the markets in which trades are made. \nEach Trading Company and Galaxy Plus entity rapidly acquires and liquidates both long and short positions in a wide range of different markets. Consequently, it is not possible to predict how a particular future market scenario will affect performance, and the past performance for any Series is not necessarily indicative of the future results of such Series. \nAdditional risk of trading loss from investment in an unaffiliated Trading Company may result from the Managing Owners inability to directly control or stop trading in the event of exercise of certain withdrawal provisions in the investment agreement. \nThe Trading Companies and Galaxy Plus entities, and consequently the Series primary market risk exposures as well as the strategies used and to be used by the Trading Advisors for managing such exposures are subject to numerous uncertainties, contingencies and risks, any one of which could cause the actual results of the Trusts and the Managing Owners risk controls to differ materially from the objectives of such strategies. Government interventions, defaults and expropriations, illiquid markets, the emergence of dominant fundamental factors, political upheavals, changes in historical price relationships, an influx of new market participants, increased regulation and many other factors could result in material losses as well as in material changes to the risk exposures and the risk management strategies of the Trading Companies and Galaxy Plus entities and consequently the Trust. There can be no assurance that the Trading Companies and Galaxy Plus entities current market exposure and/or risk management strategies will not change materially or that any such strategies will be effective in either the short- or long-term. Investors must be prepared to lose all or substantially all of their investment in a Series. \n### Quantitative Market Risk \nTrading Risk \nThe Series approximate risk exposure in the various market sectors traded by its Trading Advisors is quantified below in terms of value at risk. Due to the Series mark-to-market accounting, any loss in the fair value of the Series (through the Trading Companies and Galaxy Plus entities) open positions is directly reflected in the Series earnings, realized or unrealized gain/loss. \nExchange maintenance margin requirements have been used by the Trust as the measure of its value at risk. Maintenance margin requirements are set by exchanges to equal or exceed the maximum losses reasonably expected to be incurred in the fair value of any given contract in 95% to 99% of any one-day interval. The maintenance margin levels are established by brokers, dealers and exchanges using historical price studies as well as an assessment of current market volatility and economic fundamentals to provide a probabilistic estimate of the maximum expected near-term one-day price fluctuation. Maintenance margin has been used rather than the more generally available initial margin, because initial margin includes a credit risk component that is not relevant to value at risk. \nIn the case of market sensitive instruments that are not exchange-traded, including currencies and some energy products and metals, the margin requirements for the equivalent futures positions have been used as value at risk. In those cases in which a futures-equivalent margin is not available, dealers margins have been used. \nIn the case of contracts denominated in foreign currencies, the value at risk figures include foreign currency margin amounts converted into U.S. dollars with an incremental adjustment to reflect the exchange rate risk inherent to the Series, which is valued in U.S. dollars, in expressing value at risk in a functional currency other than U.S. dollars. \nIn quantifying each Series value at risk, 100% positive correlation in the different positions held in each market risk category has been assumed. Consequently, the margin requirements applicable to the open contracts have simply been aggregated to determine each trading categorys aggregate value at risk. The diversification effects resulting from the fact that the Series positions held through the Trading Companies and Galaxy Plus entities are rarely, if ever, 100% positively correlated have not been reflected. \n### Value at Risk by Market Sectors \nThe following tables present the trading value at risk associated with each Series exposure to open positions (as held by the Trading Companies) by market sector as of December 31, 2020 and 2019. \nDOMESTIC EXPOSURE \n### Frontier Diversified Fund: \nFrontier Long/Short Commodity Fund: \nFrontier Balanced Fund: \n### Frontier Select Fund: \nFrontier Heritage Fund: \nValue at Risk: Foreign Markets \nThe following table presents the portion of trading value at risk associated with each Series exposure to open positions (as held by the Trading Companies) by market sector as of December 31, 2020 and 2019, on foreign markets. \n### FOREIGN EXPOSURE \nAs of December 31, 2019, a portion of the assets of the Frontier Balanced Fund, Frontier Diversified Fund, Frontier Long/Short Commodity Fund, Frontier Select Fund (through its investment in an unconsolidated trading company) and Frontier Heritage Fund was invested in swap contracts (Please refer to Note 4 in the Series Financial Statements). Margin information is not available for these contracts therefore no value at risk calculations were included in the table for these investments. \n\n### Frontier Masters Fund \nFrontier Balanced Fund: \nFrontier Global Fund: \n### Frontier Heritage Fund: \nMaterial Limitations on Value at Risk as an Assessment of Market Risk \nThe face value of the market sector instruments held on behalf of the Series is typically many times the applicable maintenance margin requirement, which generally ranges between approximately 1% and 10% of contract face value, as well as many times the capitalization of the Series. The magnitude of each Series open positions creates a risk of ruin not typically found in most other investment vehicles. Because of the size of their positions, certain market conditions, although unusual, but historically recurring from time to time, could cause a Series to incur severe losses over a short period of time. The value at risk table above, as well<|endoftext|>The purchasers written acknowledgment of the receipt of a risk disclosure statement; (ii) a written agreement to transactions involving penny stocks; and (iii) a signed and dated copy of a written suitability statement. These disclosure requirements may have the effect of reducing the trading activity in the secondary market for our common stock, and therefore stockholders may have difficulty selling their shares. \nWe are subject to ongoing public reporting requirements that are less rigorous than Exchange Act rules for companies that are not emerging growth companies and our stockholders could receive less information than they might expect to receive from more mature public companies. \nWe are required to publicly report on an ongoing basis as an emerging growth company (as defined in JOBS Act) under the reporting rules set forth under the Securities Exchange Act of 1934, as amended, or the Exchange Act. For so long as we remain an emerging growth company, we may take advantage of certain exemptions from various reporting requirements that are applicable to other Exchange Act reporting companies that are not emerging growth companies, including but not limited to: not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act; being permitted to comply with reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements; and being exempt from the requirement to hold a non-binding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. \nIn addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933, as amended, or the Securities Act, for complying with new or revised accounting standards. \nWe expect to take advantage of these reporting exemptions until we are no longer an emerging growth company. We would remain an emerging growth company for up to five years, although if the market value of our common stock that is held by non-affiliates exceeds $700 million as of any June 30 before that time, we would cease to be an emerging growth company as of the following December 31. \nBecause we will be subject to ongoing public reporting requirements that are less rigorous than Exchange Act rules for companies that are not emerging growth companies, our stockholders could receive less information than they might expect to receive from more mature public companies. We cannot predict if investors will find our common stock less attractive if we elect to rely on these exemptions, or if taking advantage of these exemptions would result in less active trading or more volatility in the price of our common stock \nAnti-takeover provisions in our charter documents and under Delaware law could make an acquisition of our company more difficult, and limit attempts by our stockholders to replace or remove our current management. \nCertain provisions of Delaware law and our certificate of incorporation and bylaws may have the effect of delaying or preventing a change of control or changes in our management. Our certificate of incorporation and bylaws include provisions that: permit the board of directors to establish the number of directors and fill any vacancies and newly created directorships; provide that directors may only be removed by the majority of the shares of voting stock then outstanding; and establish advance notice requirements for nominations for election to our board of directors or for proposing matters that can be acted upon by stockholders at annual stockholder meetings. \nThey may also make it more difficult for a third party to acquire us, even if the third partys offer may be considered beneficial by many of our stockholders. As a result, our stockholders may be limited in their ability to obtain a premium for their shares. \nThese provisions, alone or together, could delay or prevent hostile takeovers and changes in control or changes in our management. \nITEM 1B.UNRESOLVED STAFF COMMENTS. \nNot applicable. \n### ITEM 2.PROPERTIES. \nWe are headquartered at 13850 Manchester Rd., St. Louis, Missouri 63011. This facility totals 50,000 square feet of office, showroom and warehouse space. We lease this facility pursuant to a lease agreement entered into with S.H.J., L.L.C., a Missouri limited liability company and affiliate of Goedeker Television, on April 5, 2019. The lease is for a term of five (5) years and provides for a base rent of $45,000 per month. In addition, we are responsible for all taxes and insurance premiums during the lease term. The lease contains customary events of default, including if: (i) we shall fail to pay rent within five (5) days after the due date; (ii) any insurance required to be maintained by us pursuant to the lease shall be canceled, terminated, expire, reduced, or materially changed; (iii) we shall fail to comply with any term, provision, or covenant of the lease and shall not begin and pursue with reasonable diligence the cure of such failure within fifteen (15) days after written notice thereof to us; (iv) we shall become insolvent, make an assignment for the benefit of creditors, or file a petition under any section or chapter of the Bankruptcy Code, or under any similar law or statute of the United States of America or any State thereof; or (v) a receiver or trustee shall be appointed for the leased premises or for all or substantially all of our assets. \nOn January 13, 2021, we entered into a lease agreement with Westgate 200, LLC for a new location totaling approximately 58,000 square feet of office, showroom and warehouse space in St. Charles, Missouri. The lease contains customary events of default, including (i) if we shall fail to pay rent within five (5) days after the due date, (ii) if we shall fail to observe or perform any other terms, covenants, conditions or provisions under the lease and fail to cure such default within thirty (30) days after written notice to us, (iii) if we fail to occupy all or any material portion of the lease premises for more than ninety (90) consecutive days, for reasons other than force majeure, and fail to pay all costs incurred by the landlord as a result of such failure to occupy, and other customary representations, warranties and covenants. \nWe believe that all our properties have been adequately maintained, are generally in good condition, and are suitable and adequate for our businesses. \n### ITEM 3.LEGAL PROCEEDINGS. \nFrom time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. We are currently not aware of any such legal proceedings or claims that we believe will have a material adverse effect on our business, financial condition or operating results. \nITEM 4. MINE SAFETY DISCLOSURES. \nNot applicable. \nPART II \nITEM 5. \n\n### Market Information \nOur common stock began trading on NYSE American under the symbol GOED on July 31, 2020. \nNumber of Holders of our Common Shares \nAs of March 26, 2021, there were approximately 48 stockholders of record of our common stock. In computing the number of holders of record of our common stock, each broker-dealer and clearing corporation holding shares on behalf of its customers is counted as a single stockholder. \n### Dividend Policy \nWe currently intend to retain all available funds and any future earnings for use in the operation of our business and do not anticipate paying any cash dividends on our common stock in the near future. We may also enter into credit agreements or other borrowing arrangements in the future that will restrict our ability to declare or pay cash dividends on our common stock. Any future determination to declare dividends will be made at the discretion of our board of directors and will depend on our financial condition, operating results, capital requirements, contractual restrictions, general business conditions and other factors that our board of directors may deem relevant. \nSee also Item 1A \nRisk FactorsRisks Related Ownership of Our Common Stock \nWe do not expect to declare or pay dividends in the foreseeable future \n\n### See Item 12 \n\n### Recent Sales of Unregistered Securities \nWe have not sold any equity securities during the 2020 fiscal year that were not previously disclosed in a quarterly report on Form 10-Q or a current report on Form 8-K that was filed during the 2020 fiscal year. \nPurchases of Equity Securities \nNo repurchases of our common stock were made during the fourth quarter of 2020. \nITEM 6.SELECTED FINANCIAL DATA. \nNot applicable. \nITEM 7. \n\nThe following discussion and analysis summarizes the significant factors affecting our operating results, financial condition, liquidity and cash flows as of and for the periods presented below. The following discussion and analysis should be read in conjunction with our consolidated financial statements and the related notes thereto included elsewhere in this report. The discussion contains forward-looking statements that are based on the beliefs of management, as well as assumptions made by, and information currently available to, management. Actual results could differ materially from those discussed in or implied by forward-looking statements as a result of various factors, including those discussed below and elsewhere in this report, particularly in the sections Item 1A Risk Factors and Cautionary Statement Regarding Forward-Looking Statements. \nAll periods presented on or prior to April 5, 2019 represent the operations of Goedeker Television, our predecessor. Unless otherwise specified, all results of operations information for the year ended December31, 2019 reflects the full year. \nReferences to Successor refer to the financial position and results of operations of our company subsequent to April 5, 2019. References to Predecessor refer to the financial position and results of operations of Goedeker Television on and before April 5, 2019. \n### Overview \nWe offer over 141,000 SKUs organized by category and product features, providing visitors to the site an easy to navigate shopping experience. \n\n### Recent Developments \nImpact of Coronavirus Pandemic \n\n\nMost states and cities, including in markets in which we operate, reacted by instituting quarantines, restrictions on travel, stay at home rules, social distancing measures and restrictions on the types of businesses that could continue to operate, as well as guidance in response to the pandemic and the need to contain it. \nNotwithstanding the foregoing, we are dependent upon suppliers to provide us with all of the products that we sell. \nIn addition, the global deterioration in economic conditions, which may have an adverse impact on discretionary consumer spending, could also impact our business. \nFurthermore, the spread of COVID-19 has adversely impacted global economic activity and has contributed to significant volatility and negative pressure in financial markets.The pandemic has resulted, and may continue to result, in a significant disruption of global financial markets, which may reduce our ability to access capital in the future, which could negatively affect our liquidity. \nWe have taken steps to take care of our employees, including providing the ability for employees to work remotely and implementing strategies to support appropriate social distancing techniques for those employees who are not able to work remotely. We have also taken precautions with regard to employee, facility and office hygiene as well as implementing significant travel restrictions. We are also assessing our business continuity plans for all business units in the context of the pandemic. This is a rapidly evolving situation, and we will continue to monitor and mitigate developments affecting our workforce, our suppliers, our customers, and the public at large to the extent we are able to do so. We have and will continue to carefully review all rules, regulations, and orders and responding accordingly. \n\nSee also Item 1A \nRisk Factors for more information. \n### Lease Agreement \nOn January 13, 2021, we entered into a lease agreement with Westgate 200, LLC, pursuant to which we lease approximately 58,000 square feet in a building located in St. Charles, Missouri, and which we expect to occupy on or around April 15,<|endoftext|>Of time. When Dragoneer invests, it is generally with a strong view that a business has a long and clear runway for compound growth. \nConcentration. There are very few companies that meet Dragoneers selective criteria, and it attempts to maintain its discipline across market cycles. Dragoneer is also a believer that concentrated investments based in rigorous analysis are more likely to produce superior outcomes over time, compared to a portfolio approach with wide dispersion among winners and losers. \nPreservation of capital. In addition to earning an attractive rate of return on Dragoneers investments, Dragoneer also seeks a significant margin of safety in each investment. Dragoneer is very focused on preservation of capital and pursues a nuanced evaluation of numerous downside scenarios. Its historical losses as a firm have been limited as a result. \nConsistent with our investment philosophy and strategy, we plan to identify high-quality businesses run by exceptional teams pursuing large market opportunities. We expect to be guided by the criteria outlined above in evaluating opportunities, but we may decide to complete our initial Business Combination with a target business that does not meet any or all of these criteria. \nThe criteria set forth above are not intended to be exhaustive. Any evaluation relating to the merits of a particular initial Business Combination may be based, to the extent relevant, on these general guidelines as well as other considerations, factors and criteria that our management and our investment team may deem relevant. \nSo long as our securities are listed on the NYSE, our initial Business Combination must occur with one or more target businesses that together have an aggregate fair market value of at least 80% of the net assets held in the trust account (excluding the deferred underwriting commissions and taxes payable on the interest earned on the trust account) at the time of signing a definitive agreement in connection with our initial Business Combination. \nWe may, at our option, pursue an acquisition opportunity jointly with one or more entities affiliated with Dragoneer and/or one or more investors in funds managed by Dragoneer, which we refer to as an Affiliated Joint Acquisition. \n10-K. \n\n\n### Our Acquisition Process \nIn evaluating a potential target business, we expect to conduct a comprehensive due diligence review to seek to determine a companys quality and its intrinsic value. That due diligence review may include, among other things, financial statement analysis, detailed document reviews, multiple meetings with management, consultations with relevant industry experts, competitors, customers and suppliers, as well as a review of additional information that we will seek to obtain as part of our analysis of a target company. \nIn the event we seek to complete our initial Business Combination with a company that is affiliated with our sponsor, officers or directors, we, or a committee of independent directors, if required by applicable law or based upon the decision of our board of directors or a committee thereof, will obtain an opinion from an independent investment banking firm or an independent accounting firm that our initial Business Combination is fair to the Company from a financial point of view. \nMembers of our and Dragoneers management teams, including our officers and directors, directly or indirectly own our securities and, accordingly, may have a conflict of interest in determining whether a particular target company is an appropriate business with which to effectuate our initial Business Combination. Each of our officers and directors, as well as our and Dragoneers management teams, may have a conflict of interest with respect to evaluating a particular Business Combination if the retention or resignation of any such officers, directors, and management team members was included by a target business as a condition to any agreement with respect to such Business Combination. \nEach of our directors and officers presently has, and any of them in the future may have additional, fiduciary or contractual obligations to other entities pursuant to which such officer or director is or will be required to present a Business Combination opportunity. \nOur amended and restated memorandum and articles of association provide that we renounce our interest in any corporate opportunity offered to any director or officer unless such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of the Company, and such opportunity is one we are legally and contractually permitted to undertake and would otherwise be reasonable for us to pursue, and to the extent the director or officer is permitted to refer that opportunity to us without violating another legal obligation. \nOur Founders, sponsor, officers, and directors may sponsor, form or participate in other blank check companies similar to ours during the period in which we are seeking an initial Business Combination. In addition, our Founders, sponsor, officers, and directors are not required to commit any specified amount of time to our affairs and, accordingly, will have conflicts of interest in allocating management time among various business activities, including identifying potential Business Combinations and monitoring the related due diligence. \n\nOur sponsor and each member of our management team have entered into an agreement with us, pursuant to which they have agreed to waive their redemption rights with respect to any founder shares and public shares held by them in connection with (i)the completion of our initial Business Combination, and (ii)a shareholder vote to approve an amendment to our amended and restated memorandum and articles of association (A)that would modify the substance or timing of our obligation to provide holders of our ClassA ordinary shares the right to have their shares redeemed in connection with our initial Business Combination or to redeem 100% of our public shares if we do not complete our initial Business Combination within 24 months (or 27 months, as applicable) from the closing of our Initial Public Offering or during any Extension Period or (B)with respect to any other provision relating to the rights of holders of our ClassA ordinary shares. \n\nOur amended and restated memorandum and articles of association provides that in no event will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 either prior to or upon consummation of an initial Business Combination (so that we do not then become subject to the SECs penny stock rules). \n\nHowever, in the event that the Proposed Business Combination is not consummated, the decision as to whether we will seek shareholder approval of a proposed Business Combination or conduct a tender offer will be made by us, solely in our discretion, and will be based on a variety of factors such as the timing of the transaction and whether the terms of the transaction would require us to seek shareholder approval under applicable law or stock exchange listing requirements or whether we were deemed to be a foreign private issuer (which would require a tender offer rather than seeking shareholder approval under SEC rules). Asset acquisitions and share purchases would not typically require shareholder approval while direct mergers with the Company where we do not survive and any transactions where we issue more than 20% of our issued and outstanding ordinary shares or seek to amend our amended and restated memorandum and articles of association would typically require shareholder approval. We currently intend to conduct redemptions in connection with a shareholder vote to consummate the Proposed Business Combination. \n\n\nIf we seek shareholder approval, we will complete our initial Business Combination only if we obtain the approval of an ordinary resolution under Cayman Islands law, which requires the affirmative vote of a majority of shareholders who attend and vote at a general meeting of the company. As a result, in addition to our initial purchasers founder shares, we would need 25,875,001, or 37.5% (assuming all issued and outstanding shares are voted), or 4,312,501, or 6.25% (assuming only the minimum number of shares representing a quorum are voted), of the 69,000,000 public shares sold in our Initial Public Offering to be voted in favor of an initial Business Combination in order to have our initial Business Combination approved. \n\n\n\n\n14e-5 under the Exchange Act. \n\n\n\n\n\n\n\n\n\n\n\nIf our initial proposed Business Combination is not completed, we may continue to try to complete a Business Combination with a different target until 24 months (or 27 months, as applicable) from the closing of our Initial Public Offering. \n\nOur amended and restated memorandum and articles of association provide that we have only 24 months (or 27 months, as applicable) from the closing of our Initial Public Offering to consummate an initial Business Combination. If we have not consummated an initial Business Combination within 24 months (or 27 months, as applicable) from the closing of our Initial Public Offering, we will: (i)cease all operations except for the purpose of winding up; and (iii)as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders and our board of directors, liquidate and dissolve, subject in each case to our obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect to our warrants, which will expire worthless if we fail to consummate an initial Business Combination within 24 months (or 27 months, as applicable) from the closing of our Initial Public Offering. \nOur sponsor and each member of our management team have entered into an agreement with us pursuant to which they have agreed to waive their rights to liquidating distributions from the trust account with respect to any founder shares they hold if we fail to consummate an initial Business Combination within 24 months (or 27 months, as applicable) from the closing of our Initial Public Offering or during any Extension Period (although they will be entitled to liquidating distributions from the trust account with respect to any public shares they hold if we fail to complete our initial Business Combination within the prescribed time frame). \nOur sponsor, executive officers, and directors have agreed, pursuant to a written agreement with us, that they will not propose any amendment to our amended and restated memorandum and articles of association (A)that would modify the substance or timing of our obligation to provide holders of our ClassA ordinary shares the right to have their shares redeemed in connection with our initial Business Combination or to redeem 100% of our public shares if we do not complete our initial Business Combination within 24 months (or 27 months, as applicable) from the closing of our Initial Public Offering or (B)with respect to any other provision relating to the rights of holders of our ClassA ordinary shares, unless we provide our public shareholders with the opportunity to redeem their public shares upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account and not previously released to us to pay our income taxes, if any, divided by the number of the then-outstanding public shares. However, we may not redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 either prior to or upon consummation of an initial Business Combination (so that we do not then become subject to the SECs penny stock rules). This redemption right shall apply in the event of the approval of any such amendment, whether proposed by our sponsor, any executive officer, director or any other person. \n\n\nLLC and J.P. Morgan Securities LLC, the underwriters of our Initial Public Offering, will not execute an agreement with us waiving such claims to the monies held in the trust account. \n\nAs of December31, 2020, we had $605,009 of cash held outside the trust account with which to pay any such potential claims (including costs and expenses incurred in connection with our liquidation, currently estimated to be no more than approximately $100,000). \nIf we file a bankruptcy or insolvency petition<|endoftext|>Cash portion of the purchase price exceeds the amount available from the trust account, net of amounts needed to satisfy any redemption by public shareholders, and the net proceeds of the sale of the private placement warrants, we may be required to seek additional financing to complete such proposed initial business combination. \n\n\n\n\nWe are not required to obtain an opinion from an independent investment banking firm or another independent entity that commonly renders valuation opinions, and consequently, you may have no assurance from an independent source that the price we are paying for the business is fair to our shareholders from a financial point of view. \nUnless we complete our initial business combination with a company that is affiliated with our sponsor, officers or directors, we are not required to obtain an opinion from an independent investment banking firm or another independent entity that commonly renders valuation opinions that our initial business combination is fair to our company from a financial point of view. \nWe may issue additional Class A ordinary shares or preference shares to complete our initial business combination or under an employee incentive plan after completion of our initial business combination. \nOur amended and restated memorandum and articles of association authorize the issuance of up to 400,000,000 Class A ordinary shares, par value $0.0001 per share, 40,000,000 Class B ordinary shares, par value $0.0001 per share, and 1,000,000 preference shares, par value $0.0001 per share. There are 345,601,567 and 26,206,250 authorized but unissued Class A ordinary shares and Class B ordinary shares, respectively, available for issuance which amount does not take into account shares issuable upon conversion of the Class B ordinary shares, if any. The Class B ordinary shares are automatically convertible into Class A ordinary shares at the time of the consummation of our initial business combination, initially at a one-for-one ratio but subject to adjustment as set forth herein and in our amended and restated memorandum and articles of association, including in certain circumstances in which we issue Class A ordinary shares or equity-linked securities related to our initial business combination. \nWe may issue a substantial number of additional Class A ordinary shares or preference shares to complete our initial business combination or under an employee incentive plan after completion of our initial business combination. We may also issue Class A ordinary shares to redeem the warrants or Class A ordinary shares upon conversion of the Class B ordinary shares at a ratio greater than one-to-one at the time of our initial business combination as a result of the anti-dilution provisions as set forth in our amended and restated memorandum and articles of association. However, our amended and restated memorandum and articles of association provide, among other things, that prior to our initial business combination, we may not issue additional shares that would entitle the holders thereof to (i) receive funds from the trust account or (ii) vote as a class with our public shares on any initial business combination. The issuance of additional ordinary or preference shares: may significantly dilute the equity interest of investors in our initial public offering, which dilution would increase if the anti-dilution provisions in the Class B ordinary shares resulted in the issuance of Class A ordinary shares on a greater than one-to-one basis upon conversion of the Class B ordinary shares; may subordinate the rights of holders of Class A ordinary shares if preference shares are issued with rights senior to those afforded our Class A ordinary shares; could cause a change in control if a substantial number of our Class A ordinary shares are issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers and directors; may adversely affect prevailing market prices for our units, Class A ordinary shares and/or warrants; \n\nThe founder shares will automatically convert into Class A ordinary shares at the time of the consummation of our initial business combination on a one-for-one basis, subject to adjustment for share sub-divisions, share capitalizations, reorganizations, recapitalizations and the like, and subject to further adjustment as provided herein. In the case that additional Class A ordinary shares or equity-linked securities are issued or deemed issued in connection with our initial business combination, the number of Class A ordinary shares issuable upon conversion of all founder shares will equal, in the aggregate, on an as-converted basis, 20% of the total number of Class A ordinary shares outstanding after such conversion (after giving effect to any redemptions of Class A ordinary shares by public shareholders), including the total number of Class A ordinary shares issued, or deemed issued or issuable upon conversion or exercise of any equity-linked securities or rights issued or deemed issued, by the company in connection with or in relation to the consummation of the initial business combination, excluding any Class A ordinary shares or equity-linked securities exercisable for or convertible into Class A ordinary shares issued, or to be issued, to any seller in the initial business combination and any private placement warrants issued to our sponsor, officers or directors upon conversion of working capital loans; If we do not complete our initial business combination within the required time period, our public shareholders may receive only approximately $10.00 per public share, or less in certain circumstances, on the liquidation of our trust account. \n\n\n\nIf (i) we issue additional Class A ordinary shares or equity-linked securities for capital raising purposes in connection with the closing of our initial business combination at a newly issued price of less than $9.20 per Class A ordinary share, (ii) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of our initial business combination on the date of the consummation of our initial business combination (net of redemptions), and (iii) the Market Value of our Class A ordinary shares is below $9.20 per share, then the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher of the market value and the newly issued price, the $18.00 per share redemption trigger price will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the newly issued price, and the $10.00 per share redemption trigger price will be adjusted (to the nearest cent) to be equal to the higher of the market value and the newly issued price. \n\nWe issued warrants to purchase 50,000,000 Class A ordinary shares as part of the units offered in our initial public offering, and simultaneously with the closing of our initial public offering, we issued in a private placement an aggregate of 5,933,333 Private Placement Warrants, each exercisable to purchase one Class A ordinary share at $10.00 per share, subject to adjustment. We may also issue Class A ordinary shares in connection with our redemption of our warrants. \nTo the extent we issue ordinary shares to effectuate a business combination, the potential for the issuance of a substantial number of additional Class A ordinary shares upon exercise of these warrants or conversion rights could make us a less attractive acquisition vehicle to a target business. Any such issuances will increase the number of issued and outstanding Class A ordinary shares and reduce the value of the Class A ordinary shares issued to complete the business combination. \n\n\nWhile short-term U.S. \n\nIf we seek shareholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our amended and restated memorandum and articles of association provide that a public shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a group (as defined under Section 13 of the Exchange Act), will be restricted from redeeming its shares with respect to more than an aggregate of 15% of the shares sold in our initial public offering, which we refer to as the Excess Shares, without our prior consent. \n\nOur Class A ordinary shares are listed on NYSE. Although after giving effect to our initial public offering we expect to meet, on a pro forma basis, the minimum initial listing standards set forth in the NYSE listing standards, we cannot assure you that our securities will be, or will continue to be, listed on the NYSE in the future or prior to our initial business combination. For instance, our share price would generally be required to be at least $4.00 per share and we would be required to have at least 400 round lot holders. \n\nBecause our units, Class A ordinary shares and warrants are listed on the NYSE, our units, Class A ordinary shares and warrants qualify as covered securities under such statute. \n\nThese provisions will include a staggered board of directors, the ability of the board of directors to designate the terms of and issue new series of preference shares, and the fact that prior to the completion of our initial business combination only holders of our Class B ordinary shares, which have been issued to our sponsor, are entitled to vote on the election of directors, which may make more difficult the removal of management and may discourage transactions that otherwise could involve payment of a premium over prevailing market prices for our securities. \n\nPursuant to an agreement, our initial shareholders and their permitted transferees can demand that we register the Class A ordinary shares into which founder shares are convertible, holders of our private placement warrants and their permitted transferees can demand that we register the private placement warrants and the Class A ordinary shares issuable upon exercise of the private placement warrants, and holders of warrants that may be issued upon conversion of working capital loans may demand that we register the Class A ordinary shares issuable upon exercise of such warrants. \n\n\nOur operations are dependent upon a relatively small group of individuals and, in particular, Todd Boehly, our Chairman, Chief Executive Officer and Chief Financial Officer, and the members of our board of directors. \n\nMembers of our management team have been involved in a wide variety of businesses. \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nDespite our agreement to obtain an opinion from an independent investment banking firm or another independent entity that commonly renders valuation opinions regarding the fairness to our company from a financial point of view of a business combination with one or more domestic or international businesses affiliated with our sponsor, officers or directors, potential conflicts of interest still may exist and, as a result, the terms of the business combination may not be as advantageous to our public shareholders as they would be absent any conflicts of interest. \nSince our sponsor, officers and directors will lose their entire investment in us if our initial business combination is not completed (other than with respect to public shares they may acquire during or after our initial public offering), a conflict of interest may arise in determining whether a particular business combination target is appropriate for our initial business combination. \nOn July2, 2020, our sponsor paid an aggregate of $25,000 to cover for certain expenses on behalf us in exchange for issuance of an aggregate of 14,375,000 founder shares, or approximately $0.002 per share. In October2020 our sponsor surrendered 194,142 shares of our ClassB ordinary shares, par value $0.0001 per share, which decreased the number of outstanding founder shares from 13,793,750 to 13,599,608. \nIn addition, our sponsor purchased an aggregate of 4,398,433 private placement units, at a price of $10.00 per unit in a private placement that closed simultaneously with the closing of our initial public offering for an aggregate purchase price of $44,000,000. This risk may become more acute as the 24- month anniversary of the closing of our initial public offering nears, which is the deadline for our consummation of an initial business combination. \n\nEven if<|endoftext|>"},"task":{"kind":"string","value":"{\"file\": \"/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz\"}"}}},{"rowIdx":88,"cells":{"text":{"kind":"string","value":"<|endoftext|>To vest in three equal annual installments commencing on the first anniversary of the date of grant. Mr. Abrams award was subject to a one-year vesting period, which differed from the vesting period of our other executive officers to correspond with the remaining one-year term of his employment agreement at such time. \nMr. Abrams August 2020 RSU award and the unvested portion of his August 2019 RSU award were forfeited in accordance with their terms at the time of his retirement. \n2021 Equity Awards \nIn February 2021, Mr. DOrazio conferred with Mr. Abram and the Committee in determining the recommended value of RSU awards to be made to our executive officers. Among other items, the parties considered the same performance factors identified in connection with the discretionary bonuses. The Committee recommended to the Board for approval, and the Board approved, the value of the RSU awards to the named executive officers. \nThe grant date fair market value of the RSU awards received by each named executive officer \n, and the number of common shares awarded based upon the fair market value of the common shares on the date of grant, are as follows \n: \nThe above equity awards vest in equal installments over a three-year period following the grant date. \nIn consideration of the award of RSUs that Mr. DOrazio received in November 2020 upon joining the Company, he did not receive a new award in February 2021 \n### Welfare Benefits and Perquisites \nOur named executive officers are provided welfare benefits that are generally the same as our other employees, such as Company-paid life insurance, contributions to the Companys 401(k) Plan, medical, dental and vision plan coverage and long and short-term disability insurance. \nIn addition to the above benefits, Messrs. Myron and Heinlein and Ms. Doran are entitled to receive benefits based upon their required work for the Company in Bermuda, and Mr. Abram was entitled to such benefits prior to his retirement. The Company implemented these benefits for its executive officers in 2008, when the Company formed its holding and reinsurance company in Bermuda. These benefits are: payment of certain housing expenses in Bermuda for Messrs. Myron and Heinlein; payment of travel costs for Messrs. DOrazio, Myron and Heinlein, Ms. Doran, and formerly Mr. Abram; and tax equalization gross-up payments or other Bermuda tax payments (collectively, Tax Equalization Payments) to which any of Messrs. Myron and Heinlein, Ms. Doran, and formerly Mr. Abram, may be subject with respect to payments or benefits that such named executive officer receives under his or her employment agreement. \nWe make the above housing, travel and tax benefits available to the specified named executive officers employed by the Company or its Bermuda subsidiary based upon the unique challenges of performing work in the Bermuda market, including the cost of living and maintaining a residence, travel to and from the island and additional tax expenses primarily resulting from the housing and travel benefits. We believe that providing these benefits is common practice for other Bermuda based insurers, and is consistent with our goal to attract and retain talented executive officers. \nThe Company also paid for Mr. Myrons family to occasionally travel to Bermuda. Any incremental costs to the Company associated with such travel is allocated to Mr. Myron. In addition, on one occasion during 2020 a family member accompanied an executive officer on business travel on a corporate chartered aircraft when there was a vacant seat available, and on another occasion during 2020 family members accompanied another executive officer on business travel and stayed in Company-paid accommodations, however, in each case there was no incremental cost to the Company. \n### Retention Program \nIn addition to the other benefits paid to our named executive officers, Mr. Schmitzer receives an annual retention payment under the Retention Program (the Retention Program). The Retention Program was adopted by effective September 30, 2011, to help attract and retain key employees of our excess and surplus lines business. Under the Retention Program, the Chief Executive Officer of our U.S. holding company (who was Mr. Abram, until Mr. DOrazios appointment as Chief Executive Officer of the U.S. holding company), or in the case of executive officers of the Company, our Board of Directors, upon recommendation of the Compensation Committee, selects the employees who participate in the Retention Program and determines the annual dollar amount to be credited to each participants account under the Retention Program. The dollar amount credited to a participants account under the Retention Program each year is paid to the participant in five equal annual installments, commencing as of the end of the second plan year beginning after the year in which the amount was credited to the participants account. Participants must be employed at the time of payment of an installment to be entitled to receive the payment, subject to certain exceptions described under Potential Payments upon Termination or Change of Control. \nAll amounts credited to a participants account remain unvested until paid and may be reduced, modified or terminated at the sole discretion of the Company. The Company may amend, modify or terminate the Retention Program at any time, including, without limitation, to comply with the provisions of Section 409A of the Internal Revenue Code of 1986, as amended, so as not to trigger any unintended tax consequences prior to the distribution of benefits under the program. There are no vested rights to amounts under the Retention Program at any time prior to the payment of such amounts, and all amounts under the Retention Program are at all times discretionary obligations of the Company, which may be reduced or terminated by the Company at any time. Except as otherwise stated above, the Retention Program is administered by the board of directors of our U.S. holding company. \nIn 2017, we determined to cease making new dollar credits to accounts of participants under the Retention Program. All amounts previously credited to the accounts of participants will continue to be paid in accordance with the terms of the Retention Program. \nConsistent with the Companys intent to cease making new dollar credits to accounts under the Retention Program, no additional amounts were credited to Mr. Schmitzers account in 2020. Mr. Schmitzer received a payout under the terms of the Retention Plan of $136,500 in 2020 based on amounts credited to his account in prior years, and subject to no further modification by the Company of the Retention Program, Mr. Schmitzers last payment under the program will be in 2023. \n### Termination Benefits \nEach of our executive officers is party to an employment agreement with us that provides for certain benefits if his or her employment is terminated under certain circumstances. This arrangement provides the named executive officers with a core level of assurance that their actions on behalf of the Company and its shareholders can proceed without the potential distraction of short-term issues that may affect the Company (e.g., a strategic transaction involving the Company) and helps ensure that our executive officers continue to act in the best interests of the Company. In addition, the agreements contain measures that protect the Company past the date of the executive officers termination, such as confidentiality, non-compete and non-solicitation requirements and the requirement that executive officers execute a general release in favor of the Company in order to receive benefits. Executive officers may also receive benefits with respect to unvested equity awards under our 2014 LTIP and in the case of Mr. Schmitzer, the Retention Program. The key terms of the separation arrangements are described below in Potential Payments Upon Termination or Change in Control. \nResponse to Say-on-Pay Results \nIn 2018, our shareholders selected, on an advisory basis, the option to hold an advisory vote on executive compensation every year, and after giving this vote consideration, our Board selected an annual frequency to hold the advisory vote on executive compensation. An advisory vote on executive compensation was held in 2020, and shareholders holding approximately 95% of our common shares that were voted on such proposal voted in favor of the compensation of our named executive officers as described in our 2020 proxy statement. We considered the result of this advisory vote and believe that it affirms shareholder approval of our approach to compensation of our executive officers. Therefore, we have continued our general approach to executive compensation. \n\nThe Compensation Committee of the Company has reviewed and discussed the required by Item 402(b) of Regulation S-K with management and, based on such review and discussions, the Compensation Committee recommended to the Board that the be included in the Form 10-K and in the definitive proxy statement for our 2021 annual general meeting of shareholders. \n### Compensation Committee \nChristopher Harris (Chairman) \nJerry R. Masters \n### Patricia H. Roberts \nSummary Compensation Table \nThe following table provides information regarding the compensation of our 2020 named executive officers: \n______________________ \n(1) \nThe amount reported for Mr. DOrazio is the 2020 bonus contemplated by his employment agreement. The amount reported for Mr. Abram is the 2020 pro-rated bonus determined prior to his retirement from the Company. For the 2020 fiscal year, the amount reported for Ms. Doran and Messrs. Myron, Schmitzer, McCafferty and Heinlein represents a discretionary annual bonus. \n(2) \nRepresents the aggregate grant date fair value of RSUs awarded under the 2014 LTIP, and, in the case of Mr. Abram in 2019 only, this amount also includes the aggregate grant date fair value of RSUs awarded to him under the 2014 Director Plan as compensation for service as our Non-Executive Chairman, in each case computed in accordance with FASB ASC Topic 718. Mr. Abram received an award of RSUs with a grant date fair value of $849,960 in 2019 for service as our Chief Executive Officer, and an award of RSUs with a grant date fair value of $149,980 in 2019 as compensation for serving as our Non-Executive Chairman. All of Mr. Abrams unvested RSUs, which included all of the RSUs granted to him in 2020, were forfeited upon his retirement in accordance with the terms of the award agreements. \n(3) \nSee the immediately following table for a breakdown of the compensation included in the All Other Compensation column. \n(4) \nMr. DOrazio was appointed Chief Executive Officer commencing November 2, 2020. \n(5) \nMr. Abram served as Chief Executive Officer and Chairman of the Company from August 5, 2019 until November 1, 2020, when he retired as Chief Executive Officer and became Non-Executive Chairman of the Company. Mr. Abram served as Non-Executive Chairman for all of 2018 and until August 5, 2019, when he was appointed Chief Executive Officer. \n(6) \nMr. Myron served as our President and Chief Executive Officer from January 1, 2018 until August 5, 2019, at which time he transitioned to our President and Chief Operating Officer. \nThe following table provides a breakdown of the amounts set forth in the All Other Compensation column of the Summary Compensation Table: \n______________________ \n(a) For Messrs. Myron and Heinlein, the transportation benefit represents home leave and travel costs incurred for travel to Bermuda, as well as the cost of any occasional family travel to Bermuda paid for by the Company. On one occasion in 2020, a family member of Mr. Abram accompanied him on a corporate chartered aircraft when the aircraft was already going to a specific destination for a business purpose and there was a vacant seat available, and on another occasion in 2020, family members of Ms. Doran accompanied her on business travel and stayed in Company-paid accommodations. In each case, there was no incremental cost to the Company for this travel. \n(b) The housing benefit represents the cost of housing and utilities in Bermuda paid or reimbursed by the Company for Messrs. Myron and Heinlein. Mr. Myrons family may occasionally stay in, and Mr. Heinleins family lives in, the housing paid for by the Company with such executives. There is no incremental cost allocated for family use of these homes. \n(c) The tax benefit represents Tax Equalization Payments made to each of Messrs. Myron and Heinlein. \n(d) Represents<|endoftext|>Terminate upon the expiration of such period. Notwithstanding the Compensation Committees general discretionary authority described above, the individual award agreements may provide for the vesting of such awards upon the occurrence of a change in control. Under the 2016 and 2007 Plans, a change in control is deemed to occur when (i)a person becomes the beneficial owner (directly or indirectly) of at least 50% of the voting power represented by the Companys outstanding voting securities, (ii)the Company sells or disposes of all or substantially all of its assets, (iii)the composition of the Board of Directors changes within a two-year period resulting in fewer than a majority of the directors being incumbent directors (as defined in the 2016 and 2007 Plans), or (iv)a merger or consolidation of the Company is consummated with any other corporation resulting in the voting securities of the Company outstanding immediately prior thereto representing (either by remaining outstanding or by being converted into voting securities of the surviving entity or its parent) less than 50% of the total voting power represented by the voting securities of the Company or such surviving entity or its parent outstanding immediately after such merger or consolidation. \nITEM12. \n\nThe following table represents securities authorized for issuance under, the Rubicon Technology Inc. 2007 Stock Incentive Plan, as amended and restated, and the Rubicon Technology Inc. 2016 Stock Incentive Plan as of December31, 2020. \n\n(1) \nThe Rubicon Technology Inc. 2007 Stock Incentive Plan was approved by stockholders before our initial public offering. The Rubicon Technology Inc. 2016 Stock Incentive Plan was approved by stockholders in June 2016. \n\nUnless otherwise noted, the following table sets forth, as of April 30, 2021, the beneficial ownership of our common stock by: each person that was a beneficial owner of 5% of more of our outstanding shares of common stock; each of our directors, including the director nominees; and all of our named executive officers and directors as a group. \nExcept as described below, in computing the number of shares beneficially owned by a person and the percentage ownership of that person, shares of common stock subject to RSUs, options or warrants held by that person that are currently exercisable or exercisable within 60 days of April 30, 2021 are deemed outstanding for such person, but are not deemed outstanding for computing the percentage ownership of any other person. These rules generally attribute beneficial ownership of securities to persons who possess sole or shared voting power or investment power with respect to such securities. Except as otherwise indicated, all of the shares reflected in the table are shares of common stock and all persons listed below have sole voting and investment power with respect to the shares beneficially owned by them, subject to applicable community property laws. Percentage of beneficial ownership is based on 2,438,855 shares of common stock outstanding as of April 30, 2021. Unless otherwise indicated in the footnotes below, the address for each beneficial owner is c/o Rubicon Technology, Inc., 900 East Green Street, Bensenville, Illinois 60106. \n* \nRepresents less than 1% of the outstanding shares of common stock. \n(1) \nThe ownership information set forth in the table is based on information contained in a statement on Schedule 13D (the Bandera 13D), filed on November11, 2017, with the SEC by Bandera Master Fund L.P. (Bandera), together with Bandera Partners LLC, Gregory Bylinsky and Jefferson Gramm, Managing Partners, Managing Directors and Portfolio Managers of Bandera Partners (Reporting Persons) with respect to ownership of shares of our common stock. The Bandera 13D reflects that each of Bandera Master Fund L.P. and Bandera Partners has sole dispositive and voting power with respect to 258,256 of the reported shares. Bandera reports on the Bandera 13D that each of Messrs. Bylinsky and Gramm as Managing Partners, Managing Directors and Portfolio Managers of Bandera Partners may be deemed to have shared power to vote or dispose of the shares owned by Bandera. Bandera reports on the Bandera 13D that no person other than the Reporting Persons have the right to receive or the power to direct the receipts of dividends from, or the proceeds from the sale of, our common stock. Mr. Gramm is a director of the Company.The principal business address of Bandera is 50 Broad Street, Suite 1820, New York, New York 10004. \n(2) \nThe ownership information set forth in the table is based on information contained in a statement on Schedule 13D (the Aldebaran 13D), filed on June30 2017, with the SEC by Aldebaran Capital LLC (Aldebaran), together with Kenneth R. Skarbeck (Reporting Persons) with respect to ownership of shares of our common stock. The Aldebaran 13D reports that included in the 160,373 shares held by Aldebaran are 3,770 shares beneficially held in family accounts related to Kenneth R. Skarbeck. The Aldebaran 13D reflects that the Reporting Persons have shared dispositive and voting power with respect to 160,373 of the reported shares. Aldebaran reports on the Aldebaran 13D that no person other than the Reporting Persons have the right to receive or the power to direct the receipts of dividends from, or the proceeds from the sale of, our common stock and that none of Aldebarans clients have an economic interest in more than 5% of the Companys outstanding shares. The principal business address of Aldebaran is 10293 N. Meridian Street, Suite 100, Indianapolis, Indiana 46290. \n(3) \nThe ownership information set forth in the table is based on information contained in a statement on Schedule 13D (the Sententia 13D), filed on December5, 2017, with the SEC by SententiaCapital Management LLC (Sententia), together with Sententia Group, LP, Sententia CI-I, LP and Michael R. Zapata (Reporting Persons) with respect to ownership of shares of our common stock. The Senentia 13D reflects that each of the Reporting Persons have dispositive and voting power with respect to 143,120 of the reported shares. Sententia reports on the Sententia 13D that no person other than the Reporting Persons have the right to receive or the power to direct the receipts of dividends from, or the proceeds from the sale of, our common stock but that none of Sententias clients have an economic interest of more than 5% of the Companys outstanding shares. The principal business address of Sententia is 745 Fifth Avenue, 14 th \nFloor, New York, New York 10151. \n(4) \nExcludes 45,000 restricted stock units granted to Mr. Brog. One third of such RSUs will vest if prior to May 12, 2021, the 15-trading day average closing price of the Companys common stock is greater than or equal to the target prices of $11.00, $12.50 and $14.00, respectively. \n(5) \nIncludes 3,194 shares of common stock, owned by Mr. Gramm, and 258,256 shares of common stock beneficially owned by Bandera Master Fund LLP. See footnote (1)above for a description of the relationship between Mr. Gramm and Bandera Master Fund LLP. Mr. Gramm disclaims beneficial ownership of the shares beneficially owned by Bandera Master Fund LLP. Excludes 1,250 RSUs that will vest on the date of the 2021 stockholder meeting. \n(6) \nExcludes 1,250 RSUs that will vest on the day prior to the 2021 stockholder meeting. \n(7) \nIncludes 432,725 shares of common stock, and excludes 3,750 RSUs that will vest on the date of the 2021 stockholder meeting, beneficially owned by our executive officers and directors. \nITEM13. \nPolicy and Procedures for Review, Approval or Ratification \nWe recognize that transactions between the Company and related persons present a potential for actual or perceived conflicts of interest. Our general policies with respect to such transactions are included in our Code of Ethics which is administered by our Audit Committee. All employees and members of our Board of Directors agree to be bound by the Code of Ethics. As a supplement to the Code of Ethics, the Audit Committee adopted a written policy setting out the procedures and standards to be followed for the identification and evaluation of related party transactions. For purposes of the policy, a related party transaction is any transaction or series of related transactions in excess of $120,000 in which we are a party and in which a related person has a material interest. Related persons include our directors, director nominees, executive officers, beneficial owners of 5% or more of any class of our voting securities and members of their immediate families. The Audit Committee has determined that certain transactions are deemed to be pre-approved under this policy. These include (i)transactions with another company in which the related persons only interest is as a director or beneficial owner of less than 10% of the equity interests in that other company and (ii)certain compensation arrangements that have either been disclosed in our public filings with the SEC or approved by our Compensation Committee. \nWe collect information about potential related party transactions in our annual questionnaires completed by directors, executive officers and certain beneficial owners of 5% or more of any class of our voting securities. Potential related party transactions are first reviewed and assessed by our Acting Secretary to consider the materiality of the transactions and then reported to the Audit Committee. If a related party transaction is identified during the year, it is reported promptly to the Audit Committee. The Audit Committee reviews and considers all relevant information available to it about each related party transaction. A related party transaction is approved or ratified only if the Audit Committee determines that it is in, or is not inconsistent with, our best interests and those of our stockholders and is in compliance with the Code of Ethics. \n### Director Independence \nMikolajczyk, Gramm and Ms. \nITEM14. \nThe Audit Committee of the Board of Directors has selected Marcum LLP (Marcum) to serve as the Companys independent registered public accounting firm for the fiscal year ending December31, 2021, and is submitting this matter to the stockholders for ratification at the Annual Meeting. Marcum has served as the Companys independent registered public accounting firm since 2017. \nNeither our bylaws nor other governing documents or law require stockholder ratification of the selection of Marcum as our independent registered public accounting firm. However, the Board is submitting the selection of Marcum to the stockholders for ratification as a matter of good corporate practice. In the event the proposal to ratify the selection of Marcum is defeated, the adverse vote will be considered as a direction to the Board to select another independent registered public accounting firm for the next fiscal year ending December31, 2022. However, because of the expense and difficulty in changing independent registered public accounting firms after the beginning of a year, the Board intends to allow the appointment of Marcum for the fiscal year ending December31, 2021 to stand unless the Board finds other reasons for making a change. \n### Audit Fees \nThe aggregate fees billed by Marcum for audit services of the Companys annual financial statements and review services of the Companys quarterly financial statements for the fiscal year 2020 were $153,954. The aggregate fees billed by Marcum for audit services of the Companys annual financial statements and assistance with and review of SEC filings for the fiscal year 2019 were $146,481. \nAudit-Related Fees \nThere were no audit-related fees billed by Marcum in the fiscal years 2020 and 2019. \n### Tax Fees \nThere were no tax fees billed by Marcum in the fiscal years 2020 and 2019. \nAll Other Fees \nThere were no other fees billed by Marcum in the fiscal years 2020 and 2019 for any other services. \n\nIn accordance with the Sarbanes-Oxley Act of 2002, the Audit Committee is required to pre-approve all auditing services and permissible non-audit services, including related fees and terms, to be performed for the Company by its independent registered public accounting firm subject to the de minimis exceptions for non-audit services described under the Exchange Act, which are approved by the Audit Committee prior to the completion of the audit. In the fiscal years 2020 and 2019, the Audit Committee pre-approved all audit and non-audit services provided to the Company by its independent registered public accounting firm. \nPART IV \nITEM15.<|endoftext|>Or warrantholders to purchase securities from in any private transaction. \n\nFor example, we may require our public shareholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in street name, to either tender their certificates to our transfer agent prior to the date set forth in the proxy solicitation or tender offer materials mailed to such holders, or up to two business days prior to the initially scheduled vote on the proposal to approve the business combination in the event we distribute proxy materials, or to deliver their shares to the transfer agent electronically. \nIf we seek shareholder approval of our initial business combination and we do not conduct redemptions pursuant to the tender offer rules, and if you or a group of shareholders are deemed to hold in excess of 20% of our Class A ordinary shares, you will lose the ability to redeem all such shares in excess of 20% of our Class A ordinary shares. \nIf we seek shareholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our amended and restated memorandum and articles of association provides that a public shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a group (as defined under Section 13(d)(3) of the Exchange Act), will be restricted from seeking redemption rights with respect to more than an aggregate of 20% of the public shares, which we refer to as the Excess Shares. \n\nFurthermore, we are obligated to offer holders of our public shares the right to redeem their shares for cash at the time of our initial business combination, in conjunction with a shareholder vote or via a tender offer. \nIf the net proceeds of our Initial Public Offering and the sale of the Private Placement Warrants not being held in the Trust Account are insufficient to allow us to operate for at least 24 months (or 27 months, as applicable) after the IPO Closing Date, we may be unable to complete our initial business combination, in which case our public shareholders may only receive $10.00 per share, or less than such amount in certain circumstances, and our warrants will expire worthless. \nThe funds available to us outside of the Trust Account may not be sufficient to allow us to operate for at least 24 months (or 27 months, as applicable) after the IPO Closing Date, assuming that our initial business combination is not completed during that time. \nIf the net proceeds of our Initial Public Offering and the sale of the Private Placement Warrants not being held in the Trust Account are insufficient to allow us to operate for at least 24 months (or 27 months, as applicable) after the IPO Closing Date, it could limit the amount available to fund our search for a target business or businesses and complete our initial business combination and we will depend on loans from our Sponsor or management team to fund our search for a business combination, to pay our income taxes and to complete our initial business combination. \nAs of December 31, 2020, we had approximately $923,000 of cash outside the Trust Account to fund our working capital requirements. In the event that such amount is insufficient to fund our search for a target business and to consummate our initial business combination, we may seek additional capital. In such an event, our public shareholders may only receive an estimated $10.00 per share, or possibly less, on our redemption of our public shares, and our warrants will expire worthless. \n\n\n\n\nIf we are unable to consummate our initial business combination within 24 months (or 27 months, as applicable) of the closing of our Initial Public Offering, our public shareholders may be forced to wait beyond such 24 months (or 27 months, as applicable) before redemption from the Trust Account. \nIf we are unable to consummate our initial business combination within 24 months (or 27 months, as applicable) from the closing of our Initial Public Offering, we will distribute the aggregate amount then on deposit in the Trust Account (less up to $100,000 of the net interest earned thereon to pay dissolution expenses), pro rata to our public shareholders by way of redemption and cease all operations except for the purposes of winding up of our affairs, as further described herein. In that case, investors may be forced to wait beyond the initial 24 months (or 27 months, as applicable) before the redemption proceeds of the Trust Account become available to them and they receive the return of their pro rata portion of the proceeds from the Trust Account. \n\nAlthough we expect to focus our search for a target business in the broad energy transition or sustainability arena targeting industries that require innovative solutions to decarbonize in order to meet critical emission reduction objectives, we may complete a business combination with an operating company in any industry or sector. \n\n\nWe may seek business combination opportunities with an early stage company, a financially unstable business or an entity lacking an established record of revenue or earnings, which could subject us to volatile revenues, cash flows or earnings or difficulty in retaining key personnel. \n\n\nHowever, our shareholders may not be provided with a copy of such opinion, nor will they be able to rely on such opinion. \n\nWe may issue a substantial number of additional ordinary shares or preferred shares to complete our initial business combination or under an employee incentive plan after completion of our initial business combination. \nUnlike some other similarly structured blank check companies, our initial shareholders will receive additional Class A ordinary shares if we issue shares to consummate an initial business combination. \nThe Founder Shares will automatically convert into Class A ordinary shares at the time of our initial business combination on a one-for-one basis, subject to adjustment for share sub-divisions, share dividends, reorganizations, recapitalizations and the like and subject to further adjustment as provided herein. In the case that additional Class A ordinary shares or equity-linked securities convertible or exercisable for Class A ordinary shares are issued or deemed issued in excess of the amounts sold in our Initial Public Offering and related to the closing of our initial business combination, the ratio at which Founder Shares will convert into Class A ordinary shares will be adjusted so that the number of Class A ordinary shares issuable upon conversion of all Founder Shares will equal, in the aggregate 20% of the sum of our ordinary shares outstanding upon completion of our Initial Public Offering plus the number of Class A ordinary shares and equity-linked securities issued or deemed issued in connection with our initial business combination, excluding any Class A ordinary shares or equity-linked securities issued, or to be issued, to any seller in our initial business combination. \n\n\n\nFor example, in connection with our initial business combination and subject to requisite shareholder approval under the Companies Act, we may structure our business combination in a manner that requires shareholders and/or warrantholders to recognize gain or income for tax purposes, effect a business combination with a target company in another jurisdiction, or reincorporate in different jurisdiction (including, but not limited to, the jurisdiction in which the target company or business is located). We do not intend to make any cash distributions to shareholders or warrantholders to pay taxes in connection with our business combination or thereafter. Accordingly, a shareholder or a warrantholder may need to satisfy any liability resulting from our initial business combination with cash from its own funds or by selling all or a portion of the shares received. In addition, shareholders and warrantholders may also be subject to additional income, withholding or other taxes with respect to their ownership of us after our initial business combination. \nIn addition, we will likely effect a business combination with a target company that has business operations outside of the Cayman Islands, and possibly, business operations in multiple jurisdictions. Therefore, as a result of our initial business combination, we could be subject to significant income, withholding and other tax obligations in a number of jurisdictions with respect to income, operations and subsidiaries related to those jurisdictions. taxing authorities. \n\nThe incurrence of debt could have a variety of negative effects, including: default and foreclosure on our assets if our operating revenues after an initial business combination are insufficient to repay our debt obligations; using a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends on our ordinary shares if declared, to pay expenses, make capital expenditures and acquisitions and fund other general corporate purposes; \n\n\n\n\n\n\n\n\n\nOur amended and restated memorandum and articles of association requires the affirmative vote of a majority of our board of directors, which must include a majority of our independent directors and each of the non-independent directors nominated by our Sponsor, to approve our initial business combination, which may have the effect of delaying or preventing a business combination that our public shareholders would consider favorable. \nOur amended and restated memorandum and articles of association requires the affirmative vote of a majority of our board of directors, which must include a majority of our independent directors and each of the non-independent directors nominated by our Sponsor, to approve our initial business combination. This may make it more difficult for us to approve and enter into an initial business combination than other blank check companies and could result in us not pursuing an acquisition target or other board or corporate action that our public shareholders would find favorable. \nIn order to effectuate our initial business combination, we may seek to amend our amended and restated memorandum and articles of association or other governing instruments in a manner that will make it easier for us to complete our initial business combination but that our shareholders and warrantholders may not support. \nAmending our amended and restated memorandum and articles of association will require at least a special resolution of our shareholders as a matter of Cayman Islands law, meaning the approval of holders of not less than two-thirds of our ordinary shares who attend and vote at a general meeting of the company, and amending our warrant agreement will require a vote of holders of at least 50% of the public warrants. In addition, our amended and restated memorandum and articles of association require us to provide our public shareholders with the opportunity to redeem their public shares for cash if we propose an amendment to our amended and restated memorandum and articles of association that would affect the substance or timing of our obligation to redeem 100% of our public shares if we do not complete an initial business combination within 24 months (or 27 months, as applicable) of the closing of our Initial Public Offering. \nIn order to effectuate a business combination, we may amend various provisions of our charter and governing instruments, including the warrant agreement, the underwriting agreement relating to our Initial Public Offering, the letter agreement among us, Tortoise and our Sponsor, officers and directors, and the registration rights agreement among us, Tortoise and our initial shareholders. Except in relation to the charter, any such amendments would not require approval from our shareholders and may have an adverse effect on the value of an investment in our securities. \n\nOur amended and restated memorandum and articles of association provides that any of its provisions (other than amendments relating to the appointment of directors, which require the approval of a majority of at least 90% of our ordinary shares voting at a general meeting) related to pre-business combination activity (including the requirement to deposit proceeds of our Initial Public Offering and the sale of the private placement of warrants into the Trust Account and not release such amounts except in specified circumstances, and to provide redemption rights to public shareholders as<|endoftext|>2021, 137,500 shares of common stock valued at approximately $0.5 million were issued to consultants for services. \nDuring the year ended July 31, 2020, 184,499 shares of common stock valued at approximately $0.9 million, were issued to consultants for services. \n\nUnder the Companys (ESPP), the Company is authorized to issue 50,000 shares of the Companys common stock. The eleventh offering period under the ESPP ended on July 31, 2021, with 2,257 shares purchased and distributed to employees and the tenth offering period under the ESPP ended on January 31, 2021, with 1,358 shares purchased and distributed to employees. The ninth offering period under the ESPP ended on July 31, 2020, with 1,358 shares purchased and distributed to employees, and the eighth offering period under the ESPP ended on January 31, 2020, with 2,841 shares purchased and distributed to employees. At July 31, 2021, there were 29,794 shares remaining available for issuance under the ESPP. \nThe ESPP is considered a Type B plan under FASB ASC Topic 718 because the number of shares a participant is permitted to purchase is not fixed based on the stock price at the beginning of the offering period and the expected withholdings. The ESPP enables the participant to buy-up to the plans share limit, if the stock price is lower on the purchase date. As a result, the fair value of the awards granted under the ESPP is calculated at the beginning of each offering period as the sum of: \n15% of the share price of an unvested share at the beginning of the offering period, \n85% of the fair market value of a six-month call on the unvested share aforementioned, and \n15% of the fair market value of a six-month put on the unvested share aforementioned. \nThe fair market value of the six-month call and six-month put are based on the Black-Scholes option valuation model. \nFor the six-month offering period ended July 31, 2021, the following assumptions were used: six-month maturity, 0.07% risk free interest, 88.03% volatility, 0% forfeitures and $0 dividends. For the six-month offering period ended January 31, 2021, the following assumptions were used: six-month maturity, 0.1% risk free interest, 122.84% volatility, 0% forfeitures and $0 dividends. \nFor the six-month offering period ended July 31, 2020, the following assumptions were used: six-month maturity, 1.54% risk free interest, 76.59% volatility, 0% forfeitures and $0 dividends. For the six-month offering period ended January 31, 2020, the following assumptions were used: six-month maturity, 2.04% risk free interest, 90.64% volatility, 0% forfeitures and $0 dividends. \nApproximately $10,300 and $3,800 was recorded as stock-based compensation during the years ended July 31, 2021 and 2020, respectively. \n\nThe following table summarizes all common stock reserved for future issuance at July 31, 2021: \nNote 8 Income Taxes \nThe FASB Topic on Income Taxes prescribes a recognition threshold and measurement attribute criteria for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. The Company has had no unrecognized tax benefits. \nThe Company has not recognized any interest and/or penalties in the accompanying consolidated statements of operations for the years ended July 31, 2021 and 2020. \nThe Company is subject to taxation in the United States, various states and in Australia. The Companys tax years for 2007 and forward, 2010 and forward and 2017 and forward are subject to examination by the United States federal tax authorities, California tax authorities and New Jersey tax authorities, respectively, due to the carry forward of unutilized net operating losses and research and development credits. \nAt July 31, 2021, the Company had federal, California and New Jersey net operating loss carryforwards of approximately $206 million, $87 million and $80 million, respectively. In addition, the Company has federal, California and New Jersey research and development tax credit carryforwards of approximately $3.4 million, $2.4 million and $0.3 million, respectively. The Company also has California Hiring Credits of approximately $9,300. The federal net operating losses incurred in years beginning after January 1, 2018 in the amount of $102 million can be carried forward indefinitely. The remaining $104 million of federal net operating loss, research tax credit carryforwards and California and New Jersey net operating loss carryforwards will begin to expire in 2029 unless previously utilized. The California research and development credit carryforwards will carry forward indefinitely until utilized. The Company has foreign net operating loss carryforwards in Australia of $5.2 million. \nThe Company has not completed a study to assess whether one or more ownership changes, as defined by IRC Section 382/383 of the Internal Revenue Code of 1986, as amended (the Code), have occurred since the Companys formation, due to the complexity and cost associated with such a study, and the fact that there may be additional such ownership changes in the future. Based on a preliminary assessment, the Company believes that ownership changes have occurred. The Company estimates that if such an ownership change had occurred, the federal and state net operating loss carry-forwards and research and development tax credits that can be utilized in the future will be significantly limited. The Company may never be able to realize the benefit of some or all of the federal and state net loss carryforwards or research and development tax credit carryforwards, either due to ongoing operating losses or due to ownership changes, which limits the usefulness of the loss carryforwards. \nSet forth below is the (benefit) provision for income taxes for continuing operations for the years ended July 31: \nSignificant components of the Companys deferred tax assets as of July 31, 2021 and 2020 are listed below: \nA valuation allowance of $63.4 million and $51.6 million at July 31, 2021 and 2020, respectively, has been recognized to offset the net deferred tax assets as realization of such assets is uncertain. The valuation allowance increased by $11.8 million and increased by $7.8 million for the years ended July 31, 2021 and 2020, respectively. \nA reconciliation of income taxes using the statutory income tax rate, compared to the effective rate, is as follows: \n### Sale of New Jersey Net Operating Losses \nIn June 2021, the Company received $2.4 million in net proceeds from the sale of its New Jersey Net Operating Losses under the State of New Jersey NOL Transfer Program. \n\n\nContingencies \nIn June 2019, Dana Farber Cancer Institute (DFCI) and OncoSec (each a Party and collectively the Parties) entered into a Sponsored Research Agreement (the SRA). On May 11, 2020, the SRA was terminated by DFCI, after a dispute arose between the parties. The Parties resolved the dispute through mediation and reached an agreement in principle. OncoSec agreed to pay DFCI a total of $900,000 in full and complete satisfaction of any and all claims that DFCI may have for reimbursement of expenses under the SRA in two equal installments of $450,000, the first of which was due on December 7, 2020 and the second of which was due on March 31, 2021. As of July 31, 2021, the Company paid both installments. \nThe Company is not a party to any other legal proceeding or aware of any other threatened action as of the date of this report. \n### Employment Agreements \nThe Company has entered into employment agreements with certain executive officers and certain other key employees. Generally, the terms of these agreements provide that, if the Company terminates the officer or employee other than for cause, death or disability, or if the officer terminates his or her employment with the Company for good cause, the officer shall be entitled to receive certain severance compensation and benefits as described in each such agreement. \nOn June 24, 2021, the Company and the Companys former Chief Executive Officer (CEO) entered into a separation and release agreement in connection with the former CEOs termination of employment with the Company, providing for severance payments and benefits to the former CEO consistent with the terms of his existing employment agreement with the Company, including a severance payment of $1,795,500, less tax withholdings, the severance payment was paid in full as of July 31, 2021; the immediate vesting of all stock options and restricted stock units held by him and the expiration date of all stock options was extended to June 24, 2023. \n### Note 10 Leases \nLease Agreements \nOn August 25, 2020, the Company entered into a second amended lease agreement (Second Amendment) with MawIt Inc. to further extend the lease term at 24 N. Main Street, Pennington, New Jersey, which serves as the Companys New Jersey corporate headquarters. Under the Second Amendment, effective January 1, 2021, the lease term is extended through and included December 31, 2021 and the base rent for 2021 is $12,416 per month. The lease term shall automatically renew for up to two additional one-year terms unless the Company gives the Landlord a notice of non-renewal at least six months prior to the end of the renewal term then in effect. During 2022, the base rent will be $12,665 per month and during 2023, the base rent will be $12,918 per month. The Company accounted for the Second Amendment as a contract modification, and accordingly, recorded an additional ROU asset for approximately $388,000 and lease liabilities of approximately $388,000 for this operating lease. \nThe Company has operating leases for corporate offices and lab space. These leases have remaining lease terms of approximately one year to seven years, some of which include options to extend the lease. For any lease where the Company is reasonably certain that a renewal option will be exercised, the lease payments associated with the renewal option period are included in the ROU asset and lease liability as of July 31, 2021. \nSupplemental balance sheet information related to leases as of July 31, 2021 was as follows: \nSupplemental lease expense related to leases was as follows: \nOther information related to leases where the Company is the lessee is as follows: \nSupplemental cash flow information related to operating leases was as follows: \nFuture minimum lease payments under non-cancellable leases as of July 31, 2021 were as follows: \n### Note 11 401(k) Plan \nEffective May 15, 2012, the Company adopted a defined contribution savings plan pursuant to Section 401(k) of the Code. The plan is for the benefit of all qualifying employees and permits voluntary contributions by employees of up to 100% of eligible compensation, subject to the maximum limits imposed by Internal Revenue Service. The terms of the plan allow for discretionary employer contributions and the Company currently matches 100% of its employees contributions, up to 3% of their annual compensation. The Companys contributions are recorded as expense in the accompanying consolidated statements of operations and totaled approximately $149,072 and $136,342 for the years ended July 31, 2021 and 2020, respectively. \nNote 12 Related Party Transactions \nExcept as disclosed elsewhere herein, below are the Companys related party transactions. \n### Equity Offerings \n(See Note 6). CGP and its affiliate Sirtex participated in the offering. Each of CGP and Sirtex exercised its right of participation in future offerings in order to maintain respective ownership percentages of the outstanding shares of common stock of the Company upon close. \n(See Note 6). CGP and Sirtex participated in the registered direct offering and maintained their respective ownership percentages of the outstanding shares of common stock of the Company upon close. \n### Co-Promotion and Funded Research Agreement \nIn consideration for the option, the Company received an upfront, non-refundable payment of $5.0 million from Sirtex (the option fee). The option to co-promote is non-exclusive and may be exercised at any time by Sirtex from the effective date until 90 days following the receipt by Sirtex of a complete copy of the final BLA filed by the Company with the FDA (the option period). If Sirtex exercises the option, the Company will receive an additional non-refundable and non-creditable option exercise fee of $25.0 million, comprised of $20.0 million in cash, and $5.0 million for the issuance<|endoftext|>Initial business combination. \n\nWe believe that our success depends on the continued service of our key personnel, at least until we have consummated our initial Business Combination. None of our officers are required to commit any specified amount of time to our affairs and, accordingly, they will have conflicts of interest in allocating management time among various business activities, including identifying potential Business Combinations and monitoring the related due diligence. If our officers and directors other business affairs require them to devote more substantial amounts of time to their other business activities, it could limit their ability to devote time to our affairs and could have a negative impact on our ability to consummate our initial Business Combination. In addition, we do not have employment agreements with, or key-man insurance on the life of, any of our officers. The unexpected loss of the services of our key personnel could have a detrimental effect on us. \nThe role of our key personnel after our initial Business Combination, however, remains to be determined. Although some of our key personnel serve in senior management or advisory positions following our initial Business Combination, it is likely that most, if not all, of the management of the target business will remain in place. These individuals may be unfamiliar with the requirements of operating a public company which could cause us to have to expend time and resources helping them become familiar with such requirements. \n\nUntil we consummate our initial Business Combination, we intend to engage in the business of identifying and combining with one or more businesses or entities. In particular, affiliates of our sponsor are currently sponsoring one other blank check company, Altimeter 2. Altimeter 2may seek to complete a business combination in any location and is similarly focusing on the technology industry for a business combination. \nIn addition, our Founder, sponsor, officers and directors have and may continue in the future become affiliated with other blank check companies that may have acquisition objectives that are similar to ours. These conflicts may not be resolved in our favor and a potential target business may be presented to such other blank check companies before its presentation to us, subject to our officers and directors fiduciary duties under Cayman Islands law. Our amended and restated memorandum and articles of association provide that, to the fullest extent permitted by applicable law: (i)no individual serving as a director or an officer shall have any duty, except and to the extent expressly assumed by contract, to refrain from engaging directly or indirectly in the same or similar business activities or lines of business as us; and (ii)we renounce any interest or expectancy in, or in being offered an opportunity to participate in, any potential transaction or matter which may be a corporate opportunity for any director or officer, on the one hand, and us, on the other. \n\nIn fact, we may enter into a Business Combination with a target business that is affiliated with our sponsor, our directors or executive officers, or we may acquire a target business through an Affiliated Joint Acquisition with one or more affiliates of Altimeter and/or one or more investors in funds managed by Altimeter. Additionally, Altimeter Partners is an affiliate of our sponsor. \n\n\n\n\n\nOur securities are listed on Nasdaq. Although we currently meet the minimum initial listing standards set forth in Nasdaq listing standards, our securities may not be listed on Nasdaq in the future or before our initial Business Combination. In order to continue listing our securities on Nasdaq before our initial Business Combination, we must maintain certain financial, distribution and share price levels, such as a minimum amount in shareholders equity (generally $2,500,000) and a minimum number of holders of our securities (generally 300 public holders) Additionally, our units will not be traded after completion of our initial Business Combination and, in connection with our initial Business Combination, we will be required to demonstrate compliance with Nasdaq initial listing requirements, which are more rigorous than Nasdaq continued listing requirements, in order to continue to maintain the listing of our securities on Nasdaq. For instance, our stock price would generally be required to be at least $4.00 per share, our shareholders equity would generally be required to be at least $5.0million and we would be required to have a minimum of 300 round lot holders of our unrestricted securities (with at least 50% of such round-lot holders holding unrestricted securities with a market value of at least $2,500). We may not be able to meet those listing requirements at that time, especially if there are a significant number of redemptions in connection with our initial business combination. \n\nBecause we expect that our units and eventually our ClassA ordinary shares and warrants will be listed on Nasdaq, our units, ClassA ordinary shares and warrants will qualify as covered securities under the statute. While we are not aware of a state having used these powers to prohibit or restrict the sale of securities issued by blank check companies, other than the State of Idaho, certain state securities regulators view blank check companies unfavorably and might use these powers, or threaten to use these powers, to hinder the sale of securities of blank check companies in their states.Further, if we were no longer listed on Nasdaq, our securities would not qualify as covered securities under the statute and we would be subject to regulation in each state in which we offer our securities. \n\nWe cannot assure you that we will be able to do so if, for example, any facts or events arise which represent a fundamental change in the information set forth in the registration statement or prospectus by which the shares are registered, the financial statements contained or incorporated by reference therein are not current, complete or correct or the SEC issues a stop order. \n\n\nThe grant of registration rights to our sponsor and the forward purchase investors may make it more difficult to complete our initial Business Combination, and the future exercise of such rights may adversely affect the market price of our ClassA ordinary shares. \nPursuant to an agreement to be entered into prior to our Initial Public Offering, our sponsor and its permitted transferees can demand that we register the resale of the ClassA ordinary shares into which founder shares are convertible, the private placement warrants and the ClassA ordinary shares issuable upon exercise of the private placement warrants, and warrants that may be issued upon conversion of working capital loans and the ClassA ordinary shares issuable upon conversion of such warrants. Pursuant to the forward purchase agreements, we will agree that we will use our commercially reasonable efforts to (i)within 30 days after the closing of the initial Business Combination, file a registration statement with the SEC for a secondary offering of (A)the forward purchase shares, (B)the ClassA ordinary shares issuable upon exercise of the forward purchase warrants and (c)any other ClassA ordinary shares acquired by the forward purchase investors, including any acquired after we complete our initial Business Combination, (ii)cause such registration statement to be declared effective promptly thereafter, but in no event later than 90 days after the closing of the initial Business Combination and (iii)maintain the effectiveness of such registration statement and to ensure the registration statement does not contain a material omission or misstatement, including by way of amendment or other update, as required, until the earlier of (A)the date on which a forward purchase investor ceases to hold the securities covered thereby and (B)the date all of the securities covered thereby can be sold publicly without restriction or limitation under Rule 144 under the Securities Act, and without the requirement to be in compliance with Rule 144(c)(1) under the Securities Act, subject to certain conditions and limitations set forth in the forward purchase agreements. \nThe provisions of our amended and restated memorandum and articles of association that relate to the rights of holders of our ClassA ordinary shares (and corresponding provisions of the agreement governing the release of funds from our Trust Account) may be amended with the approval of a special resolution which requires the approval of the holders of at least two-thirds of our ordinary shares who attend and vote at a general meeting of the company, which is a lower amendment threshold than that of some other blank check companies. \nIn those companies, amendment of these provisions typically requires approval by between 90% and 100% of the companys shareholders. Our amended and restated memorandum and articles of association provide that any of its provisions related to the rights of holders of our ClassA ordinary shares (including the requirement to deposit proceeds of our Initial Public Offering and the private placement of warrants into the Trust Account and not release such amounts except in specified circumstances, and to provide redemption rights to public shareholders as described in our charter) may be amended if approved by special resolution, meaning holders of at least two-thirds of our ordinary shares who attend and vote at a general meeting of the company, and corresponding provisions of the trust agreement governing the release of funds from our Trust Account may be amended if approved by holders of at least 65% of our ordinary shares; provided that the provisions of our amended and restated memorandum and articles of association governing the appointment or removal of directors prior to our initial Business Combination may only be amended by a special resolution passed by not less than two-thirds of our ordinary shares who attend and vote at our general meeting which shall include the affirmative vote of a simple majority of our ClassB ordinary shares. Our sponsor and its permitted transferees, if any, who collectively beneficially own, on an as-converted basis, 20% of our ClassA ordinary shares, will participate in any vote to amend our amended and restated memorandum and articles of association and/or trust agreement and will have the discretion to vote in any manner they choose. As a result, we may be able to amend the provisions of our amended and restated memorandum and articles of association which govern our pre-Business \nCombination behavior more easily than some other blank check companies, and this may increase our ability to complete a Business Combination with which you do not agree. \nOur sponsor, executive officers and directors have agreed, pursuant to agreements with us, that they will not propose any amendment to our amended and restated memorandum and articles of association (A)that would modify the substance or timing of our obligation to provide holders of our ClassA ordinary shares the right to have their shares redeemed in connection with our initial Business Combination or to redeem 100% of our public shares if we do not complete our initial Business Combination within 24 months (or 27 months, as applicable) from the closing of our Initial Public Offering or (B)with respect to any other provision relating to the rights of holders of our ClassA ordinary shares, unless we provide our public shareholders with the opportunity to redeem their ClassA ordinary shares upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account and not previously released to us to pay our income taxes, if any, divided by the number of the then-outstanding public shares. Our shareholders are not parties to, or third-party beneficiaries of, these agreements and, as a result, will not have the ability to pursue remedies against our sponsor, executive officers or directors for any breach of these agreements. \nWe may amend the terms of the warrants in a manner that may be adverse to holders of public warrants with the approval by the holders of at least 50% of the then-outstanding public warrants. \nOur warrants will be issued in registered form under a warrant agreement between Continental Stock Transfer& Trust Company, as warrant agent, and us. The warrant agreement provides that the terms of the<|endoftext|>This Amendment No.1 to Form 10-K (this Amendment) amends the Annual Report on Form 10-K for the fiscal year ended December31, 2020 (the 2020 Form 10-K) originally filed on March 8, 2021 (the Original Filing) by Clarus Corporation, a Delaware corporation (which may be referred to as the Company, Clarus, we, our or us). We are filing this Amendment to present the information required by Part III of Form 10-K. \n\nINDEX \nCLARUS CORPORATION \nPART III \nITEM 10. \nClarus directors and executive officers and their ages as of April 2, 2021 are as follows: \n(1) \nMember of the audit committee. \n(2) \n\n(3) \n\n### Executive Officers \nWarren B. Kanders \n, 63, our Executive Chairman, has served as one of our directors since June 2002 and as Executive Chairman of our Board of Directors since December 2002. Since 1990, Mr. Kanders has served as the President of Kanders & Company, Inc., a private investment firm principally owned and controlled by Mr. Kanders, which makes investments in and provides consulting services to public and private entities. From January 1996 until its sale to BAE Systems plc (BAE Systems) on July 31, 2007, Mr. Kanders served as the Chairman of the Board of Directors, and from April 2003 as the Chief Executive Officer, of Armor Holdings, Inc. (Armor Holdings), formerly a New York Stock Exchange-listed company and a manufacturer and supplier of military vehicles, armored vehicles, and safety and survivability products and systems to the aerospace and defense, public safety, homeland security, and commercial markets. Mr. Kanders received an A.B. degree in Economics from Brown University. Based upon Mr. Kanders role as Executive Chairman of the Company, service as a chairman and a director of a wide range of other public companies, financial background and education, as well as his extensive investment, capital raising, acquisition and operating expertise, the Company believes that Mr. Kanders has the requisite set of skills to serve as a Board member of the Company. \n### John C. Walbrecht \n, 53, has served as the President of the Company since October 2017, and President of BDEL since October 2016. Walbrecht served as the President of Mountain Hardwear from March 2016 to October 2016. Prior to Mountain Hardwear, Mr. Walbrecht served as the President and Chief Executive Officer of Fenix Outdoors NA from January 2012 until March 2016. Mr. Walbrecht has also served in various senior roles with Brandbase, Spyder, Dr. Martens/Airwair, and Timberland. Mr. Walbrecht holds a Master of Business Administration and a Bachelor of Science in Economics from Brigham Young University, a Bachelor of Arts in Marketing from the University of Maryland and understudies in International Trade and Finance at Cambridge University - Trinity College. \nAaron J. Kuehne \n, 42, has served as our Chief Financial Officer, Secretary and Treasurer, since 2013 and as our Executive Vice President since March 2021. Mr. Kuehne previously served as the Companys Chief Administrative Officer, interim Chief Financial Officer, in addition to serving as its Vice President of Finance, principal financial officer and principal accounting officer. Before joining the Company in September 2010, Mr. Kuehne served as the Corporate Controller of Certiport from August 2009 to September 2010. From July 2004 to August 2009, Mr. Kuehne served in various capacities with KPMG LLP, most recently as Audit Manager. Mr. Kuehne graduated with a Bachelor of Arts degree in Accounting from University of Utah David Eccles School of Business in 2002 and with an M.B.A. degree from University of Utah David Eccles School of Business in 2004. He has also been a Certified Public Accountant since 2005. \n### Non-Employee Directors \nDonald L. House \n, 79, has served as one of our directors since January 1993. Mr. House served as Chairman of our Board of Directors from January 1994 until December 1997 and as our President from January 1993 until December 1993. Mr. House is currently a private investor, and in the past, he has served on a number of Boards of Directors of public and private companies, including a position as a member of the Board of Directors of Carreker Corporation from May 1998 until March 2007, and as Chairman of Version One, Inc. from January 2003 until August 2017. Mr. House graduated with B.S. and M.S. degrees from the Georgia Institute of Technology. Based upon Mr. Houses role as the Chairman of the Compensation Committee of the Companys Board of Directors, prior experience as a chairman and an executive officer of companies in a variety of industries, financial expertise and extensive experience serving as a member of the boards of directors and committees of other public companies, the Company believes that Mr. House has the requisite set of skills to serve as a Board or Board committee member of the Company. \n### Nicholas Sokolow \n, 71, has served as one of our directors since June 2002, and has been designated as the lead independent director of the Companys Board of Directors since June 2016. From January 1996 until its sale to BAE Systems on July 31, 2007, Mr. Sokolow served as a member of the Board of Directors of Armor Holdings. Mr. Sokolow served as a member of the Board of Directors of Stamford Industrial Group, Inc. from October 2006 until September 2009. From 2007 until December 31, 2014, Mr. Sokolow practiced law at the firm of Lebow & Sokolow LLP. From 1994 to 2007, Mr. Sokolow was a partner at the law firm of Sokolow, Carreras & Partners. From June 1973 until October 1994, Mr. Sokolow was an associate and partner at the law firm of Coudert Brothers. Mr. Sokolow graduated with Economics and Finance degrees from the Institut DEtudes Politiques, a Law degree from the Faculte de Droit and a Masters of Comparative Law degree from the University of Michigan. Mr. Sokolow is also an honorary member of the French Bar. Based upon Mr. Sokolows role as the Chairman of the Nominating/Corporate Governance Committee of the Companys Board of Directors, education, legal background involving mergers and acquisitions, corporate governance expertise and extensive experience serving as a member of the boards of directors and committees of other public companies, the Company believes that Mr. Sokolow has the requisite set of skills to serve as a Board or Board committee member of the Company. \nMichael A. Henning \n, 80, has served as one of our directors since May 2010. Mr. Henning served as a director and the Chairman of the Audit Committee of the Board of Directors of Highlands Acquisition Corp. from May 2007 until September 2009. From 2000 to May 2015, Mr. Henning had served as the Chairman of the Audit Committee and member of the Compensation Committee, and had previously served as the Vice Chairman of the Finance Committee, of the Board of Directors of CTS Corporation, a NYSE-listed company that provides electronic components to auto, wireless and PC businesses. From December 2002 to May 2017, Mr. Henning served on the Board of Directors of Omnicom Group Inc., a NYSE-listed global communications company, where he also served on the Audit Committee and the Compensation Committee. From 2007 to May 2017, Mr. Henning served on the Board of Directors of Landstar System, Inc., a NASDAQ-listed transportation and logistics services company, and served on committees such as the Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee. Mr. Henning retired as Deputy Chairman from Ernst & Young in 2000 after forty years with the firm. Mr. Henning was the inaugural Chief Executive Officer of Ernst & Young International, serving from 1993 to 1999. From 1991 to 1993, he served as Vice Chairman of Tax Services at Ernst & Young. Mr. Henning was also the Managing Partner of the firms New York office, from 1985 to 1991, and the Partner in charge of International Tax Services, from 1978 to 1985. From 1994 to 2000, Mr. Henning served as a Co-Chairman of the Foreign Investment Advisory Board of Russia, where he co-chaired a panel of 25 chief executive officers from the G-7 countries who advised the Russian government in adopting international accounting and tax standards. Mr. Henning graduated with a B.B.A. degree from St. Francis College and received a Certificate from the Harvard University Advanced Management Program. Mr. Henning is a Certified Public Accountant. Based upon Mr. Hennings role as the Chairman of the Audit Committee of the Companys Board of Directors, his accounting and financial expertise and extensive experience serving as a member of the boards of directors and committees of other public companies, the Company believes that Mr. Henning has the requisite set of skills to serve as a Board or Board committee member of the Company. \n### Code of Ethics \nThe Company has adopted a code of ethics that applies to its principal executive officer and principal financial officer, and to all of its other officers, directors and employees. The code of business conduct and ethics may be accessed at www.claruscorp.com, under the tab Governance Documents within the section called Governance. In addition, you may request a copy of any such materials, without charge, by submitting a written request to: Clarus Corporation, Attention: Secretary, 2084 East 3900 South, Salt Lake City, UT 84124. The Company intends to disclose future amendments to, or waivers from, certain provisions of its code of business conduct and ethics, if any, on the above website within five business days following the date of such amendment or waiver. \nAudit Committee \nThe Audit Committee is responsible for the oversight and evaluation of (i) the qualifications, independence and performance of our independent registered public accounting firm (independent auditors); (ii) the performance of our internal audit function; and (iii) the quality and integrity of our financial statements and the effectiveness of our internal control over financial reporting. In addition, the Audit Committee recommends to the Board of Directors the appointment of independent auditors and analyzes the reports and recommendations of such auditors. The Audit Committee also assesses major risk factors relating to the Company and its performance, and reviews measures to address and mitigate financial, legal and operational risks. The committee also prepares the Audit Committee report required by the rules of the U.S. \nOur Audit Committee is currently comprised of Messrs. Henning, House and Sokolow, with Mr. Henning serving as the Chairman. All of the members of our Audit Committee were determined by the Board of Directors to be independent of Clarus based on NASDAQs definition of independence and are able to read and understand the Companys fundamental financial statements. Henning qualifies as an audit committee financial expert (as such term is defined under the Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated thereunder). \n### ITEM 11. EXECUTIVE COMPENSATION \n\nOverview \nThe Compensation Committee assists the independent members of the Board of Directors in establishing a compensation package for Clarus Executive Chairman and assists the Board of Directors in establishing compensation packages for Clarus other Named Executive Officers, its key employees and non-employee directors as well as administering Clarus incentive plans. The Compensation Committee is generally responsible for setting and administering the policies which govern annual salaries of executive officers, raises and bonuses and certain awards of stock options and common stock under the Companys 2015 Stock Incentive Plan and otherwise, and such responsibility is generally limited to the actions taken by the Compensation Committee, although at times the full Board of Directors has determined annual executive salaries, raises and bonuses as well as grants of stock options and common stock without having first received recommendations from the Compensation Committee. From time to time, the Compensation Committee reviews our compensation packages to ensure that they remain competitive with the compensation packages offered by similarly-situated companies and continue to incentivize management and align managements interests with those of our stockholders. Although we do not target executive compensation to any peer group median, we strive to provide a compensation package that is competitive in the market and rewards each executives performance. \nThe Compensation Committee is comprised of two directors, each of whom has considerable experience in executive compensation issues. Each member<|endoftext|>Indemnification obligations related to a particular claim, our independent directors would determine whether to take legal action against our sponsor to enforce its indemnification obligations. \nWe have access to the amount held outside the trust account with which to pay any such potential claims (including costs and expenses incurred in connection with our liquidation, currently estimated to be no more than approximately $100,000). \n\nOur public shareholders are be entitled to receive funds from the trust account only (i)in the event of the redemption of our public shares if we do not complete our initial business combination within 24 months from the closing of our initial public offering, (ii)in connection with a shareholder vote to amend our amended and restated memorandum and articles of association (A)to modify the substance or timing of our obligation to provide holders of our ClassA ordinary shares the right to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of our initial public offering or (B)with respect to any other provision relating to the rights of holders of our ClassA ordinary shares, or (iii)if they redeem their respective shares for cash upon the completion of the initial business combination. \n### Competition \n\nFacilities \n\n### Employees and Human Capital Resources \n\n\n\n\n\nPrior to the date of this Report, we filed a Registration Statement on Form 8-A with the SEC to voluntarily register our securities under Section12 of the Exchange Act. \n\nAs such, we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section404 of the Sarbanes- Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. \n\nWe will remain an emerging growth company until the earlier of (1)the last day of the fiscal year (a)following the fifth anniversary of the completion of our initial public offering, (b)in which we have total annual gross revenue of at least $1.07 billion, or (c)in which we are deemed to be a large accelerated filer, which means the market value of our ClassA ordinary shares that are held by non-affiliates exceeds $700 million as of the prior June30th, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three- year period. \n\n### Item1A. Risk Factors \n\n\n\n\n\n\nIf we seek shareholder approval of our initial business combination, our sponsor, members of our management team and members of our board of directors have agreed to vote in favor of such initial business combination, regardless of how our public shareholders vote. \nOur initial shareholders own, on an as-converted basis, 20% of our outstanding ordinary shares. Our sponsor, members of our management team and members of our board of directors also may from time to time purchase ClassA ordinary shares prior to our initial business combination. Our amended and restated memorandum and articles of association provide that, if we seek shareholder approval, we will complete our initial business combination only if a majority of the ordinary shares, represented in person or by proxy and entitled to vote thereon, voted at a shareholder meeting are voted in favor of the business combination. As a result, in addition to our initial shareholders founder shares, we would need 13,647,939, or 37.5% (assuming all issued and outstanding shares are voted and the over-allotment option is not exercised), of the 36,394,500 public shares issued and outstanding to be voted in favor of an initial business combination in order to have our initial business combination approved. Accordingly, if we seek shareholder approval of our initial business combination, the agreement by our sponsor, each member of our management team and each member of our board of directors to vote in favor of our initial business combination will increase the likelihood that we will receive the requisite shareholder approval for such initial business combination. \n\n\n\n\n\n\n\n\n\nOn January31, 2020, U.S. If the disruptions posed by COVID-19 or other matters of global concern continue for an extensive period of time, our ability to consummate a business combination, or the operations of a target business with which we ultimately consummate a business combination, may be adversely affected in a material way. \nIn addition, our ability to consummate a transaction may be dependent on our ability to raise equity and debt financing which may be impacted by COVID-19 and other events, including increased market volatility or decreased market liquidity in third party financing being unavailable on terms acceptable to us or at all. \n\nFor example, the outbreak of COVID-19 may grow both in the U.S. and globally and, while the continuing extent of the impact of the outbreak on us will depend on future developments, it could limit our ability to complete our initial business combination, including as a result of increased market volatility, decreased market liquidity and third-party financing being unavailable on terms acceptable to us or at all. (ii)as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account and not previously released to us to pay our taxes, if any (less up to $100,000 of interest to pay dissolution expenses), divided by the number of the then-outstanding public shares, which redemption will completely extinguish public shareholders rights as shareholders (including the right to receive further liquidation distributions, if any); \n\n\n\n\n\n\n\n\n\n\nIf we seek shareholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our amended and restated memorandum and articles of association provide that a public shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a group (as defined under Section13 of the Exchange Act), will be restricted from seeking redemption rights with respect to more than an aggregate of 15% of the shares sold in our initial public offering without our prior consent, which we refer to as the Excess Shares. \n\n\nIf the net proceeds of our initial public offering and the sale of the private placement warrants not being held in the trust account are insufficient to allow us to operate for the 24 months following the closing of our initial public offering, it could limit the amount available to fund our search for a target business or businesses and our ability to complete our initial business combination, and we will depend on loans from our sponsor, its affiliates or members of our management team or of our board of directors to fund our search and to complete our initial business combination. \nAs of December31, 2020, we had approximately $30,000 in cash held outside the trust account to fund our working capital requirements. We believe that the funds available to us outside of the trust account, together with funds available from loans from our sponsor, will be sufficient to allow us to operate for 24 months from the closing of our initial public offering; however, we cannot assure you that our estimate is accurate, and that our sponsor will provide working capital loans beyond a twelve month period from the issuance of the financial statements included in this Report. \nIf we are required to seek additional capital, we would need to borrow funds from our sponsor, its affiliates, members of our management team, members of our board of directors or other third parties to operate or may be forced to liquidate. Neither our sponsor, members of our management team, members of our board of directors nor their affiliates is under any obligation to us in such circumstances. Up to $4,500,000 of such loans may be convertible into warrants of the post-business combination entity at a price of $1.50 per warrant at the option of the lender. Prior to the completion of our initial business combination, we do not expect to seek loans from parties other than our sponsor, its affiliates or members of our management team or of our board of directors as we do not believe third parties will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in our trust account. \n\n\n\n\n\n\n\n\n\nIf we are unable to consummate an initial business combination within 24 months from the closing of our initial public offering, the proceeds then on deposit in the trust account, including interest earned on the funds held in the trust account and not previously released to us to pay our income taxes, if any, (less up to $100,000 of interest to pay dissolution expenses), will be used to fund the redemption of our public shares, as further described herein. We have no obligation to return funds to investors prior to the date of our redemption or liquidation unless we consummate our initial business combination prior thereto or amend certain provisions of our amended and restated memorandum and articles of association, and only then in cases where investors have sought to redeem their ClassA ordinary shares. Only upon our redemption or any liquidation will public shareholders be entitled to distributions if we are unable to complete our initial business combination and do not amend certain provisions of our amended and restated memorandum and articles of association. \n\nUntil we hold an annual meeting of shareholders, public shareholders may not be afforded the opportunity to elect directors and to discuss company affairs with management and our board of directors. Our board of directors is divided into three classes with only one class of directors being elected in each year and each class (except for those directors appointed prior to our first annual meeting of shareholders) serving a three- year term. \n\n\n\n\n\nPursuant to the registration and shareholder rights agreement, our sponsor and its permitted transferees can demand that we register the ClassA ordinary shares into which founder shares are convertible, the private placement warrants and the ClassA ordinary shares issuable upon exercise of the private placement warrants, and warrants that may be issued upon conversion of working capital loans and the ClassA ordinary shares issuable upon conversion of such warrants. The registration rights will be exercisable with respect to the founder shares and the private placement warrants and the ClassA ordinary shares issuable upon exercise of such private placement warrants. \n\n\n\n\n\n\n\nOur amended and restated memorandum and articles of association authorizes the issuance of up to 950,000,000 ClassA ordinary shares, par value $0.0001 per share, 95,000,000 Class B ordinary shares, par value $0.0001 per share, and 1,000,000 preference shares, par value $0.0001 per share. There are 913,605,500 and 85,901,375 authorized but unissued ClassA ordinary shares and Class B ordinary shares, respectively, available for issuance which amount does not take into account shares reserved for issuance upon exercise of outstanding warrants or shares issuable upon conversion of the Class B ordinary shares, if any. The Class B ordinary shares are automatically convertible into ClassA ordinary shares at the time of our initial business combination or earlier at the option of the holders thereof as described herein and in our amended and restated memorandum and articles of association. \nWe may also issue ClassA ordinary shares in connection with our redeeming the warrants or upon conversion of the Class B ordinary shares at a ratio greater than one-to-one at the time of our initial business combination as a result of the anti-dilution provisions as set forth herein. However, our amended and restated memorandum and articles of association provide, among other things, that prior to or in connection with our<|endoftext|>The ticker symbol OMWS since April 15, 2020. There can be no assurance that a trading market will ever develop or, if such a market does develop, that it will continue. Prior to April 15, 2020, our common stock was quoted on the OTC Pink Market under the symbol GLLX. There were no trades in our common stock prior to May 27, 2019. \nThe following table sets forth for the periods indicated the high and low bid prices per share of our common stock as reported on OTC Pink Market, but as adjusted to reflect our March 5, 2020 12.6374:1 forward stock split and our April 6, 2021 15:1 forward stock split. \n### Number of Holders \nAs of July 28, 2021, 224,227,107 shares of our common stock were issued and outstanding, which were held by approximately 41 holders of record. \nDividends \nWe have never declared or paid any cash dividend. We do not anticipate that we will declare or pay any dividends in the foreseeable future. Our current policy is to retain earnings, if any, to fund operations, and the development and growth of our business. Any future determination to pay cash dividends will be at the discretion of our Board and will be dependent upon our financial condition, operation results, capital requirements, applicable contractual restrictions, restrictions in our organizational documents, and any other factors that our Board deems relevant. \n### Penny Stock \nOur Common Stock is subject to provisions of Section 15(g) and Rule 15g-9 of the Exchange Act, commonly referred to as the penny stock rule. Section 15(g) sets forth certain requirements for transactions in penny stock, and Rule 15g-9(d) incorporates the definition of penny stock that is found in Rule 3a51-1 of the Exchange Act. The SEC generally defines a penny stock to be any equity security that has a market price less than $5.00 per share, subject to certain exceptions. The Company is subject to the SECs penny stock rules. \nSince the Common Stock will be deemed to be penny stock, trading in the shares of our common stock is subject to additional sales practice requirements on broker-dealers who sell penny stock to persons other than established customers and accredited investors, as defined in Regulation D promulgated under the Securities Act. For transactions covered by these rules, broker-dealers must make a special suitability determination for the purchase of such security and must have the purchasers written consent to the transaction prior to the purchase. Additionally, for any transaction involving a penny stock, unless exempt the rules require the delivery, prior to the first transaction of a risk disclosure document, prepared by the SEC, relating to the penny stock market. A broker-dealer also must disclose the commissions payable to both the broker-dealer and the registered representative and current quotations for the securities. Finally, monthly statements must be sent disclosing recent price information for the penny stocks held in an account and information to the limited market in penny stocks. Consequently, these rules may restrict the ability of broker-dealer to trade and/or maintain a market in our common stock and may affect the ability of the Companys stockholders to sell their shares of common stock. \n\nIn March 2020, our board of directors adopted subject to the closing of the Acquisition, and stockholders approved the 2020 Equity Incentive Plan. \nUnder the 2020 Equity Incentive Plan, we may grant equity based incentive awards, including options, restricted stock, and other stock-based awards, to any directors, employees, advisers, and consultants that provide services to us or any of our subsidiaries on terms and conditions that are from time to time determined by us. An aggregate of up to 2,000,000 of our common stock are reserved for issuance under the 2020 Plan. No grants under the 2020 Plan are outstanding as of March 31, 2021. The purpose of the 2020 Plan is to provide financial incentives for selected directors, employees, advisers, and consultants of the Company and/or its subsidiaries, thereby promoting the long-term growth and financial success of the Company. The board of directors believes that the 2020 Plan will serve a critical role in attracting and retaining high caliber employees, consultants and directors essential to our success and in motivating these individuals to strive to meet our goals. \nThe table below sets forth information as of March 31, 2021 with respect to compensation plans under which our common stock is authorized for issuance. \n\nAs of January 5, 2021, as a result of the Closing, pursuant to and in connection with the Acquisition, the Company issued an aggregate of approximately 10,000,000 shares of common stock to the former stockholders of Omnia Corp. \nAlso as of January 5, 2021, in connection with the Acquisition, an aggregate of approximately $500,000 principal amount of convertible promissory notes of Omnia Corp. \nOn February 9, 2021, the Company issued 20,000 shares of common stock to an existing lender as consideration for the extension of the maturity date of an existing loan held by such lender. Additionally, the Company issued on February 9, 2021 an additional 177,650 shares of common stock to an existing investor upon the conversion of such investors loan to the Company of approximately $320,000 in principal plus accrued interest. All of such shares were issued in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act, as no general solicitation was used in the offer and sale of such securities. \n### On or about March 15, 2021, the Company issued: \nAn aggregate of 514,392 shares of common stock to existing lenders upon the previous conversion of such lenders loans to the Company of approximately $925,905 in principal plus accrued interest. \nAn aggregate of 270,000 shares of common stock to existing lenders as consideration for the previous extension of the maturity dates of existing loans to the Company held by such lenders. \nAn aggregate of 247,800 shares of common stock to consultants as consideration for services provided by such consultants to the Company. The issuance of such shares was exempt from registration under Section 4(a)(2) under the Securities Act as a transaction not involving a public offering, as the issuance thereof was made to a limited number of persons or entities as compensation for services rendered. \nAs of May 4, 2021, the Company issued 1,500,000 shares of common stock to an existing lender as consideration for the extension of the maturity date of an existing loan held by such lender. The shares were issued in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as no general solicitation was used in the offer and sale of such securities. \nAs of June 22, 2021, the Company issued 454,545 shares of common stock to an investor pursuant to the terms of a Stock Purchase Agreement. The shares were issued in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act, as no general solicitation was used in the offer and sale of such securities, and/or Regulation S promulgated under the Securities Act as the investor is a non-U.S. person and the offer was made in an offshore transaction. \nOn June 24, 2021, the Company entered into a Securities Purchase Agreement (the Purchase Agreement) dated as of June 24, 2021 (the Issuance Date) and issued and sold to Auctus Fund, LLC (the Investor), a Senior Secured Promissory Note (the Note) in the principal amount of $650,000 (the Capital Raise). Also pursuant to the Purchase Agreement, in connection with the issuance of the Note, the Company issued two common stock purchase warrants (separately, the First Warrant and the Second Warrant and together, the Warrants) to the Investor, each allowing the Investor to purchase an aggregate of 4,333,333 shares of the Companys common stock (the Common Stock). The Second Warrant is subject to cancellation pursuant to the terms of the Note, and may not be exercised until the Trigger Date (as defined in the Second Warrant). The Warrants each have an exercise price of $0.15 per share, subject to customary adjustments (including anti-dilution adjustments), and may be exercised at any time until the three year anniversary of the Warrants; provided, however, in the event the Company repays the Note in its entirety on or prior to the Maturity Date, the Second Warrant shall automatically expire and may only be exercised in the event it does not so automatically expire. The Warrants include a cashless exercise provision as set forth therein. The Note and the Warrants each was, and, unless subsequently registered, the shares underlying the Warrants will be, issued in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act and/or Regulation D promulgated thereunder, as no general solicitation was used in the offer and sale of such securities. \n### Item 6. RESERVED \nItem 7. \nYou should read the following discussion and analysis of financial condition and results of operations of the Company together with our financial statements and the related notes included in Item 8, Financial Statements and Supplementary Data, of this Annual Report on Form 10-K. Some of the information contained in this discussion and analysis or set forth elsewhere in this Annual Report on Form 10-K, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties. You should review the Risk Factors section of this Annual Report on Form 10-K for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. \n\nThe following discussion should be read in conjunction with our financial statements and related notes included in this Annual Report on Form 10-K. Certain information contained in this MD&A includes forward-looking statements. Statements which are not historical reflect our current expectations and projections about our future results, performance, liquidity, financial condition and results of operations, prospects and opportunities and are based upon information currently available to us and our management and their interpretation of what is believed to be significant factors affecting our existing and proposed business, including many assumptions regarding future events. Actual results, performance, liquidity, financial condition and results of operations, prospects and opportunities could differ materially and perhaps substantially from those expressed in, or implied by, these forward-looking statements as a result of various risks, uncertainties and other factors, including those risks described in detail in the section entitled Risk Factors of this Annual Report on Form 10-K. \nForward-looking statements, which involve assumptions and describe our future plans, strategies, and expectations, are generally identifiable by use of the words may, should, would, will, could, scheduled, expect, anticipate, estimate, believe, intend, seek, or project or the negative of these words or other variations on these words or comparable terminology. \nIn light of these risks and uncertainties, and especially given the nature of our existing and proposed business, there can be no assurance that the forward-looking statements contained in this section and elsewhere in this circular will in fact occur. Potential investors should not place undue reliance on any forward-looking statements. \n### Overview \nOn April 17, 2020, we entered into the Exchange Agreement with Omnia Corp. and the beneficial stockholders of Omnia Corp. The transactions contemplated by the Exchange Agreement were consummated on January 5, 2021 and, pursuant to the terms of the Exchange Agreement, among other things, all outstanding Omnia Corp. Shares were exchanged for shares of our common stock, par value $0.001 per share, based on the exchange ratio of one share of our common stock for every one Omnia Corp. Share. in exchange for the issuance of 10,000,000 shares of our common stock and Omnia Corp. As of the Closing, Mr. Amer Samad, formerly our sole director and executive officer, agreed to cancel 52,656,888 (pre-stock split) shares of our common stock owned beneficially and of record by him as part of the conditions to Closing, which were cancelled immediately after the Closing. The Company also issued an aggregate of 1,269,665 shares of common<|endoftext|>11. \nMr. Power attended, but did not receive a degree from, Occidental College and University of California at Davis. \nBrian Power has served as an officer/director of the company since its inception in December 2003. He was CEO and President from December 2003 until December 2005 and currently serves as a director of the company. From 1997 to 2014 Mr. Power served as CEO and President of Lone Oak Vineyards, Incorporated, a real estate/agricultural investment company. From October 1998 to 2005, he was a co-founder and managing member of Spirit of Adventure, LLC a company engaged in the development of deep ocean exploration technologies including the design/build of advancedmanned submersibles. From 1996 through the present he serves on the board of directors of Snuba, Incorporated, a manufacturer and international licensor of proprietary ocean diving systems. From 2014 through the present, Mr. Power founded and is the managing member of Asperatus LLC, a company engaged in the development of airborne remote earth sensing technologies and related data processing analytics. Mr. Power attended Solano Community College and the University of California at Davis. \n\nDuring the last 10 years, except as disclosed above, none of our directors or officers has: a.had any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time; b.been convicted in a criminal proceeding or subject to a pending criminal proceeding; c.been subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; or d.been found by a court of competent jurisdiction in a civil action, the Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated. \nOur executive officers are elected at the annual meeting of our Board of Directors held after each annual meeting of our shareholders. Our directors are elected at the annual meeting of our shareholders. Each director and executive officer holds office until his successor is duly elected and qualified, until his resignation or until he is removed in the manner provided by our by-laws. \n### Family Relationships \nJohn C. There do not exist any arrangements or understandings between any director and any other person pursuant to which any director was elected as such. \nDirector Independence \nOur common stock is listed on the OTC Market Inc.s OTCQB and OTC Pinks inter-dealer quotation systems, which does not have director independence requirements. The following directors are considered independent as defined under Rule 4200(a)(15): None. John C. Powers brother. \n### Board Meetings \nDuring the year ended December 31, 2020 Our Board held no meetings but has taken numerous actions by unanimous written consent. \n\nWe currently do not have standing audit, compensation or nominating committees of the Board of Directors. We plan to form audit, compensation and nominating committees when it is necessary to do so to comply with federal securities laws or to meet listing requirements of a stock exchange or the Nasdaq Capital Market. \nCompliance with Section 16(a), Beneficial Ownership \nUnder the Securities Laws of the United States, our directors, executive (and certain other) officers, and any persons holding more than ten percent (10%) of our common stock during any part of our most recent fiscal year are required to report their ownership of common stock and any changes in that ownership to the SEC. Specific due dates for these reports have been established and we are required to report in this Report any failure to file by these dates. During the year ended December 31, 2020, all of these filing requirements were satisfied by our officers, directors, and ten- percent holders except that Brian Power failed to file two reports covering two transactions in a timely fashion, John Power failed to file one report covering three transactions in a timely fashion and Mr. Gibbs, failed to file one report covering two transaction in a timely fashion. In making these statements, we have relied on the written representation of our directors and officers or copies of the reports that they have filed with the Commission. \n### Code of Ethics \nWe have adopted a Code of Ethics that apples to, among other persons, our companys principal executive officer, as well as persons performing similar functions. As adopted, our Code of Ethics sets forth written guidelines to promote: honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships; full, fair, accurate, timely and understandable disclosure in all reports and documents that we file with, or submit to, the SEC and in other public communications made by us that are within the executive officers area of responsibility; the prompt internal reporting of violations of the Code; \nOur Code of Ethics has been filed with the SEC as Exhibit 14 to our Annual Report on Form 10-KSB for the fiscal year ended December 31, 2006, as filed with the SEC on April 24, 2007. We will provide a copy of the Code of Ethics to any person without charge, upon request. Requests can be sent to: Athena Gold Corporation, 2010A Harbison Drive # 312, Vacaville, CA 95687. \n### ITEM 11 EXECUTIVE COMPENSATION \nDirector Compensation \nThe following table summarizes all director compensation in the most recent fiscal year ended December 31, 2020. There are no standard compensation arrangements in place for our directors. \n### Executive Compensation \nThe executive officers for the most recent fiscal year ended December 31, 2020 are as follows: \nJohn C. Power, CEO, President, CFO, Secretary and director. \n\nThe following table sets forth all compensation recorded by us to Mr. Power during the years ended December 31, 2020 and 2019: \nMr. Power is our only executive officer. We entered into a one-year consulting agreement with Mr. Power at the rate of $30,000 per year for his part-time service as our President. Mr. Power devotes approximately 25% of his time and attention to our business. \n### Employment Agreements \nWe do not have any written employment agreements other than the above-referenced consulting agreement with any of our executive officers; nor do we have or maintain key man life insurance on Mr. Power. \nEquity Incentive Plan \nThe Company adopted its 2020 Equity Incentive Plan which became effective in January 2021 (the Plan) for our officers, directors and other employees, plus outside consultants and advisors. Under the Plan, our employees, outside consultants and advisors may receive awards of non-qualified options and incentive options, stock appreciation rights or shares of stock. As required by Section 422 of the Internal Revenue Code of 1986, as amended, the aggregate fair market value of our common stock underlying incentive stock options granted to an employee exercisable for the first time in any calendar year may not exceed $100,000. The foregoing limitation does not apply to non-qualified options. The exercise price of an incentive option may not be less than 100% of the fair market value of the shares of our common stock on the date of grant. The same limitation does not apply to non-qualified options. An option is not transferable, except by will or the laws of descent and distribution. If the employment of an optionee terminates for any reason, (other than for cause, or by reason of death, disability or retirement), the optionee may exercise his options within a 90-day period following such termination to the extent he was entitled to exercise such options at the date of termination. A maximum of 10,000,000 shares of our common stock are subject to the Plan. The purpose of the Plan is to provide employees, including our officers, directors, and non-employee consultants and advisors with an increased incentive to make significant and extraordinary contributions to our long-term performance and growth, to join their interests with the interests of our shareholders, and to facilitate attracting and retaining employees of exceptional ability. \nThe Plan may be administered by the Board or in the Board's sole discretion by the Compensation Committee of the Board or such other committee as may be specified by the Board to perform the functions and duties of the Committee under the Plan. Subject to the provisions of the Plan, the Committee and the Board shall determine, from those eligible to be participants in the Plan, the persons to be granted stock options, stock appreciation rights and restricted stock, the amount of stock or rights to be optioned or granted to each such person, and the terms and conditions of any stock option, stock appreciation rights and restricted stock. \nThere have been no grants under the Plan to date. \n\nNone \nExpense Reimbursement \nWe will reimburse our officers and directors for reasonable expenses incurred during the course of their performance. \n### Retirement Plans and Benefits \nNone. \n\nOur bylaws contain provisions that limit the liability of our directors for monetary damages to the fullest extent permitted by Delaware law. Consequently, our directors will not be personally liable to us or our stockholders for monetary damages for any breach of fiduciary duties as directors, except liability for: any breach of the directors duty of loyalty to us or our stockholders, any act or omission not in good faith or that involves intentional misconduct or a knowing violation of law, unlawful payments of dividends or unlawful stock repurchases or redemptions as provided in Section174 of the Delaware General Corporation Law,or any transaction from which the director derived an improper personal benefit. \nOur bylaws provide that we are required to indemnify our directors and executive officers to the fullest extent permitted by Delaware law. Any repeal of or modification to our restated certificate of incorporation or bylaws may not adversely affect any right or protection of a director or executive officer for or with respect to any acts or omissions of such director or executive officer occurring prior to such amendment or repeal. Our bylaws also provide that we may advance expenses incurred by a director or executive officer in advance of the final disposition of any action or proceeding, and permit us to secure insurance on behalf of any officer, director, employee or other agent for any liability arising out of his or her actions in that capacity regardless of whether we would otherwise be permitted to indemnify him or her under the provisions of Delaware law. We believe that these bylaw provisions are necessary to attract and retain qualified persons as directors and officers. \nThe limitation of liability and indemnification provisions in our bylaws may discourage stockholders from bringing a lawsuit against our directors for breach of their fiduciary duty. They may also reduce the likelihood of derivative litigation against our directors and executive officers, even though an action, if successful, might benefit us and other stockholders. Further, a stockholders investment may be adversely affected to the extent that we pay the costs of settlement and damage awards against directors and executive officers as required by these indemnification provisions. At present, there is no pending litigation or proceeding involving any of our directors, officers or employees for which indemnification is sought, and we are not aware of any threatened litigation that may result in claims for indemnification. \nITEM 12 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS. \nThe following table sets forth information with respect to beneficial ownership of our common stock by: each person who beneficially owns more than 5% of our common stock; each of our directors; and all named executive officers and directors as a group. \nThe following table shows the number of shares owned as of February 15, 2021 and the percentage of outstanding common stock owned as of that date. Each person has sole voting and investment power with respect to the shares shown, except as noted. \n______________ \n(1) \nUnless otherwise stated, address is 2010A Harbison Drive # 312, Vacaville,<|endoftext|>Stockholders and our board of directors, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect to our warrants, which will expire worthless if we fail to complete our business combination by October 23, 2022. \n### Competition \n\nEmployees \n\n### Our Website \nOur corporate website address is www.dpcmcapital.com. \n\nWe have registered our units, Class A common stock and warrants under the Securities Exchange Act of 1934, as amended (the Exchange Act), and have reporting obligations, including the requirement that we file annual, quarterly and current reports with the SEC. Such reports and other information filed by the company with the SEC are available free of charge on our website and on the SECs website at www.sec.gov. \nWe will provide stockholders with audited financial statements of a prospective target business as part of the tender offer materials or proxy solicitation materials sent to stockholders to assist them in assessing the target business. In all likelihood, these financial statements will need to be prepared in accordance with, or reconciled to, United States generally accepted accounting principles (U.S. GAAP) or international financial reporting standards (IFRS), depending on the circumstances, and the historical financial statements may be required to be audited in accordance with the standards of the Public Company Accounting Oversight Board (United States) (the PCAOB). \nWe will be required to evaluate our internal control procedures for the fiscal year ending December 31, 2021 as required by the Sarbanes-Oxley Act of 2002 (the Sarbanes-Oxley Act). \nWe are an emerging growth company, as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the JOBS Act). \n\nWe will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of our initial public offering, (b) in which we have total annual gross revenue of at least $1.07 billion, or (c) in which we are deemed to be a large accelerated filer, which means the aggregate worldwide market value of the shares of our Class A common stock that are held by non-affiliates equals or exceeds $700 million as of the prior June 30, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period. \nWe will remain a smaller reporting company until the last day of the fiscal year in which (1) the market value of the shares of our Class A common stock held by non-affiliates equals or exceeds $250 million as of the prior June 30, and (2) our annual revenues equaled or exceeded $100 million during such completed fiscal year or the market value of the shares of our Class A common stock held by non-affiliates equals or exceeds $700 million as of the prior June 30. \n### Item 1A. Risk Factors (Restated) \nOwnership of our securities involves a high degree of risk. This report also contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in the forward-looking statements as a result of specific factors, including the risks described below. For risk factors related to the Proposed Business Combination, see the Registration Statement on Form S-4 we will file in connection with such business combination. \n\n\nPast performance by our management team is not indicative of future performance of an investment in us. \nInformation regarding performance by, or businesses associated with, our management team, is presented for informational purposes only. Any past experience and performance of our management team is not a guarantee either: (1)that we will be able to successfully identify a suitable candidate for our initial business combination; You should not rely on the historical record of the performance of our management team as being indicative of the future performance of an investment in us or the returns we will, or are likely to, generate going forward. \n\n\n\nUnlike many other blank check companies in which the initial stockholders agree to vote their founder shares in accordance with the majority of the votes cast by the public stockholders in connection with an initial business combination, our initial stockholders have agreed to vote their founder shares, as well as any public shares purchased during or after our initial public offering, in favor of our initial business combination. As a result, in addition to our initial stockholders founder shares, we would need 11,250,001, or 37.5%, of the 30,000,000 public shares sold in our initial public offering to be voted in favor of a transaction (assuming all outstanding shares are voted) in order to have our initial business combination approved. We expect that our initial stockholders will own shares representing approximately 20% of our outstanding shares of common stock at the time of any such stockholder vote. Accordingly, if we seek stockholder approval of our initial business combination, it is more likely that the necessary stockholder approval will be received than would be the case if our initial stockholders agreed to vote their founder shares in accordance with the majority of the votes cast by our public stockholders. \n\n\n\nFurthermore, in no event will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 upon consummation of our initial business combination (so that we are not subject to the SECs penny stock rules) or any greater net tangible asset or cash requirement which may be contained in the agreement relating to our initial business combination. \n\nThe amount of the deferred underwriting commissions payable to the underwriter will not be adjusted for any shares that are redeemed in connection with a business combination. \nThe ability of our public stockholders to exercise redemption rights with respect to a large number of our shares could increase the probability that our initial business combination would not be consummated and that you would have to wait for liquidation in order to redeem your stock. \nIf our business combination agreement requires us to use a portion of the cash in the trust account to pay the purchase price, or requires us to have a minimum amount of cash at closing, the probability that our initial business combination would not be consummated is increased. \n\nAny potential target business with which we enter into negotiations concerning a business combination will be aware that we must complete our initial business combination by October 23, 2022. \n\nOur sponsor, officers and directors have agreed that we must complete our initial business combination by October 23, 2022. For example, the COVID-19pandemic persists both in the U.S. and globally and, while the extent of the impact of the COVID-19 pandemic on us will depend on future developments, it could limit our ability to complete our initial business combination, including as a result of increased market volatility, decreased market liquidity and third-partyfinancing being unavailable on terms acceptable to us or at all. Additionally, the COVID-19pandemic and other events (such as terrorist attacks, natural disasters or a significant outbreak of other infectious diseases) may negatively impact businesses we may seek to acquire. \nIf we have not completed our initial business combination within such time period, we will: (i)cease all operations except for the purpose of winding up; (ii)as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-shareprice, payable in cash, equal to the aggregate amount then on deposit in the trust account including interest earned on the funds held in the trust account and not previously released to us to pay our taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law; and (iii)as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. \nIf we seek stockholder approval of our initial business combination, our sponsor, directors, officers, advisors and their affiliates may elect to purchase shares from public stockholders, which may influence a vote on a proposed business combination and reduce the public float of our Class A common stock. \nIf we seek stockholder approval of our initial business combination, our sponsor, directors, officers, advisors and their affiliates may elect to purchase shares from public stockholders, which may influence a vote on a proposed business combination and reduce the public float of our ClassA common stock. \nIf we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our business combination pursuant to the tender offer rules, our sponsor, directors, officers, advisors or their affiliates may purchase shares in privately negotiated transactions or in the open market either prior to or following the completion of our initial business combination, although they are under no obligation to do so. \nIn addition, if such purchases are made, the public float of our ClassA common stock and the number of beneficial holders of our securities may be reduced, possibly making it difficult to obtain or maintain the quotation, listing or trading of our securities on a national securities exchange. \n\nIn addition, the proxy solicitation or tender offer materials, as applicable, that we will furnish to holders of our public shares in connection with our initial business combination will indicate the applicable delivery requirements, which may include the requirement that a beneficial holder must identify itself in order to validly redeem its shares. For example, we may require our public stockholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in street name, to either tender their certificates to our transfer agent prior to the date set forth in the tender offer documents or proxy materials mailed to such holders, or up to two business days prior to the initially scheduled vote on the proposal to approve the business combination in the event we distribute proxy materials, or to deliver their shares to the transfer agent electronically. \n\nOur public stockholders will be entitled to receive funds from the trust account only upon the earliest to occur of: (i)our completion of an initial business combination; (ii)the redemption of any public shares properly tendered in connection with a stockholder vote to amend our amended and restated certificate of incorporation (a)to modify the substance or timing of our obligation to provide holders of our ClassA common stock the right to have their shares redeemed or to redeem 100% of our public shares if we do not complete our initial business combination by October 23, 2022, or (b)with respect to any other provisions relating to rights of holders of our ClassA common stock; and (iii)the redemption of our public shares if we do not complete an initial business combination by October 23, 2022, subject to applicable law and as further described herein. In addition, if we do not complete an initial business combination by October 23, 2022 for any reason, compliance with Delaware law may require that we submit a plan of dissolution to our then-existingstockholders for approval prior to the distribution of the proceeds held in our trust account. In that case, public stockholders may be forced to wait beyond by October 23, 2022 before they receive funds from our trust account. \n\nOur units, ClassA common stock and warrants are currently listed on the NYSE. For instance, our stock price would generally be required to be at least $4.00 per share and we must have 400 round lot holders of our ClassA common stock upon the consummation of our initial business combination. \n\nBecause our units, ClassA common stock and warrants are listed on the NYSE, our<|endoftext|>Serve on our Board due to his extensive experience in the entertainment and media industries. \nMartin Luther King III has served as one of our directors since the consummation of our initial public offering. The oldest son of Martin Luther King Jr. and Coretta Scott King, Mr. King is a celebrated human rights advocate who has devoted his life to promoting civil and global human rights. Since 2006, Mr. King has served as the founder and Chief Executive Officer of Realizing the Dream, a non-profit organization that continues the humanitarian and liberating work of his parents, through which he has spearheaded nonviolence training in Bosnia Herzegovina, India, Israel and Palestine, Kenya, Sri Lanka, and the United States. In 2011, Mr. King co-founded Bounce TV, an African American broadcast network. Mr. King served as the fourth President of the Southern Christian Leadership Conference from 1997 to 2004. Since March 2021, Mr. King has served as a director, the chair of the compensation committee and members of the audit and nominating and corporate governance committees of Forest Road Acquisition Corp. II, a special purpose acquisition company. Since 1997, Mr. King has been Chairman of the Nominating and Governance Committee of the Board of MetWest, a mutual fund complex. Mr. King served as the President and Chief Executive Officer of The King Center, based in Atlanta, and remains a member of its board of directors. In 1986, he was elected to the Fulton County Board of Commissioners to represent more than 700,000 Georgia residents. He received a B.A. degree in Political Science from Morehouse College. Mr. King is well-qualified to serve on our Board due to his extensive experience in the broadcast network industry and dedication to human rights advocacy. \nTeresa Miles Walsh has served as one of our directors since the consummation of our initial public offering. In 2003, Ms.Walsh founded Access Media Advisory, a boutique corporate advisory firm with offices in London and New York focused on media sector clients, and currently serves as its Chief Executive Officer and Managing Director. Since 2009, Ms. Walsh has served as the Partner and the Senior Banker of Media Investment Banking at Pickwick Capital Partners, LLC, an investment bank and fund placement advisory firm. From 1989 until 2002, Ms. Walsh held various investment banking positions at Merrill Lynch, Pierce, Fenner & Smith Incorporated, including Group Head and Managing Director of the European Media Investment Banking Group in London from 1997 until 2002. She has been a member of the board of directors of Upland Software, Inc. (Nasdaq: UPLD), a provider of cloud-based enterprise work management software, since March 2020. Ms.Walsh received her M.B.A. with distinction from the Fuqua School of Business at Duke University and has her Bachelor of Arts degree in Economics, Magna Cum Laude, also from Duke University. Ms.Walsh is well-qualified to serve on our Board due to her extensive experience in the media industry and corporate finance, as well as her publicly company experience. \nSheila A. Stamps has served as one of our directors since the consummation of our initial public offering. Since September 2020, Ms. Stamps has been a member of the board of directors, the audit committee, and the executive compensation committee of Pitney Bowes Inc. (NYSE: PBI), a technology company providing solutions and analytics to businesses. Since May 2018, Ms. Stamps has served as a member of the board of directors and the Chairperson of the audit committee of Atlas Air Worldwide Holdings, Inc. (Nasdaq: AAWW), an airfreight company. Since February 2014, Ms. Stamps has served as a member of the board of directors of CIT Group, Inc. (NYSE: CIT), a financial services company, and its banking subsidiary, CIT Bank, N.A. From July 2014 to July 2018, Ms. Stamps served as the Commissioner of the New York State Insurance Fund, a governmental insurance carrier. During her time at the New York State Insurance Fund, Ms. Stamps also served on the business operations committee and served as Chairperson of the audit committee. Ms. Stamps was the Executive Vice President of DBI, LLC, a private mortgage investment company, from 2011 to 2012. From 2008 to 2011, Ms. Stamps served as the Head of Fixed Income and Cash Management, a senior management member of the Investment Advisory Committee and the Real Estate Advisory Committee of New York State Common Retirement Fund. From 2005 to 2016, Ms. Stamps served as the Managing Director of Golden Seeds, Inc., an investment company. From 2003 to 2004, Ms. Stamps served as a Managing Director and Financial Institutions Group Head at Bank of America (formerly, FleetBoston Financial). From 1997 to 2003, Ms. Stamps held a number of executive positions in Bank One Corporation (now JPMorgan Chase), including Managing Director and Head of European Asset-Backed Securitization and a member of the Operating Management Committee. Ms. Stamps received her B.S. in Management Sciences from Duke University and her M.B.A. from University of Chicago. She was a fellow of Weatherhead Center for International Affairs at Harvard University and received her CERT Certificate in Cybersecurity Oversight from Carnegie Mellon University. Ms. Stamps is well-qualified to serve on our Board due to her extensive experience in the finance and investment sectors as well as her roles on public company boards. \n### Strategic Advisory Committee \nOur Strategic Advisory Committee, comprised of Mr. Staggs, Chairperson, and our strategic advisors, assists our management team in its search of suitable acquisition targets. Mr. Staggs acts as liaison to our management and serves to coordinate and lead the strategic advisors efforts to assist the management team in their search for a business combination target. In addition to Mr. Staggs, the members of the Strategic Advisory Committee are as follows: \nKevin Mayer has served as a strategic advisor since the consummation of our initial public offering. Mr. Mayer has served as the Co-Chief Executive Officer and Co-Chairperson of the Board of Forest Road Acquisition Corp II. Mr. Mayer has been the chairman of the board of directors of DAZN, a sports steaming service provider, from March 2021. In November 2020, Mr. Mayer agreed to advise Access Industries with the title of Senior Advisor. From May 2020 to August 2020, Mr. Mayer served as Chief Executive Officer of TikTok Inc. and Chief Operating Officer of ByteDance Ltd., TikToks parent company. Prior to joining TikTok, Mr. Mayer oversaw the launch of Disney+ while serving as Chairman of Direct-to-Consumer & International division at Disney. After joining Disney in 1993, Mr. Mayer led strategy and business development for Disneys interactive and television businesses worldwide. He later became Executive Vice President of the internet group, responsible for the operations, business plans, creative direction, and distribution of Disneys popular websites, including ESPN.com and ABCNews.com. Mr. Mayer departed Disney in 2000 but returned in 2005, eventually rising to the role of Chief Strategy Officer before accepting the position of Chairman of Direct-to-Consumer & International until his departure in May 2020. Prior to rejoining Disney in 2005, Mr. Mayer served as a partner and head at L.E.K. Consultings Global Media and Entertainment practice. Prior to L.E.K., he held leading positions at interactive and internet businesses, including Chairman and Chief Executive Officer of Clear Channel Interactive, where he managed all aspects of new media business, including content, sales, business and technology development, and distribution. Mr. Mayer is an investor in and serves on the strategic advisory board of Forest Road. Mr. Mayer received his B.S. degree in Mechanical Engineering from Massachusetts Institute of Technology, a M.Sc. degree in Electrical Engineering from San Diego State University and an M.B.A. degree from Harvard University. \nShaquille Shaq ONeal has served as a strategic advisor since the consummation of our initial public offering. Mr. ONeal is an American athlete, investor, and entrepreneur, and is regarded as one of the greatest players in NBA history. Mr. ONeal was elected to both the Naismith Memorial Basketball Hall of Fame and FIBA Hall of Fame. Beyond basketball, Mr. ONeal has made investments in Google prior to its initial public offering and Ring prior to its sale to Amazon. Mr. ONeal currently owns multiple franchises, including Auntie Annes and Papa Johns Pizza, as well as several restaurants in Las Vegas. Mr. ONeal moved into e-sports by assuming the role of General Manager of the Kings Guard (NBA 2K League), an e-sports team associated with the Sacramento Kings, in which he owns a minority stake. Mr. ONeal serves on the board of directors of Papa Johns Pizza, as a national spokesperson for the non-profit Boys& Girls Clubs of America, and as a global spokesperson for Krispy Kreme. Mr. ONeal received his B.A. degree in General Studies from Louisiana State University, an M.B.A. degree from University of Phoenix and an Ed.D degree in Human Resource Development from Barry University. \nMark Burg has served as a strategic advisor since the consummation of our initial public offering. Mr. Burg is an entrepreneur, business executive and American film producer, best known for his work on the \n### Saw film series and on the CBS sitcom \nTwo and a Half Men \nFrom November 2014 to December 2017, Mr. Burg served as Vice Chairman of Management and Production at Primary Wave Entertainment, a private music publishing and talent management company. In 2004, Mr. Burg founded the production company Twisted Pictures, which primarily focuses on the development and production of horror films. Mr. Burg personally financed the first production of the \nSaw films. He has received a ShoWest Award, a Peoples Choice Award, has been recognized in the Guinness Book of World Records for the Most Successful Horror Movie Franchise, has been nominated for three Emmy Awards, and has received multiple awards for previous films. Mr. Burg is an investor in, and serves on the strategic advisory board of, Forest Road. Mr. Burg received his B.A. degree in Communications and Management from Ithaca College. \nOur Strategic Advisory Committee and the strategic advisors (i)assist us in sourcing and negotiating with potential business combination targets, (ii)provide business insights when we assess potential business combination targets and (iii)upon our request, provide business insights as we work to create additional value in the businesses that we acquire. In this regard, our strategic advisors fulfill some of the same functions as our board members. However, our strategic advisors are not executive officers of our company and have no written advisory agreement with us, nor do they have any other employment arrangements with us. Moreover, our strategic advisors will not be under any fiduciary obligation to us nor will they perform board or committee functions, nor will they have any voting or decision-making capacity on our behalf. Our strategic advisors will not be required to devote any specific amount of time to our efforts or be subject to the fiduciary requirements to which our board members are subject. Accordingly, if our strategic advisors become aware of a business combination opportunity which is suitable for any of the entities to which they have fiduciary or contractual obligations, they will honor their fiduciary or contractual obligations to present such business combination opportunity to such entity, and only present it to us if such entity rejects the opportunity. We may modify or expand our roster of strategic advisors as we source potential business combination targets or create value in businesses that we may acquire. \n\nOur board of directors consists of seven members and is divided into three classes with only one class of directors being elected in each year, and with each class (except for those directors appointed prior to our first annual meeting of stockholders) serving a three-year term. The term of office of the first class of directors, consisting of Peter Schlessel and Teresa Miles Walsh, will expire at our first annual meeting of stockholders. The term of office of the second class of directors, consisting of Martin Luther King III and Sheila A. Stamps, will expire at the second annual meeting of stockholders. The term of office of the third class of directors, consisting of Keith L. Horn, Zachary Tarica and Thomas Staggs, will expire at the third<|endoftext|>Their public shares in connection with such vote. \n\nOur sponsor, its affiliates or permitted designees are not obligated to purchase private placement warrants to extend the initial time period for us to complete our initial business combination. If we are unable to consummate our initial business combination within the applicable time period, we will: (i)cease all operations except for the purpose of winding up; \n\nThe COVID-19 outbreak has resulted in, and a significant outbreak of other infectious diseases could result in, a widespread health crisis that has, and in the future could, adversely affected the economies and financial markets worldwide, and the business of any potential target business with which we consummate a business combination could be materially and adversely affected. Furthermore, we may be unable to complete a business combination if continued concerns relating to COVID-19 continues to restrict travel, limit the ability to have meetings with potential investors, limit the ability to conduct due diligence, or the target companys personnel, vendors and services providers are unavailable to negotiate and consummate a transaction in a timely manner. The extent to which COVID-19 impacts our search for a business combination will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of and perceptions to COVID-19 and the actions to contain COVID-19 or treat its impact, among others. If the disruptions posed by COVID-19 or other matters of global concern continue, our ability to consummate a business combination, or the operations of a target business with which we ultimately consummate a business combination, may be materially adversely affected. \n\nFinally, the outbreak of COVID-19 or other infectious diseases may also have the effect of heightening many of the other risks described in this Risk Factors section, such as those related to the market for our securities. \nWe may not be able to consummate an initial business combination within 18months after the closing of our Initial Public Offering, prior to the Contractual Redemption Date if extended at our sponsors option or during any Extension Period, in which case we would cease all operations except for the purpose of winding up and we would redeem our public shares and liquidate, in which case our public shareholders may receive only $10.10 per share, or less than such amount in certain circumstances, and our warrants will expire worthless. \nWe may not be able to find a suitable target business and consummate an initial business combination within 18months after the closing of our Initial Public Offering, prior to the Contractual Redemption Date if extended at our sponsors option or during any Extension Period. For example, the outbreak of COVID-19 continues both in the U.S. \nIn either such case, our public shareholders may receive only $10.10 per public share, or less than $10.10 per public share, on the redemption of their shares, and our warrants will expire worthless. \n\nOn January31, 2020, U.S. \n\n\nSee Item1. \n\n\n\nIn recentyears, the number of special purpose acquisition companies that have been formed has increased substantially. Many potential targets for special purpose acquisition companies have already entered into an initial business combination, and there are still many such companies currently in registration. This could increase the cost of delay or otherwise complicate or frustrate our ability to find and consummate an initial business combination and may result in our inability to consummate an initial business combination on terms favorable to our investors altogether. \n\n\nIf the net proceeds of our Initial Public Offering and the sale of the private placement warrants not being held in the trust account are insufficient to allow us to operate for 18months from the closing of our Initial Public Offering, until the Contractual Redemption Date if extended at our sponsors option or during any Extension Period, it could limit the amount available to fund our search for a target business or businesses and our ability to complete our initial business combination, and we will depend on loans from our sponsor, its affiliates or members of our management team to fund our search and to complete our initial business combination. \nAs of December31, 2020, we had approximately $1,906,348 available to us outside the trust account to fund our working capital requirements. We believe that the funds available to us outside of the trust account, together with funds available from loans from our sponsor, its affiliates or members of our management team will be sufficient to allow us to operate for 18months from the closing of our Initial Public Offering, until the Contractual Redemption Date if extended at our sponsors option or during any Extension Period; \nConsequently, our public shareholders may only receive an estimated $10.10 per public share, or possibly less, on our redemption of our public shares, and our warrants will expire worthless. See \nIf third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share redemption amount received by shareholders may be less than $10.10 per public share and other risk factors herein. \n\n\n\n\n\n\nAs an exempted company, there is no requirement under the Companies Act for us to hold annual or general meetings to appoint directors. \n\n\n\n\n\n\nThe founder shares will automatically convert into ClassA ordinary shares on the first business day following the consummation of our initial business combination at a ratio such that the number of ClassA ordinary shares issuable upon conversion of all founder shares will equal, in the aggregate, on an as-converted basis, 20% of the sum of (i)the total number of ordinary shares issued and outstanding (excluding the private placement shares) upon completion of our Initial Public Offering, plus (ii)the sum of the total number of ClassA ordinary shares issued or deemed issued or issuable upon conversion or exercise of any equity-linked securities or rights issued or deemed issued, by the Company in connection with or in relation to the consummation of the initial business combination, excluding any ClassA ordinary shares or equity-linked securities exercisable for or convertible into ClassA ordinary shares issued, deemed issued, or to be issued, to any seller in the initial business combination and any private placement shares issued to our sponsor, members of our management team or any of their affiliates upon conversion of working capital loans. \n\n\n\nFor example, blank check companies have amended the definition of business combination, increased redemption thresholds, and extended the time to consummate a business combination. Amending our amended and restated memorandum and articles of association require at least a special resolution of our shareholders as a matter of Cayman Islands law, meaning the approval of holders of at least two-thirds of our ordinary shares who attend and vote at a general meeting of the company. \n\nOur initial shareholders own, on an as-converted basis, 20% of our issued and outstanding ordinary shares (excluding the private placement shares). In addition, our board of directors, whose members were elected by our sponsor, is divided into three classes, each of which will generally serve for a term of threeyears with only one class of directors being appointed in each year. If there is an annual meeting, as a consequence of our staggered board of directors, only a minority of the board of directors will be considered for election and our sponsor, because of its ownership position, will control the outcome, as only holders of our ClassB ordinary shares will have the right to vote on the appointment of directors and to remove directors prior to our initial business combination. \n\n\n\n\nHowever, because we have net tangible assets in excess of $5,000,001 upon the completion of our Initial Public Offering and the sale of the private placement shares and have filed a Current Report on Form 8-K, including an audited balance sheet demonstrating this fact, we are exempt from rules promulgated by the SEC to protect investors in blank check companies, such as Rule419. Among other things, this means that since our shares were immediately tradable and we have a longer period of time to complete our initial business combination than do companies subject to Rule419. \n\nIn addition, charges of this nature may cause us to violate net worth or other covenants to which we may be subject as a result of assuming preexisting debt held by a target business or by virtue of our obtaining post-combination debt financing. \nIf third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share redemption amount received by shareholders may be less than $10.10 per public share. \n\nUpon redemption of our public shares, if we have not consummated an initial business combination within 18months from the closing of our Initial Public Offering, prior to the Contractual Redemption Date if extended at our sponsors option or during any Extension Period or upon the exercise of a redemption right in connection with our initial business combination, we will be required to provide for payment of claims of creditors that were not waived that may be brought against us within the tenyears following redemption. Accordingly, due to claims of such creditors, the per-share redemption amount received by public shareholders could be less than the $10.10 per public share initially held in the trust account. Pursuant to a letter agreement, our sponsor has agreed that it will be liable to us if and to the extent any claims by a third-party (other than our independent auditors) for services rendered or products sold to us, or a prospective target business with which we have discussed entering into a transaction agreement, reduce the amounts in the trust account to below the lesser of (i)$10.10 per public share and (ii)the actual amount per public share held in the trust account as of the date of the liquidation of the trust account if less than $10.10 per public share due to reductions in the value of the trust assets, in each case net of the interest that may be withdrawn to pay our income tax obligations, provided that such liability will not apply to any claims by a third-party or prospective target business that executed a waiver of any and all rights to seek access to the trust account nor will it apply to any claims under our indemnity of the underwriters of our Initial Public Offering against certain liabilities, including liabilities under the Securities Act. \nAs a result, if any such claims were successfully made against the trust account, the funds available for our initial business combination and redemptions could be reduced to less than $10.10 per public share. \n\nIn the event that the proceeds in the trust account are reduced below the lesser of (i)$10.10 per public share and (ii)the actual amount per public share held in the trust account as of the date of the liquidation of the trust account if less than $10.10 per public share due to reductions in the value of the trust assets, in each case net of the interest that may be withdrawn to pay our income tax obligations, and our sponsor asserts that it is unable to satisfy its obligations or that it has no indemnification obligations related to a particular claim, our independent directors would determine whether to take legal action against our sponsor to enforce its indemnification obligations. If our independent directors choose not to enforce these indemnification obligations, the amount of funds in the trust account available for distribution to our public shareholders may be reduced below $10.10 per public share. \n\n\n\n\n\n\n\n\n\n\n\n\n\n\nWe may pursue business combination opportunities in any sector, except that we are not, under our amended and restated memorandum and articles of association, be permitted to effectuate our initial business combination solely with another blank check company or similar company with nominal operations. \n\n\n\n\n\n\n\nOur amended and restated memorandum and articles of association authorizes the issuance of up to 300,000,000 ClassA ordinary shares, par value $0.0001 per share, 30,000,000 ClassB ordinary shares, par value $0.0001 per share, and 1,000,000 preference shares, par value $0.0001 per share. There are 277,000,000 and 24,250,000 authorized but unissued ClassA ordinary shares and ClassB ordinary<|endoftext|>"},"task":{"kind":"string","value":"{\"file\": \"/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz\"}"}}},{"rowIdx":89,"cells":{"text":{"kind":"string","value":"<|endoftext|>Agreements was \n2.94% \n\nBorrowing availability under the US Facility and the Multicurrency Facility is equal to the lesser of (i)the aggregate Revolver Commitments and (ii) the Line Cap. At December 31, 2020, the Line Cap was $2.4billion and the Borrowers had $1.1billion of available borrowing capacity under the 2020 ABL Facility, including $681.0million under the US ABL Facility and $400.0million un der the Multicurrency \nFacility. Borrowing capacity under the 2020 ABL Facility is made available for up to $205.6million of letters of credit and up to $170.0million of swingline loans. At December 31, 2020, letters of credit and bank guarantees carried fees of \n2.00% \nThe Company had issued $14.4million of standby letters of credit under the 2020 ABL Facility at December 31, 2020. \nThe Company had $1.3billion outstanding principal under the 2020 ABL Facility at December 31, 2020. Debt issuance costs of $40.8million were included in the carrying value of the 2020 ABL Facility at December 31, 2020. \nThe obligations of the US Borrowers are unconditionally guaranteed by Holdings and each existing and subsequently acquired or organized direct or indirect wholly-owned US organized restricted subsidiary of Holdings, other than excluded subsidiaries (together with Holdings, the \"US Guarantors\"). The obligations of the Multicurrency Borrowers are unconditionally guaranteed by the US Borrowers and the US Guarantors, and each existing and subsequently acquired or organized direct or indirect wholly-owned Canadian organized restricted subsidiary of Holdings other than certain excluded subsidiaries (together with the US Guarantors, the \"ABL Guarantors\"). \n2022 Senior Secured Notes \nIn 2017, WSII issued $300.0million aggregate principal amount of 7.875% senior secured notes due December 15, 2022 (the 2022 Secured Notes) under an indenture dated November 29, 2017. Interest was payable semi-annually on June 15 and December 15 beginning June 15, 2018. \nOn December 13, 2019, the Company completed a partial redemption of $30.0million of the 2022 Secured Notes at a redemption price of 103% using proceeds from its 2017 ABL Facility. The Company recorded a loss on extinguishment of debt of $1.5million, which included $0.9million of an early redemption premium and $0.6million related to the write-off of unamortized deferred financing fees. \nIn connection with the Merger and related financing transactions in the third quarter of 2020, using proceeds from the 2025 Secured Notes discussed below, the Company redeemed all of its 2022 Secured Notes and recorded a loss on extinguishment of debt in the consolidated statements of operations of $15.2million comprised of a redemption premium of $10.6million and write off of unamortized deferred financing fees of $4.6million. \nAs of December 31, 2019, unamortized debt issuance costs pertaining to the 2022 Secured Notes were $5.4million. \n2023 Senior Secured Notes \nIn connection with the acquisition of ModSpace in 2018, $300.0million in aggregate principal amount of its 6.875% senior secured notes due August 15, 2023 (the 2023 Secured Notes) were issued. Interest was payable semi-annually on February 15 and August 15 of each year, beginning February 15, 2019. \nOn May 14, 2019, WSII completed a tack-on offering of $190.0million in aggregate principal amount to the initial 2023 Secured Notes (the \"Tack-On Notes\"). The Tack-On Notes were issued as additional securities under the 2023 Secured Notes indenture. The Tack-On Notes and the initial 2023 Secured Notes were treated as a single class of debt securities under the 2023 Secured Notes indenture. The Tack-On Notes have identical terms to the initial 2023 Secured Notes, other than with respect to the issue date and issue price. WSII incurred a total of $3.0million in debt issuance costs in connection with the tack-on offering, which were deferred and were being amortized through the August 15, 2023 maturity date. Subsequent to the Tack-On Notes, WSII had $490.0million of 6.875% 2023 Secured Notes. On August 11, 2020, WSII redeemed 10% of the outstanding principal amount of the 2023 Secured Notes, $49.0million, at a redemption price of 103% plus accrued interest and unpaid interest. This repayment was funded by borrowings under the Company's 2020 ABL Facility. \nOn August 25, 2020, the Company completed a private offering of its 2028 Secured Notes, discussed below, and used the offering proceeds to repay, along with expenses, the $441.0million outstanding principal amount of its 2023 Secured Notes at a redemption price of 103.438% plus accrued interest and unpaid interest. The Company recorded a loss on extinguishment of debt in the consolidated statements of operations of $22.7million comprised of a redemption premium of $16.6million and a write off of unamortized deferred financing fees of $6.1million. \nUnamortized debt issuance costs of $7.2million were included in the carrying value of the debt as of December 31, 2019. \n2025 Senior Secured Notes \nIn anticipation of the Merger, on June 15, 2020, Picasso Finance Sub, Inc., a newly-formed indirect finance subsidiary (the \"Finance Sub\") of the Company completed a private offering of $650.0million in aggregate principal amount of its 6.125% senior secured notes due 2025 (the \"2025 Secured Notes\"). The 2025 Secured Notes contained provisions requiring repayment, without penalty, in the event the Merger was not consummated. The offering proceeds from the 2025 Secured Notes of $650.0million and $5.1million of interest due through August 1, 2020 were deposited into an escrow account, pending the closing of the Merger. In connection with the completion of the Merger, on July 1, 2020, the offering proceeds were released and the proceeds were used to repay the 2022 Secured Notes, repay Mobile Mini senior notes assumed in the acquisition and pay certain fees and expenses related to the Merger and the related financing transactions. In addition, Finance Sub was merged into WSII on July 1, 2020. The Company recorded $14.3million in deferred financing fees related to the 2025 Secured Notes. \n\nThe Company may redeem the 2025 Secured Notes at any time before June 15, 2022 at a redemption price equal to 100% of the principal amount thereof, plus a customary make whole premium for the 2025 Secured Notes being redeemed, plus accrued and unpaid interest, if any, to but not including the redemption date. Before June 15, 2022, the Company may redeem up to 40% of the aggregate principal amount of the 2025 Secured Notes at a price equal to 106.125% of the principal amount of the 2025 Secured Notes being redeemed, plus accrued and unpaid interest, if any, to but not including the redemption date with the net proceeds of certain equity offerings. At any time prior to June 15, 2022, the Company may also redeem up to 10% of the aggregate principal amount of the 2025 Secured Notes at a redemption price equal to 103% of the principal amount of the 2025 Secured Notes being redeemed during each twelve-month period commencing with the issue date, plus accrued and unpaid interest, if any, to but not including the redemption date. If the Company undergoes a change of control or sells certain of its assets, the Company may be required to offer to repurchase the 2025 Secured Notes. \nOn and after June 15, 2022, the Company may redeem the 2025 Secured Notes, in whole or in part, at the redemption prices expressed as percentages of principal amount set forth below plus accrued and unpaid interest to but not including the applicable redemption date, subject to the holders' right to receive interest due on an interest payment date falling on or prior to the redemption date, if redeemed during the twelve-month period beginning on June 15 of each of the years set forth below. \nThe 2025 Secured Notes are unconditionally guaranteed by each of WSII's direct and indirect domestic subsidiaries and WSII's parent, Holdings (collectively, \"the Note Guarantors\"). WillScot Mobile Mini is not a guarantor of the 2025 Secured Notes. The guarantees of the 2025 Secured Notes by WillScot Equipment II, LLC, a Delaware limited liability company which holds certain of WSIIs assets in the US, will be subordinated to its obligations under the 2020 ABL Facility. \nUnamortized deferred financing costs pertaining to the 2025 Secured Notes were $12.9million as of December 31, 2020. \n2028 Senior Secured Notes \nOn August 25, 2020, the Company completed a private offering of $500.0million in aggregate principal amount of 4.625% senior secured notes due 2028 (the \"2028 Secured Notes\"). \nThe 2028 Secured Notes mature on August 15, 2028. They bear interest at a rate of 4.625% per annum. Interest is payable semi-annually on August 15 and February 15 of each year, beginning February 15, 2021. \nThe Company may redeem the 2028 Secured Notes at any time before August 15, 2023 at a redemption price equal to 100% of the principal amount thereof, plus a customary make whole premium for the 2028 Secured Notes being redeemed, plus accrued and unpaid interest, if any, to but not including the redemption date. Before August 15, 2023, the Company may redeem up to 40% of the aggregate principal amount of the 2028 Secured Notes at a price equal to 104.625% of the principal amount of the 2028 Secured Notes being redeemed, plus accrued and unpaid interest, if any, to but not including the redemption date with the net proceeds of certain equity offerings. At any time prior to August 15, 2023, the Company may also redeem up to 10% of the aggregate principal amount at a redemption price equal to 103% of the principal amount of the 2028 Secured Notes being redeemed during each twelve-month period commencing with the issue date, plus accrued and unpaid interest, if any, to but not including the redemption date. If the Company undergoes a change of control or sells certain of its assets, the Company may be required to offer to repurchase the 2028 Secured Notes. \nOn and after August 15, 2023, the Company may redeem the 2028 Secured Notes, in whole or in part, at the redemption prices expressed as percentages of principal amount set forth below plus accrued and unpaid interest to but not including the applicable redemption date, subject to the holders' right to receive interest due on an interest payment date falling on or prior to the redemption date, if redeemed during the twelve-month period beginning on August 15 of each of the years set forth below. \nThe 2028 Secured Notes are unconditionally guaranteed by the Note Guarantors. WillScot Mobile Mini is not a guarantor of the 2028 Secured Notes. The guarantees of the 2028 Secured Notes by WillScot Equipment II, LLC, a Delaware limited liability company which holds certain of WSIIs assets in the US, will be subordinated to its obligations under the 2020 ABL Facility. \nUnamortized deferred financing costs pertaining to the 2028 Secured Notes were $8.4million as of December 31, 2020. \nThe Company is in compliance with all debt covenants and restrictions for the aforementioned debt instruments as of December 31, 2020. \n2023 Senior Unsecured Notes \nThe Company had $200.0million in aggregate principal amount of senior unsecured notes due November 15, 2023. On June 19, 2019 (the \"Redemption Date\"), WSII used proceeds from its US ABL Facility to redeem all $200.0million in aggregate outstanding principal amount of the unsecured notes at a redemption price of 102.0%, plus a make-whole premium of 1.126% and any accrued and unpaid interest to, but not including, the Redemption Date. The Company recorded a loss on extinguishment of $7.2million, which included $6.2million of make-whole premiums and $1.0million related to the write-off of unamortized deferred financing fees. \n### Finance Leases \nThe Company maintains finance leases primarily related to transportation equipment. At December 31, 2020, obligations under the finance leases for certain real property and transportation related equi pment were $77.9million. The C ompany had no finance leases at December 31, 2019. \n### Mobile Mini Debt \nMobile Mini had $250.0million in aggregate principal amount of 5.875% senior notes outstanding prior to the Merger. Interest was payable semi-annually on January 1 and July 1. In connection with the Merger, these notes were assumed by WillScot Mobile Mini and subsequently redeemed using proceeds from the 2025 Secured Notes discussed above. \nMobile Mini had a $1.0billion first lien senior secured revolving credit facility. At June 30, 2020, Mobile Mini had $563.2million of outstanding principal on the credit facility. In connection<|endoftext|>The performance period that occurs post-Separation, relative TSR will be determined by using the combined TSR of AIR and Aimco. \n(5) \nFor additional information on the valuation assumptions with respect to the grants reflected in this column, refer to the Share-Based Compensation footnote to \nAIRs consolidated financial statements in its Annual Report on Form 10-K for the year ended December31, \n2020. \nBeldin and Kimmel, and Ms.Cohn that are based on relative TSR performance.The grant date fair value of the performance-based LTIP Unit award, assuming achievement at the maximum level of performance, is $8,600,011 for Mr.Considine. The grant date fair value of the performance-based restricted stock awards, assuming achievement at the maximum level of performance, is $372,526 for Mr.Beldin, $1,181,050 for Ms.Cohn, and $1,006,586 for Mr.Kimmel. \n\n\nThe table also shows unvested and unearned stock awards assuming a market value of $38.41 per share (the closing market price of the AIRs Class A Common Stock (AIRs Common Stock) on the New York Stock Exchange on December31, 2020). \n(1) \nEffective December 15, 2020, in connection with the Separation, the executive officers received a share or partnership unit of AIR for every share or partnership unit of Aimco, and both stock options and partnership units were adjusted to preserve their pre-Separation value.The amounts in this table reflect only the AIR awards, and, in the case of stock options, the post-Separation exercise price. Amounts reflect the number of shares subject to the award that have not vested multiplied by the market value of $38.41 per share, which was the closing market price of AIRs Common Stock on December31, 2020. \n(2)This option was granted on January31, 2017. The amount shown in the table represents the portion of the award that was earned based on Aimcorelative TSR performance for the three-year performance period from January1, 2017, through December31, 2019, of which 50% vested on January31, 2020, and the remaining 50% vested on January31, 2021. \n(3) \n\n(4) \nThe amount shown in the table represents the portion of the award that was earned based on \nAimco relative TSR performance for the three-year performance period from January1, 2016, through December31, 2018, of which 50% vested on January26, 2019, and the remaining 50% vested on January26, 2020. \n(5)This performance-based LTIP Unit award was granted on January 29, 2019, and, subject to relative TSR metrics set forth in the CD&A, vests 50% following the end of the three-year forward looking performance period and 50% on the fourth anniversary of the grant date. \n(6) This option was granted on February12, 2015, and vested 25% on each anniversary of the grant date. \n(7) This performance-based LTIP Unit award was granted on January30, 2018. The amount shown in the table represents the portion of the award that was earned based on Aimcos relative TSR performance for the roughly three-year performance period from January1, 2018, through December11, 2020, of which 50% vested on January30, 2021, and the remaining 50% will vest on January30, 2022, as described in the CD&A.Mr. Considine holds a corresponding number of Aimco shares with a value of $235,542. \n(8)This performance-based LTIP Unit award was granted on January30, 2018. The amount shown in the table represents the portion of the award that was earned based on Aimcos relative TSR performance for roughly the three-year performance period from January1, 2018, through December11, 2020, of which 50% vested on January30, 2021, and the remaining 50% will vest on January30, 2022, as described earlier in the CD&A.Mr. Considine holds a corresponding number of Aimco shares with a value of $433,034. \n(9)This performance-based LTIP Unit award was granted on January31, 2017. The amount shown in the table represents the portion of the award that was earned based on Aimcos relative TSR performance for the three-year performance period from January1, 2017, through December31, 2019, of which 50% vested on January31, 2020, and the remaining 50% vested on January31, 2021, as described in the CD&A.Mr. Considine holds a corresponding number of Aimco shares with a value of $86,471. \n(10) This option was granted on January28, 2020 and, subject to relative TSR metrics set forth in the CD&A, vests 50% following the end of the three-year forward-looking performance period and 50% on the fourth anniversary of the grant date. \n(11) \nThis performance-based restricted stock award was granted on January28, 2020 and, subject to relative TSR metrics set forth in the CD&A, vests 50% following the end of the three-year forward looking performance period and 50% on the fourth anniversary of the grant date. \n(12) This option was granted on January31, 2017. \n(13) \nThis performance-based restricted stock award was granted on January29, 2019, and, subject to relative TSR metrics, vests 50% following the end of the three-year forward-looking performance period and 50% on the fourth anniversary of the grant date. \n(14) The amount shown in the table represents the portion of the award that was earned based on Aimcos relative TSR performance for the three-year performance period from January1, 2016, through December31, 2018, of which 50% vested on January26, 2019, 37.5% vested on January26, 2020, and 12.5% vests on January26, 2022. \n(15) \nBeldin - $12,170, Ms. Cohn- $36,168, and Mr. Kimmel - $24,663. \n(16) \nBeldin - $10,143, Ms. Cohn- $30,154, and Mr. Kimmel - $19,874. \n(17) This restricted stock award was granted on January30, 2018, and vests 100% on the fourth anniversary of the grant date. Mr. Beldin holds a corresponding number of Aimco shares with a value of $31,662. \n(18) \nThe amount shown in the table represents the portion of the award that was earned based on Aimcos relative TSR performance for the roughly three-year performance period from January1, 2018, through December11, 2020, of which 50% vested on January31, 2021, and the remaining 50% will vest on January31, 2022. Beldin - $45,529, Ms. Cohn- $63,745, and Mr. Kimmel - $44,014. \n(19) This restricted stock award was granted on January31, 2017, and vested 25% on the first anniversary of the grant date and 75% will vest on the fifth anniversary of the grant date. The following NEO holds a corresponding number of Aimco shares with the following values:Mr. Beldin - $22,392. \n(20) This performance-based restricted stock award was granted on January31, 2017. Mr. Beldin holds a corresponding number of Aimco shares with a value of $19,341. \n(21) This restricted stock award was granted on January26, 2016, and vested 25% on each of the first, second anniversaries of the grant date and 50% will vest on the sixth anniversary of the grant date. Mr. Beldin holds a corresponding number of Aimco shares with a value of $14,045. \n(22) This performance-based restricted stock award was granted on January26, 2016. The amount shown in the table represents the portion of the award that was earned based on Aimcos relative TSR performance for the three-year performance period from January1, 2016, through December31, 2018, as described in the CD&A, of which 50% vested on January26, 2019, 37.5% vested on January26, 2020, and 12.5% vests on January26, 2022. Mr. Beldin holds a corresponding number of Aimco shares with a value of $10,887. \n(23) This restricted stock award was granted on January26, 2016, and vested 25% on each of the first, second, and third anniversaries of the grant date and will vest 12.5% on each of the fifth and sixth anniversaries of the grant date. Mr. Beldin holds a corresponding number of Aimco shares with a value of $9,446. \n(24) This restricted stock award was granted on January 30, 2018, and vests 25% on each anniversary of the grant date. Cohn- $22,134, and Mr. Kimmel - $15,286. \n(25) This restricted stock award was granted on January31, 2017, and vested 25% on each anniversary of the grant date. Cohn- $9,953, and Mr. Kimmel - $7,218. \n(26) This performance-based restricted stock award was granted on January31, 2017. The amount shown in the table represents the portion of the award that was earned based on Aimcos relative TSR performance for the three-year performance period from January1, 2017, through December31, 2019, of which 50% vested on January31, 2020, and the remaining 50% vested on January31, 2021. Cohn- $28,660, and Mr. Kimmel - $20,782. \n\n\n(1) \n\n(2) \n\n\n\nThe actual amounts to be paid out can only be determined at the time of such NEOs separation from AIR. \n(1) \nAmounts reflect value of accelerated restricted stock, LTIP Units, and options using the closing market price on December31, 2020, of $38.41 per share. \n(2) \n\n(3) \nAmount does not reflect the offset for long-term disability benefit payments in the case of a qualifying disability under AIRs long-term disability insurance plan. \n(4) \nAmount consists of (i) a lump sum cash payment equal to the sum of (a)three times the sum of Mr.Considines base salary, or $2.1million, and (b)Mr.Considines 2020 target STI of $1.8million, and (ii) 24 months of medical coverage reimbursement at an estimated amount of $28,450, as payable pursuant to the terms of Mr. Considines employment agreement with the Company. \n(5) \n\n(6) \nAmount consists of (i)a lump sum cash payment equal to the sum of base salary and the average of the amount of STI paid for the previous three years, and (ii) 18 months of medical coverage reimbursement at an estimated amount of $29,482, as payable pursuant to the Executive Severance Policy. \n(7) \nAmount consists of (i)a lump sum cash payment equal to two times the sum of base salary and the average of the amount of STI paid for the previous three years, and (ii) 18 months of medical coverage reimbursement at an estimated amount of $29,482, as payable pursuant to the Executive Severance Policy. \n\nWe believe that executive pay should be internally consistent and equitable to motivate our teammates to create stockholder value.In August 2015, pursuant to a mandate of the Dodd-Frank Act, the SEC adopted a rule requiring annual disclosure of the ratio of the median employees annual total compensation to the annual total compensation of the principal executive officer. The disclosure is required for fiscal years beginning on or after January1, 2017. The annual total compensation for 2020 for Mr.Considine, our CEO, was $6,802,856, as reported under the heading Summary Compensation Table. Our median employees total compensation for 2020 was $68,664. As a result, we estimate that Mr.Considines 2020 total compensation was approximately 99.07 times that of our median employee. \nOur CEO to median employee pay ratio was calculated in accordance with Item 402(u) of Regulation S-K.We identified the median employee by examining 2020 total compensation, consisting of base salary, annual bonus amounts, stock-based compensation (based on the grant date fair value of awards granted during 2020) and other incentive payments for all individuals who were employed by the Company on December31, 2020, other than our CEO. Our measuring date of December 31 remained the same as last year. We included all active employees and annualized the compensation for any employees who were not employed by the Company for the full 2020 calendar year. After identifying the median employee based on 2020 total compensation, we calculated annual total compensation for such employee using the same methodology we use for our named executive officers as set forth in the Total column in the Summary Compensation Table. \n### Director Compensation \nThe Nominating and Corporate Governance Committee also considers the relatively small size of the AIR board as compared to other boards, the participation of each Independent Director on each committee, and the resulting workload on the directors. \nAs noted previously, on December 15, 2020, AIR became a separate and distinct public company from Aimco with the consummation of the Separation.The majority of the directors of the Company served as the directors of Aimco for all but two weeks of 2020 and then became directors of AIR.As described herein, AIRs director compensation philosophy, including with respect to its directors remains largely consistent with that of pre-Separation Aimcos. Given the timing of the Separation, the 2020 elements of director compensation reflect Aimcos compensation program and philosophy. \nFor 2020, compensation for the Independent Directors remained consistent with their compensation for 2019. Specifically, director compensation included a fixed annual cash retainer of $90,000 and an award of 3,200<|endoftext|>References in this Amendment No. 1 on Form 10-K/A (this Amendment) to we, us, our, Eagle Bulk, the Company and similar terms all refer to Eagle Bulk Shipping Inc. and its subsidiaries, unless otherwise stated or the context otherwise requires. \n### REVERSE STOCK SPLIT \nEffective as of September 15, 2020, the Company completed a 1-for-7 reverse stock split (the Reverse Stock Split) of the Company's issued and outstanding shares of common stock, par value $0.01 per share. Proportional adjustments were made to the Companys issued and outstanding common stock and to the exercise price and the number of shares issuable upon exercise of all of the Companys outstanding warrants, the exercise price and number of shares issuable upon exercise of the options outstanding under the Companys equity incentive plans, and the number of shares subject to restricted stock awards under the Companys equity incentive plans. Furthermore, the conversion rate set forth in the indenture governing the Companys Convertible Bond Debt was adjusted to reflect the Reverse Stock Split. No fractional shares of common stock were issued in connection with the Reverse Stock Split. Furthermore, if a shareholder held less than seven shares prior to the Reverse Stock Split, then such shareholder received cash in lieu of the fractional share. All references to common stock and all per share data contained in this Annual Report have been retrospectively adjusted to reflect the Reverse Stock Split unless explicitly stated otherwise. \nFORWARD-LOOKING STATEMENTS \nMatters discussed in this Amendment may constitute forward-looking statements. Forward-looking statements reflect managements current expectations and observations with respect to future events and financial performance. Where the Company expresses an expectation or belief as to future events or results, such expectation or belief is expressed in good faith and believed to have a reasonable basis. However, the Companys forward-looking statements are subject to risks, uncertainties, and other factors, which could cause actual results to differ materially from future results expressed, projected, or implied by those forward-looking statements. The Companys actual results may differ materially from those anticipated in these forward looking statements as a result of certain factors, including changes in the Companys financial resources and operational capabilities, including as a result of the impact of the COVID-19 pandemic, and as a result of certain other factors listed from time to time in the Companys filings with the U.S. The Company disclaims any intent or obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws. \n### EXPLANATORY NOTE \nThis Amendment amends the Annual Report on Form 10-K of the Company for the year ended December 31, 2020 that was originally filed with the SEC on March 12, 2021 (the Original Filing). The Company plans to file a resale registration statement on Form S-3 before it files a definitive proxy statement for its 2021 annual meeting of shareholders. In order to comply with the requirements for a prospectus under the Securities Act of 1933, as amended (the Securities Act), the Company is filing this Amendment to the Original Filing for the purpose of providing the information required by Items 10, 11, 12, 13, and 14 of Part III. This information was previously omitted from the Original Filing in reliance on General Instruction G(3) to Form 10-K, which permits the information in the above referenced items to be incorporated in the Form 10-K by reference from a definitive proxy statement if such statement is filed no later than 120 days after our fiscal year end. The reference on the cover of the Original Filing to the incorporation by reference to portions of our definitive proxy statement into Part III of the Original Filing has been deleted. \nIn addition, pursuant to the rules of the SEC, Item 15 of Part IV has been amended to include the currently dated certifications of our principal executive officer and principal financial officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. We are not including the certificate under Section 906 of the Sarbanes-Oxley Act of 2002 as no financial statements are being filed with this Amendment. \n\n### PART III \nItem 10. \n\nSet forth below is certain information concerning our directors and executive officers, effective as of March 22, 2021. \n\n### Paul M. Leand, Jr. \n, age 54, has served as a Director of the Company since November 2014 and is the Chairman of the Board of Directors. Mr. Leand joined AMA Capital Partners LLC (AMA), in 1998 from First National Bank of Maryland. He was appointed CEO in 2004. He has led the development of AMAs restructuring practice, helping AMA earn its position as the pre-eminent maritime restructuring advisor for both creditors and companies alike. He has been involved in the restructuring of numerous high yield issues including Golden Ocean, ACL, GlobalOcean, Pegasus and Enterprises, and Horizon Lines. On the offshore side, Mr. Leand has led AMAs efforts in the restructurings of, amongst others, PetroMENA ASA, Sevan Marine ASA, Remedial Offshore and Equinox Offshore.Mr. Leand has also been involved in numerous M&A roles, including with Golden Ocean, SFL and TECO Transport and also spearheaded the firms private equity investments in Chembulk and PLM and Lloyds Fonds. Mr. Leand serves as a Director of Golar LNG Partners LP (Nasdaq). Mr. Leand previously served on the boards of Lloyd Fonds AG (Frankfurt Stock Exchange), North Atlantic Drilling (Oslo Stock Exchange), SeaDrill Ltd. (New York Stock Exchange (\"NYSE\")) as well as Ship Finance International Ltd. (NYSE). Mr. Leand holds a BS/BA from Boston Universitys School of Management. Mr. Leand is familiar with a range of corporate and board functions based on significant prior board experience. \nRandee E. Day \n, age 72, has served as a Director of the Company since November 2014 and the Chairwoman of our Nominating and Governance Committee until March 1, 2021. Effective March 1, 2021, Ms.Day is serving as the Chairwoman of our Compensation Committee. Ms. Day briefly served as interim President of the Company from February 25, 2014 through March 6, 2015. Ms. Day is President and Chief Executive Officer of Day & Partners, LLC, a specialized advisory firm focused on the maritime and offshore industries. Ms. Day accepted the position as a senior advisor to Goldin Associates LLC, now part of Teneo Capital, which is a specialized restructuring firm, in 2016. She also heads an asset management platform called Teneo Maritime. Ms. Day is also an independent board member of International Seaways Inc. (NYSE-listed under INSW). INSW is one of the worlds largest owner/operators of crude oil and petroleum product tankers, with a fleet of 55 vessels. She is Chairwoman of the Audit Committee and serves on Compensation Committees of the board of directors of INSW. Ms. Day was also an independent board member of Tidewater (NYSE-listed under TDW) from 2017-2020. TDW owns and operates one of the largest fleets of offshore support vessels in the industry, supporting offshore energy exploration and production activities worldwide. She chaired the Nominating/Governance Committee and served on the Audit Committee. \nMs. Day has an extensive background as an owner/operator of public companies, a senior lending officer, and as an advisor on mergers and acquisitions and restructuring transactions. Prior to founding Day & Partners, LLC in 2011, Ms. Day served as interim Chief Executive Officer of DHT Maritime, Inc., a NYSE-listed owner/operator of 12 crude oil tankers. Previously, Ms. Day was Managing Director at the Seabury Group, a transportation advisory firm. She was the Division Head of JP Morgans shipping group in New York and served as the Senior Lending Officer for the banks shipping clients in Asia, Europe, and the Americas. She served as a director of TBS International Ltd. from 2001 to 2012; of Ocean Rig ASA, in Oslo, Norway, an operator of ultra-deep-water oil rigs, from 2008 to 2009 and of DHT Maritime, Inc. from 2005 to 2013. In 2014, Ms. Day was appointed as an independent director alongside appointees from Angelo, Gordon & Co. and Oaktree Capital Management to the board of Excel Maritime Carriers Ltd. \nMs. Day holds a B.A. degree from the School of International Relations at the University of Southern California and is a graduate of the Senior Executive Program in International and National Security at the Harvard Kennedy School and a graduate of the Directors College at Stanford University. She is also a director of the American-Georgian Business Council in Washington, DC, which is the official trade council between the U.S. and the Republic of Georgia. \nThe Board of Directors selected Ms. Day as a Director because it believes that Ms. Day brings valuable management, financial and corporate governance experience to the Board of Directors. \n### Justin A. Knowles \n, age 52, has served as a Director of the Company since November 2014 and is the Chairman of our Audit Committee (the Audit Committee). \nMr. Knowles graduated from the University of Edinburgh in 1990 with a M.A. Hons degree in Accounting and Economics before joining Ernst & Young, where he trained and qualified as a Chartered Accountant. In 1994 he left Ernst & Young to join the Bank of Scotland, initially working in various head office roles, before joining the Bank of Scotlands Shipping Finance team in 1999. Mr. Knowles spent 13 years working in senior roles within the shipping team, in both loan origination and debt restructure/work-out units, working with a wide variety of public and private shipping companies. \nIn 2012, Mr. Knowles left banking to establish Dean Marine Advisers Ltd., a United Kingdom-based shipping finance consultancy that works with banks, financial institutions and ship owners providing strategic advice on shipping projects and investments. \nKnowles to serve as a Director because it believes he has valuable business and management experience and important perspectives on issues facing our Company. Mr. Knowles's experience enables him to provide insight, guidance and strategic direction to the Board of Directors. Mr. Knowles has a strong financial background, including an understanding of financial statements, corporate finance, accounting and capital markets. \n### Bart Veldhuizen \n, age 54, has served as a Director of the Company since November 2014. Mr. Veldhuizen has been working in the shipping industry since 1994 on both the banking and non-banking sides. He started his career with Van Ommeren Shipping, a Dutch public shipping and storage company, after which he joined DVB Bank SE as a shipping banker working in both Rotterdam and Piraeus. After working for Smit International in both Greece and Singapore, Mr. Veldhuizen returned to the Netherlands to work with NIBC Bank, a Dutch-based merchant bank. From August 2007 until October 2011, he was the Managing Director and Head of Shipping of Lloyds Banking Group plc in London. In this capacity, Mr. Veldhuizen managed the combined Lloyds Bank and Bank of Scotlands shipping loan and lease portfolio. From 2015 to 2017, Mr. Veldhuizen was on the Board of Managing Directors of DVB Bank SE where he was responsible for the banks shipping and offshore franchises. Through his private company Aquarius Maritime Capital Ltd, he advises various credit funds and private equity firms on a variety on shipping investments in both the credit and hard asset classes. \nMr. Veldhuizen holds a degree in Business Economics from the Erasmus University in Rotterdam, the Netherlands. Mr. Veldhuizen is a former Director of Seadrill Partners LLC (NYSE-listed SDLP) and Golar LNG Partners LP (Nasdaq-listed under GMLP). In March 2019, Mr. Veldhuizen joined the board of Diamond S Shipping Inc. (NYSE listed under DSSI) as an independent Member of the Board. Veldhuizen to serve as a Director because it believes that Mr. Veldhuizen brings valuable banking and financial expertise. Mr. Veldhuizen brings over 25 years of experience in international banking specialized in shipping to the Board of Directors. \n### Gary Vogel \n, age 55, has served as Chief Executive Officer and Director of the Company since September 2015. Prior to joining our Company, Mr. Vogel was chief executive officer of Clipper Group Ltd., a ship-owning and operating company headquartered in Copenhagen, Denmark. He was also a<|endoftext|>Although the Company was in compliance with the financial covenants set forth in the amended master credit agreement (the \"Credit Agreement\") with Farm Credit Services of America, FLCA, Farm Credit Services of America, PCA and CoBank, ACB as of September 30, 2020, the impact the COVID-19 pandemic could have an adverse impact on the Companys operating results which could result in an inability of the Company to comply with certain of these financial covenants and require its lenders to waive compliance with, or agree to amend, any such covenant to avoid a default. \nHowever, based on managements current forecast of market conditions and the Companys financial performance together with the amended financial covenants set forth in our Credit Agreement, management expects that the Company will be in a position to satisfy all of the financial covenants in the Credit Agreement for the next twelve months. \nThe COVID-19 pandemic is ongoing, and its dynamic nature, including uncertainties relating to the ultimate geographic spread of the virus, the severity of the disease, the duration of the pandemic, and actions that would be taken by governmental authorities to contain the pandemic or to treat its impact, makes it difficult to forecast any effects on the Companys results for the fiscal year ending September 30, 2021 (Fiscal 2021). \nDespite the strategic transactions taken by the Company and the positive financial performance achieved by the Company during Fiscal 2020, the challenges posed by the COVID-19 pandemic on the ethanol industry and the global economy are continuing, and may accelerate, during the first quarter of Fiscal 2021. As of the date of this filing, management does not anticipate material improvement in the macroeconomic environment and, as a result our results for the first quarter of Fiscal 2021 may be significantly affected. \nDespite the economic uncertainty resulting from the COVID-19 pandemic, management intends to continue to focus on strategic initiatives designed to improve on the plants operational efficiencies and diversify the Companys products which is critical in order to drive positive results in a negative margin environment. \nManagement believes that consolidation within the ethanol industry, coupled with the plants location, good operating efficiencies and the Companys solid management and operational team may provide new opportunities for the Company. \nManagement continues to monitor the rapidly evolving situation and guidance from international and domestic authorities, including federal, state and local public health authorities and may take additional actions based on their recommendations. In these circumstances, there may be developments outside the Companys control requiring management to adjust the Companys operating plan. As such, given the dynamic nature of this situation, management cannot reasonably estimate the impacts of COVID-19 on the Companys financial condition, results of operations or cash flows in the future. \nComparison of Fiscal Years Ended September 30, 2020 and 2019 \nNet income was approximately $320 thousand in Fiscal 2020, which was a $13.6 million increase as compared to net income in Fiscal 2019. The increase in net income for Fiscal 2020 can be attributed in part to an 7% increase in ethanol production and a decrease in the total cost of production of $0.18 a production gallon. Additionally, ethanol revenue increased $4.9 million as a result of the increase in the gallons produced which was partially offset by a $1.4 million increase in the cash corn expense. The cost of production decreased by $4 million due to changes in operating procedures and a strategic focus on producing ethanol gallons more efficiently. Additionally, distillers grains revenue increased $3.9 million as a result of a 14% increase in production, or production of an additional 14,875 tons of distillers grains. \nRevenues from operations for the fiscal year ended September 30, 2020 were approximately $105.2 million, consisting of $80.0 million of ethanol sales (net of hedging activity), or 76% of revenues, $19.2 million in distillers grains sales, or 18.3% of revenues, and $5.8 million of corn oil, syrup, CO2 and other sales, or 5.5% of revenues. \nRevenues increased in fiscal year 2020 by approximately 8.0%, when compared to fiscal year 2019. The increase in revenues for the fiscal year ended September 30, 2020 resulted from an increase in ethanol and distiller grains production. \nEthanol average price per gallon decreased 1% from fiscal year 2019. \nIn addition to the increase in ethanol revenue, distillers grains revenue increased by $3.9 million during fiscal year 2020 as compared to fiscal year 2019. \nThe average price per ton increased 5% when compared to the prior fiscal year. \nThe increase in revenues was due in part to a strategic focus on improvements in the volume and quality of the distillers grains product sold. \nThis effort resulted in a 24% increase in distiller grains tons produced over the prior fiscal year. \nCorn oil revenue decreased 19% in fiscal year 2020 or $871 thousand dollars when compared to fiscal year 2019. The decrease is due to a 13.5% decrease in production as a result of the strategic focus on improving distiller grains production and improved ethanol production. \nLincolnway Energy's cost of goods sold for the fiscal year ended September 30, 2020 totaled approximately $101 million, which was a decrease of 3.9% when compared to fiscal year 2019. \nThe decrease in cost of goods sold for the 2020 fiscal year is primarily due to an overall focus on production efficiencies and improvements to operations. \nCost of goods sold major components consists of corn costs, energy costs, ingredient costs, production labor, repairs and maintenance, process equipment depreciation, and ethanol and distillers grain freight expense and marketing fees. \nThe average cost of corn increased by $1.4 million compared to fiscal year 2020. \nCorn hedging activity for fiscal year 2020 included a combined unrealized and realized net gain of $55 thousand from derivative instruments compared to a $.672 million combined unrealized and realized net gain for fiscal year 2019. \nCorn costs, including the combined unrealized and realized net gain from derivative instruments, represented 75% of cost of goods sold for the fiscal year ended September 30, 2020, compared to 70.5% of costs of goods sold for fiscal year 2019. \nEnergy costs for the fiscal year ended September 30, 2020 totaled approximately $8.2 million, or 8.2% of cost of goods sold, compared to $9.3 million or 8.87% of cost of goods sold for the 2019 fiscal year. \nEnergy costs consist of natural gas and electricity costs. \nFor fiscal year 2020, Lincolnway Energy purchased 1,768,901 MMBTUs of natural gas at an average price of $2.73. \nIn comparison, in fiscal year 2019 the Company used 1,764,330 MMBTUs of natural gas at an average price of $3.29. Electricity costs amounted to approximately $3.5 million in fiscal year 2020 which is unchanged compared to $3.5 million in fiscal year 2019. \nIngredient costs for the fiscal years ended September 30, 2020 and 2019 totaled approximately $5.4 million, or 5.3% of cost of goods sold, and $6.7 million, or 6.4% of cost of goods sold, respectively. \nProduction labor, repairs and maintenance and other plant costs totaled approximately $4.3 million, or 4.3% of cost of goods sold, for fiscal year 2020 compared to $7.5 million, or 7.1% of cost of goods sold, for the fiscal year ended September 30, 2019. \n\nDeprecation totaled approximately $4.1 million, or 4.0% of cost of goods sold, for fiscal year 2020 compared to $4.6 million, or 4.5% of cost of goods sold, for the fiscal year 2019. \nEthanol, distillers grain and corn oil freight expense and marketing fees totaled approximately $3.2 million, or 3.2% of cost goods sold, for fiscal year ending September 30, 2020. \nThis compared to $2.7 million, or 2.7% of cost of goods sold, during the fiscal year ended September 30, 2019. The increase is due to incurring ethanol and distiller grains railcar leases to handle the increased production of ethanol and distiller grains production. \nGeneral and administrative expenses totaled approximately $3.3 million during the fiscal year ending September 30, 2020 compared to $3.3 million during the fiscal year ended September 30, 2019. The unchanged expenses is due to the implementation of cost control measures aimed at maintaining or reducing our general and administrative expenses. \nOther income decreased $2.7 million in fiscal year 2020 from fiscal year 2019. The decrease is due to the early termination of the load out service agreement which resulted in income of approximately $3.4 million in fiscal year 2019. \nComparison of Fiscal Years Ended September 30, 2019 and 2018 \nNet loss was approximately $13.2 million in the fiscal year ended September 30, 2019, which was a $10.3 million decrease when compared to the net income for the 2018 fiscal year. The decrease in net income for fiscal year 2019 can be attributed in part to a one-time bad debt expense of $4,385,009 as further described in Note 1. In addition, during the 2019 fiscal year, the Company had a 1.2% decrease in production levels for ethanol including a $2.5 million decrease in ethanol revenues, increased corn cost of $3.6 million on 872 thousand less bushel ground and lower market price for distiller grains that equated to $1.1 million less revenue. \nRevenues from operations for the fiscal year ended September30, 2019 were approximately $97.4 million, consisting of $75.2 million of ethanol sales (net of hedging activity), or 77.2% of revenues, $15.4 million in distillers grains sales, or 15.9% of revenues, and $6.7 million of corn oil, syrup, CO2 and other sales, or 6.9% of revenues.Revenues decreased in fiscal year 2019 by approximately 4.6%, when compared to fiscal year 2018. The decrease in revenues for the fiscal year ended September30, 2019 resulted principally from lower ethanol prices, lower ethanol production and higher corn costs. Ethanol prices decreased due to the oversupply in the domestic market which was not met by increased demand as well as continued concern within the market relating to recent international trade disputes and the small refiner waivers granted by the EPA which negatively impacted prices. Ethanol average price per gallon decreased 1.6% from fiscal year 2018. Production decreased due to equipment issues with our regenerative thermal oxidizer, forcing the plant to run at slower rates during the first quarter. The regenerative thermal oxidizer came on line at the end of December 2018 operating at planned performance. \nIn addition to the decrease in ethanol revenue, distillers grains revenue decreased by $1.5 million compared to fiscal year 2018. The average price per ton increased 7.3% when compared to the prior fiscal year. The decrease in revenues was due in part to a 2.6% decrease in the price per ton we received for our dried distillers grains during fiscal year 2019 which decrease was partially offset by an increase in our dried distillers grain production as well as a 22% increase in the per ton price we received for our wet distillers grains as compared to fiscal year 2018. In addition, we also experienced a substantial decrease in production of our wet distillers grains which further reduced the benefits of the per ton price increase we received for wet distillers grains and contributed to the decreased distillers grain revenues in fiscal year 2019. \nCorn oil revenue decreased 1% in fiscal year 2019 or $57 thousand dollars when compared to fiscal year 2018. The decrease is due to a decrease in production. \nLincolnway Energy's cost of goods sold for the fiscal year ended September30, 2019 totaled approximately $105.1 million, which was an increase of 2.7% when compared to fiscal year 2018.The increase in cost of goods sold for the 2019 fiscal year is primarily due to increases in corn costs.Cost of goods sold major components consists of corn costs, energy costs, ingredient costs, production labor, repairs and maintenance, process equipment depreciation, and ethanol and distillers grain freight expense and marketing fees. \nCorn costs including hedging activity for the fiscal year ended September30, 2019 totaled approximately $74.1 million compared to $70.1 million for fiscal year 2018. There were .87 million less bushels ground due to improved production yields and a slight decrease in production levels during fiscal year 2019 while the average cost of corn increased by $0.32 compared to<|endoftext|>Indirect holders of the above referenced shares disclaim beneficial ownership of all applicable shares except to the extent of their actual pecuniary interest therein. The address for these entities and individuals is 1954Greenspring Drive, Suite600, Timonium, MD 21093. \n(2) \nConsists of (a)193,592 shares of ClassA common stock held by Lux Ventures V, L.P., (b)16,630,411 shares of ClassA common stock held by Lux Ventures IV, L.P., and (c)1,827,971 shares of ClassA common stock held by Lux Ventures IV, L.P. Lux Venture Partners V, LLC is the general partner of Lux Ventures V, L.P. and exercises voting and dispositive power over the shares noted herein held by Lux Ventures V, L.P. Lux Venture Partners IV, LLC is the general partner of Lux Ventures IV, L.P. and exercises voting and dispositive power over the shares noted herein held by Lux Ventures IV, L.P. Lux Co-Invest Partners, LLC is the general partner of Lux Co-Invest Opportunities, L.P. and exercises voting and dispositive power over the shares noted herein held by Lux Co-Invest Opportunities, L.P. Peter Hebert and Josh Wolf are the individual managing members of Lux Venture Partners V, LLC, Lux Venture Partners IV, LLC and Lux Co-Invest Partners, LLC (the Individual Managers). The Individual Managers, as the sole managers of Lux Venture Partners V, LLC, Lux Venture Partners IV, LLC and Lux Co-Invest Partners, LLC, may be deemed to share voting and dispositive power for the shares noted herein held by Lux Ventures V, L.P., Lux Ventures IV, L.P. and Lux Co-Invest Opportunities, L.P. Each of Lux Venture Partners V, LLC, Lux Venture Partners IV, LLC, Lux Co-Invest Partners, LLC and the Individual Managers separately disclaim beneficial ownership over the shares noted herein except to the extent of their pecuniary interest therein. The address for these entities and individuals is c/oLux Capital Management, 920 Broadway, 11th Floor, New York, NY 10010. \n(3) \nAll shares are held for convenience in the name of KPCB Holdings,Inc., as nominee for the accounts of such entities. Consists of 17,134,580 shares held by Kleiner Perkins Caufield& Byers XVI, LLC (KPCB XVI), 586,570 shares held by KPCB XVI Founders Fund, LLC (XVI Founders), 131,219 shares held by Kleiner Perkins Caufield& Byers XVII, LLC (KPCB XVII), and 4,296 shares held by KPCB XVII Founders Fund, LLC (XVII Founders). The managing member of KPCB XVI and XVI Founders is KPCB XVI Associates, LLC (KPCB XVI Associates). Beth Seidenberg, L. John Doerr, Randy Komisar, Theodore E. Schlein and Wen Hsieh, the managing members of KPCB XVI Associates, exercise shared voting and dispositive control over the shares held by KPCB XVI and XVI Founders. Such managing members disclaim beneficial ownership of all shares held by KPCB XVI and XVI Founders except to the extent of their pecuniary interest therein. The managing member of KPCB XVII and XVII Founders is KPCB XVII Associates, LLC (KPCB XVII Associates). Beth Seidenberg,Ilya Fushman, Mamoon Hamid, Theodore E. Schlein and Wen Hsieh, the managing members of KPCB XVII Associates, exercise shared voting and dispositive control over the shares held by KPCB XVII and XVII Founders. Such managing members disclaim beneficial ownership of all shares held by KPCB XVII and XVII Founders except to the extent of their pecuniary interest therein. The principal business address for all entities and individuals affiliated with Kleiner Perkins Caufield& Byers is c/oKleiner Perkins Caufield& Byers, LLC, 2750 Sand Hill Road, Menlo Park, CA 94025. \n(4) \nConsists of (a)2,332,177 shares of ClassA common stock held by GV 2017, L.P., (b)8,923,643 shares of ClassA common stock held by GV 2016, L.P., and (c)3,046,618 shares of ClassA common stock held by GV 2017, L.P. GV 2017 GP, L.P. (the general partner of GV 2017, L.P.), GV 2017 GP, L.L.C. (the general partner of GV 2017 GP, L.P.), Alphabet Holdings LLC (the sole member of GV 2017 GP, L.L.C.), XXVI Holdings Inc. (the sole stockholder of XXVI Holdings Inc.) may each be deemed to have sole power to vote or dispose of the shares held directly by GV 2017, L.P. GV 2016 GP, L.P. (the general partner of GV 2016, L.P.), GV 2016 GP, L.L.C. (the general partner of GV 2016 GP, L.P.), Alphabet Holdings LLC (the sole member of GV 2016 GP, L.L.C.), XXVI Holdings Inc. (the sole stockholder of XXVI Holdings Inc.) may each be deemed to have sole power to vote or dispose of the shares held directly by GV 2016, L.P. GV 2019 GP, L.P. (the general partner of GV 2019, L.P.), GV 2019 GP, L.L.C. (the general partner of GV 2019 GP, L.P.), Alphabet Holdings LLC (the sole member of GV 2019 GP, L.L.C.), XXVI Holdings Inc. (the sole stockholder of XXVI Holdings Inc.) may each be deemed to have sole power to vote or dispose of the shares held directly by GV 2019, L.P. The principal mailing address for each of GV 2016, L.P., GV 2016 GP, L.P., GV 2016 GP, L.L.C, GV 2017, L.P., GV 2017 GP, L.P., GV 2017 GP, L.L.C, GV 2019, L.P., GV 2019 GP, L.P., GV 2019 GP, L.L.C., Alphabet Holdings LLC, XXVI Holdings Inc., and Alphabet Inc. is 1600 Amphitheatre Parkway, Mountain View, CA 94043. \n(5) \nConsists of (a)20,095,149 shares of ClassA common stock held directly by Mr.Fulop, (b)628,927 shares of ClassA common stock held by Bluebird Trust, (c)628,927 shares of ClassA common stock held by Khaki Campbell Trust, and (d)628,927 shares of ClassA common stock held by Red Tailed Hawk Trust. The trustee of the Bluebird Trust, Khaki Campbell Trust and Red Tailed Hawk Trust is Steve Papa. Voting and investment power over the shares held of record by the trusts is exercised by Mr.Fulop and his wife. \n(6) \nConsists of shares of ClassA common stock subject to options held by Mr.Billow that are exercisable within 60days of April1, 2021. \n(7) \nConsists of ClassA common stock subject to options held by Ms.Linardos that are exercisable within 60days of April1, 2021. \n(8) \nConsists of 2,897,317 shares of ClassA common stock. The business address of Mr.Hindery and RTH is 405 Lexington Avenue, 48th Floor, New York, New York 10174. The business address of HPS is 40 West 57th Street, 33rd Floor, New York, NY 10019. \n(9) \nConsists of (a)39,256 shares of ClassA common stock and (b)219,819 shares of ClassA common stock subject to options held by Mr.Immelt that are exercisable within 60days of April1, 2021. \n(10) \nConsists of (i)47,811,310 shares of ClassA common stock and (ii)1,452,555 shares of ClassA common stock subject to options that are exercisable within 60days of April1, 2021. \n### ITEM 13 \n\n\nThe following includes a summary of transactions since January1, 2020 to which we have been a party in which the amount involved exceeded or will exceed $120,000, and in which any of our directors, executive officers or, to our knowledge, beneficial owners of more than 5% of our capital stock or any member of the immediate family of any of the foregoing persons had or will have a direct or indirect material interest, other than transactions that are described under the section \n### Executive and Director Compensation \nWe also describe below certain other transactions with our directors, executive officers and stockholders. \nStockholders Agreement \nPursuant to the Stockholders Agreement, the Sponsor and its permitted transferees have (i)the right to nominate Leo Hindery,Jr. to our \nBoard of Directors for so long as the Sponsor and its permitted transferees beneficially own, in the aggregate, a number of shares of ClassA common stock equal to or greater than 25% of the aggregate number of shares of ClassA common stock beneficially owned by the Sponsor and its permitted transferees immediately following the closing of the Business Combination (the Initial Sponsor Shares), and (ii)certain information rights for so long as the Sponsor and its permitted transferees beneficially own, in the aggregate, a number of shares of ClassA common stock equal to or greater than 25% of the Initial Sponsor Shares. The Stockholders Agreement will terminate with respect to the Sponsor at the time that it and its permitted transferees cease to collectively beneficially own, in the aggregate, a number of shares of ClassA common stock equal to or greater than 25% of the Initial Sponsor Shares. \n\nIn connection with the execution of the Merger Agreement, we and certain stockholders of Legacy Desktop Metal and Trine entered into an amended and restated registration rights agreement, or the Registration Rights Agreement. Pursuant to the Registration Rights Agreement, we agreed to file a shelf registration statement with respect to the registrable securities under the Registration Rights Agreement within 45days of the closing of the Business Combination. Up to twice in any 12 month period, certain Legacy Desktop Metal stockholders and Trine stockholders may request to sell all or any portion of their registrable securities in an underwritten offering so long as the total offering price is reasonably expected to exceed $75.0million. We also agreed to provide customary piggyback registration rights. The Registration Rights Agreement also provides that we will pay certain expenses relating to such registrations and indemnify the stockholders against certain liabilities. \nWarrants \nIn August2020, Legacy Desktop Metal issued a warrant to purchase up to 300,000 shares of Legacy Desktop Metals common stock to KDT Desktop Metal Holdings, LLC, which held more than 5% of Desktop Metals capital stock, in exchange for technical research and development advisor services. The warrant was cashlessly exercised for 200,151 shares of Legacy Desktop Metals common stock in connection with the consummation of the Business Combination. \n### Option Repricing \nIn July2020, Legacy Desktop Metals board of directors approved a stock option repricing in which the strike price of employees unvested stock option awards was modified to the strike price consummate with the recent third-party stock valuation. Employees had the ability to opt out of the repricing of the unvested stock option grants by providing notice to Legacy Desktop Metal. Steve Billow, Meg Broderick and Elizabeth Linardos, each an executive officer, participated in the repricing. \nRestricted Stock Unit Grant to Director \nIn August2020, Legacy Desktop Metals board of directors approved a grant of 50,000 restricted stockunits to Stephen Nigro in connection with his role as a consultant to Desktop Metal. \n### Transaction Bonuses \nIn December2020, our Chief Executive Officer and Chairman, Ric Fulop, our General Counsel, Meg Broderick, and our Chief Product Officer, Arjun Aggarwal, were each awarded a cash bonus of $150,000 in connection with their efforts related to the Business Combination. Ms.Broderick was previously awarded a cash bonus in the amount of $40,000 in connection with the Business Combination. In February2021, our Chief Financial Officer and Treasurer, James Haley, was awarded a cash bonus in the amount of $150,000 in connection with his efforts related to the Business Combination. \nDirector and Officer Indemnification \nLegacy Desktop Metals charter and bylaws provided for indemnification and advancement of expenses for its directors and officers to the fullest extent permitted by the DGCL, subject to certain limited exceptions. Legacy Desktop Metal also entered into indemnification agreements with each of its directors. Following the Business Combination, these agreements were replaced with new indemnification agreements for each director and officer. \n### PIPE Investment \nIn August2020, Jeffrey Immelt, a director, entered into a Subscription Agreement with Trine to subscribe for 25,000 shares of ClassA common stock at a purchase price of $250,000 pursuant to a private placement of Trine ClassA common stock that closed immediately prior to the Business Combination. \nAcquisition \nOn February16, 2021, pursuant to a Purchase Agreement and Plan of Merger by and among Desktop Metal and certain of its affiliates, Ali El Siblani, EnvisionTec,Inc. and certain of its affiliates (the EnvisionTec Group), we completed the acquisition of the EnvisionTec Group (the EnvisionTec Acquisition). Upon completion of the EnvisionTec Acquisition, (i)Mr.El Siblani, a director and executive officer, received (a)$143.58 million in cash, and (b)5,036,142 shares of ClassA common stock of Desktop Metal, with a fair value of approximately $159.8 million as of the close of business on the acquisition date, and (ii)Mr.El Siblani was elected to our Board of Directors. \nAgreements with Entities Controlled by Ali El Siblani \nAs a result of our EnvisionTec Acquisition in February2021, we<|endoftext|>Shares as soon as reasonably possible following our Extension Date and, therefore, we do not intend to comply with those procedures. \nBecause we will not be complying with Section 280, Section 281(b) of the DGCL requires us to adopt a plan, based on facts known to us at such time that will provide for our payment of all existing and pending claims or claims that may be potentially brought against us within the subsequent ten years. As described above, pursuant to the obligation contained in our underwriting agreement, we will seek to have all vendors, service providers (other than our independent registered public accounting firm), prospective target businesses or other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the Trust Account. \nor (2) such lesser amount per public share held in the Trust Account as of the date of the liquidation of the Trust Account, due to reductions in value of the trust assets, in each case net of the amount of interest withdrawn to pay our franchise and income taxes and will not be liable as to any claims under our indemnity of the underwriters of the Initial Public Offering against certain liabilities, including liabilities under the Securities Act. \nFurthermore, our board may be viewed as having breached its fiduciary duty to our creditors and/or may have acted in bad faith, and thereby exposing itself and our company to claims of punitive damages, by paying public stockholders from the \nTrust Account prior to addressing the claims of creditors. See Risk FactorsIf, after we distribute the proceeds in the \nTrust Account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, a bankruptcy court may seek to recover such proceeds, and the members of our board of directors may be viewed as having breached their fiduciary duties to our creditors, thereby exposing the members of our board of directors and us to claims of punitive damages. \nOur public stockholders will be entitled to receive funds from the Trust Account only in the event of the redemption of our public shares if we do not complete an initial business combination by the Extension Date or if they redeem their respective shares for cash upon the completion of an initial business combination. In the event we seek stockholder approval in connection with an initial business combination, a stockholders voting in connection with an initial business combination alone will not result in a stockholders redeeming its shares to us for an applicable pro rata share of the Trust Account. \n\nOur amended and restated certificate of incorporation contains certain requirements and restrictions relating to our Initial Public Offering that will apply to us until the consummation of an initial business combination. If we seek to amend any provisions of our amended and restated certificate of incorporation relating to stockholders rights or pre-initial business combination activity, we will provide dissenting public stockholders with the opportunity to redeem their public shares in connection with any such vote. Our Initial Stockholders have agreed to waive any redemption rights with respect to their Founder Shares and public shares in connection with the completion of an initial business combination. Specifically, our amended and restated certificate of incorporation provides, among other things, that: prior to the consummation of an initial business combination, we shall either (1) seek stockholder approval of an initial business combination at a meeting called for such purpose at which stockholders may seek to redeem their shares, regardless of whether they vote for or against the proposed initial business combination, into their pro rata share of the aggregate amount then on deposit in our Trust Account, including interest (which interest shall be net of taxes payable) or (2) provide our public stockholders with the opportunity to tender their shares to us by means of a tender offer (and thereby avoid the need for a stockholder vote) for an amount equal to their pro rata share of the aggregate amount then on deposit in our Trust Account, including interest (which interest shall be net of taxes payable) in each case subject to the limitations described herein; we will consummate an initial business combination only if we have net tangible assets of at least $5,000,001 upon such consummation and, solely if we seek stockholder approval, a majority of the outstanding shares of capital stock voted are voted in favor of an initial business combination; if an initial business combination is not consummated by the Extension Date, then our existence will terminate and we will distribute all amounts in our Trust Account; and prior to an initial business combination, we may not issue additional shares of capital stock that would entitle the holders thereof to (i) receive funds from our Trust Account or (ii) vote on any initial business combination. \nThese provisions cannot be amended without the approval of holders of 65% of capital stock. In the event we seek stockholder approval in connection with an initial business combination, our amended and restated certificate of incorporation provides that we may consummate an initial business combination only if approved by a majority of the shares of capital stock voted by our stockholders voting at a duly held stockholders meeting. \n### COMPETITION \nIn identifying, evaluating and selecting a target business for an initial business combination, we may encounter intense competition from other entities having a business objective similar to ours, including other blank check companies, private equity groups and leveraged buyout funds, public companies and operating businesses seeking strategic acquisitions. Furthermore, our obligation to pay cash in connection with our public stockholders who exercise their redemption rights may reduce the resources available to us for an initial business combination and our outstanding warrants, and the future dilution they potentially represent, may not be viewed favorably by certain target businesses. \n### Conflicts of Interest \nCertain of our directors and officers and affiliates of our Sponsor manage several investment vehicles. These entities may compete with us for acquisition opportunities in the same industries and sectors as we may target for an initial business combination. If these entities decide to pursue any such opportunity, we may be precluded from procuring such opportunities. \nIn addition, investment ideas generated within our Sponsor and other persons who may make decisions for the company, may be suitable for both us and for current or future entities managed by our directors, officers or affiliates of our Sponsor and may be directed to such investment vehicle rather than to us. As employees of Crescent or its affiliates, certain members of the management team are and in the future will be involved in the formation of and offerings by these companies as well as the identification, acquisition and management of investments by such companies. The letter agreement entered into with certain of our officers will not restrict them from undertaking any such activities. As a result, conflicts of interest may arise between our officers fiduciary and contractual obligations to these companies and our officers obligations to us. None of the members of our management team who are also employed by our Sponsor or its affiliates have any obligation to present us with any opportunity for a potential business combination of which they become aware. Our management team, in their capacities as directors, officers or employees of our Sponsor or its affiliates in their other endeavors, may choose to present potential business combinations to the related entities described above, current or future investment vehicles of our Sponsor or its affiliates, or third parties, before they present such opportunities to us, subject to applicable fiduciary duties. See Risk Factors\nEach of our officers and directors presently has, and any of them in the future may have additional, fiduciary or contractual obligations to one or more other entities pursuant to which such officer or director is or will be required to present a business combination opportunity to such entity. Accordingly, if any of our officers or directors becomes aware of a business combination opportunity which is suitable for an entity to which he or she has then-current fiduciary or contractual obligations, he or she will honor these obligations to present such business combination opportunity to such entity, subject to his or her fiduciary duties to us under Delaware law. We do not believe, however, that the fiduciary duties or contractual obligations of our officers or directors will materially affect our ability to complete an initial business combination. \nPotential investors should also be aware of the following other potential conflicts of interest as it relates to the Business Combination: the fact that our Sponsor, officers (other than our officer who was appointed subsequent to our Initial Public Offering, who does not own any shares of our Common Stock) and directors (including our independent directors) have agreed to waive their redemption rights with respect to any shares of our Common Stock they may hold in connection with the consummation of the Business Combination, including all of the Founder Shares; the fact that our Sponsor has agreed to, in its capacity as the holder of a majority of our Class F Stock, waive the right to a conversion price adjustment with respect to all shares of our Class F Stock in connection with the consummation of the Business Combination, such authority granted to the majority holders of our Class F Stock in our amended and restated certificate of incorporation; the fact that our Sponsor paid an aggregate of $25,000 for 6,250,000 shares of Class F Stock (75,000 of which have been transferred to our independent directors, after giving effect to the (i) surrender of 1,437,500 shares on November 29, 2017 and (ii) forfeiture of 937,500 shares in April 2019) which will be converted into Common Stock upon the closing of the Business Combination, including the 2,725,000 shares that our Sponsor has agreed to cancel concurrently with the closing of the Business Combination and the Lock-Up Shares which will be subject to release only if the price of Common Stock trading on NASDAQ or another national securities exchange exceeds certain thresholds during the seven-year period following the closing of the \nBusiness C ombination and will otherwise be forfeited and cancelled for no consideration \n, but which will have no value if the \nBusiness C ombination is not consummated by our current extended date of June 30, 2021 \n; the fact that our Initial Stockholders have agreed to waive their rights to liquidating distributions from the Trust Account with respect to their Founder Shares if we fail to complete an initial business combination by our current extended date of June 30, 2021; Beyer and Todd M. the fact that our Sponsor, officers and directors will lose their entire investment in us and will not be reimbursed for any out-of-pocket expenses if an initial business combination is not consummated by the Extension Date; that, as described in the Charter Proposals and reflected in Annex C, our proposed Second Amended and Restated Certificate of Incorporation will be amended to expressly elect not to be bound or governed by, or otherwise subject to, Section 203 of the DGCL, thereby removing certain restrictions on business combinations with interested stockholders (which amendment will become effective 12 months after the Second Amended and Restated Certificate of Incorporation is filed and becomes effective); that Crescent has entered into the Forward Purchase Agreement with the Company, pursuant to which Crescent has committed to purchase, subject to the terms and conditions set forth in the Forward Purchase Agreement, including a lock-up period that restricts the transfer of securities issued pursuant to the Forward Purchase Agreement and registration rights granted thereto, an aggregate of 2,500,000 shares of Class A Stock plus 833,333 Warrants for an aggregate purchase price of $25,000,000 in cash in a private placement that will close immediately prior to the Business Combination, which such commitment Crescent may assign, in whole or in part, to certain transferees, including,<|endoftext|>Initial business combination, (iii)may be exercised by the holders on a cashless basis and (iv)will be entitled to registration rights. \nIn connection with the consummation of the initial public offering, we have entered into a forward purchase agreement with OrION pursuant to which OrION committed that it will purchase from us 10,000,000 forward purchase units, or at its option up to an aggregate maximum of 30,000,000 forward purchase units, each consisting of one ClassA ordinary share, or a forward purchase share, and one-third of one warrant to purchase one ClassA ordinary share, or a forward purchase warrant, for $10.00 per unit, or an aggregate amount of $100,000,000, or at OrIONs option up to an aggregate amount of $300,000,000, in a private placement that will close concurrently with the closing of our initial business combination. The forward purchase shares will be identical to the ClassA ordinary shares included in the units being sold in the initial public offering, except that they will be subject to transfer restrictions and registration rights, as described herein. The forward purchase warrants will have the same terms as the private placement warrants so long as they are held by OrION or its permitted assignees and transferees. \nWe currently utilize office space at 10 Queen St Place, 2 nd \nFloor, London, EC4R 1BE, United Kingdom from our sponsor as our executive offices. Commencing on December 16, 2020, we have agreed to pay our Sponsor $10,000 per month for office space, utilities, secretarial and administrative support services provided to members of our management team. \n\n\n\nIt is unlikely the amount of such compensation will be known at the time of distribution of such tender offer materials or at the time of a general meeting held to consider our initial business combination, as applicable, as it will be up to the directors of the post-combination business to determine executive and director compensation and forward purchase securities. \nQuarterly Results \n\n### JOBS Act \n\n\nItem 7A. \n\nItem 8. \nScION Tech Growth I \n\n\nScION Tech Growth I \n\nWe have audited the accompanying balance sheet of ScION Tech Growth I (the Company) as of December 31, 2020, the related statements of operations, changes in shareholders equity and cash flows for the period from October 7, 2020 (inception) through December 31, 2020, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020, and the results of its operations and its cash flows for the period from October 7, 2020 (inception) through December 31, 2020, in conformity with accounting principles generally accepted in the United States of America. \n\nAs discussed in Note 2 to the financial statements, the accompanying financial statements as of December 31, 2020 and for the period from October 7, 2020 (inception) through December 31, 2020, have been restated. \nBasis for Opinion \n\nAs part of our audit \n\n\n/s/ Marcum llp \n### Marcum llp \nMelville, NY \nMarch 31, 2021 except for the effects of the restatement discussed in Note 2, as to which the day is May 17, 2021 \nScION Tech Growth I \nBALANCE SHEET \n### DECEMBER 31, 2020 \n(As Restated) \n\nScION Tech Growth I \nSTATEMENT OF OPERATIONS \n\n(As Restated) \n(1) \nExcludes 52,082,462 shares subject to possible redemption. \n(2) \nExcludes interest income attributable to shares subject to possible redemption of $9,029. \n\nScION Tech Growth I \n\n(As Restated) \n\nScION Tech Growth I \nSTATEMENT OF CASH FLOWS \n\n(As Restated) \n\nScION Tech Growth I \n\n### DECEMBER 31, 2020 \n\nOrganization and General \nScION Tech Growth I (the Company) was incorporated as a Cayman Islands exempted company on October 7, 2020. \n\nAll activity for the period from October 7, 2020 (inception) through December 31, 2020 relates to the Companys formation and the Initial Public Offering (IPO) described below. \n### Financing \nThe registration statement for the Companys IPO was declared effective on December 16, 2020 (the Effective Date). On December 21, 2020, the Company consummated the IPO of 57,500,000 units, including the issuance of 7,500,000 units as a result of the underwriters full exercise of the over-allotment option (the Units and, with respect to the ordinary shares included in the Units being offered, the Public Shares), at $10.00 per Unit, generating gross proceeds of $575,000,000, which is discussed in Note 4. \nSimultaneously with the closing of the IPO, the Company consummated the sale of 9,000,000 warrants (the Private Placement Warrants) at a price of $1.50 per Private Placement Warrant in a private placement to the Sponsor, generating gross proceeds of $13,500,000, which is discussed in Note5. \nTransaction costs amounted to $32,212,884 consisting of $11,500,000 of underwriting discount, $20,125,000 of deferred underwriting discount, and $587,884 of other offering costs. \n### Trust Account \nFollowing the closing of the IPO on December 21, 2020, $575,000,000 ($10.00 per Unit) from the net proceeds of the sale of the Units in the IPO and the sale of the Private Placement Warrants was placed in a Trust Account, which can only be invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act, having a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act which invest only in direct U.S. Except with respect to interest earned on the funds held in the Trust Account that may be released to the Company to pay its taxes, if any, the proceeds from the IPO and the sale of the Private Placement Warrants will not be released from the Trust Account until the earliest of (i) the completion of the Business Combination, (ii) the redemption of the Companys Public Shares if the Company is unable to complete the initial Business Combination within 24 months from December 21, 2020 (the Combination Period), the closing of the IPO, subject to applicable law, or (iii) the redemption of the Companys Public Shares properly submitted in connection with a shareholder vote to amend the Companys amended and restated memorandum and articles of association. \nInitial Business Combination \n\n\nThe Company will provide its public shareholders with the opportunity to redeem all or a portion of their public shares upon the completion of the initial Business Combination either (i) in connection with a general meeting called to approve the initial Business Combination or (ii) without a shareholder vote by means of a tender offer. The shareholders will be entitled to redeem their shares for a pro rata portion of the amount then on deposit in the Trust Account (initially $10.00 per share, plus any pro rata interest earned on the funds held in the Trust Account and not previously released to the Company to pay its taxes). \nThe shares of ordinary share subject to redemption will be recorded at a redemption value and classified as temporary equity upon the completion of the IPO, in accordance with Accounting Standards Codification (ASC) Topic 480 Distinguishing Liabilities from Equity. In such case, the Company will proceed with a Business Combination if the Company has net tangible assets of at least $5,000,001 and, if the Company seeks shareholder approval, a majority of the issued and outstanding shares voted are voted in favor of the Business Combination. \nIf the Company is unable to complete the initial Business Combination within the Combination Period, the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account (less tax payable and up to $100,000 of interest to pay dissolution expenses) divided by the number of then outstanding public shares, which redemption will completely extinguish public shareholders rights as shareholders (including the right to receive further liquidation distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the Companys remaining shareholders and the Companys board of directors, liquidate and dissolve, subject in the case of clauses (ii) and (iii) to the Companys obligations under Cayman Islands law to provide for claims of creditors and in all cases subject to the other requirements of applicable law. \nThe Sponsor, officers and directors have agreed to (i) waive their redemption rights with respect to their founder shares and public shares in connection with the completion of the initial Business Combination, (ii) waive their redemption rights with respect to their founder shares and public shares in connection with a shareholder vote to approve an amendment to the Companys amended and restated memorandum and articles of association, (iii) waive their rights to liquidating distributions from the Trust Account with respect to their founder shares if the Company fails to complete the initial Business Combination within the Combination Period, and (iv) vote any founder shares held by them and any public shares purchased during or after the IPO (including in open market and privately-negotiated transactions) in favor of the initial Business Combination. \nOn February 1, 2021, the Company announced that, commencing on February 5, 2021, the holders of Units may elect to separately trade the Class A ordinary shares and warrants included in the Units. The Units not separated will continue to trade on the NASDAQ Capital Market under the symbol SCOAU. Class A ordinary shares and warrants will separately trade on The Nasdaq Capital Market under the symbols SCOA and SCOAW, respectively. \n\nAs of December 31, 2020, the Company had cash outside the Trust Account of $1,425,919 available for working capital needs. \nThrough December 31, 2020, the Companys liquidity needs were satisfied through a capital contribution from the Sponsor of $25,000, to cover certain offering costs, for the founder shares (see Note 6), the loan under an unsecured promissory note from the Sponsor of $222,583 (see Note 6), and the net proceeds from the consummation of the Private Placement not held in the Trust Account. \nThe Company anticipates that the $1,425,919 outside of the Trust Account as of December 31, 2020, will be sufficient to allow the Company to operate for at least the next 12 months, assuming that a Business Combination is not consummated during that time. \n\n### Risks and Uncertainties \n\nNOTE 2 \n\nIn April 2021, the Company concluded that, because of a misapplication of the accounting guidance related to its Public and Private Placement warrants the Company issued in December 2020, the Companys previously issued financial statements for the Affected Period should no longer be relied upon. \nOn April 12, 2021, the SEC Statement was issued. Specifically, the SEC Statement focused on certain settlement terms and provisions related to certain tender offers following a Business Combination, which terms are similar to those contained in the warrant agreement, dated as of December 16, 2020, between the Company and Continental Stock Transfer & Trust Company, a New York corporation, as warrant agent (the Warrant Agreement). \nHistorically, the Warrants were reflected as a component of equity as opposed to liabilities on the balance sheets and the statements of operations did not include the subsequent non-cash changes in estimated fair value of the Warrants, based on our application of ASC 815-40. As a result of the SEC Statement, the Company reevaluated the accounting treatment of (i) the 19,166,667 Public Warrants, (ii) the 9,000,000 Private Placement Warrants, and (iii) the 6,666,667 Forward Purchase Warrants (See Note 4, Note 5 and Note 8). \nTherefore, the Companys management and the Audit Committee of the Companys Board of Directors (the Audit Committee) concluded that, in light of the SEC Statement, (i) certain items on the Companys previously issued audited balance sheet dated as of December 21, 2020 which was related to its initial public offering, and (ii) the Companys previously issued audited financial statements for the Affected Periods included in the Companys Annual Report should no longer be relied upon and that it is appropriate to restate the Annual Report.<|endoftext|>Distributions from the trust account with respect to any founder shares they hold if we fail to consummate an initial business combination within 24 months from the closing of this offering (although they will be entitled to liquidating distributions from the trust account with respect to any public shares they hold if we fail to complete our initial business combination within the prescribed time frame). or (B)subsequent to our initial business combination, (x)if the closing price of our ClassA common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30- trading day period commencing at least 150 days after our initial business combination, or (y)the date on which we complete a liquidation, merger, capital stock exchange, reorganization or other similar transaction that results in all of our stockholders having the right to exchange their shares of common stock for cash, securities or other property. Since our sponsor and officers and directors may directly or indirectly own common stock and warrants following this offering, our officers and directors may have a conflict of interest in determining whether a particular target business is an appropriate business with which to effectuate our initial business combination. \n\n\n\n\n\nAccordingly, if any of the above executive officers, directors or director nominees becomes aware of a business combination opportunity which is suitable for any of the above entities to which he or she has current fiduciary or contractual obligations, he or she will honor his or her fiduciary or contractual obligations to present such business combination opportunity to such entity, and only present it to us if such entity rejects the opportunity. \nIn the event we seek to complete our initial business combination with such a company, we, or a committee of independent directors, would obtain an opinion from an independent investment banking firm or from an independent accounting firm that such initial business combination is fair to our company from a financial point of view. \nAs long as our sponsor is controlled by our founders, we have agreed not to enter into a definitive agreement regarding an initial business combination without the prior consent of our sponsor. \n### ITEM 11. EXECUTIVE COMPENSATION \n\n\nNone of our executive officers or directors have received any cash compensation for services rendered to the company. Commencing at the consummation of our initial public offering, we reimburse the sponsor for office space, secretarial and administrative services provided to the company in an amount not to exceed $10,000 per month. In addition, our sponsor, executive officers and directors, or any of their respective affiliates are being reimbursed for any out-of-pocket expenses incurred in connection with activities conducted on our behalf such as identifying potential target businesses and performing due diligence on suitable business combinations. Our audit committee reviews all payments that the company makes to the sponsor, executive officers or directors, or their affiliates on a quarterly basis. Other than quarterly audit committee review of such reimbursements, the company does not have any additional controls in place for governing reimbursement payments to its directors and executive officers for their out-of-pocket expenses incurred on behalf of the company and in connection with identifying and consummating an initial business combination. Other than these payments and reimbursements, no compensation of any kind, including finders and consulting fees, is paid by the company to our sponsor, executive officers and directors, or any of their respective affiliates, prior to completion of the initial business combination. \nAfter the completion of the initial business combination, directors or members of its management team who remain with New Stem may be paid consulting or management fees from New Stem. It is unlikely the amount of management and executive compensation will be known at the time of the proposed business combination, because the directors of New Stem will be responsible for determining executive officer and director compensation. Any compensation to be paid to our executive officers will be determined, or recommended to the board of directors of New Stem for determination, by a compensation committee constituted solely of independent directors or a majority of the independent directors on New Stems board of directors. \nITEM 12. \nThe following table sets forth information regarding the beneficial ownership of our shares of common stock as of February16, 2021 based on information obtained from the persons named below, with respect to the beneficial ownership of our shares of common stock, by: each person known by us to be the beneficial owner of more than 5% of our outstanding shares of common stock; \nIn the table below, percentage ownership is based on 38,358,504 shares of ClassA common stock (which includes shares of ClassA common stock that are underlying the units) and 9,589,626 shares of ClassB common stock outstanding as of December31, 2020. The table below does not include the shares of ClassA common stock underlying the private placement warrants held by our sponsor because these securities are not exercisable within 60 days of this Report. \n* \nLess than one percent. \n(1) \nUnless otherwise noted, the business address of each of our stockholders is 1603 Orrington Avenue, 13th Floor, Evanston,IL 602010. \n(2) \nEach of Star Peak 19, LLC, Star Peak L LLC and Star Peak M LLC are the managing members of our sponsor and as such, each have voting and investment discretion with respect to the ClassB Common Stock held of record by the sponsor and may be deemed to have shared beneficial ownership of the ClassB Common Stock held directly by the sponsor. Eric Scheyer is the sole member of and controls Star Peak 19 LLC; Alec Litowitz is the sole member of and controls Star Peak L LLC; and Michael C. Morgan is the sole member of and controls Star Peak M LLC (each, a Sponsor Controlling Entity). The unanimous consent of each Sponsor Controlling Entity is required to make voting and dispositive decisions with respect to the securities held by our sponsor. Accordingly, each of Messrs.Scheyer, Litowitz and Morgan are deemed to have or share beneficial ownership of the securities held directly by our sponsor. \n(3) \nEach of these individuals, as well as STPKs advisor, holds a direct or indirect interest in the sponsor. \n(4) \nBased on a Schedule 13G/A filed on February11, 2021 (the Adage 13G). According to the Adage 13G, Adage Capital Partners, L.P., a Delaware limited partnership (ACP is the direct owner of such ClassA Common Stock. Adage Capital Partners GP, L.L.C., a limited liability company organized under the laws of the State of Delaware (ACPGP), is the general partner of ACP and therefore has beneficial ownership of the shares of ClassA Common Stock directly owned by ACP. Adage Capital Advisors, L.L.C., a limited liability company organized under the laws of the State of Delaware (ACA), is the managing member of ACPGP, the general partner of ACP, and therefore has beneficial ownership of the shares of ClassA Common Stock directly owned by ACP. Robert Atchinson (Mr.Atchinson) is the managing member of ACA, which is the managing member of ACPGP, which is the general partner of ACP and therefore Mr.Atchinson has beneficial ownership of the shares of ClassA Common Stock directly owned by ACP. Phillip Gross (Mr.Gross) is the managing member of ACA, which is the managing member of ACPGP, which is the general partner of ACP and therefore Mr.Gross has beneficial ownership of the shares of ClassA Common Stock directly owned by ACP. \n(5) \nThe address of Fifth Street Station LLC is 505 Fifth Avenue South, Suite900, Seattle, WA 98104. Based on a Schedule 13G filed on February11, 2021 (the Fifth Street 13G). According to the Fifth Street 13G, Fifth Street Station LLC beneficially owns 2,375,989 shares of ClassA Common Stock. \n(6) \nThe address of Park West Asset Management LLC is 900 Larkspur Landing Circle, Suite165, Larkspur, California 94939. Based on a Schedule 13G/A filed on January11, 2021 (the Park 13G). According to the Park 13G, Park West Asset Management LLC, a Delaware limited liability company (PWAM), Park West Investors Master Fund, Limited, a Cayman Islands exempted company (PWIMF) and Peter S. Park (Mr.Park) beneficially own 2,300,320 shares of ClassA Common Stock. Mr.Park, through one or more affiliated entities, is the controlling manager of PWAM. As of December22, 2020, PWAM and Mr.Park may be deemed to beneficially own 2,300,320 shares of ClassA Common Stock held in the aggregate by the PW Funds and PWIMF may be deemed to beneficially own 2,092,797 shares of ClassA Common Stock. \n(7) \nThe address of Van Eck Associates Corporation is 666 Third Ave., 9th Floor, New York, New York 10017. Based on a Schedule 13G filed on February11, 2021 (the Van Eck 13G). According to the Van Eck 13G, 2,278,397 Common Shares are held within mutual funds and other client accounts managed by Van Eck Associates Corporation, none of which individually owns more than 5% of the outstanding shares. \n(8) \nThe address of William Blair Investment Management, LLC is 150 North Riverside Plaza, Chicago, IL 60606. Based on a Schedule 13G filed on January8, 2021 (the William Blair 13G). According to the William Blair 13G, William Blair Investment Management, LLC beneficially owns 5,493,831 shares of ClassA Common Stock. \n\n### Changes in Control \nNone. \nITEM 13. \n### Founder Shares \nOn August26, 2020, the underwriters partially exercised the over-allotment option and purchased an additional 3,358,504 units, at a price of $10.00 per unit; The founder shares will automatically convert into shares of ClassA common stock at the time of the merger on a one-for-one basis, subject to adjustments, and are subject to certain transfer restrictions, as described in more detail below. \nThe sponsor and STPKs officers and directors have agreed not to transfer, assign or sell any of their founder shares until the earlier to occur of (A)one (1)year after the completion of STPKs initial business combination or (B)subsequent to STPKs initial business combination, (x)if the last reported sale price of STPKs ClassA common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any twenty (20) trading days within any 30- trading day period commencing at least one hundred fifty (150) days after STPKs initial business combination, or (y)the date on which STPK completes a liquidation, merger, capital stock exchange, reorganization or other similar transaction that results in all STPK stockholders having the right to exchange their shares of common stock for cash, securities or other property. Any permitted transferees will be subject to the same restrictions and other agreements of our initial stockholders with respect to any founder shares. \n\nSimultaneously with the consummation of our initial public offering, we completed the sale of private placement warrants to the sponsor in a private placement, generating gross proceeds of $10.1 million. Each private placement warrant is exercisable for one (1)share of our ClassA common stock at an exercise price of $11.50 per share. A portion of the purchase price of the private placement warrants was added to the proceeds from our initial public offering held in the trust account. If our initial business combination is not completed by August20, 2022, the proceeds from the sale of the private placement warrants held in the trust account will be used to fund the redemption of the ClassA common stock (subject to the requirements of applicable law) and the private placement warrants will expire worthless. \n\n\nOn July10, 2020, the sponsor agreed to loan us an aggregate of up to $300,000 to cover expenses related to our initial public offering pursuant to a promissory note (the Note). The Note was non-interest bearing and was due upon the completion of our initial public offering. We borrowed $300,000 under the Note. The Note balance was paid in full at closing of our initial public offering on August20, 2020. \n\nWe have agreed to pay $10,000 a month for office space, utilities, and secretarial and administrative support to the sponsor. We have incurred approximately $20,000 for expenses in connection with such services for the period from October29,<|endoftext|>Section entitled Director Compensation Table below. \n(6) \nMr. Jurgensen was appointed our General Counsel and Corporate Secretary on September 15, 2020. The amounts reported under Salary are comprised of (a) $178,179 paid to Optima Law Group for its consulting services and (b) $85,846 paid to Mr. Jurgensen as base salary. Mr. Jurgensens All Other Compensation for Fiscal 2021 includes $837 for the Companys matching contribution to the 401(k) plan. \n(7) \nDr. Miner was appointed our Chief Scientific Officer on September 15, 2020. \n(8) \nMr. Mr. Crouchs All Other Compensation for Fiscal 2021includes $1,030,000 for severance payments in connection with the Change in Control, $5,122 for the Companys matching contribution to the 401(k) plan and $24,198 in COBRA payments. \n(9) \nMr. Mr. Kussmans All Other Compensation for Fiscal 2021includes $793,350 for severance payments in connection with the Change in Control, $6,237 for the Companys matching contribution to the 401(k) plan and $34,803 in COBRA payments. \n(10) \nMs. Ms. Bushs All Other Compensation for Fiscal 2021includes $714,820 for severance payments in connection with the Change in Control and $4,696 for the Companys matching contribution to the 401(k) plan. \n\nThe following table shows certain information regarding outstanding equity awards as of March31, 2021 for our named executive officers: \n(1) \n25% of the option shares vest and become exercisable on September 15, 2021 and the remaining shares vest in 12 equal quarterly installments thereafter. \n(2) \n25% of the option shares vest and become exercisable on March 8, 2022 and the remaining shares vest in 12 equal quarterly installments thereafter. \n(3) \nThe option becomes exercisable, if at all, if the 45-day moving average closing price of Organovo Holdings, Inc.'s common stock on The Nasdaq Stock Market LLC exceeds $20.00 per share. \n(4) \nThe option becomes exercisable, if at all, if the 45-day moving average closing price of Organovo Holdings, Inc.'s common stock on The Nasdaq Stock Market LLC exceeds $25.00 per share. \n(5) \n25% of the shares subject to the restricted stock unit shall vest on March 8, 2022 and the remaining shares vest in 12 equal quarterly installments thereafter. \n(6) \n25% of the option shares vest and become exercisable on December 31, 2021 and the remaining shares vest in 12 equal quarterly installments thereafter. \n(7) \nCrouch, Mr. Kussman and Ms. Pursuant to the Severance Plan, the vesting of Mr. Crouchs, Mr. Kussmans and Ms. Bushs outstanding options were accelerated, and each of the options is fully exercisable until September 15, 2021. \n### Director Compensation \nOur directors play a critical role in guiding our strategic direction and overseeing the management of our Company. Ongoing developments in corporate governance and financial reporting have resulted in an increased demand for such highly qualified and productive public company directors. The many responsibilities and risks and the substantial time commitment of being a director of a public company require that we provide adequate incentives for our directors continued performance by paying compensation commensurate with our directors workload. Our non-employee directors are compensated based upon their respective levels of Board participation and responsibilities, including service on Board committees. Our employee directors receive no separate compensation for their service as directors. Our Executive Chair is not an employee of ours and therefore is deemed to be a non-employee director for purposes of our non-employee director compensation policy. \nOur director compensation is overseen by the Compensation Committee, which makes recommendations to our Board on the appropriate structure for our non-employee director compensation program and the appropriate amount of compensation. Our Board is responsible for final approval of our non-employee director compensation program and the compensation paid to our non-employee directors. \nIn connection with establishing our non-employee director compensation for Fiscal 2021, the Compensation Committee retained Anderson as its independent compensation consultant. With the assistance of Anderson, the Board and Compensation Committee conducted a formal review of our non-employee director compensation and incentive programs relative to the same peer group used in benchmarking the compensation for our executive officers. The Compensation Committee and the Board determined that a philosophy of targeting total compensation for our non-employee directors at the 50th percentile (based on peer group benchmarks) is in the best interests of the Company and its stockholders. \n### Non-Employee Director Compensation Framework \nFor Fiscal 2021, our non-employee director compensation program consisted of: (i)annual cash retainers for Board service and for service as the chair or member of one of the standing Board committees and (ii)equity awards granted on an annual basis to continuing non-employee directors immediately following the Annual Meeting of Stockholders or upon their initial appointment to the Board for new directors. Our non-employee directors are not entitled to any Board or Board committee meeting fees. \nAnnual Cash Retainers \nFrom April 1, 2020 to September 15, 2020, each of our non-employee directors was eligible to receive an annual cash retainer of $50,000 for Board membership. In addition, the chair of our Audit Committee was eligible to receive an annual retainer of $10,000. Our non-employee directors were otherwise not eligible to receive an annual cash retainer in Fiscal 2021. \nEffective as of September 15, 2020, for Fiscal 2021, each of our non-employee directors was eligible to receive an annual cash retainer of $65,000 for Board membership. In addition, for Fiscal 2021, each of our non-employee directors was eligible to receive the applicable annual retainers set forth below for serving as committee chairs and for service as a member of a Board committee: \nNo additional meeting fees were paid to our non-employee directors for Fiscal 2021. \n### Annual Equity Awards \nIn addition to the annual cash retainers, each non-employee director continuing in office after the adjournment of the 2020 Annual Meeting of Stockholders received a stock option award (the Annual Award) immediately following the adjournment of the annual meeting. The number of shares subject to the Annual Award was calculated by taking the number of shares of common stock equal to 0.04% of the outstanding shares of common stock of the Company as of the date of the Annual Award, with the number of shares subject to the option rounded up to the nearest 500 shares. \nThe Annual Award has an exercise price equal to the closing market price of the Companys common stock on the date of the Annual Awards. Each such Annual Award will vest in full on the earlier of (i)one year from the date of the Annual Award or (ii)one day prior to the next Annual Meeting of Stockholders held by the Company, subject to acceleration in the event of the change of control. \n### Initial Long-Term Equity Awards \nDuring Fiscal 2021, our non-employee director compensation program provided that upon joining the Board (whether by appointment or election by stockholders), a non-employee director will receive an initial stock option award (the Initial Award) equal to 0.04% of the outstanding shares of common stock of the Company as of the date of the directors appointment or election to the Board. The new director also receives an Annual Award calculated on the same basis as the Annual Award for an existing director, except that the initial Annual Award shall be pro-rated based on the date of the directors appointment or election and the number of months remaining in the twelve-month period between the last regularly scheduled Annual Meeting held by the Company and the next regularly scheduled Annual Meeting to be held by the Company. The Initial Award and initial Annual Award will have an exercise price equal to the closing market price of the Companys common stock on the date the awards are granted. Each such Initial Award will vest quarterly over a period of twelve quarters from the vesting commencement date, subject to acceleration in the event of the change of control. \n### Each initial \nAnnual Award shall vest in full on the earlier of ( i \n) one year from the date of the Annual Award or (ii) one day prior to the next Annual Meeting of Stockholders held by the Company, subject to acceleration in the event of the change of control. \n### Reimbursement \nOur non-employee Directors are entitled to reimbursement for their reasonable travel and lodging expenses for attending Board and Board committee meetings. \nDirector Compensation Table \nThe following table sets forth the compensation earned and paid to each member of our Board for service as a director during Fiscal 2021: \n(1) \nTaylor Crouch, our former President and Chief Executive Officer, and two of our named executive officers, are not included in this table as they were employees of the Company and therefore received no compensation for their service as a director. Mr. Crouchs compensation is included in the section entitled Summary Compensation Table above. \n( \n) \nThese amounts represent the grant date fair value of stock option awards granted by the Board, determined in accordance with FASB ASC Topic 718. For the assumptions used in our valuations, see Note 5 Stockholders Equity of our notes to consolidated financial statements in Item 8 of this Annual Report on Form 10-K. \n( \n) \nExcludes amounts reimbursed for reasonable travel to Board and Board committee meetings. For Mr. Cohen, the amount consists of the reimbursement of Mr. Cohens expenses for attending corporate governance training. \n(4) \nMr. Cohen, Mr. Gobel and Ms. Milhous were appointed to our Board on September 15, 2020. \n(5) \nMr. Stern was appointed to our Board on July 14, 2020. \n(6) \nComprised solely of the fees received by Mr. Murphy pursuant to his service as a member of the Board of Directors. Mr. Murphys additional compensation for Fiscal 2021 is included in the section entitled Summary Compensation Table above. \n( \n) \nMr. Kessel, Dr. Malloy and Ms. Beaver each resigned from the Board on September 15, 2020. \n( \n) \nPursuant to that the Cooperation Agreement, Mr. Maroun and Dr. Shapiro resigned from the Board on July 14, 2020. \n\nNo member of our Compensation Committee has at any time been our employee. None of our executive officers serves, or has served during the last fiscal year, as a member of the board of directors or compensation committee of any other entity that has one or more executive officers serving as a member of our Board or our Compensation Committee. \nItem12. \n\nThe following tables set forth certain information regarding the beneficial ownership of our common stock as of July 19, 2021 by (i)each person who, to our knowledge (based solely on our review of Schedules 13D and 13G filed with the SEC or ETF website, as applicable \n), beneficially owns more than 5% of our common stock; (ii)each of our directors, director nominees and named executive officers (as disclosed in this Annual Report on Form 10-K); and (iii)all of our executive officers, directors and director nominees as a group. Unless otherwise indicated in the table or the footnotes to the following table, each person named in the table has sole voting and investment power and such persons address is c/o Organovo Holdings, Inc., \n440 Stevens Ave, Suite 200, Solana Beach, CA 92075 \nWe determined the number of shares of common stock beneficially owned by each person under rules promulgated by the SEC, based on information obtained from Company records and filings with the SEC on or before July 19, 2021. In cases of holders who are not directors, director nominees and named executive officers, Schedules 13G or 13D filed with the SEC or \n### ETF website, as applicable \n(and, consequently, ownership reflected here), often reflect holdings as of a date prior to July 19, 2021. Under these rules, beneficial ownership includes any shares as to which the individual or entity has sole or shared voting power or investment power and also any shares which the individual or entity had the right to acquire within sixty days of July 19, 2021. These shares, however, are not deemed outstanding for the purpose of computing the percentage ownership of any other person or entity. \nApplicable percentages are based on 8,705,358 shares of common stock outstanding as of July 19, 2021, as adjusted as required by the rules promulgated by the SEC.<|endoftext|>For litigation or other disputes which may include, among others, claims invoking the federal and state securities laws, contractual claims or other claims arising from the restatement and the material weakness in our internal control over financial reporting and the preparation of our financial statements. 1 to the Annual Report on Form 10-K, we have no knowledge of any such litigation or dispute. \nFuture sales, or the perception of future sales, by us or our stockholders in the public market could cause the market price for our Class A common stock to decline. \nThe sale of shares of our Class A common stock in the public market, or the perception that such sales could occur, could harm the prevailing market price of shares of our Class A common stock. \nPursuant to a registration rights agreement, 313 Acquisition, LLC (313 Acquisition), certain stockholders of 313 Acquisition, Mosaic Sponsor, LLC, Fortress Mosaic Sponsor LLC and certain other stockholders named therein have exercised their right to require us to register the sale of their shares of our Class A common stock under the Securities Act. By exercising their registration rights and selling a large number of shares, these stockholders could cause the prevailing market price of our Class A common stock to decline. The shares covered by registration rights represent a substantial majority of our outstanding Class A common stock. \nIn March 2020, we filed a registration statement on Form S-8 to register 34.3 million shares of Class A common stock that have been issued or are reserved for issuance under our 2020 Omnibus Incentive Plan, which includes shares of Class A common stock underlying restricted shares of Class A common stock, stock appreciation rights and restricted stock units that have been granted to our directors, executive officers and other employees as substitute awards pursuant to such 2020 Omnibus Incentive Plan, all of which are subject to time-based vesting conditions, as well as all shares of Class A common stock underlying the hypothetical stock appreciation rights subject to each of our (i) Third Amended and Restated 2013 Long-Term Incentive Pool Plan for Lead Technicians, (ii) Second Amended and Restated 2013 Long- Term Incentive Pool Plan for Regional Technicians, (iii) Third Amended and Restated 2013 Long-Term Incentive Pool Plan for Sales Managers and (iv) Third Amended and Restated 2013 Long-Term Incentive Pool Plan for Regional Managers. Under our registration statement on Form S-8, subject to the satisfaction of applicable vesting periods, the shares of Class A common stock issuable upon the satisfaction of all applicable vesting conditions tied to the aforementioned equity awards or upon exercise of any outstanding stock appreciation rights can be freely sold in the public market upon issuance, subject to volume limitations applicable to affiliates. We intend to similarly register all shares of Class A common stock that may be approved for issuance under the 2020 Omnibus Incentive Plan in the future pursuant to the evergreen provision thereof or otherwise. \nThe number of shares of our Class A common stock issued in connection with an investment or acquisition could constitute a material portion of our then-outstanding shares of Class A common stock. \n\nCertain provisions of our amended and restated certificate of incorporation and amended and restated bylaws (Bylaws) may have an anti-takeover effect and may delay, defer or prevent a merger, acquisition, tender offer, takeover attempt or other change of control transaction that a stockholder might consider in our best interest, including those attempts that might result in a premium over the market price for the shares held by our stockholders. \nThese provisions provide for, among other things: the ability of the Board to issue one or more series of preferred stock; providing that the Board is expressly authorized to make, alter or repeal the Bylaws; the removal of directors only for cause and only upon the affirmative vote of holders of at least 66 2/3% of the shares of common stock entitled to vote generally in the election of directors if the Stockholder Parties and their affiliates hold less than 30% of our outstanding shares of Class A common stock; and that certain provisions may be amended only by the affirmative vote of at least 30% of the shares of Class A common stock entitled to vote generally in the election of directors if the Stockholder Parties and their affiliates hold less than 30% of our outstanding shares of Class A common stock. \nThese anti-takeover provisions could make it more difficult for a third party to acquire us, even if the third- partys offer may be considered beneficial by many of our stockholders. \nThe Certificate of Incorporation designates the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, which could limit the stockholders ability to obtain a favorable judicial forum for disputes with us or our directors, officers, employees or stockholders. \nThe Certificate of Incorporation provides that, subject to limited exceptions, any (i) derivative action or proceeding brought on our behalf, (ii) action asserting a claim of breach of a fiduciary duty owed by any director, officer, stockholder or employee to us or our stockholders, (iii) action asserting a claim arising pursuant to any provision of the DGCL or the Certificate of Incorporation or the Bylaws or (iv) action asserting a claim governed by the internal affairs doctrine shall, to the fullest extent permitted by law, be exclusively brought in the Court of Chancery of the State of Delaware or, if such court does not have subject matter jurisdiction thereof, another state or federal court located within the State of Delaware. Any person or entity purchasing or otherwise acquiring any interest in shares of our capital stock shall be deemed to have notice of and to have consented to the provisions of the Certificate of Incorporation. Alternatively, if a court were to find these provisions of the Certificate of Incorporation inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could adversely affect our business and financial condition. \nCertain significant Company stockholders whose interests may differ from those of Company public stockholders will have the ability to significantly influence our business and management. \nPursuant to the stockholders agreement (the Stockholders Agreement) that we entered into with Mosaic Sponsor, LLC and Fortress Mosaic Sponsor LLC (the SPAC sponsors), Blackstone and certain other parties thereto (collectively, the Stockholder Parties), Blackstone has the right to designate nominees for election to our Board at any meeting of its stockholders. The number of Blackstone Designees (as defined in the Stockholders Agreement) will be equal to (i) a majority of the total number of directors in the event that 313 Acquisition, Blackstone and their respective affiliates (collectively, the 313 Acquisition Entities) beneficially own in the aggregate 50% or more of the outstanding shares of Class A common stock, (ii) 40% of the total number of directors in the event that the 313 Acquisition Entities beneficially own in the aggregate more than 40%, but not 50% or more, of the outstanding shares of Class A common stock, (iii) 30% of the total number of directors in the event that the 313 Acquisition Entities beneficially own in the aggregate more than 30%, but not more than 40%, of the outstanding shares of Class A common stock, (iv) 20% of the total number of directors in the event that the 313 Acquisition Entities beneficially own in the aggregate more than 20%, but not more than 30%, of the outstanding shares of Class A common stock and (v) 10% of the total number of directors in the event that the 313 Acquisition Entities beneficially own in the aggregate more than 5%, but not more than 20% of the outstanding shares of Class A common stock. \nUnder the Stockholders Agreement, we agreed to nominate one director designated by Fortress Mosaic Investor LLC to our Board (the Fortress Designee) so long as the Fortress Holders (as defined in the Stockholders Agreement) beneficially own at least 50% of the shares of our Class A common stock the Fortress Holders own immediately following the consummation of the Merger; provided that the Fortress Designee must be (A) Andrew McKnight, (B) Max Saffian or (C) another senior employee or principal of Fortress Investment Group who is acceptable to a majority of the members of the board of directors of the Company. \nUnder the Stockholders Agreement, we agreed to nominate one director designated by the Summit Designator (as defined in the Stockholders Agreement) to our Board so long as the Summit Holders (as defined in the Stockholders Agreement) beneficially own at least 50% of the shares of our Class A Common Stock they own immediately following the consummation of the Merger. \nAccordingly, the persons party to the Stockholders Agreement will be able to significantly influence the approval of actions requiring Board approval through their voting power. Such stockholders will retain significant influence with respect to our management, business plans and policies, including the appointment and removal of its officers. In particular, the persons party to the Stockholder Agreement could influence whether acquisitions, dispositions and other change of control transactions are approved. \nAffiliates of Blackstone control the Company, and their interests may conflict with ours or yours in the future. \nAs of December 31, 2020, affiliates of Blackstone beneficially own approximately 57.8% of our Class A common stock. For so long as Blackstone continues to own a significant percentage of our Class A common stock, Blackstone will still be able to significantly influence the composition of our board of directors and the approval of actions requiring stockholder approval. \nAccordingly, for such period of time, Blackstone will have significant influence with respect to ours management, business plans and policies, including the appointment and removal of our officers. In particular, for so long as affiliates of Blackstone continues to own a significant percentage of our Class A common stock, Blackstone will be able to cause or prevent a change of control of the Company or a change in the composition of the Companys board of directors and could preclude any unsolicited acquisition of the Company. The concentration of ownership could deprive you of an opportunity to receive a premium for your shares of common stock as part of a sale of the Company and ultimately might affect the market price of our Class A common stock. In addition, Blackstone may have an interest in pursuing acquisitions, divestitures and other transactions that, in its judgment, could enhance its investment, even though such transactions might involve risks to you. For example, Blackstone could cause us to make acquisitions that increase our indebtedness or cause us to sell revenue-generating assets. In certain circumstances, acquisitions of debt at a discount by purchasers that are related to a debtor can give rise to cancellation of indebtedness income to such debtor for U.S. federal income tax purposes. So long as affiliates of Blackstone continues to own a significant amount of our combined voting power, even if such amount is less than 50%, Blackstone will continue to be able to strongly influence or effectively control our decisions. \nNotwithstanding Blackstones control of or substantial influence over us, we may from time to time enter into transactions with Blackstone and its affiliates, or enter into transactions in which Blackstone or its affiliates otherwise have a direct or indirect material interest. In connection with the Merger, the Company adopted a formal written policy for the review and approval of transactions with related persons. \nCertain of our stockholders, including Blackstone, the SPAC sponsors and affiliates of Summit Partners, L.P., may engage in business activities which compete with the Company or otherwise conflict with the Companys interests. \nBlackstone, the SPAC sponsors, affiliates of Summit Partners, L.P. and certain other Stockholder Parties and their respective affiliates are in the business of making investments in companies and may from time to time<|endoftext|>Advaxis, Inc. 1 (the Amendment) to its Annual Report on Form 10-K for the fiscal year ended October 31, 2020 (the Form 10-K) filed with the Securities and Exchange Commission (the SEC) on January 22, 2021 to include Part III of the 10-K. This Amendment also updates, amends and supplements Part IV, Item 15 of the Form 10-K to include Exhibits 4.11, 10.32 and 10.33. \nExcept as described above and for currently-dated certifications of the Companys Chief Executive Officer and Chief Financial Officer filed herewith as Exhibits 31.1, 31.2, 32.1 and 32.2, this Amendment does not affect any other parts of, or exhibits to, the Form 10-K, and those unaffected parts or exhibits are not included in this Amendment. Except as expressly stated in this Amendment, the Form 10-K continues to speak as of the date of the original filing of the Form 10-K, and the Company has not updated the disclosure contained in this Amendment to reflect events that have occurred since the filing of the Form 10-K. \nItem 10: Directors, Executive Officers and Corporate Governance. \n### Legal Proceedings Involving Directors \nNone. \nBoard Leadership Structure \nOn May 27, 2015, David Sidransky was appointed Chairman of the Board of Directors (the Board) and continues to serve as Chairman. Dr. Sidranskys experience in life science companies, as well as his scientific knowledge, his history with our Company and his own history of innovation and strategic thinking, qualify him to serve as our Chairman. Additionally, on April 23, 2018, Kenneth Berlin was appointed President and Chief Executive Officer and named a member of the Board of Directors. Mr. Berlins knowledge of industry standards, his experience in industry operations, and his leadership experience complements Dr. Sidranskys scientific knowledge. \nWhile we do not have a formal policy regarding the separation of our principal executive officer and chairman of our Board, we believe the current structure is in the best interest of the Company at this time. Further, this structure demonstrates to our employees and stockholders that we maintain strong leadership, with multiple backgrounds informing strategic direction of the company, and establishes effective oversight of our operations. This leadership structure promotes strategic development and execution, timely decision-making and effective management of our resources. We believe that we are well-served by this structure. \nAdvaxis directors are elected annually by the stockholders and serve for one-year terms until his/her successor is elected and qualified or until such directors earlier death, resignation or removal. The executive officers and key personnel are appointed by and serve at the discretion of the Board of Directors. \n### Executive Officers and Directors of the Company \nThe current executive officers and directors of Advaxis and their respective ages as of January 31, 2021 are as set forth in the table below. There are no family relationships among any of our directors or our executive officers. \nName \nAge \n### Position \nDr. David Sidransky \n(2) (3) (4) \n### Chairman of our Board of Directors \nDr. James P. Patton \n(1) (3) (4) \n### Vice Chairman of our Board of Directors \nRoni A. Appel \n(1) (3) \n### Director \nKenneth A. Berlin \n(5) \nPresident and Chief Executive Officer, Interim Chief Financial Officer, Director \nRichard J. Berman \n(1) (2) \n### Director \nDr. Samir N. Khleif \n(2) (4) \n### Director \nAndres Gutierrez \nChief Medical Officer and Executive Vice President \n### Igor Gitelman \nChief Accounting Officer and Vice President of Finance \n(1) \n\n(2) \nMember of the Compensation Committee \n(3) \nMember of the Nominating and Corporate Governance Committee \n(4) \nMember of the Research & Development Committee \n(5) \nMr. Molly Hendersons (former Chief Financial Officer) resignation, which became effective on September 25, 2020. \n### Dr. David Sidransky \nDr. Sidransky currently serves as the Chairman of our Board of Directors and has served as a member of our Board of Directors since July 2013. He is a renowned oncologist and research scientist named and profiled by TIME magazine in 2001 as one of the top physicians and scientists in America, recognized for his work with early detection of cancer. Since 1994, Dr. Sidransky has been the Director of the Head and Neck Cancer Research Division and Professor of Oncology, Otolaryngology, Genetics, and Pathology at Johns Hopkins University School of Medicine. He has served as Chairman or Lead of the Board of Directors of Champions Oncology since October 2007 and was a director and Vice-Chairman of ImClone Systems until its merger with Eli Lilly Inc. He is the Chairman of Tamir Biotechnology and Ayala and serves on the Board of Directors of Galmed and Orgenesis. He has served on scientific advisory boards of MedImmune, Roche, Amgen, and Veridex, LLC (a Johnson & Johnson diagnostic company), among others. Dr. Sidransky served as Director (2005-2008) of the American Association for Cancer Research (AACR). He earned his B.S. from Brandeis University and his Medical Doctorate from Baylor College of Medicine. Dr. Sidranskys experience in life science companies, as well as his scientific knowledge, qualify him to service as our director and non-executive chairman. \nDr. James P. Patton \nDr. Patton currently serves as the Vice Chairman of our Board of Directors, has served as the Chairman of our Board and has been a member of our Board of Directors since February 2002. Furthermore, Dr. Patton was the Chairman of our Board of Directors from November 2004 until December 2005, as well as a period from July 2013 until May 2015, and was our Chief Executive Officer from February 2002 to November 2002. Since February 1999, Dr. Patton has been the Vice President of Millennium Oncology Management, Inc., which is a consulting company in the field of oncology services delivery. Dr. Patton was a trustee of Dundee Wealth US, a mutual fund family, from October 2006 through September 2014. He is a founder and has been chairman of VAL Health, LLC, a health care consultancy, from 2011 to the present. In addition, he was President of Comprehensive Oncology Care, LLC, a company that owned and operated a cancer treatment facility in Exton, Pennsylvania from 1999 until its sale in 2008. From February 1999 to September 2003, Dr. Patton also served as a consultant to LibertyView Equity Partners SBIC, LP, a venture capital fund based in Jersey City, New Jersey. From July 2000 to December 2002, Dr. Patton served as a director of Pinpoint Data Corp. From February 2000 to November 2000, Dr. Patton served as a director of Healthware Solutions. From June 2000 to June 2003, Dr. Patton served as a director of LifeStar Response. He earned his B.S. from the University of Michigan, his Medical Doctorate from Medical College of Pennsylvania, and his M.B.A. from Penns Wharton School. Dr. Patton was also a Robert Wood Johnson Foundation Clinical Scholar. He has published papers regarding scientific research in human genetics, diagnostic test performance and medical economic analysis. Dr. Pattons experience as a trustee and consultant to funds that invest in life science companies provide him with the perspective from which we benefit. Additionally, Dr. Pattons medical experience and service as a principal and director of other life science companies make Dr. Patton particularly qualified to serve as our director and non-executive vice chairman. \n### Roni A. Appel \nMr. Appel has served as a member of our Board of Directors since November 2004. He was our President and Chief Executive Officer from January 1, 2006 until December 2006 and Secretary and Chief Financial Officer from November 2004 to September 2006. From December 15, 2006 to December 2007, Mr. Appel served as a consultant to us. Mr. Appel currently is a self-employed consultant and the Co-Founder and President of Spirify Pharma Inc. Previously, he served as Chief Executive Officer of Anima Biotech Inc., from 2008 through January 31, 2013. From 1999 to 2004, he was a partner and managing director of LV Equity Partners (f/k/a LibertyView Equity Partners). From 1998 until 1999, he was a director of business development at Americana Financial Services, Inc. From 1994 to 1996, he worked as an attorney. Mr. Appel holds an M.B.A from Columbia University (1998) and an LL.B. from Haifa University (1994). Mr. Appels longstanding service with us and his entrepreneurial investment career in early stage biotech businesses qualify him to serve as our director. \nKenneth Berlin \nMr. Berlin has served as our President and Chief Executive Officer and a member of our Board of Directors since April 2018. Mr. Berlin has served as our Interim Chief Financial Officer since September 2020. Prior to joining Advaxis, Mr. Berlin served as President and Chief Executive Officer of Rosetta Genomics from November 2009 until April 2018. Prior to Rosetta Genomics, Mr. Berlin was Worldwide General Manager at cellular and molecular cancer diagnostics developer Veridex, LLC, a Johnson & Johnson company. At Veridex he grew the organization to over 100 employees, launched three cancer diagnostic products, led the acquisition of its cellular diagnostics partner, and delivered significant growth in sales as Veridex transitioned from an R&D entity to a commercial provider of oncology diagnostic products and services. Mr. Berlin joined Johnson & Johnson in 1994 and served as corporate counsel for six years. From 2001 until 2004 he served as Vice President, Licensing and New Business Development in the pharmaceuticals group, and from 2004 until 2007 served as Worldwide Vice President, Franchise Development, Ortho-Clinical Diagnostics. Mr. Berlin holds an A.B. degree from Princeton University and a J.D. from the University of California Los Angeles School of Law. Mr. Berlins experience in life science companies, as well as his business experience in general qualify him to service as our director. \n### Richard J. Berman \nMr. Berman has served as a member of our Board of Directors since September 1, 2005. Richard Bermans business career spans over 35 years of venture capital, senior management and merger and acquisitions experience. In the past 5 years, Mr. Berman has served as a director and/or officer of over a dozen public and private companies. Mr. Berman currently serves as a director of four public healthcare companies Cryoport Inc., Advaxis, Inc., BioVie, Inc. and BriaCell Therapeutics. Recently, he became a director of Comsovereign Holding Corp, a leader in the drone market. From 2002 to 2010, he was a director at Nexmed Inc. (now Apricus Biosciences, Inc.) where he also served as Chairman/CEO in 2008 and 2009. From 1998-2000, he was employed by Internet Commerce Corporation (now Easylink Services) as Chairman and CEO and served as director from 1998-2012. Previously, Mr. Berman worked at Goldman Sachs, was Senior Vice President of Bankers Trust Company, where he started the M&A and Leveraged Buyout Departments, created the largest battery company in the world in the 1980s by merging Prestolite, General Battery and Exide to form Exide Technologies (XIDE), helped to create what is now Soho (NYC) by developing five buildings, and advised on over $4 billion of M&A transactions (completed over 300 deals). He is a past Director of the Stern School of Business of NYU where he obtained his B.S. and M.B.A. Mr. Bermans extensive knowledge of our industry, his role in the governance of publicly held companies and his directorships in other life science companies qualify him to serve as our director. \nDr. Samir Khleif \nDr. Khleif has served as a member of our Board of Directors since October 2014. He currently serves as the Director of the State of Georgia Cancer Center, Georgia Regents University Cancer Center and the Cancer Service Line. Dr. Khleif was formerly Chief of the Cancer Vaccine Section at the NCI, and also served as a Special Assistant to the Commissioner of the FDA leading the Critical Path Initiative for oncology. Dr. Khleif is a Georgia Research Alliance Distinguished Cancer Scientist and Clinician and holds a professorship in Medicine, Biochemistry and Molecular Biology, and Graduate Studies at Georgia Regents University. Dr. Khleifs research program at Georgia Regents University Cancer Center focuses on understanding the mechanisms of cancer-induced immune suppression, and utilizing this knowledge for the development of novel immune therapeutics and vaccines against cancer. His research group designed and performed some of the first cancer vaccine clinical trials targeting specific<|endoftext|>### EXPLANATORY NOTE \nFreshpet, Inc. (Freshpet, the Company, we, our or us) is filing this Amendment No. 1 on Form 10-K/A (this Amendment) to amend the Companys Annual Report on Form 10-K for the fiscal year ended December 31, 2020, originally filed with the Securities and Exchange Commission (the SEC) on February 22, 2021 (the 2020 10-K), to include the information required by Items 10 through 14 of Part III of Form 10-K. \nThis Amendment amends and restates in their entirety Items 10, 11, 12, 13 and 14 of Part III of the 2020 10-K and the exhibit index set forth in Part IV of the 2020 10-K and includes certain exhibits as noted thereon. \n\n\nFreshpet, Inc. \nAmendment No. 1 on Form 10-K/A \n### PART III \nItem10 \n\n### Item11 \nExecutive Compensation \n### Item12 \n\n### Item13 \n\n### Item14 \n\n### PART IV \nItem15 \n\nPART III \nITEM \n10. \nSet forth below is the name, age (as of April30, 2021), position and a description of the business experience of each of our executive officers and directors: \n### Background of Directors and Executive Officers \nChairman of the Board and Director \nCharles A. Norris has been a member of our Board of Directors and Chairman of the Board since October 2006. Mr. Norris served as a member of the board of directors of Primo Water Corporation from 2016 to April 2020 and previously served as the Chairman of Glacier Water Services Inc. from 2001 to 2016. Mr. Norris was previously a member of the board of directors of Advanced Engineering Management and MP Holdco LLC, and was Chairman of the Board of Day Runner from September 2001 to November 2003, when it was sold. Mr. Norris is the retired President of McKesson Water Products Company, a bottled water company and division of McKesson Corporation, where he served as President from 1990 until he retired in October 2000. From 1981 through 1989, Mr. Norris served as President of Deer Park Spring Water Company, which was a division of Nestle USA, and then led an investor group that acquired the business in 1985 until it was sold to Clorox in 1987. Mr. Norris remained with Clorox through 1989 following their acquisition of Deer Park. From 1973 to 1985, Mr. Norris served in various operational executive positions with Nestle in both Switzerland and the United States. Mr. Norris has been nominated to serve as Chairman of the Board of Directors of Transformational CPG Acquisition Corp., a newly organized blank check company focused on effecting a potential transaction in the consumer packaged goods industry. Mr. Norris provides the Board of Directors with extensive corporate leadership experience as well as a deep understanding of our business. \n### Director and CEO \nWilliam B. Cyr has been a member of our Board of Directors and our Chief Executive Officer since September 2016. Before assuming his role at Freshpet, Mr. Cyr served as President and Chief Executive Officer of Sunny Delight Beverages Co. (SDBC) from August 2004 to February 2016. Prior to joining SDBC, Mr. Cyr spent 19 years at Procter & Gamble, where he ultimately served as the Vice President and General Manager of the North American Juice Business and Global Nutritional Beverages. Mr. Cyr serves as a Board and Executive Committee Member of the Consumer Brands Association, a position he has held since 2002. Additionally, during his time as President and Chief Executive Officer of SDBC, Mr. Cyr was a member of the Board of Directors of American Beverage Association from 2007 until 2016 and on the Executive Committee from 2012 to 2016. Mr. Cyr holds an A.B. from Princeton University. Mr. Cyr provides the Board of Directors with knowledge of the daily affairs of the Company, expertise in the consumer products industry and extensive experience in corporate leadership. \n### Director \nJ. David Basto has been a member of our Board of Directors since December 2010. Mr.Basto is a Managing Director of The Carlyle Group, which he joined in 2015.Prior to joining The Carlyle Group, Mr. Basto was Founding Partner and Managing Director of Broad Sky Partners, from its formation in 2013 to 2015. Prior to co-founding Broad Sky Partners, Mr.Basto worked for MidOcean Partners from its inception in 2003 through 2013, most recently as Managing Director and co-head of MidOcean Partners consumer sector investing team. Prior to MidOcean Partners, Mr.Basto worked for DB Capital Partners and its predecessor BT Capital Partners from 1998 through 2003. Previously, Mr.Basto held positions with Juno Partners and Tucker Anthony Inc. Mr.Basto currently serves as chairman of the board of directors of PurposeBuilt Brands, Inc. Mr. Basto also serves on the board of directors of the parent entities of Arctic Glacier, Inc., Every Man Jack and Hive Brands. Mr.Basto provides the Board of Directors with extensive core business and leadership skill as well as expertise in analyzing financial issues and insights into the consumer sector. \n### Director \nOlu Beck has been a member of our Board of Directors since October 2019. Since January 2013, Ms.Beck has been the Founder and Chief Executive Officer of The Beck Group NJ, a boutique strategic and management consulting firm. Ms.Beck also served as Chief Executive Officer and a member of the board of directors of Wholesome Sweeteners, Inc., a maker of consumer-packaged natural and organic sweeteners and snacks, from January 2016 to June 2018. Prior to that, Ms.Beck served as Head of Global & U.S. Marketing & Health and Wellness for Johnson and Johnson, Inc. from 2010 to 2012. Prior to Johnson and Johnson, Inc., Ms.Beck served in various executive leadership roles in Finance and Sales at Mars Incorporated from 1989 to 2009, including serving as Chief Financial Officer of Uncle Bens Rice. Ms. Beck also serves on the board of directors of Hostess Brands, Inc. and has been nominated to serve on the board of directors of Dennys Corporation. Ms.Beck has more than 25 years of experience in portfolio business management and general management, including direct experience in transformational and strategic growthboth organically and through mergers and acquisition. Ms.Beck provides the Board of Directors with diversified, cross-functional and global experience, extensive management experience in the consumer packaged goods industry and insights into leading practices in executive compensation, corporate governance and audit. \n### Director \nDaryl G. Brewster has been a member of our Board of Directors since January 2011. Since 2021, Mr. Brewster has served as the Chief Executive Officer of Transformational CPG Acquisition Corp., a newly organized blank check company focused on effecting a potential transaction in the consumer packaged goods industry. Since 2013, Mr.Brewster has served as the Chief Executive Officer of CECP, a coalition of chief executive officers from over 200 large cap companies focused on driving sustainable business and improving communication with strategic investors. Since 2008, Mr.Brewster has also been the founder and chief executive officer of \nBrookside Management, LLC, a boutique consulting firm that provides C-level consulting and support to consumer companies and service providers to the industry. Mr.Brewster serves as an Operating Advisor to The Carlyle Group and previously served as a Management Advisor to MidOcean Partners. Mr.Brewster served as the Chief Executive Officer of Krispy Kreme Doughnuts, Inc. from March 2006 through January 2008. From 1996 to 2006, Mr.Brewster was a senior executive at Nabisco, Inc. and Kraft, Inc. (which acquired Nabisco in 2000), where he served in numerous senior executive roles, most recently as Group Vice President and President, Snacks, Biscuits and Cereal. Before joining Nabisco, Mr.Brewster served as Managing Director, Campbells Grocery Products Ltd.UK, Vice-President, Campbells Global Strategy, and Business Director, Campbells U.S. Soup. Mr.Brewster serves on the boards of several middle-market growth companies, and previously served on the board of E*Trade Financial Services, Inc. Mr.Brewster provides the Board of Directors with experience in corporate leadership, public company operations, and an understanding of the pet and consumer packaged goods industries. \n### Director \nLawrence S. Coben, Ph.D. has been a member of our Board of Directors since November 2014. Dr. Coben has served as Chairman of the Board of NRG Energy since February 2017 and has been a director of NRG since December 2003. Dr. Coben was Chairman and Chief Executive Officer of Tremisis Energy Corporation LLC from 2003 to December 2017. Dr. Coben was Chairman and Chief Executive Officer of Tremisis Energy Acquisition Corporation II, a publicly held company, from July 2007 through March 2009 and of Tremisis Energy Acquisition Corporation from February 2004 to May 2006. From January 2001 to January 2004, Dr. Coben was a Senior Principal of Sunrise Capital Partners L.P., a private equity firm. From 1997 to January 2001, Dr. Coben was an independent consultant. From 1994 to 1996, Dr. Coben was Chief Executive Officer of Bolivian Power Company. Dr. Coben served on the advisory board of Morgan Stanley Infrastructure II, L.P. from September 2014 through December 2016. Dr. Coben is also Executive Director of the Escala Initiative (formerly the Sustainable Preservation Initiative) and a Consulting Scholar at the University of Pennsylvania Museum of Archaeology and Anthropology. Dr. Coben provides the Board of Directors with significant managerial, strategic, and financial expertise, particularly as it relates to company financings, transactions and development initiatives. \n### Director \nWalter N. George III has been a member of our Board of Directors since November 2014. Mr.George is the President of G3 Consulting, LLC, a boutique advisory firm specializing in value creation in small and mid-market consumer products companies, a company he founded in 2013. Mr.George served as President of the American Italian Pasta Company and Corporate Vice President of Ralcorp Holdings from 2010 until its sale to Conagra Foods in 2013. Mr.George served as Chief Operating Officer at American Italian Pasta Company from 2008 to 2010. From 2001 to 2008, Mr.George served in other executive roles with American Italian Pasta Company, including Senior Vice PresidentSupply Chain and Logistics and Executive Vice PresidentOperations and Supply Chain. From 1988 through 2001, Mr.George held a number of senior operating positions with Hills Pet Nutrition, a subsidiary of Colgate Palmolive Company, most recently as Vice President of Supply Chain. Mr.George is President and serves on the board of Old World Spice and Seasoning Company, and serves on the board of directors of Vision Bank. Mr. George is non-executive chairman of the board of Indigo Wild, LLC. Mr.George provides the Board of Directors with operations expertise, consumer products and pet food industry expertise and public company experience. \n### Director \nJacki S. Kelley has been a member of our Board of Directors since February 2019. Ms. Kelley has over 25 years of executive and senior leadership experience in the media and digital industries. Ms. Kelley currently serves as CEO/Americas at Dentsu, Inc., a role she has held since January 2020. Prior to her current role, Ms. Kelley spent five years at Bloomberg, first joining as Chief Operating Officer of Bloomberg Media in 2014 and then moving to Bloomberg LP in 2017 after being appointed Deputy Chief Operating Officer. Before joining Bloomberg, Ms. Kelley was the CEO, North America, and President of Global Clients for IPG Mediabrands as well as Global CEO, Universal McCann. Ms. Kelley was also a Vice President, Worldwide Strategy & Solutions, at Yahoo! and worked with USA Today for 18 years, leaving the company as a Senior Vice President. Ms. Kelley also serves on the board of directors of Comic Relief USA and is an Executive Board member of the Ad Council. Ms. Kelley provides the Board of Directors with corporate leadership and extensive senior management experience in media and marketing. \n### Director \nLeta D. Priest has been a member of our Board of Directors since September 2018. Ms. Priest has over 30 years of executive and senior leadership experience in the retail and consumer packaged goods industries. Ms. Priest was a key leader in food for Walmart from May 2003 to November 2015 during Walmarts expansion of grocery, including having served as Senior Vice President and General Merchandising Manager, Fresh Food from 2009 to 2015. Ms. Priest also served as Senior Vice President, General Merchandising Manager in other key areas of food for Walmart<|endoftext|>"},"task":{"kind":"string","value":"{\"file\": \"/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz\"}"}}},{"rowIdx":90,"cells":{"text":{"kind":"string","value":"<|endoftext|>Agreement between us and our sponsor, our sponsor has agreed that it will be liable to us if and to the extent any claims by a third party (excluding our independent registered public accounting firm) for services rendered or products sold to us, or a prospective partner business with which we have discussed entering into a transaction agreement, reduce the amounts in the trust account to below the lesser of (i)$10.00 per public share and (ii)the actual amount per share held in the trust account as of the date of the liquidation of the trust account if less than $10.00 per public share due to reductions in the value of the trust assets, in each case net of the interest that may be withdrawn to pay our tax obligations, provided that such liability will not apply to any claims by a third party or prospective partner business who executed a waiver of any and all rights to seek access to the trust account nor will it apply to any claims under our indemnity of the underwriters of our initial public offering against certain liabilities, including liabilities under the Securities Act. \n\nSince only holders of our founder shares have the right to vote on the appointment of directors, the NYSE may consider us to be a controlled company within the meaning of the NYSE rulesand, as a result, we may qualify for exemptions from certain corporate governance requirements. \nPrior to our initial business combination only holders of our founder shares will have the right to vote on the appointment of directors. \n\n\n\n\n\nIf, before distributing the proceeds in the trust account to our public shareholders, we file a bankruptcy or insolvency petition or an involuntary bankruptcy or insolvency petition is filed against us that is not dismissed, the claims of creditors in such proceeding may have priority over the claims of our shareholders and the per- share amount that would otherwise be received by our shareholders in connection with our liquidation may be reduced. \n\n\n\n\n\n(ii)the redemption of any public shares properly tendered in connection with a shareholder vote to amend our amended and restated memorandum and articles of association (A)to modify the substance or timing of our obligation to provide holders of our ClassA ordinary shares the right to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of our initial public offering or (B)with respect to any other provision relating to the rights of holders of our ClassA ordinary shares, and (iii)the redemption of our public shares if we have not consummated an initial business within 24 months from the closing of our initial public offering, subject to applicable law and as further described herein. \n\n\n\nIf we do not consummate an initial business combination within 24 months from the closing of our initial public offering, the proceeds then on deposit in the trust account, including interest earned on the funds held in the trust account and not previously released to us to pay our income taxes, if any (less up to $100,000 of interest to pay dissolution expenses), will be used to fund the redemption of our public shares, as further described herein. \n\n\n\nIn accordance with NYSE corporate governance requirements and our amended and restated memorandum and articles of association, we are not required to hold an annual general meeting until no later than one year after our first fiscal year end following our listing on NYSE. \n\n\n\nNotwithstanding the above, if our ClassA ordinary shares are at the time of any exercise of a warrant not listed on a national securities exchange such that they satisfy the definition of a covered security under Section18(b)(1)of the Securities Act, we may, at our option, require holders of public warrants who exercise their warrants to do so on a cashless basis in accordance with Section3(a)(9)of the Securities Act and, in the event we so elect, we will not be required to file or maintain in effect a registration statement, but we will use our reasonable best efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available. \n\nThis will have the effect of reducing the potential upside of the holders investment in our company because the warrantholder will hold a smaller number of ClassA ordinary shares upon a cashless exercise of the warrants they hold. \n\n\n\nPursuant to an agreement to be entered into concurrently with the issuance and sale of the securities in our initial public offering, our initial shareholders, and their permitted transferees can demand that we register the ClassA ordinary shares into which founder shares are convertible, the private placement warrants and the ClassA ordinary shares issuable upon exercise of the private placement warrants, and warrants that may be issued upon conversion of working capital loans and the ClassA ordinary shares issuable upon conversion of such warrants. \nBecause we are not limited to evaluating a partner business in a particular industry sector, you will be unable to ascertain the merits or risks of any particular partner businesss operations. \nAn investment in our units may not ultimately prove to be more favorable to investors than a direct investment, if such opportunity were available, in a business combination partner. \n\nWe also cannot assure you that an investment in our units will not ultimately prove to be less favorable to investors in our initial public offering than a direct investment, if an opportunity were available, in a business combination partner. In the event we elect to pursue an acquisition outside of the areas of our founders expertise, our founders expertise may not be directly applicable to its evaluation or operation, and the information contained in this Report regarding the areas of our founders expertise would not be relevant to an understanding of the business that we elect to acquire. \n\n\n\n\nWe may also issue ClassA ordinary shares upon the conversion of the founder shares at a ratio greater than one-to- one at the time of our initial business combination as a result of the anti-dilution provisions contained in our amended and restated memorandum and articles of association. \nOur amended and restated memorandum and articles of association authorizes the issuance of up to 400,000,000 ClassA ordinary shares, par value $0.0001 per share, 10,000,000 ClassB ordinary shares, par value $0.0001 per share, and 1,000,000 preference shares, par value $0.0001 per share. Immediately after our initial public offering, there were 378,500,000 and 4,625,000 authorized but unissued ClassA ordinary shares and ClassB ordinary shares, respectively, available for issuance which amount includes shares reserved for issuance upon exercise of outstanding warrants or shares issuable upon conversion of the ClassB ordinary shares, if any. \nWe may also issue ClassA ordinary shares to redeem the warrants or upon conversion of the ClassB ordinary shares at a ratio greater than one-to-one at the time of our initial business combination as a result of the anti-dilution provisions as set forth herein. The issuance of additional ordinary or preference shares: may significantly dilute the equity interest of investors in our initial public offering, which dilution would increase if the anti-dilution provisions in the ClassB ordinary shares resulted in the issuance of ClassA ordinary shares on a greater than one-to-one basis upon conversion of the ClassB ordinary shares; \n\nThe founder shares will automatically convert into ClassA ordinary shares immediately upon the consummation of our initial business combination at a ratio such that the number of ClassA ordinary shares issuable upon conversion of all founder shares will equal, in the aggregate, on an as-converted basis, 20% of the sum of (i)the total number of ordinary shares issued and outstanding upon the completion of our initial public offering, plus (ii)the sum of the total number of ClassA ordinary shares issued or deemed issued or issuable upon conversion or exercise of any equity-linked securities or rights issued or deemed issued, by the Company in connection with or in relation to the consummation of the initial business combination, excluding any ClassA ordinary shares or equity-linked securities exercisable for or convertible into ClassA ordinary shares issued, deemed issued, or to be issued, to any seller in the initial business combination and any private placement warrants issued to our sponsor, members of our founding team or any of their affiliates upon conversion of working capital loans. \n\n\ninvestors. \nWe urge U.S. \n\nWe may, in connection with our initial business combination and subject to requisite shareholder approval under the Companies Law, reincorporate in the jurisdiction in which the partner company or business is located or in another jurisdiction. \n\n\n\n\n\n\n\n\nIn addition, pursuant to an agreement to be entered into on or prior to the closing of our initial public offering, our sponsor, upon and following consummation of an initial business combination, will be entitled to nominate three individuals for election to our board of directors, as long as the sponsor holds any securities covered by the registration and shareholder rights agreement. \n\n\n\n\n\n\n\nFollowing the completion of our initial public offering and until we consummate our initial business combination, we have engaged and intend to engage in the business of identifying and combining with one or more businesses. \n\n\nIn fact, we may enter into a business combination with a partner business that is affiliated with our sponsor, our directors or executive officers, although we do not intend to do so. \n\n\nAlthough we are not specifically focusing on, or pursuing, any transaction with any affiliated entities, we will pursue such a transaction if we determine that such affiliated entity meets our criteria for a business combination as set forth in Proposed Business Evaluation of a Partner Business and Structuring of Our Initial Business Combination and such transaction is approved by a majority of our independent and disinterested directors. \n\nOn June26, 2020 our sponsor paid $25,000, or approximately $0.004 per share, to cover for certain offering costs in consideration for 5,750,000 founder shares. In addition, our sponsor, pursuant to a written agreement, purchased 3,150,000 private placement warrants at a purchase price of $6,300,000 in a private placement that closed simultaneously with the closing of our initial public offering. If we do not consummate an initial business within 24 months from the closing of our initial public offering, the private placement warrants (and the underlying securities) will expire worthless. \n\nAlthough we have no commitments as of the date of this Report to issue any notes or other debt, or to otherwise incur debt following our initial public offering, we may choose to incur substantial debt to complete our initial business combination. \n\n\nThe net proceeds from our initial public offering and the sale of the private placement warrants provided us with up to $216,000,000 that we may use to complete our initial business combination (inclusive of approximately $1,000,000 held outside the trust account which we intend to use for working capital purposes). \nHowever, we may not be able to effectuate our initial business combination with more than one partner business because of various factors, including the existence of complex accounting issues and the requirement that we prepare and file pro forma financial statements with the SEC that present operating results and the financial condition of several partner businesses as if they had been operated on a combined basis. \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nThe provisions of our amended and restated memorandum and articles of association that relate to our pre- business combination activity (and corresponding provisions of the agreement governing the release of funds from our trust account) may be amended with the approval of a special resolution which requires the approval of the holders of at least two-thirds of our ordinary shares who attend and vote at a general meeting of the company, which is a lower amendment threshold than that of some other blank check companies. \nSome other blank check companies have a provision in their charter which prohibits the amendment of certain of its provisions, including those which relate to a companys pre-business combination activity, without approval by a certain<|endoftext|>Allowance is recorded to reduce the deferred tax asset if, based on the weight of the evidence, it is more likely than not that some portion or all of the deferred tax asset will not be realized. After consideration of all the evidence, both positive and negative, management has determined that a valuation allowance of $4,321,802 and $4,183,994 for the years ended on February 29, 2020 and February 28, 2019 respectively, is necessary to reduce the deferred tax asset to the amount that will more likely than not be realized. \nOn March 27, 2020, the Coronavirus Aid, Relief and Economic Security (CARES) Act was enacted and signed into law. Certain provisions of the CARES Act could impact the 2019 income tax provision computations of the Company and will be reflected in the period of enactment (tax year 2020). The CARES Act, among other things, contains modifications on the limitation of business interest expense under Section 163(j), allow for NOL carryovers and carrybacks to offset 100% of taxable income for taxable years before 2021, and includes a technical correction to the TCJA with respect to Qualified Improvement Property (\"QIP\") where such property has a 15-year recovery period for purposes of the general depreciation system of Section 168(a). The Company has evaluated the impact of the CARES Act, and it believes that none of the modifications or tax law changes will result in any material benefit. \nAs of February 29, 2020, the Company estimates it has approximately $11.8 million of Federal and $11 million of state net operating loss (NOL) carryforwards as compared to $11.2 million of Federal and $10.8 million of state net operating loss carryforwards as of February 28, 2019. Of the Federal NOL carryforwards, $0 expired in 2020 and the remaining balance will expire between 2022 and 2040. Of the state NOL carryforwards, $0expired in 2020, and the remaining balance will expire between 2022 and 2040. \nSuch net operating losses are available to offset future taxable income, if any. As the utilization of such net operating losses for tax purposes is not assured, the deferred tax asset has been fully reserved through the recording of a 100% valuation allowance. \nUnder Sections 382 and 383 of the Internal Revenue Code of 1986, as amended, (the Code), substantial changes in the Companys ownership may limit the amount of net operating loss and research and development credit carryforwards that could be used annually in the future to offset taxable income. A formal Section 382 study has not been completed to determine if an ownership change has occurred and if its net operating losses are subject to an annual limitation. Such annual limitations could affect the utilization of NOL and tax credit carryforwards in the future. \nThe Federal net operating loss carryforwards will expire as follows: \n8. STOCK OPTIONS \nThere are no stock options outstanding and no options have been granted during the fiscal years ended February 29, 2020 and February 28, 2019 under the Companys 2019 Stock Incentive Plan. \n9. EMPLOYEE BENEFIT PLANS \nThe Company has a 401k and Profit Sharing Plan (the \"Profit Sharing Plan\") in which substantially all employees may participate after three months of service. Contributions to the Profit Sharing Plan by participants are voluntary. The Profit Sharing Plan allows for matching and discretionary employer contributions. In addition, the Company may make additional contributions at its discretion. The Company did not contribute to the Profit Sharing Plan during the fiscal years ended February 29, 2020 and February 28, 2019. \n10. DISAGGREGATION OF REVENUES AND MAJOR CUSTOMERS \nRevenues from domestic and export sales to unaffiliated customers for the fiscal years ended February 29, 2020 and February 28, 2019 are as follows: \nRevenues from domestic and export sales are attributed to global geographic regions according to the location of the customers primary manufacturing or operating facilities. \n\nSales to the Company's top two customers accounted for 70% of net sales for the year ended February 29, 2020 as compared with 78% of the Company's net sales for the year ended February 28, 2019. Sales to Raytheon Technologies Corporation accounted for approximately 52% of net sales for the year ended February 29, 2020 and 60% for the year ended February 28, 2019. Sales to the second largest customer, USI Electronics, accounted for 18% of net sales for the years ended February 29, 2020 and February 28, 2019. \n11. MAJOR SUPPLIERS \nFor the year ended February 29, 2020, purchases from the Companys top supplier, Egide USA accounted for 18% of the Company's total purchases of production materials, and all other suppliers were individually less than 10% of purchases. For the year ended February 28, 2019, purchases from the Companys top supplier, CPS Technologies Corp. accounted for 21% of the Company's total purchases of production materials, Egide USA accounted for 11% of the Companys total purchases of production materials, and all other suppliers were individually less than 10% of purchases. \n12. \n### Operating leases: \nOn October 1, 2014, the Company extended its current lease with its landlord, CF EB REO II LLC, for the occupancy and use of its 47,000 square foot facility located at 3301 Electronics Way, West Palm Beach, Florida 33407 (the Lease). The property subsequently was sold to La Boheme Properties, Inc., a Florida corporation, which is the current landlord as the Lease was assigned to them. The term of the Lease ends on December 31, 2021. The base rent provided in the Lease is $31,555 per month, excluding sales tax. The Company has the option to extend the term of the Lease for an additional five years beginning on January 1, 2022 and ending on December 31, 2026. \nCommencing on January 1, 2016 and on the first day of January of every subsequent year, the base rent will be increased to compensate for changes in the cost of living, provided that in no event will the base rent be increased by less than three percent nor more than five percent annually. \nWe adopted ASU No. 2016-02Leases (Topic 842), as amended, as of March 1, 2019, using the modified retrospective approach. The modified retrospective approach provides a method for recording existing leases at adoption and in comparative periods that approximates the results of a full retrospective approach. \nAdoption of the new standard resulted in the recording of an additional net operating lease right-of-use asset of approximately $1,081,000 and an operating lease liability of approximately ($1,172,000), as of March 1, 2019. The ($91,000) difference between the additional lease assets and lease liabilities was recorded as an adjustment to retained earnings. Operating lease assets represent the Companys right to use an underlying asset for the lease term and lease liabilities represent its obligation to make lease payments arising from the lease. The standard did not materially impact our equity and had no impact on cash flows. \nAs our lease does not provide an implicit interest rate, we estimated a current borrowing rate of 6.25% in determining the present value of lease payments. \nThe balance sheet classification of lease assets and liabilities were as follows: \nFuture minimum lease payments, excluding Florida sales tax, as of February 29, 2020 under non-cancelable operating leases are as follows: \nActual rent expense paid for the fiscal years ended February 29, 2020 and February 28, 2019 including Florida sales tax was approximately $472,000 and $456,000, respectively. \n13. STOCKHOLDERS EQUITY \nThe Board of Directors has authorized a stock repurchase program of up to $1.0 million of its outstanding common stock Purchases under the program may be made through the open market or privately negotiated transactions as determined by the Companys management, and in accordance with the requirements of the Securities and Exchange Commission. The timing and actual number of shares repurchased will depend on variety of factors including price, corporate and regulatory requirements and other conditions. \nDuring the fiscal year ended February 28, 2019 the Company repurchased 20 shares of common stock and was notified by its transfer agent that an adjustment increasing outstanding shares of common stock by 29 shares was necessary. During the fiscal year ended February 29, 2020 the Company repurchased 10 shares of common stock. \nFair value was approximately $282,000 based on then current price of $1.75 per share. \n14. SUBSEQUENT EVENTS \nIn June 2020 the Company repurchased 2,493 shares at a total cost of $5,734, or $2.30 per share. \nOn July 21, 2020, the Company executed a promissory note in favor of Bank of America, N.A. (the \"Lender\") for an unsecured $807,415 loan under the Paycheck Protection Program (the PPP Loan). The Company received the proceeds of the PPP Loan on July 23, 2020. \nOn November 13, 2020, the Company granted Mr. Eriksen and Mr. Matson the option to receive half of their bonuses in shares instead of cash, which both elected. Mr. Eriksen received 7,669 shares and Mr. Matson received 15,337 shares. Shares were issued under the 2019 Stock Incentive Plan. \n### None \nOur Evaluation of Disclosure Controls and Procedures \nThe Company carried out an evaluation, under the supervision and with the participation of its management, including our Chief Executive Officer and Interim Chief Financial Officer, of the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e), and 15d-15(e) as of the end of the period covered by this Annual Report. Based upon that evaluation, our Chief Executive Officer and Interim Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of February 29, 2020 due to the material weakness described above under Managements Report on Internal Control over Financial Reporting. \nBecause of its inherent limitations, internal control over financial reporting may not prevent or detect all misstatements or fraud. \n\nHowever, giving full consideration to the material weakness and the remediation plan, the Companys management has concluded that the Companys financial statements included in this Annual Report fairly present, in all material respects, the Companys financial condition and results of operations as of and for the year ended February 29, 2020. \n\nOther than the changes referenced above under Managements Report on Internal Control over Financial Reporting, there were no changes in the Companys internal control over financial reporting during the fourth quarter ended February 29, 2020 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. \nNone. \n### PART III \nBoard of Directors \nThe following table sets forth certain information concerning the current directors: \n________________ \n### Tim Eriksen \nMr. Eriksen was elected a director on August 4, 2015. Mr. Eriksen served as a member of the Audit Committee from October 14, 2015 through July 22, 2016 when he resigned from the Audit Committee and was named Chief Executive Officer and Interim Chief Financial Officer. Mr. Eriksen was appointed Chief Executive Officer and Interim Chief Financial Officer of the Company on July 22, 2016. Mr. Eriksen founded Eriksen Capital Management LLC (\"ECM\"), a Lynden, Washington based investment advisory firm, in 2005. Mr. Eriksen is the Managing Member of ECM and Cedar Creek Partners LLC (\"CCP\"), a hedge fund founded in 2006 that focuses primarily on micro-cap and small cap stocks. Prior to founding ECM, Mr. Eriksen worked for Walkers Manual, Inc., a publisher of books and newsletters on micro-cap stocks, unlisted stocks and community banks. Earlier in his career, Mr. Eriksen worked for Kiewit Pacific Co, a subsidiary of Peter Kiewit Sons, as an administrative engineer on the Benicia Martinez Bridge project. Mr. Eriksen received a B.A. from The Masters University and an M.B.A. from Texas A&M University. Mr. Eriksen was appointed as a director and member of the Audit Committee of Novation Companies Inc. on April 12, 2018, and elected a director of TSR Inc. on October 22,2019, and appointed to the Audit, Nominating, Compensation, and Special Committee on December 30, 2019. \nThe Company believes that Mr. Eriksens extensive financial expertise, including knowledge of unlisted micro-cap companies and capital allocation, and his role as an officer of one of the Company's largest institutional stockholders highly qualifies him to serve as a member of the Board of Directors. \n### Dwight<|endoftext|>Benefits the payment of which is contingent upon a change in control. If certain individuals receive parachute payments in excess of a safe harbor amount prescribed by the Code, the payor is denied a federal income tax deduction for a portion of the payments and the recipient must pay a 20% excise tax, in addition to income tax, on a portion of the payments. \nIf we experience a change in control, benefits provided under the Equity Incentive Plan could be treated as parachute payments. In that event, the Equity Incentive Plan provides that the benefits under the Equity Incentive Plan, and all other parachute payments provided under other plans and agreements, will be reduced to the safe harbor amount, i.e., the maximum amount that may be paid without excise tax liability or loss of deduction, if the reduction allows the participant to receive greater after-tax benefits. The benefits under the Equity Incentive Plan and other plans and agreements will not be reduced, however, if the participant will receive greater after-tax benefits (taking into account the 20% excise tax payable by the participant) by receiving the total benefits. The Equity Incentive Plan also provides that these provisions do not apply to a participant who has an agreement with us providing that the individual is entitled to indemnification or other payment from us for the 20% excise tax or if the participant has an agreement with us providing that the participant cannot receive payments in excess of the safe harbor amount. \n### Director Compensation \nThe following table sets forth information regarding the compensation paid or accrued by our Company during 2020 to each of our independent directors: \n(1) \n\n(2) \nMs.Raedle and Mr.Mullinix resigned from the board of directors during the year ended 2020. \nITEM12. \n### Stock Ownership \nThe following table sets forth the number and percentage owned by each person who, to the knowledge of the Company as of March30, 2021, is the beneficial owner of more than 5% of the outstanding shares of common stock. Shares of common stock issuable pursuant to warrants or convertible notes are deemed to be outstanding for purposes of computing the percentage ownership of the person or group holding such options or warrants but are not deemed to be outstanding for purposes of computing the percentage ownership of any other person. \n(1) \nBased on 7,198,303 shares of common stock outstanding and 213,531 common units outstanding that are convertible to common shares as of March30, 2021. \n(2) \n7501 Boulders View, Suite210, Richmond, Virginia 23225 \nThe following tables set forth the number and percentage owned as of March30, 2021 by each of our present directors, each of our named executive officers, and each of our named executive officers and directors as a group of our shares of common stock. \nShares of common stock issuable pursuant to vested options, warrants or share appreciation rights are deemed to be outstanding for purposes of computing the percentage ownership of the person or group holding such options or warrants but are not deemed to be outstanding for purposes of computing the percentage ownership of any other person. \n(1) \nBased on 7,198,303 shares of common stock outstanding. \n(2) \nBased on 7,198,303 shares of common stock outstanding and 213,531 common units outstanding, that are convertible to common shares as of March30, 2021. \n(3) \nThe address of each beneficial owner is 1051 E. Cary Street, Suite601, James Center Three, Richmond, VA, 23219 \n\nThe following table provides information about our common stock that may be issued upon the exercise of options, warrants and rights under our Plan as of December31, 2020. \n(1) \nOn each January1 during the term of the Plan, the maximum number of shares of common stock that may be issued under the Plan will increase by eight percent (8%) of any additional shares of common stock or interests in the Operating Partnership issued in the preceding calendar year. As of January1, 2021, the shares available for issuance under the plan will adjust to 76,849 shares. \nITEM13. \n### Management Agreement \nWe have entered into a Management Agreement with our Manager pursuant to which it will provide for the day-to-day management of our operations. The Management Agreement requires our Manager to manage our business affairs in conformity with the investment guidelines and other policies as approved and monitored by our board of directors. Our Managers role as Manager is under the supervision and direction of our board of directors. Our Manager does not currently manage or advise any other entities and is not actively seeking new clients in such a capacity, although it is not prohibited from doing so under the Management Agreement. \nManagement Fees,Incentive Fees and Expense Reimbursements \n### Type \nDescription \nAsset Management Fee \nWe pay our Manager a monthly asset management fee equal to 0.125% of our stockholders equity payable in arrears in cash. For purposes of calculating the asset management fee, our stockholders equity means: (a)the sum of (1)the net proceeds from (or equity value assigned to) all issuances of our companys equity and equity equivalent securities (including common stock, common stock equivalents, preferred stock and OP Units issued by our operating partnership) since inception (allocated on a pro rata daily basis for such issuances during the fiscal quarter of any such issuance), plus (2)our companys retained earnings at the end of the most recently completed calendar quarter (without taking into account any non-cash equity compensation expense incurred in current or prior periods), less (b)any amount that our company has paid to repurchase our common stock issued in this or any subsequent offering. Stockholders equity also excludes (1)any unrealized gains and losses and other non-cash items (including depreciation and amortization) that have impacted stockholders equity as reported in our companys financial statements prepared in accordance with GAAP, and (2)one-time events pursuant to changes in GAAP, and certain non-cash items not otherwise described above, in each case after discussions between our Manager and our independent director(s)and approval by a majority of our independent directors. For the years ended December31, 2019 and 2020, we incurred $486,042 and $605,414, in asset management fees, respectively. \n### Property Management Fee \nDodson Properties, an entity in which Mr.Elliott holds a 6.32% interest, wholly owns Shockoe Properties. Shockoe Properties receives an annual property management fee, of up to 3.0% of the monthly gross revenue from any of our properties it manages. The Property Management Fee is paid in arrears on a monthly basis. Shockoe Properties manages our Franklin Square Property and Hanover Square North property, and it may manage additional properties we may acquire. \nAcquisition Fee \nOur Manager receives an acquisition fee, of 2.0% of the purchase price plus transaction costs, for each Investment made on our behalf at the closing of such Investment, in consideration for our Managers assistance in identifying and effectuating the Investment. \nOur Manager has agreed to defer the payment of half of any acquisition fee it earns until the public trading price of our common stock reaches $5.00 per share as reported on the Nasdaq Capital Market. \n### Incentive Fee \nOur Manager is entitled to an incentive fee, payable quarterly, equal to an amount, not less than zero, equal to the difference between (1)the product of (x)20% and (y)the difference between (i)our Adjusted Funds from Operations (AFFO) (as further defined below) for the previous 12-month period, and (ii)the product of (A)the weighted average of the issue price of equity securities issued in our 2018 exempt offering and in future offerings and transactions, multiplied by the weighted average number of all shares of our common stock outstanding on a fully-diluted basis (including any restricted stock units, any restricted shares of common stock and common units) in the previous 12-month period, exclusive of equity securities issued prior to our 2018 exempt offering, and (B)7%, and (2)the sum of any incentive fee paid to our Manager with respect to the first three calendar quarters of such previous 12-month period. \nWe further adjust FFO for certain items that are not added to net income in NAREITs definition of FFO, such as acquisition expenses, equity-based compensation expenses, and any other non-recurring or non-cash expenses, which are costs that do not relate to the operating performance of our properties, and subtract recurring capital expenditures (and, when calculating the incentive fee only, we further adjust FFO to include any realized gains or losses on our real estate investments). The following example illustrates how we would calculate our quarterly incentive fee in accordance with the Management Agreement. Our actual results may differ materially from the following example. \n### Assume the following: \nAFFO for the 12-month period equals $4,000,000; \n3,000,000 shares of common stock are outstanding and the weighted average number of shares of common stock outstanding during the 12-month period is 3,000,000; weighted average issue price per share of common stock is $10.00; and incentive fees paid during the first three quarters of such 12-month period are $300,000. \nUnder these assumptions, the quarterly incentive fee payable to our Manager would be $80,000, as calculated below: \nPursuant to the calculation formula, if AFFO increases and the weighted average share price and weighted average number of shares of common stock outstanding remain constant, the incentive fee will increase. \nOur Manager computes each quarterly installment of the incentive fee within 45 days after the end of the calendar quarter with respect to which such installment is payable and promptly delivers such calculation to our board of directors. The amount of the installment shown in the calculation is due and payable no later than the date which is five business days after the date of delivery of such computation to our board of directors. \nWe have yet to pay our Manager or accrue any incentive fees. \n\nOur board of directors has adopted a written related person transaction policy, for which the audit committee oversees compliance. The purpose of this policy is to describe the procedures used to identify, review and approve any existing or proposed transaction, arrangement, relationship (or series of similar transactions, arrangements or relationships) in which (a)we, our Operating Partnership or any of our subsidiaries were, are or will be a participant, (b)the aggregate amount involved exceeds $120,000, and (c)a related person has or will have a direct or indirect interest. For purposes of this policy, a related person is (i)any person who is, or at any time since the beginning of the current fiscal year was, a director, director nominee, or executive officer of the Company, (ii)any beneficial owner of more than 5% of our stock, or (iii)any immediate family member of any of the foregoing persons. \nUnder this policy, our audit committee is responsible for reviewing and approving or ratifying each related person transaction or proposed related person transaction. In determining whether to approve or ratify a related person transaction, the audit committee is required to consider all relevant facts and circumstances of the related person transaction available to the audit committee and to approve only those related person transactions that are in, or not inconsistent with, the best interests of the Company and its stockholders, as the audit committee determines in good faith. No member of the audit committee is permitted to participate in any consideration of a related person transaction with respect to which that member or any of his or her immediate family is a related person. A copy of our related person transaction policy is available in the Corporate Governance section of our website at [IDX] \n### Related Party Notes \nWe issued a note to our Manager in exchange for cash in the amount of $183,000 on September30, 2019 and issued a second note to our Manager in exchange for cash in the amount of $80,000 on October2, 2019, or $263,000 in the aggregate, to fund a portion of our companys acquisition of the Brookfield Center Property which closed on October3, 2019. We also issued a note to our Manager in exchange for cash in the amount of $589,000 on November29, 2019. The notes were due on demand and beared interest at a rate of 5percent annually. We<|endoftext|>Allow for the transfer or assignment of options, except by will or by the laws of descent and distribution. \nCertain Adjustments. \nIn the event of certain changes in our capitalization, in order to prevent diminution or enlargement of the benefits or potential benefits intended to be made available under the 2000 Plan, the board of directors will adjust the number and class of shares that may be delivered under our 2000 Plan and/or the number, class and price of shares covered by each outstanding award. \nS-8 Registration Statement \n: \nOn October 3, 2018, the Company filed a Form S-8 Registration Statement relating to 3,432,525 shares of the Companys common stock, par value $0.0001 per share issuable to the employees, officers, directors, consultants and advisors of the Company under the Companys 2017 Plan, 2015 Plan, 2011 Plan, and 2000 Plan. \nITEM 12. \nThe following table sets forth information regarding beneficial ownership of our common stock, as of February 28, 2021, by: each person, or group of affiliated persons, known by us to be the beneficial owner of more than 5% of our common stock; each of our directors; \nThe information does not necessarily indicate beneficial ownership for any other purpose. Under these rules, the number of shares of common stock deemed outstanding includes shares issuable upon exercise of stock options or warrants held by the respective person or group that may be exercised or converted within 60 days after February 28, 2021. For purposes of calculating each persons or groups percentage ownership, stock options and warrants exercisable within 60 days after February 2 \n1 are included for that person or group but not for any othe r person or group. \nApplicable percentage ownership is based on 16,912,312 shares of common stock outstanding at February 28,2021. \nUnless otherwise indicated and subject to applicable community property laws, to our knowledge, each stockholder named in the following table possesses sole voting and investment power over the shares listed. Unless otherwise noted below, the address of each person listed on the table is c/o One Stop Systems, Inc., 2235 Enterprise Street, #110, Escondido, CA 92029. \n* \nLess than 1%. \n(1) \nConsists of (i) 81,544 shares of common stock held by Mr.Raun, (ii) 10,000 shares of common stock Mr. Raun has the right to acquire or receive from us within 60 days of February 28, 2021, and (iii) 13,953 shares of common stock that Mr. Raun has the right to exercise within 60 days of February 28, 2021 pursuant to common stock warrants. Mr.Raun is our president and chief executive officer. \n(2) \nConsists of (i) 169,200 shares of common stock held by Mr.Potashner, (ii) 47,857 shares of common stock that Kenco, Inc. has the right to exercise within 60 days of February 28, 2021 (pursuant to common stock warrants, and (iii) 145,000 shares of common stock that Mr.Potashner has the right to acquire or receive from us within 60 days of February 28, 2021 pursuant to the exercise of stock options. Mr.Potashner has sole voting and investment control over Kenco, Inc. Mr.Potashner is the chairman of the board of directors. \n(3) \nConsists of (i) 30,451 shares of common stock held by Mr. Harrison, and (ii) 19,767 shares of common stock that Mr. Harrison has the right to exercise within 60 days of February 28, 2021 pursuant to common stock warrants, and (iii) 10,000 shares of common stock that Mr.Harrison has the right to acquire from us within 60 days of February 28, 2021 pursuant to the exercise of stock options.Mr.Harrison is a member of the board of directors. \n(4) \nConsists of 17,500 shares of common stock held by Ms. Sentovich. Ms. Sentovich is a member of the board of directors. \n(5) \nConsists of 6,164 shares of common stock held by Ms. Lowman.Ms. Lowman is a member of the board of directors. \n(6) \nConsists of 6,924 shares of common stock held by Ms. Messinger. Ms. Messinger is a member of the board of directors. \n(7) \nConsists of 8,664 shares of common stock held by Mr. Matz.Mr. Matz is a member of the board of directors. \n(8) \nConsists of (i) 31,400 shares of common stock held by Mr.Ison, and (ii) 120,355 shares of common stock and (iii) 837 RSUs that Mr. Ison has the right to acquire or receive from us within 60 days of February 28, 2021 pursuant to the exercise of stock options. Mr. Ison is the chief sales and marketing officer of the company. \n(9) \nConsists of (i) 69,611 shares of common stock held by Mr.Morrison.Mr. Morrison is the chief financial officer of the company. \n(10) \nIncludes (i) 421,458 shares beneficially owned by our current named executive officers and directors, (ii) 366,932 shares subject to options, warrants or convertible securities, and (iii) 837 RSUs that are either exercisable or such person has a right to receive within 60 days of February 28, 2021, as set forth in the previous footnotes. \n(11) \n### Consists of \n,675 shares of common stock held by The Cooper Revocable Trust dated April25, 2001 \nMr. \nCooper shares joint voting and investment control of The Cooper Revocable Trust dated \nApril25, 2001 with his wife Lori Cooper. Mr. Cooper served as our chief executive officer and president until February 15, 2020. \n(12) \nConsists of (i) 1,119,312 shares of common stock held by Mr. Reardon, and (ii) 20,000 shares of common stock that Mr. Reardon has the right to acquire from us within 60 days of February 28, 2021 pursuant to the exercise of stock options. Mr. Reardon is a VP of sales of the Company. \n\nThe following table provides information as of December 31, 2020, regarding our equity compensation plans: \nITEM 13. \nWe describe below the transactions and series of similar transactions, since January 1, 2019, to which we were a party or will be a party, in which: the amounts involved exceeded or will exceed $120,000; and any of our directors, executive officers, holders of more than 5% of our capital stock or any member of their immediate family had or will have a direct or indirect material interest, other than equity and other compensation, termination, change in control and other arrangements with directors and executive officers, which are described where required under the section above titled Executive Compensation. \n### Convertible Note and Warrant Financing \nThe Company initially borrowed $1,150,000 from members of the Board of Directors for a two-year period at an interest rate of 9.5% which requires the Company to make monthly principal and interest payments of $52,900 per month. In connection with these loans, the Company issued to these note holders warrants to purchase shares of the Companys common stock equal to 10% of the original principal as a price per share equal to $2.15 per share.Accordingly, the Company issued to these note holders warrants to purchase 53,490 shares of the Companys common stock.The relative fair value of the warrants issued was $46,121. \n\nEffective August1, 2016, we entered into a management services agreement with a company owned by the former chief executive officer of Magma. The agreement calls for payments of $180,000 per year for the first two years paid in monthly installments. In the third year, the amount is reduced to $37,500 for the year paid in monthly installments. Additionally, we granted 30,000 non-statutory stock options in conjunction with execution of this agreement with an exercise price of $1.78 per share. Payments for the year ended December31, 2020 and 2019 were $0 and $21,875, respectively.Such management services agreement has been fully completed. \n\nWe entered into a second amended and restated investors rights agreement in January 2007 with the holders of our preferred stock, including entities with which certain of our directors are affiliated. This agreement provides for certain rights relating to the registration of their shares of common stock issuable upon conversion of their preferred stock, a right of first refusal for certain holders of preferred stock to purchase future securities sold by us and certain additional covenants made by us. Excep t for the registration rights (including the related provisions pursuant to which we have agreed to indemnify the parties to the investors rights agreement), all rights under this agreement terminated upon closing of our initial public offering. The regis tration rights will continue and will terminate two years following the closing of our initial public offering, or for any particular holder with registration rights, at such time when such holder may sell all of such shares pursuant to Rule 144(b)(1) unde r the Securities Act. Our common holders also have certain rights to piggyback onto the registration rights provided to our former holders of preferred stock. See Description of Capital StockRegistration Rights for additional information. \nExecutive Compensation and Employment Arrangements \nPlease see Item 11 Executive Compensation for information on compensation arrangements with our executive officers and agreements with our executive officers containing compensation and termination provisions, among others. \nDirector and Officer Indemnification and Insurance \nWe have entered into indemnification agreements with each of our directors and executive officers, and we maintain directors and officers liability insurance. \nOur certificate of incorporation and our amended and restated bylaws provide that we will indemnify each of our directors and officers to the fullest extent permitted by the Delaware General Corporation Law. Further, we have entered into indemnification agreements with each of our directors and officers, and we have purchased a policy of directors and officers liability insurance that insures our directors and officers against the cost of defense, settlement or payment of a judgment under certain circumstances. For further information, see Executive CompensationLimitations of Liability and Indemnification Matters. \n### Board Committees and Independence \nOur board of directors has established four standing committees audit, compensation, nominating and corporate governance, and risk oversight each of which operates under a charter that has been approved by our board of directors. \nPolicies and Procedures Regarding Related Party Transactions \nOur board of directors has adopted a written related person transaction policy setting forth the policies and procedures for the review and approval or ratification of related-person transactions. This policy covers, with certain exceptions set forth in Item 404 of Regulation S-K under the Securities Act, any transaction, arrangement or relationship, or any series of similar transactions, arrangements or relationships in which we were or are to be a participant, where the amount involved exceeds $120,000 and a related person had or will have a direct or indirect material interest, including, without limitation, purchases of goods or services by or from the related person or entities in which the related person has a material interest, indebtedness, guarantees of indebtedness and employment by us of a related person. \nITEM 14. PRINCIPAL ACCOUNTANT \n### FEES AND SERVICES. \nThe Audit Committee of the Board has selected Haskell & White LLP (H&W) as our independent registered public accounting firm for the fiscal year ended December 31, 2020.H&W has audited our consolidated financial statements for the years ended December 31, 2020 and 2019. \n\nThe aggregate fees for professional services rendered to us by Haskell &White LLP, (H&W), our independent registered public accounting firm which performed our audits for the years ended December 31, 2020 and 2019, and for other services were as follows: \n(1) \nIncludes fees for (i) audits of our consolidated financial statements for the fiscal years ended December 31, 2020 and 2019, and (ii) reviews of our interim period financial statements for fiscal year 2020 and 2019. \n(2) \nIncluded fees related to the initial and subsequent review of our registration statement on Form S-3 in 2019. \n\nThe Audit Committee pre-approves all auditing services and the terms of non-audit services provided by our independent registered public accounting firm, but only to the extent that the non-audit services are not prohibited under applicable law and the committee determines that the non-audit services do not impair the independence of the independent registered public accounting firm. \nIn situations where it is impractical to wait until the next regularly scheduled quarterly meeting, the chairman of the committee has been delegated authority to approve audit and non-audit services to be provided by our independent<|endoftext|>To us if and to the extent any claims by a vendor for services rendered or products sold to us, or a prospective target business with which we have discussed entering into a transaction agreement, reduce the amount of funds in the trust account to below (i)$10.00 per public share or (ii)such lesser amount per public share held in the trust account as of the date of the liquidation of the trust account due to reductions in the value of the trust assets, in each case net of the interest which may be withdrawn to pay taxes. Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, then our sponsor will not be responsible to the extent of any liability for such third party claims. \n\nIn the event that the proceeds in the trust account are reduced below the lesser of (i)$10.00 per public share or (ii)such lesser amount per share held in the trust account as of the date of the liquidation of the trust account due to reductions in the value of the trust assets, in each case net of the interest which may be withdrawn to pay taxes, and our sponsor asserts that it is unable to satisfy its obligations or that it has no indemnification obligations related to a particular claim, our independent directors would determine whether to take legal action against our sponsor to enforce its indemnification obligations. \n\nIf, after we distribute the proceeds in the trust account to our public stockholders, we filea bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, a bankruptcy court may seek to recover such proceeds, and we and our board may be exposed to claims of punitive damages. \nIf, after we distribute the proceeds in the trust account to our public stockholders, we filea bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, any distributions received by stockholders could be viewed under applicable debtor/creditor and/or bankruptcy laws as either a preferential transfer or a fraudulent conveyance. \n\n\n\n\n\n\nTo this end, the proceeds held in the trust account may only be invested in United States government securities within the meaning of Section2(a)(16) of the Investment Company Act having a maturity of 180days or less or in money market funds meeting certain conditions under Rule2a-7 promulgated under the Investment Company Act which invest only in direct U.S. (ii)the redemption of any public shares properly submitted in connection with a stockholder vote to amend our amended and restated certificate of incorporation to modify the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial business combination by September 17, 2021; \n\n\n\nThe pro rata portion of our trust account distributed to our public stockholders upon the redemption of our public shares in the event we do not complete our initial business combination by September 17, 2021 may be considered a liquidating distribution under Delaware law. However, it is our intention to redeem our public shares as soon as reasonably possible following September 17, 2021 in the event we do not complete our business combination and, therefore, we do not intend to comply with the foregoing procedures. \nThere can be no assurances that we will properly assess all claims that may be potentially brought against us. Furthermore, if the pro rata portion of our trust account distributed to our public stockholders upon the redemption of our public shares in the event we do not complete our initial business combination by September 17, 2021 is not considered a liquidating distribution under Delaware law and such redemption distribution is deemed to be unlawful, then pursuant to Section174 of the DGCL, the statute of limitations for claims of creditors could then be six years after the unlawful redemption distribution, instead of three years, as in the case of a liquidating distribution. \n\nIn accordance with NASDAQ corporate governance requirements, we are not required to hold an annual meeting until no later than one year after our first fiscal year end following our listing on NASDAQ (or until December 31, 2020). \nWe have not registered the shares of ClassA common stock issuable upon exercise of the warrants under the Securities Act or any state securities laws at this time, and such registration may not be in place when an investor desires to exercise warrants, thus precluding such investor from being able to exercise its warrants except on a cashless basis and potentially causing such warrants to expire worthless. \nWe have not registered the shares of ClassA common stock issuable upon exercise of the warrants issued in our initial public offering under the Securities Act or any state securities laws at this time. However, under the terms of the warrant agreement, we will use our reasonable best efforts to file, and within 60 business days following our initial business combination to have declared effective, a registration statement under the Securities Act covering such shares and maintain a current report relating to the ClassA common stock issuable upon exercise of the warrants, until the expiration of the warrants in accordance with the provisions of the warrant agreement. There can be no assurances that we will be able to do so if, for example, any facts or events arise which represent a fundamental change in the information set forth in the registration statement or the report, the financial statements contained or incorporated by reference therein are not current or correct or the SEC issues a stop order. If the issuance of the shares upon exercise of the warrants issued in our initial public offering is not so registered or qualified or exempt from registration or qualification, the holder of such warrant shall not be entitled to exercise such warrant and such warrant may have no value and expire worthless. \n\nPursuant to the agreement entered into concurrently with the issuance and sale of the securities in our initial public offering, our initial stockholders and their permitted transferees can demand that we register their founder shares, after those shares convert to our ClassA common stock at the time of our initial business combination. In addition, holders of our private placement warrants and their permitted transferees can demand that we register the private placement warrants and the ClassA common stock issuable upon exercise of the private placement warrants, and holders of warrants that may be issued upon conversion of working capital loans may demand that we register such warrants or the ClassA common stock issuable upon exercise of such warrants. This is because the shareholders of the target business may increase the equity stake they seek in the combined entity or ask for more cash consideration to offset the negative impact on the market price of our ClassA common stock that is expected when the common stock owned by our initial stockholders, holders of our private placement warrants or holders of our working capital loans or their respective permitted transferees are registered. \n\nAlthough we expect to focus our search for a target business in the travel and leisure industry, we may seek to complete a business combination with an operating company in any industry or sector. Although our officers and directors will endeavor to evaluate the risks inherent in a particular target business, there can be no assurances that we will properly ascertain or assess all the significant risk factors or that we will have adequate time to complete due diligence. \nPast performance by our management team and KSL Capital Partners may not be indicative of future performance of an investment in us. \nInformation regarding performance by, or businesses associated with our management team and KSL Capital Partners and its affiliates is presented for informational purposes only. Past performance by our management team and KSL Capital Partners is not a guarantee either (i)of success with respect to any business combination we may consummate or (ii)that we will be able to locate a suitable candidate for our initial business combination. You should not rely on the historical record of our management teams and KSL Capital Partners performance as indicative of our future performance of an investment in us or the returns we will, or are likely to, generate going forward. Furthermore, an investment in us is not an investment in KSL Capital Partners. \n\nAfter discussion with our independent registered public accounting firm following the issuance of the SEC Staff Statement on April 12, 2021, our management and our audit committee concluded that, in light of the SEC Staff Statement, it was appropriate to restate our previously issued and audited financial statements as of and for the years ended December 31, 2020. \nOur management is responsible for establishing and maintaining adequate internal controls over financial reporting designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. \nAs described elsewhere in this Report, we have identified a material weakness in our internal control over financial reporting related to the accounting for a significant and unusual transaction related to the warrants we issued in connection with our initial public offering in September 2019. This material weakness resulted in a material misstatement of our warrant liabilities, change in fair value of warrant liabilities, additional paid-in capital, accumulated deficit and related financial disclosures as of and for the year ended December 31, 2020. \nAs described in Item 9A. Controls and Procedures. \n\n\nFollowing the issuance of the SEC Staff Statement, after consultation with our independent registered public accounting firm, our management and our audit committee concluded that it was appropriate to restate our previously issued audited financial statements as of December 31, 2020 and for the period from May 24, 2019 (inception) through December 31, 2020. \n\n\nAlthough our management will endeavor to evaluate the risks inherent in any particular business combination candidate, there can be no assurances that we will adequately ascertain or assess all the significant risk factors. \n\n\nWe may seek business combination opportunities with an early stage company, a financially unstable business or an entity lacking an established record of revenue or earnings, which could subject us to volatile revenues or earnings or difficulty in retaining key personnel. \n\n\n\n\nOur amended and restated certificate of incorporation authorizes the issuance of up to 100,000,000 shares of ClassA common stock, par value $0.0001 per share, 10,000,000 shares of ClassB common stock, par value $0.0001 per share, and 1,000,000 shares of preferred stock, par value $0.0001 per share. As of December 31, 2020, there were 72,500,000 and 3,125,000 authorized but unissued shares of ClassA common stock and ClassB common stock, respectively, available for issuance, which amount does not take into account the shares of ClassA common stock reserved for issuance upon exercise of any outstanding warrants or the shares of ClassA common stock issuable upon conversion of ClassB common stock. Shares of ClassB common stock are convertible into shares of our ClassA common stock initially at a one-for-one ratio but subject to adjustment as set forth herein, including in certain circumstances in which we issue ClassA common stock or equity-linked securities related to our initial business combination. \nWe may issue a substantial number of additional shares of common or preferred stock to complete our initial business combination (including pursuant to a specified future issuance) or under an employee incentive plan after completion of our initial business combination (although our amended and restated certificate of incorporation provides that we may not issue securities that can vote with common stockholders on matters related to our pre-initial business combination activity). We may also issue shares of ClassA common stock to redeem the warrants or upon conversion of the ClassB common stock at a ratio greater than one-to-one at the time of our initial business combination as a result of the anti-dilution provisions contained in our amended and restated certificate of incorporation. The issuance of additional shares of common or preferred stock may significantly dilute the equity interest of investors in our initial public offering;<|endoftext|>Of increased consumer spending. \n### Comparable Store Sales \nComparable store sales measure performance of a store during the current reporting period against the performance of the same store in the corresponding period of the previous year. Comparable store sales consist of net sales from our stores beginning on the first day of the sixteenth full fiscal month following the stores opening, which is when we believe comparability is achieved. Comparable store sales are impacted by the same factors that impact net sales. \nWe define comparable stores to be stores: that have been remodeled while remaining open; that are closed for five or fewer days in any fiscal month; that are closed temporarily and relocated within their respective trade areas; and that have expanded, but are not significantly different in size, within their current locations. \n### Index \nNon-comparable store sales consist of new store sales and sales for stores not open for a full 15 months. Stores which are closed temporarily, but for more than five days in any fiscal month, are included in non-comparable store sales beginning in the fiscal month in which the temporary closure begins until the first full month of operation once the store re-opens, at which time they are included in comparable store sales. \nOpening new stores is the primary component of our growth strategy and as we continue to execute on our growth strategy, we expect a significant portion of our sales growth will be attributable to non-comparable store sales. Accordingly, comparable store sales are only one measure we use to assess the success of our growth strategy. \n\nGross profit is equal to our net sales less our cost of sales. Gross margin is gross profit as a percentage of our net sales. Gross margin is a measure used by management to indicate whether we are selling merchandise at an appropriate gross profit. \nIn addition, our gross margin is impacted by product mix, as some products generally provide higher gross margins, by our merchandise mix and availability and by our merchandise cost, which can vary. \nOur gross profit is variable in nature and generally follows changes in net sales. We regularly analyze the components of gross profit as well as gross margin. Specifically, our product margin and merchandise mix is reviewed by our merchant team and senior management, ensuring strict adherence to internal margin goals. Our disciplined buying approach has produced consistent gross margins and we believe helps to mitigate adverse impacts on gross profit and results of operation. \nThe components of our cost of sales may not be comparable to the components of cost of sales or similar measures of our competitors and other retailers. As a result, our gross profit and gross margin may not be comparable to similar data made available by our competitors and other retailers. \n\nSG&A are comprised of payroll and benefits for store, field support and support center associates. The components of our SG&A remain relatively consistent per store and for each new store opening. Consolidated SG&A generally increase as we grow our store base and as our net sales increase. A significant portion of our expenses is primarily fixed in nature, and we expect to continue to maintain strict discipline while carefully monitoring SG&A as a percentage of net sales. \nThe components of our SG&A may not be comparable to the components of similar measures of other retailers. We expect that our SG&A will continue to increase in future periods with future growth. \n### Depreciation and Amortization Expenses \nDepreciation and amortization expenses are calculated over the estimated useful lives of the related assets, or in the case of leasehold improvements, the lesser of the useful lives or the remaining term of the lease. Depreciation and amortization are computed on the straight-line method for financial reporting purposes. Depreciation as it relates to our distribution centers is included within cost of sales on the consolidated statements of income. \nIndex \n### Pre-Opening Expenses \n\nOperating Income \nOperating income is gross profit less SG&A, depreciation and amortization and pre-opening expenses. Operating income excludes net interest income or expense and income tax expense. We use operating income as an indicator of the productivity of our business and our ability to manage expenses. \n\nEBITDA and Adjusted EBITDA are key metrics used by management and our Board to assess our financial performance. EBITDA and Adjusted EBITDA are also frequently used by analysts, investors and other interested parties to evaluate companies in our industry. We use Adjusted EBITDA to supplement GAAP measures of performance to evaluate the effectiveness of our business strategies, to make budgeting decisions, to evaluate our performance in connection with compensation decisions and to compare our performance against that of other peer companies using similar measures. Management believes it is useful to investors and analysts to evaluate these non-GAAP measures on the same basis as management uses to evaluate the Companys operating results. We believe that excluding items from operating income, net income and net income per diluted share that may not be indicative of, or are unrelated to, our core operating results, and that may vary in frequency or magnitude, enhances the comparability of our results and provides a better baseline for analyzing trends in our business. \nWe define EBITDA as net income before net interest income or expense, depreciation and amortization expenses and income taxes. Adjusted EBITDA represents EBITDA as further adjusted for non-cash stock-based compensation expense and gains on insurance settlements. EBITDA and Adjusted EBITDA are non-GAAP measures and may not be comparable to similar measures reported by other companies. EBITDA and Adjusted EBITDA have limitations as analytical tools, and you should not consider them in isolation or as a substitute for analysis of our results as reported under GAAP. In the future we may incur expenses or charges such as those added back to calculate Adjusted EBITDA. Our presentation of Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by these items. For further discussion of EBITDA and Adjusted EBITDA and for reconciliations of net income, the most directly comparable GAAP measure, to EBITDA and Adjusted EBITDA, see Results of Operations. \n### Results of Operations \nThis section includes comparisons of certain 2020 financial information to the same information for 2019. Year-to-year comparisons of the 2019 financial information to the same information for fiscal 2018, the 52-week period ended February 2, 2019, are contained in Item 7 of our Form 10-K for 2019 filed with the SEC on March 25, 2020 and available through the SECs website at [IDX] \n### Index \nThe following tables summarize key components of our results of operations for 2020 and 2019, both in dollars and as a percentage of our net sales. \nWe derived the consolidated statements of income for 2020 and 2019 from our consolidated financial statements and related notes. \n(1) \nComponents may not add to totals due to rounding. \n(2) \nAverage net sales per store represents the weighted average of total net weekly sales divided by the number of stores open at the end of each week for the respective periods presented. \n### Index \nThe following table provides a reconciliation of our net income to Adjusted EBITDA for the periods presented: \n(1) \nIncludes depreciation and amortization relating to our distribution centers, which is included within cost of sales on our consolidated statements of income. \n2020 compared to 2019 \n### Net Sales \nNet sales increased to $1.809 billion in 2020 from $1.408 billion in 2019, an increase of $400.6 million, or 28.4%. The increase was the result of a comparable store sales increase of $206.2 million and a non-comparable store sales increase of $194.4 million. The increase in non-comparable store sales was driven by sales from new stores that have not been open for a full 15 months during 2020. \nComparable store sales increased 15.6% in 2020. The performance reflects our ability to effectively respond to changing consumer needs throughout the year, creating a strong alignment between a value-driven merchandise assortment and customer demand. We also benefited from increased consumer spending associated with federal stimulus monies and spending in our stores driven by a shift in spend from COVID-impacted categories, such as travel, dining and experiences, to retail. \nThe increase in comparable store sales in 2020 consisted of significant growth in the average transaction size as numerous shoppers consolidated their store visits and, to a lesser extent, increased transactions. Sales were strong across merchandise categories, with over 80% of our departments achieving comparable store sales growth. On a departmental basis, the increase was driven by strong results in the housewares, health and beauty aids, bed and bath, flooring and food departments, slightly offset by decreases in our candy and luggage departments. \n\nGross profit increased to $723.4 million in 2020 from $555.6 million in 2019, an increase of $167.8 million, or 30.2%. The increase in gross profit was primarily the result of both comparable store and new store sales growth and, to a lesser extent, an increase in gross margin. Our gross margin increased 50 basis points to 40.0% in 2020 from 39.5% in 2019 due to improvement in the merchandise margin and leveraging of supply chain costs. \nIndex \n\nSG&A increased to $418.9 million in 2020 from $356.1 million in 2019, an increase of $62.8 million, or 17.6%. The dollar increase in SG&A was primarily driven by increased selling expenses associated with new stores and higher store payroll and variable selling expenses to support the significant increase in sales as well as increased incentive compensation. As a percentage of net sales, SG&A decreased 210 basis points to 23.2% in 2020 from 25.3% in 2019. The decrease was primarily due to significant leverage in occupancy and other costs from the strong increase in comparable store sales in addition to continued tight expense controls throughout the organization. This leverage was partially offset by certain increased expenses, such as premium pay of $9.7 million, associated with operating through the COVID-19 pandemic. \nIncluded in SG&A in 2020 and 2019 is $0.2 million and $1.0 million, respectively, of income related to gains from insurance settlements. Excluding the gains in both years, SG&A expenses increased 17.4% in 2020 and as a percentage of net sales decreased 220 basis points. \n### Depreciation and Amortization Expense \nDepreciation and amortization expenses increased to $16.7 million in 2020 from $14.6 million in 2019, an increase of $2.1 million, or 14.6%, the result of the i ncreased asset base due to new store growth \n### Pre-Opening Expenses \nPre-opening expenses decreased to $10.3 million in 2020 from $13.1 million in 2019, a decrease of $2.8 million, or 21.5%. The decrease is primarily due to reduced grand opening advertising expenses as we were mindful of crowd size at our store openings in order to maintain compliance with COVID-related social distancing requirements. We opened 46 new stores and closed a net of three stores in 2020 compared with 42 new store openings in 2019. \nInterest Income, Net \nNet interest income was $0.3 million in 2020 and $0.9 million in 2019. \n### Income Tax Expense \nIncome tax expense increased to $35.1 million in 2020 from $31.6 million in 2019, an increase of $3.5 million, or 11.0%. The effective tax rates for 2020 and 2019 were 12.6% and 18.3%, respectively. The decreased effective tax rate in 2020 was primarily the result of an increase in excess tax benefits related to stock-based compensation, largely due to the exercise of stock options, including exercises by the estate of Mark Butler, our former Chairman of the Board, President and Chief Executive Officer. These discrete benefits totaled $34.5 million and $11.2 million in 2020 and 2019, respectively. For further information, see Note 8 under Notes to Consolidated Financial Statements. \nNet Income \nAs a result of the foregoing, net income increased to $242.7 million in 2020 from $141.1 million in 2019, an increase of $101.6 million, or 72.0%. \n### Adjusted EBITDA \nAdjusted EBITDA increased to $306.5 million in 2020 from $196.0 million in 2019, an increase of $110.5 million, or 56.4%. \nIndex \n\nOverview \nOur primary sources of liquidity are<|endoftext|>Underwriting discounts and commissions. On July28, 2020, the underwriters fully exercised their over-allotment option. \n\n### \nThe underwriters were entitled to an underwriting discount of $0.20 per unit, or approximately $8.9million in the aggregate, paid upon the closing of the Initial Public Offering. In addition, $0.35 per unit, or approximately $14.5million in the aggregate will be payable to the underwriters for deferred underwriting commissions. \nForward Purchase Agreement \nIn connection with the consummation of the Offering, the Company entered into a forward purchase agreement with NEXON Co. Ltd. (Nexon), pursuant to which Nexon has subscribed to purchase from us, upon request, up to 25,000,000 forward purchase units (the Forward Purchase Units), consisting of one ClassA ordinary share (the Forward Purchase Shares), and one-half of one warrant to purchase one ClassA ordinary share (the Forward Purchase Warrants), for $10.00 per unit, or an aggregate amount of up to $250,000,000, in a private placement that will close concurrently with the closing of our initial business combination. \n### Risks and Uncertainties \nManagement is continuing to evalute the impact of the \nCOVID-19 pandemic and has concluded that, while it is reasonably possible that the virus could have a negative effect on the Companys financial position, results of its operations and/or close of the Business Combination Agreement, the specific impact is not readily determinable as of the date of these financial statement. \nN \nO \nTE \n7. \nAs of December 31, 2020, the Company had 20,700,000 and 10,280,000 Public Warrants and Private Placement Warrants, respectively, outstanding. \nNo fractional Public Warrants will be issued upon separation of the Units and only whole Public Warrants will trade. The Public Warrants will become exercisable on the later of (a) 30 days after the completion of a Business Combination and (b)one year from the closing of the Initial Public Offering; provided in each case that the Company has an effective registration statement under the Securities Act covering the ClassA ordinary shares issuable upon exercise of the warrants and a current prospectus relating to them is available and such shares are registered, qualified or exempt from registration under the securities, or blue sky, laws of the state of residence of the holder (or the Company permits holders to exercise their warrants on a cashless basis under the circumstances specified in the warrant agreement). The Company has agreed that as soon as practicable, but in no event later than 15 business days after the closing of the initial Business Combination, the Company will use commercially reasonable efforts to file with the SEC and have an effective registration statement covering the ClassA ordinary shares issuable upon exercise of the warrants and to maintain a current prospectus relating to those ClassA ordinary shares until the warrants expire or are redeemed, as specified in the warrant agreement. If a registration statement covering the ClassA ordinary shares issuable upon exercise of the warrants is not effective by the 60 th business day after the closing of the initial Business Combination, warrant holders may, until such time as there is an effective registration statement and during any period when the Company will have failed to maintain an effective registration statement, exercise warrants on a cashless basis in accordance with Section3(a)(9) of the Securities Act or another exemption. Notwithstanding the above, if the ClassA ordinary shares are at the time of any exercise of a warrant not listed on a national securities exchange such that they satisfy the definition of a covered security under Section18(b)(1) of the Securities Act, the Company may, at its option, require holders of public warrants who exercise their warrants to do so on a cashless basis in accordance with Section3(a)(9) of the Securities Act and, in the event the Company so elect, it will not be required to file or maintain in effect a registration statement, and in the event the Company does not so elect, it will use commercially reasonable efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available. \nThe Public Warrants have an exercise price of $11.50 per share, subject to adjustments as described below, and will expire five years after the completion of a Business Combination or earlier upon redemption or liquidation. In addition, if (x)the Company issues additional ClassA ordinary shares or equity-linked securities for capital raising purposes in connection with the closing of the initial Business Combination at an issue price or effective issue price of less than $9.20 per ClassA ordinary share (with such issue price or effective issue price to be determined in good faith by the Companys board of directors and, in the case of any such issuance to the Initial Shareholders or their affiliates, without taking into account any Founder Shares held by the Initial Shareholders or such affiliates, as applicable, prior to such issuance) (the Newly Issued Price), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of the initial Business Combination on the date of the consummation of our initial Business Combination (net of redemptions), and (z)the volume weighted average trading price of our ClassA ordinary shares during the \n10-trading day period starting on the trading day prior to the day on which the Company consummates the initial Business Combination (such price, the Market Value) is below $9.20 per share, then the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value and the Newly Issued Price, the $18.00 per share redemption trigger price will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price (SeeRedemption of warrants when the price per ClassA ordinary share equals or exceeds $18.00 and Redemption of warrants when the price per ClassA ordinary share equals or exceeds $10.00), and the $10.00 per share redemption trigger price will be adjusted (to the nearest cent) to be equal to the higher of the Market Value and the Newly Issued Price (SeeRedemption of warrants when the price per ClassA ordinary share equals or exceeds $10.00). \n\n### \nThe Private Placement Warrants are identical to the Public Warrants underlying the Units sold in the Initial Public Offering, except that the Private Placement Warrants and the ordinary shares issuable upon exercise of the Private Placement Warrants will not be transferable, assignable or salable until 30 days after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Placement Warrants will benon-redeemable(except as set forth below under Redemption of warrants when the price per ClassA ordinary share equals or exceeds $10.00)so long as they are held by the Sponsor, members of the Sponsor or their permitted transferees. If the Private Placement Warrants are held by someone other than the Sponsor or its permitted transferees, the Private Placement Warrants will be redeemable by the Company for cash and exercisable by the holders on the same basis as the Public Warrants. \nRedemption of warrants when the price per ClassA ordinary share equals or exceeds $10.00 \nOnce the warrants become exercisable, the Company may redeem the outstanding warrants for ClassA ordinary shares: in whole and not in part; at $0.10 per warrant upon a minimum of 30 days prior written notice of redemption provided that holders will be able to exercise their warrants on a cashless basis prior to redemption and receive that number of ClassA ordinary shares to be determined by reference to an agreed table based on the redemption date and the fair market value of the ClassA ordinary shares; if, and only if, the last reported sale price (the closing price) of the ClassA ordinary shares equals or exceeds $10.00 per share (as adjusted) for any 20 trading days within the \n30-trading day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders; and if the closing price of the ClassA ordinary shares for any 20 trading days within a \n30-trading day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders is less than $18.00 per share (as adjusted), the Private Placement Warrants must also be concurrently called for redemption on the same terms as the outstanding Public Warrants, as described above. \nThe fair market value of the ClassA ordinary shares shall mean the volume weighted average price of the ClassA ordinary shares during the 10 trading days immediately following the date on which the notice of redemption is sent to the holders of warrants. The Company will provide warrant holders with the final fair market value no later than one business day after the \n10-trading day period described above ends. In no event will the warrants be exercisable in connection with this redemption feature for more than 0.361 ClassA ordinary shares per warrant (subject to adjustment). \nRedemption of warrants when the price per ClassA ordinary share equals or exceeds $18.00 \nOnce the warrants become exercisable, the Company may redeem the outstanding warrants for cash (except as described herein with respect to the Private Placement Warrants): in whole and not in part; upon a minimum of 30 days prior written notice of redemption; and \n\nif, and only if, the closing price of the ClassA ordinary shares equals or exceeds $18.00 per share (as adjusted) for any 20 trading days within a30-tradingday period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders. \nThe Company will not redeem the warrants as described above unless a registration statement under the Securities Act covering the issuance of the ClassA ordinary shares issuable upon exercise of the warrants is then effective and a current prospectus relating to those ClassA ordinary shares is available throughout the \n30-day redemption period. \nIf the Company is unable to complete the initial Business Combination within the combination period and the Company liquidates the funds held in the Trust Account, holders of warrants will not receive any of such funds with respect to their warrants, nor will they receive any distribution from the Companys assets held outside of the Trust Account with the respect to such warrants. \n### NOTE 8. SHAREHOLDERS EQUITY \nClass \nA Ordinary Shares \nThe Company is authorized to issue 200,000,000 ClassA ordinary shares with a par value of $0.0001 per share. As of December31, 2020, there were 41,400,000 ClassA ordinary shares issued and outstanding, including 39,576,710 ClassA ordinary shares subject to possible redemption. \n### Class \nB Ordinary Shares \nThe Company is authorized to issue 20,000,000 ClassB ordinary shares with a par value of $0.0001 per share. As of December31, 2020, there were 10,350,000 ClassB ordinary shares outstanding. \nHolders of record of our ClassA ordinary shares and ClassB ordinary shares are entitled to one vote for each share held on all matters to be voted on by shareholders, except as required by law; provided, that, prior to the Companys initial Business Combination, only holders of ClassB ordinary shares will have the right to vote on the election of directors prior to or in connection with the completion of the initial Business Combination. \nThe ClassB ordinary shares will automatically convert into ClassA ordinary shares at the time of the consummation of the initial Business Combination on aone-for-onebasis,subject to adjustment for sharesub-divisions,share capitalizations, reorganizations, recapitalizations and the like, and subject to further adjustment as provided herein. In the case that additional ClassA ordinary shares or equity-linked securities are issued or deemed issued in connection with the initial Business Combination, the number of ClassA ordinary shares issuable upon conversion of all Founder Shares will equal, in the aggregate, 20% of the total number of ClassA ordinary shares outstanding after such conversion (after giving effect to any redemptions of ClassA ordinary shares by Public Shareholders), including the total number of ClassA ordinary shares issued, or deemed issued or<|endoftext|>### EXPLANATORY NOTE \n1 to the Annual Report on Form 10-K to we, us, the Company or our company are to Dune Acquisition Corporation, unless the context otherwise indicates. \nThis Amendment No. 1 (Amendment No. 1) to the Annual Report on Form 10-K/A amends the Annual Report on Form 10-K of Dune Acquisition Corporation, for the year ended December 31, 2020, as filed with the on March 29, 2021 (the Original Filing). \n\n\n\n\n\n(ASC 815-40). \n1 to include additional risk factors under Item 1A, the Managements Discussion and Analysis of Financial Condition and Results of Operation described in Item 7, and described in Item 8, which such financial data give effect to the change in accounting for the Warrants as disclosed in the Original Filing, and Item 9A, Controls and Procedures. \n\nThis Amendment No. \nThis Amendment No. \nii \n\nor our financial performance. \n\niii \n### PART I \nReferences in this report to we, us or the Company refer to Dune Acquisition Corporation. References to our management or our management team refer to our officers and directors, and references to the Sponsor refer to Dune Acquisition Holdings LLC, a Delaware limited liability company. \nItem 1. Business. \n### Introduction \nWhile we may pursue an initial business combination target in any business or industry or geographic region, we intend to focus on opportunities in the technology sector, particularly companies pursuing a Software as a Service, or SaaS, model. \nOn December 22, 2020, we consummated our initial public offering (the initial public offering) of 17,250,000 units (the units), including the issuance of 2,250,000 units as a result of the underwriters exercise of their over-allotment option in full. Each unit consists of one share of Class A common stock and one-half warrant, with each warrant entitling the holder thereof to purchase one share of Class A common stock for $11.50 per share. The units were sold at a price of $10.00 per unit, generating gross proceeds of $172.5 million. \nSimultaneously with the consummation of the initial public offering, we completed the private sale (the private placement) of an aggregate of 4,850,000 warrants (the private placement warrants) to Dune Acquisition Holdings LLC (the Sponsor) at a purchase price of $1.00 per private placement warrant, generating gross proceeds of $4.85 million. \nPrior to the consummation of the initial public offering, on July 10, 2020, we issued an aggregate of 3,737,500 shares (the founder shares) of our Class B common stock to the Sponsor for an aggregate purchase price of $25,000 in cash. \n/ \n\nA total of $172,500,000, comprised of $169,050,000 of the proceeds from the initial public offering (which amount includes $6,037,500 of the underwriters deferred discount) and $3,450,000 of the proceeds of the sale of the private placement warrants, was placed in a U.S.-based trust account (the trust account) at J.P. \ngovernment securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act of 1940, as amended (the Investment Company Act), with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act which invest only in direct U.S. until the earlier of: (i) the consummation of an initial business combination or (ii) the distribution of the trust account. \nAs of December 31, 2020, there was $172,511,212 in investments and cash held in the trust account, which includes interest income available to us for franchise and income tax obligations of approximately $11,200 and $941,242 of cash held outside the trust account. As of December 31, 2020, we have not withdrawn any amount of interest earned from the trust account to pay taxes. \nBusiness Strategy and Effecting Our Initial Business Combination \n### General \n\n\n\nAlthough we may pursue an acquisition opportunity in any business or industry, we intend to focus on opportunities in the technology sector, particularly companies pursuing a Software as a Service, or SaaS, model. Our amended and restated certificate of incorporation (as amended on December 17, 2020, our amended and restated certificate of incorporation) prohibits us from effectuating a business combination with another blank check company or similar company with nominal operations. \nIf our board of directors is not able to independently determine the fair market value of our initial business combination, we will obtain an opinion from an independent investment banking firm which is a member of the Financial Industry Regulatory Authority (FINRA) or a valuation or appraisal firm with respect to the satisfaction of such criteria. While we consider it unlikely that our board of directors will not be able to make an independent determination of the fair market value of our initial business combination, it may be unable to do so if it is less familiar or experienced with the business of the particular target or if there is a significant amount of uncertainty as to the value of a targets assets or prospects. \n\nIn evaluating a prospective target business, we expect to conduct a due diligence review which may encompass, among other things, meetings with incumbent management and employees, document reviews, interviews of customers and suppliers, inspections of facilities, as well as reviewing financial and other information which will be made available to us. \n\nWe are not prohibited from pursuing an initial business combination with a company that is affiliated with the Sponsor, executive officers or directors, or completing the business combination through a joint venture or other form of shared ownership with the Sponsor, executive officers or directors. In the event we seek to complete an initial business combination with a target that is affiliated with the Sponsor, executive officers or directors, we, or a committee of independent directors, would obtain an opinion from an independent investment banking firm which is a member of FINRA or a valuation or appraisal firm stating that such an initial business combination is fair to our company from a financial point of view. \n\nWe will provide our public stockholders with the opportunity to redeem all or a portion of their shares of Class A common stock upon the completion of our initial business combination at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account calculated as of two business days prior to the consummation of the initial business combination, including interest earned on the funds held in the trust account and not previously released to us to pay our taxes, divided by the number of then outstanding public shares, subject to the limitations and on the conditions described herein. The initial stockholders, Sponsor, officers and directors have entered into a letter agreement with us, pursuant to which they have agreed to waive their redemption rights with respect to any founder shares and public shares they may hold in connection with the completion of our initial business combination. \n\nWe will provide our public stockholders with the opportunity to redeem all or a portion of their public shares upon the completion of our initial business combination either (i)in connection with a stockholder meeting called to approve the initial business combination or (ii)without a stockholder vote by means of a tender offer. Asset acquisitions and share purchases would not typically require stockholder approval while direct mergers with our company where we do not survive and any transactions where we issue more than 20% of our outstanding Class A common stock or seek to amend our amended and restated certificate of incorporation would require stockholder approval. So long as we obtain and maintain a listing for our securities on Nasdaq, we will be required to comply with Nasdaqs stockholder approval rules. \nThe requirement that we provide our public stockholders with the opportunity to redeem their public shares by one of the two methods listed above will be contained in provisions of our amended and restated certificate of incorporation and will apply whether or not we maintain our registration under the Exchange Act or our listing on Nasdaq. \nIf we provide our public stockholders with the opportunity to redeem their public shares in connection with a stockholder meeting, we will (a)conduct the redemptions in conjunction with a proxy solicitation pursuant to Regulation 14A of the Exchange Act, which regulates the solicitation of proxies, and not pursuant to the tender offer rules, and (b) file proxy materials with the U.S. \nOur initial stockholders will count towards this quorum and, the Sponsor, officers and directors have agreed to vote any founder shares they hold and any public shares purchased during or after the initial public offering (including in open market and privately-negotiated transactions) in favor of our initial business combination. In addition, our initial stockholders have agreed to waive their redemption rights with respect to their founder shares and any public shares they may hold in connection with the consummation of the initial business combination. \nIf we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, the Sponsor, initial stockholders, directors, executive officers, advisors or their affiliates may purchase shares or public warrants in privately negotiated transactions or in the open market either prior to or following the completion of our initial business combination. We expect any such purchases will be reported pursuant to Section 13 and Section 16 of the Exchange Act to the extent such purchasers are subject to such reporting requirements. \nThe purpose of any such purchases of public warrants could be to reduce the number of public warrants outstanding or to vote such warrants on any matters submitted to the warrantholders for approval in connection with our business combination. \nIf we conduct redemptions pursuant to the tender offer rules of the SEC, we will, pursuant to our amended and restated certificate of incorporation: (a) conduct the redemptions pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, which regulate issuer tender offers; and (b) file tender offer documents with the SEC prior to completing our initial business combination which contain substantially the same financial and other information about our initial business combination and the redemption rights as is required under Regulation 14A of the Exchange Act, which regulates the solicitation of proxies. \n\nNotwithstanding the foregoing, if we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our amended and restated certificate of incorporation provides that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a group (as defined under Section 13 of the Exchange Act), will be restricted from seeking redemption rights with respect to more than an aggregate of 20% of the shares sold in our initial public offering, which we refer to as the Excess Shares. Absent this provision, a public stockholder holding more than an aggregate of 20% of the shares sold in our initial public offering could threaten to exercise its redemption rights if such holders shares are not purchased by us, the Sponsor or our management at a premium to the then-current market price or on other undesirable terms. \n\nOur amended and restated certificate of incorporation provides that we will have until eighteen (18) months from the closing of our initial public offering, or June 22, 2022, to complete our initial business combination. If we are unable to complete our initial business combination by June 22, 2022, we will: (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account including interest earned on the funds held in the trust account and not previously released to us to pay our taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders rights as stockholders (including<|endoftext|>(after taking into account the $18,375,000 of deferred underwriting commissions being held in the trust account and the estimated expenses of our initial public offering). \n\n\n\n\n\n\n\nWe may structure our initial business combination so that the post-business combination company in which our public stockholders own shares will own less than 100% of the equity interests or assets of a target business, but we will only complete such business combination if the post-business combination company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target business sufficient for us not to be required to register as an investment company under the Investment Company Act. Even if the post-business combination company owns 50% or more of the voting securities of the target, our stockholders prior to our initial business combination may collectively own a minority interest in the post-business combination company, depending on valuations ascribed to the target and us in the business combination. However, as a result of the issuance of a substantial number of new shares of ClassA common stock, our stockholders immediately prior to such transaction could own less than a majority of our outstanding shares of ClassA common stock subsequent to such transaction. \n\n\n\n\nOur amended and restated certificate of incorporation does not provide a specified maximum redemption threshold, except that in no event will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 (so that we do not then become subject to the SECs penny stock rules). As a result, we may be able to complete our initial business combination even though a substantial majority of our public stockholders do not agree with the transaction and have redeemed their shares or, if we seek stockholder approval of our initial business combination and do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, have entered into privately negotiated agreements to sell their shares to our initial stockholders, officers, directors, advisors or their affiliates. In the event the aggregate cash consideration we would be required to pay for all shares of ClassA common stock that are validly submitted for redemptionplusany amount required to satisfy cash conditions pursuant to the terms of the proposed business combination exceed the aggregate amount of cash available to us, we will not complete the business combination or redeem any shares, all shares of ClassA common stock submitted for redemption will be returned to the holders thereof, and we instead may search for an alternate business combination. \n\nFor example, special purpose acquisition companies have amended the definition of business combination, increased redemption thresholds and extended the time to consummate a business combination and, with respect to their warrants, amended their warrant agreements to require the warrants to be exchanged for cash and/or other securities. Amending our amended and restated certificate of incorporation will require the approval of holders of 51% of our common stock, and amending our warrant agreement will require a vote of holders of at least 50% of the public warrants that vote on such amendment and, solely with respect to any amendment to the terms of the private placement SAIL \nSM securities or any provision of the warrant agreement with respect to the private placement SAIL \nSM securities, 50% of the number of the then outstanding private placement SAIL \nSM securities. In addition, our amended and restated certificate of incorporation requires us to provide our public stockholders with the opportunity to redeem their public shares for cash if we propose an amendment to our amended and restated certificate of incorporation to modify the substance or timing of our obligation to redeem 100% of our public shares if we do not complete a business combination within 24months of the closing of our initial public offering (or such later date as approved by holders of a majority of shares of our outstanding common stock that are voted at a meeting to extend such date, voting together as a single class) or with respect to any other material provisions relating to stockholders rights or business combination transaction activity. To the extent any of such amendments would be deemed to fundamentally change the nature of the securities offered, we would register, or seek an exemption from registration for, the affected securities. We may seek to amend our charter or governing instruments or extend the time to consummate a business combination in order to effectuate our business combination. \n\nSome other blank check companies have a provision in their charter which prohibits the amendment of certain of its provisions, including those which relate to a companys pre-business combination activity, without approval by a certainpercentage of the companys stockholders. Our amended and restated certificate of incorporation provides that any of its provisions related to pre-business combination activity (including the requirement to deposit proceeds of our initial public offering and the private placement of warrants into the trust account and not release such amounts except in specified circumstances, and to provide redemption rights to public stockholders as described herein) may be amended if approved by holders of 65% of our common stock entitled to vote thereon and corresponding provisions of the trust agreement governing the release of funds from our trust account may be amended if approved by holders of at least 65% of our common stock entitled to vote thereon. Our initial stockholders and their permitted transferees, if any, who will collectively beneficially own 20% of the voting power of our common stock immediately following the completion of our initial public offering, will participate in any vote to amend our amended and restated certificate of incorporation and/or trust agreement and will have the discretion to vote in any manner they choose. \nOur initial stockholders, executive officers and directors have agreed, pursuant to a written agreement with us, that they will not propose any amendment to our amended and restated certificate of incorporation that would affect the substance or timing of our obligation to allow redemption in connection with our initial business combination or to redeem 100% of our public shares if we do not complete an initial business combination within 24months from the closing of our initial public offering (or such later date as approved by holders of a majority of shares of our outstanding common stock that are voted at a meeting to extend such date, voting together as a single class), unless we provide our public stockholders with the opportunity to redeem their ClassA common stock upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account and not previously released to us to pay our taxes, if any (less up to $100,000 of interest to pay dissolution expenses)divided bythe number of then outstanding public shares. These agreements are contained in letter agreements that we have entered into with our initial stockholders, directors and each member of our management team. Our stockholders are not parties to, or third-party beneficiaries of, these agreements and, as a result, will not have the ability to pursue remedies against our initial stockholders, executive officers or directors for any breach of these agreements. \n\n\n\nUpon closing of our initial public offering, our initial stockholders, with their alignment shares, owns approximately 20% of the voting power of our common stock prior to the completion of an initial business combination. In addition, the alignment shares, all of which are held by our initial stockholders, will entitle the holders to elect all of our directors prior to our initial business combination. Following the completion of our initial business combination, the alignment shares will be entitled to one vote per share. Further, pursuant to a letter agreement with our sponsor, we have agreed not to enter into a definitive agreement regarding an initial business combination without the prior written consent of our sponsor. As a result, we may not be permitted to enter into an initial business combination that our Board believes to be in the stockholders best interests. Further, for so long as any alignment shares remain outstanding, we may not, without the prior or written consent of the holders of a majority of the alignment shares then outstanding, voting separately as a single class, (i)amend, alter or repeal any provision of our amended and restated certificate of incorporation, whether by merger, consolidation or otherwise, if such amendment, alteration or repeal would alter or change the powers, preferences or relative, participating, optional or other or special rights of our ClassB Shares, (ii)change our fiscal year, (iii)increase the number of directors on the Board, (iv)pay any dividends or effect any split on any of our capital stock or make any distributions of cash, securities or any other property, (v)adopt any stockholder rights plan, (vi)acquire any entity or business with assets at a purchase price greater than 10% or more of our total assets measured in accordance with in the United States or the accounting standards then used by us in the preparation of our financial statements, (vii)issue any shares of ClassA common stock in excess of 5% of our ClassA common stock outstanding at the closing of our initial public offering or that would otherwise require a stockholder vote pursuant to the rulesof the stock exchange on which the ClassA shares are then listed, (viii)make a rights offering to all or substantially all holders of any class of our common stock or (ix)issue additional ClassB shares. As a result, the holders of the alignment shares may be able to prevent us from taking such actions that the Board believes is in our interest. \nIf our initial stockholders purchase anysecurities or if our initial stockholders purchase any additional shares of ClassA common stock in the aftermarket or in privately negotiated transactions, this would increase their control. In addition, our board of directors, whose members were elected by our sponsor, is and will be divided into three classes, each of which will generally serve for a terms for threeyears with only one class of directors being elected in each year. \n\nOur warrants be issued in registered form under a warrant agreement between Continental Stock Transfer& Trust Company, as warrant agent, and us. The warrant agreement provides that the terms of the warrants may be amended without the consent of any holder to cure any ambiguity or to correct any defective provision but requires the approval by the holders of at least 50% of the then-outstanding public warrants is required to make any change that adversely affects the interests of the registered holders of public warrants. Accordingly, we may amend the terms of the public warrants in a manner adverse to a holder provided 50% of the holders of the then outstanding public warrants that vote on such amendment approve of such amendment, after at least 10days notice that an amendment is being sought. \n\nWe have the ability to redeem the outstanding public warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01 per warrant,providedthat the closing price of our shares of ClassA 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 warrant as described under the heading Description of SecuritiesWarrantsPublic Stockholders WarrantsAnti-Dilution Adjustments) for any 20 trading days within a 30 trading-day period ending on the third trading day prior to proper notice of such redemption andprovidedthat certain other conditions are met. \nIn addition, we have the ability to redeem the outstanding public warrants at any time after they become exercisable and prior to their expiration, at a price of $0.10 per warrant upon a minimum of 30 days prior written notice of redemption providedthat certain other conditions are met. A ny such redemption may have similar consequences to a cash redemption described above. In addition, such redemption may occur<|endoftext|>One of the appointees shall be independent and shall be an audit committee financial expert. \n\nITEM 2. \n### Properties. \nOur corporate headquarters are comprised of 10,000 square feet of floor space located at 3825 Rockbottom Drive, North Las Vegas, NV 89030. One of our shareholders makes the office space available to us without a lease and we pay no rent. \nITEM 3. \nLegal Proceedings. \nNone. \nITEM 4. \nMine Safety Disclosures. \nNot applicable. \nPART II \nITEM 5. \n\nOur common stock is currently available for trading on the OTC Pink (over-the-counter pink sheets) under the trading symbol QEGY. The following table sets forth the high and low bid prices (USD) for our Common Stock per quarter as reported by the OTC Markets based on our fiscal year end February 28, 2018, 2019, and 2020. \n### Holders \nAs of June 1, 2021, there were 58 holders of record of our common stock. \nDividends \nWe have not declared any cash dividends on our Common Stock since our inception and do not anticipate paying such dividends in the foreseeable future. We plan to retain any future earnings for use in our business. \n\nWe have not adopted an equity compensation plan and no securities have been authorized or reserved for issuance under any equity compensation plan. \n### Description of Securities \nThe following description is a summary of the material terms of the provisions of our Articles of Incorporation and Bylaws. The Articles of Incorporation and Bylaws have been filed with the SEC as exhibits to our registration statement on Form S-1. \nCommon Stock \nWe are authorized to issue 495,000,000 shares of Common Stock with $0.001 par value per share. As of our fiscal year ended February 28, 2021, there were 48,491,485 shares of Common Stock issued and outstanding and 3,688,524 shares reserved for issuance upon the exercise of issued and outstanding options. \nEach share of Common Stock entitles the holder to one vote, either in person or by proxy, at meetings of stockholders. The holders are not permitted to vote their shares cumulatively. Accordingly, the holders of our Common Stock who hold, in the aggregate, more than fifty percent of the total voting rights can elect all of our directors and, in such event, the holders of the remaining minority shares will not be able to elect any of such directors. The vote of the holders of a majority of the issued and outstanding shares of Common Stock entitled to vote thereon is sufficient to authorize, affirm, ratify or consent to such act or action, except as otherwise provided by law. \nHolders of Common Stock are entitled to receive ratably such dividends, if any, as may be declared by the Board of Directors out of funds legally available. Any future disposition of dividends will be at the discretion of our Board of Directors and will depend upon, among other things, our future earnings, operating and financial condition, capital requirements, and other factors. \nHolders of our Common Stock have no preemptive rights or other subscription rights, conversion rights, redemption or sinking fund provisions. Upon our liquidation, dissolution or windup, the holders of our Common Stock will be entitled to share ratably in the net assets legally available for distribution to stockholders after the payment of all of our debts and other liabilities. There are not any provisions in our Articles of Incorporation or our Bylaws that would prevent or delay change in our control. \nOur stock transfer agent is Issuer Direct Corporation, located at 1981 Murray Holladay Road, Suite 100, SLC UT, 84117. \n### Preferred Stock \nWe are authorized to issue 5,000,000 shares of preferred stock, par value $0.001 per share. As of our fiscal year ended February 28, 2021, no shares of preferred stock were issued and outstanding. Our preferred stock is not quoted on any market or system and there is currently no market for our preferred stock. \nPromissory Notes \nIn April 2019, the Company borrowed $12,500 from Jeffrey Mallmes, President, Treasurer, and director of the Company, and $12,500 from Raleigh Kone, Co-Chairman of the Companys board of directors, Executive Vice President, and director of the Company. Each lender also received warrants to purchase 225,000 shares of the Companys common stock. The warrants have an exercise price of $0.25 and expire three years after issuance. The principal and interest due under these notes are outstanding as of the issuance of these financial statements. \nSeparately in April 2019, the Company borrowed $3,325 from Raleigh Kone and John Provacek, which loans are evidenced by demand promissory notes that bear interest at the rate of 6% per annum. \nOn October 22, 2019 and October 23, 2019, the Company borrowed approximately $90,0000 from six of its current stockholders in reliance on the Regulation D and Regulation S exemptions from the securities registration requirement of the Securities Act of 1933, as amended. These loans are evidenced by promissory notes that bear interest at the rate of 8% per annum and are convertible into shares of the Companys common stock, at $0.05 per share. \n### Emerging Growth Company \nWe are an emerging growth company under the JOBS Act. We shall continue to be deemed an emerging growth company until the earliest of: \n1. the last day of our first fiscal year following the fifth anniversary of the Companys S-1 Registration which was declared effective on December 26, 2018; \n2. the last day of our fiscal year during which we had annual gross revenues are $1 billion or more; \n3. the date on which we have, during the previous 3-year period, issued more than $1 billion in non-convertible debt securities; or \n4. the date on which we are deemed to be a large accelerated filer, as defined in section 240.12b-2 of title 46, Code of Federal Regulations, or any successor thereto. \nAs an emerging growth company, we are exempt from Section 404(a) and (b) of Sarbanes Oxley. Section 404(a) requires issuers to publish information in their annual reports concerning the scope and adequacy of the internal control structure and procedures for financial reporting. This statement shall also assess the effectiveness of such internal controls and procedures. Section 404(b) requires that the registered accounting firm shall, in the same report, attest to and report on the assessment and the effectiveness of the internal control structure and procedures for financial reporting. \nAs an emerging growth company, we are also exempt from Section 14A(a) and (b) of the Exchange Act, which require the stockholder approval of executive compensation and golden parachutes. These exemptions are also available to us as a Smaller Reporting Company. \nWe have elected to use the extended transition period for complying with new or revised accounting standards under Section 102(b)(2) of the Jobs Act, that allows us to delay the adoption of new or revised accounting standards that have different effective dates for public and private companies until those standards apply to private companies. \nITEM 6. \n\nITEM 7. \n\n### INTRODUCTION \nThis section provides managements discussion of the financial condition, changes in financial condition and results of operations of Quantum Energy Inc. with specific information on results of operations and liquidity and capital resources. It includes managements interpretation of our financial results, the factors affecting these results, the major factors expected to affect future operating results and future investment and financing plans. This discussion should be read in conjunction with our consolidated financial statements and notes thereto. \nSeveral factors exist that could influence our future financial performance, some of which are described in Item 1A above, Risk Factors. They should be considered in connection with evaluating forward-looking statements contained in this report or otherwise made by or on behalf of us since these factors could cause actual results and conditions to differ materially from those set out in such forward-looking statements. \nCautionary Statement for the Purposes of the Safe Harbor under the Private Securities Litigation Reform Act of 1995 \nThe statements contained in this Annual Report on Form 10-K may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements other than statements of historical fact included in this Report are forward-looking statements made in good faith by us and are intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. When used in this Report, or any other of our documents or oral presentations, the words anticipate, believe, estimate, expect, forecast, goal, intend, objective, plan, projection, seek, strategy or similar words are intended to identify forward-looking statements. Such forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied in the statements relating to our strategy, operations, markets, services, and other factors all of which are difficult to predict and many of which are beyond our control. Accordingly, while we believe these forward-looking statements to be reasonable, there can be no assurance that they will approximate actual experience or that the expectations derived from them will be realized. Further, we undertake no obligation to update or revise any of our forward-looking statements whether as a result of new information, future events or otherwise. \n### Results of Operations \nYear Ended February 28, 2021 Compared to Year Ended February 29, 2020. \nOperating expenses for the year ended February 28, 2021 were $210,929 compared to $234,359 for the year ended February 28, 2020. The decrease in operating expenses was due to the fact that the Company had no cash to operate therefore professional fees and general and administrative expenses decreased by $109,126. Management and consulting fees however did increase by $86,584 for the year ended February 28, 2021. Other expenses for the year ended February 28, 2021 were $6,470 compared to $817,189 for the year ended February 29, 2020. During the year ended February 28, 2021 the Company had $-0- in bad debts, $21,787 gain on derivative for a convertible note payable, incurred $28,257 in interest expense and had $-0- in interest expense warrants, compared to the year ended February 29, 2020 when the Company had $30,000 in bad debts, $138,185 loss on derivative for a convertible note payable, incurred $45,743 in interest expense, $453,261 in interest expense warrants and $150,000 in joint venture write off. \n### Net Loss \nNet loss for the years ended February 28, 2021 and February 29, 2020 was $217,399 and $1,051,548, respectively. The decrease in loss of $834,149 was due to the decrease in operating expenses of $23,430 and the changes to other expenses as mentioned above. \nLiquidity and Capital Resources: \nAs of February 28, 2021, our assets totaled $47 which consisted of cash. The Company's total liabilities were $1,130,129, which consisted of accounts payable and accrued expenses, accounts payable and accrued expenses related parties, common stock payable, convertible note payable, derivative liability, promissory notes payable and promissory notes payable related parties. As of February 28, 2021, the Company had an accumulated deficit of $12,628,254 and working capital deficit of $1,130,082. \nThe Company's significant operating losses raise substantial doubt about its ability to continue as a going concern. We do not have sufficient revenues to pay our operating expenses at this time. Unless the Company is able to raise working capital, it is likely that the Company will either have to cease operations or substantially change its methods of operations or change its business plan. For the next 12 months the Company has an oral commitment from its CEO to advance funds as necessary to meeting our operating requirement. \n### Cash (Used in) Operating Activities \nNet cash used in operating activities for the year ended February 28, 2021 and February 29, 2020 was $-0- and $206,571, respectively. The decrease amount was attributed to interest expense on convertible note warrants, joint venture write off and (gain) loss on derivative. \nCash from \n### Investing Activities \nNet cash used in investing activities was $-0- and $150,000 for the year ended February 28, 2021 and February 29, 2020, respectively. \nCash from Financing Activities \nNet cash provided by financing<|endoftext|>Such expense in our consolidated financial statements on a straight-line basis over the requisite service period. \n### Leases \nIn February 2016, FASB issued ASU-2016-02 (Topic 842) Leases, provides accounting guidance for leases, recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. ASU 2016-02 is effective for annual reporting periods beginning after December 15, 2018. Effective August 1, 2019, the Company implemented ASU 2016-02 under the modified retrospective method. As a result, the Company recognized right of use assets of $54,475 and lease liabilities of $57,064. \n\n\nFinancial Instruments (Topic 326): Measurement of Credit Losses on Financial Instruments \n, which modifies the measurement of expected credit losses of certain financial instruments, including trade receivables, contract assets, and lease receivables. This standard will be effective for the Company beginning August 1, 2020. The Company does not believe that this standard will have a material impact on its consolidated financial statements. \n\n\n\nJuly 31, 2020 and 2019 \n### NOTE 3 GOING CONCERN \nManagement does not expect existing cash as of July 31, 2020 to be sufficient to fund the Companys operations for at least twelve months from the issuance date of these July 31, 2020 financial statements. These financial statements have been prepared on a going concern basis which assumes the Company will continue to realize its assets and discharge its liabilities in the normal course of business. As of July 31, 2020, the Company has incurred losses totaling $13,221,838 since inception, has not yet generated material revenue from operations, and will require additional funds to maintain its operations. These factors raise substantial doubt regarding the Companys ability to continue as a going concern within one year after the consolidated financial statements are issued. The Companys ability to continue as a going concern is dependent upon its ability to generate future profitable operations and obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they become due. The Company intends to finance operating costs over the next twelve months through its existing financial resources and we may also raise additional capital through equity offerings, debt financings, collaborations and/or licensing arrangements. If adequate funds are not available on acceptable terms, we may be required to delay, reduce the scope of, or curtail, our operations. The accompanying consolidated financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. \nNOTE 4 DISCONTINUED OPERATIONS \nOn November 6, 2019, the Company discontinued its operations of subsidiary Global3pl, Inc., formerly known as KRG Logistics, Inc., (an Ontario corporation) and sold the assets of $54,296 for $10 dollars. The transactions resulted in a loss of $430,329 as reported on the income statement as of July 31, 2020. As such, the assets of KRG Logistics, Inc. were removed from the accounts, and all remaining liabilities were classified as Discontinued Operations in the accompanying Balance Sheets. As of July 31, 2020, and July 31, 2019, the summaries of liabilities pertaining to discontinued operations were as follows: \n\n\n\nJuly 31, 2020 and 2019 \n### NOTE 5 PROMISSORY NOTES \nPromissory notes payable as of July 31, 2020 and 2019 consisted of the following: \nInterest expense for the year ended July 31, 2020 and 2019 was $17,350 and $18,644, respectively. \n\n\n\nJuly 31, 2020 and 2019 \n### NOTE 6 - CONVERTIBLE DEBT \nConvertible debt as of July 31, 2020 and July 31, 2019 consisted of the following: \n\n\n\nJuly 31, 2020 and 2019 \nThe Company recognized $0 of debt discount accretion expense on the above notes. Interest expense related to these notes for the year ended July 31, 2020 and 2019 was $384,649 and $163,668. \n### Derivative liabilities \nCertain of the Companys convertible notes are convertible into a variable number of shares of common stock for which there is not a floor to the number of common stock shares the Company might be required to issue. Based on the requirements of ASC 815 Derivatives and Hedging, the conversion feature represented an embedded derivative that is required to be bifurcated and accounted for as a separate derivative liability. The derivative liability is originally recorded at its estimated fair value and is required to be revalued at each conversion event and reporting period. Changes in the derivative liability fair value are reported in operating results each reporting period. The Company uses the Black-Scholes option pricing model for the valuation of its derivative liabilities as further discussed below. There are no material differences between using the Black-Scholes option pricing model for these estimates as compared to the Binomial Lattice model. \nFor the two notes with a variable-rate conversion feature issued during the year ended July 31, 2020, the Company valued the conversion features on the date of issuance resulting in initial liabilities totaling $167,804. Since the fair value of the derivative was in excess of the proceeds received, a full discount to the convertible notes payable and a day one loss on derivative liabilities of $84,629 was recorded during the year ended July 31, 2020. The Company valued the conversion feature using the Black-Scholes option pricing model with the following assumptions: conversion prices ranging from $0.0275 to $0.0325, the closing stock price of the Company's common stock on the dates of valuation ranging from $0.050 to $0.059, an expected dividend yield of 0%, expected volatilities ranging from 254%-277%, risk-free interest rate ranging from 0.19% to 0.97%, and expected terms ranging from 0.75 to one year. \nOn July 31, 2020, the derivative liabilities on these two convertible notes were revalued at $205,796 resulting in a loss of $37,992 for the year ended July 31, 2020 related to the change in fair value of the derivative liabilities. The derivative liabilities were revalued using the Black-Scholes option pricing model with the following assumptions: conversion prices ranging from $0.0088 to $0.0110, the closing stock price of the Company's common stock on the date of valuation of $0.023, an expected dividend yield of 0%, expected volatility of 230, risk-free interest rate of 0.11%, and an expected term ranging from 0.33 to 0.71 years. \nThe Company amortizes the discounts over the term of the convertible promissory notes using the straight-line method which is similar to the effective interest method. During the year ended July 31, 2020, the Company amortized $52,414 to interest expense. As of September 30, 2020, discounts of $57,586 remained for which will be amortized through September 2021. \n### NOTE 7 - LINEOFCREDIT (Discontinued) \nThe Company has a line of credit with a maximum borrowing limit of $400,000, bearing an interest rate of prime plus 3.25% per annum and secured by a General Security Agreement. As of July 31, 2020, and July 31, 2019, $0 and $258,708 were drawn on the line of credit, respectively. Interest expense for the year ended July 31, 2020, and 2019 was $0 and $13,554 respectively. Beginning February 1, 2019, the Company is required to maintain a cash collateral account in the amount of $200,000 in Canadian dollars. The Company has invested in a Guaranteed Investment Certificate for a one-year term at an interest rate of .25%. \n\n\n\nJuly 31, 2020 and 2019 \n### NOTE 8 RELATED PARTY TRANSACTIONS \nA shareholder of the Company has paid certain expenses of the Company. These amounts are reflected as a loan payable to related party. The shareholder advanced $45,269 and $35,777 during the year ended July 31, 2020 and 2019, respectively. As of July 31, 2020, and 2019, there were $388,094 and $365,945 due to related parties, and a shareholder, respectively. \nThe Company has consulting agreements with two of its shareholders to provide management and financial services that commenced on December 1, 2017. For the year ended July 31, 2020 and 2019 consulting fees paid were $130,447 and $169,719 respectively. The consulting fees are included as part of professional fees on the Companys consolidated statements of operations. \nThe Company on February 20, 2018 entered into a related party (that being Recommerce Group, Inc. and our former President and current Vice-President of Corporate Finance and a Director, is a principal in Recommerce Group, Inc.) note receivable in the amount of $1,034,000. The Company made an additional advance in the amount of $175,000 that is non-interest bearing. The note is payable and due on demand and bears interest at the rate of 10%. A total of $153,217 has been applied as payments against this Note. Interest income in the amount of $87,037 and $64,695 for the year ended July 31, 2020 and 2019, respectively, has been recorded in the financial statements \n### NOTE 9 STOCKHOLDERS DEFICIT \nThe Company is authorized to issue 500,000,000 shares of its $0.001 par value common stock and 10,000,000 shares of Preferred stock. As of July 31, 2020, and July 31, 2019, there were 100,599,277 and 93,118,077 shares, respectively of common stock outstanding. There were 10,000,000 shares of Series D Preferred stock outstanding as of July 31, 2020, and 8,000,000 shares of Series D Preferred Stock outstanding as of July 31, 2019. \nOn November 1, 2017, we effected a one-for-four reverse stock split. All share and per share information has been retroactively adjusted to reflect the stock split. \nOn November 7, 2017, the Company designated 1,000,000 shares of Preferred Stock as Series C Preferred stock, par value $0.001 per share (the Series C Preferred Stock). Each share of Series C Preferred Stock is convertible into 72.5 common shares and has voting rights based on this ratio. As of January 31, 2018, there were 1,000,000 shares of \nPreferred C shares issued and outstanding. On May 15, 2019, the 1,000,000 shares were converted to 72,500,000 shares of common stock. \nOn April 29, 2019, the Company designated 10,000,000 shares of Preferred Stock as Series D Preferred stock, par value $0.001 per share (the Series D Preferred Stock). Each share of Series D Preferred Stock is convertible into 72.5 common shares and has voting rights based on this ratio. There were 10,000,000 shares of Series D Preferred stock outstanding as of July 31, 2020 and 8,000,000 shares of Series D Preferred Stock outstanding as of July 31, 2019. \n\n\n\n\nJuly 31, 2020 and 2019 \n### NOTE 10 WARRANT \nOn April 15, 2020, the Company issued a five-year Common Stock Purchase Warrant in connection with a $31,500 convertible promissory note. The warrant is convertible into 437,500 shares of the Companys common stock at $.12 per share. \nOn April 23, 2020, the Company issued a three-year Common Stock Purchase Warrant in connection with a $75,000 investment in the Companys common stock. The warrant has a conversion price of $.15 per share of the Companys common stock and expires in three years from issuance \n### NOTE 11 INCOME TAXES \nThe Company is subject to United States federal and state income taxes at an approximate rate of 21%. The reconciliation of the provision for income taxes at the United States federal statutory rate compared to the Companys income tax expense as reported is as follows: \nThe significant components of deferred income tax assets and liabilities at July 31, 2020 and 2019 are as follows: \n### NOTE 12 COMMITMENTS AND CONTINGENCIES \nLitigations, Claims and Assessments \nThe Company may become involved in various lawsuits and legal proceedings, which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise that may harm its business. The Company is currently not aware of any such legal proceedings or claims that they believe will have, individually or in the aggregate, a material adverse effect on its business, financial condition or operating results. \n### Operating Leases \nThe Company in February 2019 assumed a lease agreement for a facility site and entered into a lease agreement for office space. The facility site lease has a term of twenty-three months expiring on December 31, 2020 and the office space lease has a five-year term and begins April 1, 2019 and ends March 31, 2024. \nThe transaction<|endoftext|>We effected a stock dividend for 0.1 shares for each share of Class B common stock outstanding, resulting in our sponsor holding an aggregate of 6,325,000 founder shares. \nOur sponsor purchased an aggregate of 4,666,667 private placement warrants for a purchase price of $1.50 per warrant in a private placement that occurred simultaneously with the closing of our initial public offering. As such, our sponsors interest in this transaction is valued at $7,000,000. \nCommencing on December 2, 2020, we agreed to pay Live Oak Merchant Partners, an affiliate of our sponsor, a total of $15,000 per month for office space, utilities and secretarial and administrative support. \nNo compensation of any kind, including any finders fee, reimbursement, consulting fee or monies in respect of any payment of a loan, will be paid by us to our sponsor, officers and directors, or any affiliate of our sponsor or officers, prior to, or in connection with any services rendered in order to effectuate, the consummation of an initial business combination (regardless of the type of transaction that it is). \nOur anchor investor purchased an aggregate of $16,500,000 of units sold in our initial public offering. In the event that such anchor votes its shares in favor of our initial business combination, it is possible that no votes from other public stockholders would be required to approve our initial business combination, depending on the number of shares that are present at the meeting to approve such transaction. As a result of the founder shares and private placement warrants that our anchor investor may hold (directly or indirectly), it may have different interests with respect to a vote on an initial business combination than other public stockholders. \nOur anchor investor will have the same rights to the funds held in the trust account with respect to the common stock underlying the units it may purchase in our initial public offering as the rights afforded to our public stockholders. \nPrior to the closing of our initial public offering, our sponsor agreed to loan us up to an aggregate of $300,000 to be used for a portion of the expenses of our initial public offering. As of December 7, 2020 (the date on which our initial public offering closed), we had borrowed $240,000 under such promissory note. These loans were non-interest bearing, unsecured and were due at the earlier of March 31, 2021 or the closing of our initial public offering. The loan was repaid upon the closing of our initial public offering out of the $750,000 of offering proceeds that was allocated to the payment of offering expenses (other than underwriting commissions) not held in the trust account. The value of our sponsors interest in this transaction corresponds to the principal amount outstanding under any such loan. \n\nAfter our initial business combination, members of our management team who remain with us may be paid consulting, management or other fees from the combined company with any and all amounts being fully disclosed to our stockholders, to the extent then known, in the proxy solicitation materials or tender offer documents, as applicable, furnished to our stockholders. It is unlikely the amount of such compensation will be known at the time of distribution of such proxy solicitation materials or tender offer documents, as applicable, as it will be up to the directors of the post-combination business to determine executive and director compensation. \nWe have entered into a registration rights agreement with respect to the private placement warrants, the warrants issuable upon conversion of working capital loans (if any) and the shares of Class A common stock issuable upon exercise of the foregoing and upon conversion of the founder shares. \n\nOur audit committee shall review and, if appropriate, approve or ratify any related person transactions and other significant conflicts of interest. (ii) the amount of which exceeds (or is reasonably expected to exceed) $120,000 in the aggregate over the duration of the transaction (without regard to profit or loss); Related parties under this policy will include: (i) our directors, nominees for director or executive officers; Pursuant to the policy, the audit committee will consider (i) the relevant facts and circumstances of each related party transaction, including if the transaction is on terms comparable to those that could be obtained in arms-length dealings with an unrelated third party, (ii) the extent of the related partys interest in the transaction, (iii) whether the transaction contravenes our code of ethics or other policies, (iv) whether the audit committee believes the relationship underlying the transaction to be in the best interests of the company and its stockholders and (v) the effect that the transaction may have on a directors status as an independent member of the board and on his or her eligibility to serve on the boards committees. \nDirector Independence \nAmboian, Braham, and Furer are independent directors as defined in the NYSE listing standards and applicable SEC rules. \n### Item 14. \n\nWe were formed in August 2020, and therefore did not incur any such fees in 2019. \n### Audit Fees \n\nAudit-Related Fees. \n\n### Tax Fees \nTax fees consist of fees billed for tax planning services and tax advice for the period from August 12, 2020 (inception) through December 31, 2020. \nAll Other Fees \nWe did not pay Withum for other services for the period from August 12, 2020 (inception) through December 31, 2020. \n### Pre-Approval Policy \n\nPART IV \nITEM 15. \n(a) \n\n(1) \nFinancial Statements \n(2) \n\nAll financial statements schedules are omitted because they are not applicable or the amounts are immaterial and not required, or the required information is presented in the financial statements and notes thereto beginning on page F-1 of this annual report. \n(3) \n### Exhibits \nWe hereby file as part of this annual report the exhibits listed in the attached Exhibit Index. Copies of such material can be obtained on the SEC website at www.sec.gov. \nItem 16. Form 10-K Summary \nNot applicable. \nEXHIBIT INDEX \n* \nIncorporated by reference to the Original Filing, filed with the SEC on March 25, 2021. \nLIVE OAK ACQUISITION CORP. II \n\n\n\nLive Oak Acquisition Corp. II \n\nWe have audited the accompanying balance sheet of Live Oak Acquisition Corp. II. (the Company) as of December 31, 2020, the related statements of operations, changes in stockholders equity and cash flows for the period from August 12, 2020 (inception) through December 31, 2020, and the related notes (collectively referred to as the financial statements). \n\n\nBasis for Opinion \n\n\n\n/s/ WithumSmith+Brown, PC \n\n### New York, New York \nMay 24, 2021 \nLIVE OAK ACQUISITION CORP. II \nBALANCE SHEET \n### DECEMBER 31, 2020 \n(As Restated) \n\nLIVE OAK ACQUISITION II \nSTATEMENT OF OPERATIONS \n\n(As Restated) \n\nLIVE OAK ACQUISITION II \n\n\n(As Restated) \n\nLIVE OAK ACQUISITION II \nSTATEMENT OF CASH FLOWS \nFOR THE PERIOD FROM AUGUST 12, 2020 (INCEPTION) THROUGH DECEMBER 31, 2020 \n(As Restated) \n\nLIVE OAK ACQUISITION II \n\n\nLive Oak Acquisition Corp. II (the Company) was incorporated in Delaware on August 12, 2020. \n\nAll activity for the period from August 12, 2020 (inception) through December 31, 2020 relates to the Companys formation and the initial public offering (Initial Public Offering), which is described below. \nThe registration statement for the Companys Initial Public Offering was declared effective on December 2, 2020. On December 7, 2020 the Company consummated the Initial Public Offering of 25,300,000 units (the Units and, with respect to the Class A common stock included in the Units sold, the Public Shares), which included the full exercise by the underwriter of its over-allotment option in the amount of 3,300,000 Units, at $10.00 per Unit, generating gross proceeds of $253,000,000 which is described in Note 4. \nSimultaneously with the closing of the Initial Public Offering, the Company consummated the sale of 4,666,667 warrants (each, a Private Placement Warrant and collectively, the Private Placement Warrants) at a price of $1.50 per Private Placement Warrant in a private placement to Live Oak Sponsor Partners II, LLC (the Sponsor), generating gross proceeds of $7,000,000, which is described in Note 5. \nTransaction costs amounted to $13,064,337, consisting of $4,610,000 in cash underwriting fees, $8,067,500 of deferred underwriting fees and $386,837 of other offering costs. \nFollowing the closing of the Initial Public Offering on December 7, 2020, an amount of $253,000,000 ($10.00 per Unit) from the net proceeds of the sale of the Units in the Initial Public Offering and the sale of the Private Placement Warrants was placed in a trust account (the Trust Account), located in the United States and was invested only in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act of 1940, as amended (the Investment Company Act), with a maturity of 185 days or less or in any open-ended investment company that holds itself out as a money market fund selected by the Company meeting certain conditions of Rule 2a-7 of the Investment Company Act, as determined by the Company, until the earlier of: (i) the completion of a Business Combination and (ii) the distribution of the funds held in the Trust Account, as described below. \nThe Company must complete one or more initial Business Combinations with one or more operating businesses or assets with a fair market value equal to at least 80% of the net assets held in the Trust Account (net of amounts disbursed for working capital purposes, if permitted, and excluding deferred underwriting commissions). \n\n\nNotwithstanding the foregoing, if the Company seeks stockholder approval of a Business Combination and it does not conduct redemptions pursuant to the tender offer rules, the Certificate of Incorporation will provide that a Public Stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a group (as defined under Section13 of the Securities Exchange Act of 1934, as amended (the Exchange Act)), will be restricted from redeeming its shares with respect to more than an aggregate of 15% of the Public Shares, without the prior consent of the Company. \nThe Sponsor has agreed (a)to waive its redemption rights with respect to the Founder Shares and Public Shares held by it in connection with the completion of a Business Combination and (b)not to propose an amendment to the Certificate of Incorporation (i)to modify the substance or timing of the Companys obligation to allow redemptions in connection with a Business Combination or to redeem 100% of its Public Shares if the Company does not complete a Business Combination within the Combination Period (as defined below) or (ii)with respect to any other provision relating to stockholders rights or pre-business combination activity, unless the Company provides the Public Stockholders with the opportunity to redeem their Public Shares in conjunction with any such amendment. \nIf the Company has not completed a Business Combination by December 7, 2022 (the Combination Period), the Company will (i)cease all operations except for the purpose of winding up, (ii)as promptly as reasonably possible but not more than ten business days thereafter, redeem the Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account and not previously released to pay taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding Public Shares, which redemption will completely extinguish Public Stockholders rights as stockholders (including the right to receive further liquidating distributions, if any), and (iii)as promptly as reasonably possible following such redemption, subject to the approval of the Companys remaining stockholders and the Companys board of directors, dissolve and liquidate, subject in each case to the Companys obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. \n\n\n### NOTE 2. \n\n\n\nBased on managements evaluation, the Companys audit committee, in consultation with management, concluded that the Companys Private Placement Warrants are not indexed to the Companys common stock in the manner contemplated by ASC Section815-40-15 because the holder of the instrument is not an input into the pricing of a fixed-for-fixed option on<|endoftext|>"},"task":{"kind":"string","value":"{\"file\": \"/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz\"}"}}},{"rowIdx":91,"cells":{"text":{"kind":"string","value":"<|endoftext|>Strong and Stable Financial Position with Flexibility. \nWith funds in the trust account of $57.5 million as of March 31, 2021 available to use for a business combination, we offer a target business a variety of options such as providing the owners of a target business with shares in a public company and a public means to sell such shares, providing capital for the potential growth and expansion of its operations or strengthening its balance sheet by reducing its debt ratio. Because we are able to consummate our initial business combination using our cash, debt or equity securities, or a combination of the foregoing, we have the flexibility to use the most efficient combination that will allow us to tailor the consideration to be paid to the target business to fit its needs and desires. However, since we have no specific business combination under consideration, we have not taken any steps to secure third party financing and there can be no assurance that it will be available to us. \n\nGeneral \nWe are not presently engaged in any substantive commercial business. We intend to utilize cash derived from the proceeds of our initial public offering and the private placement of private warrants, our capital stock, debt or a combination of these in effecting a business combination which has not yet been identified. Accordingly, investors in our initial public offering invested without first having an opportunity to evaluate the specific merits or risks of any one or more business combinations. A business combination may involve the acquisition of, or merger with, a company which does not need substantial additional capital, but which desires to establish a public trading market for its shares. While we may seek to effect simultaneous business combinations with more than one target business, we will likely have the ability, as a result of our limited resources, to effect only a single business combination. \n\nWhile we have not yet selected a target business with which to consummate our initial business combination, we believe based on our managements business knowledge and past experience that there are numerous potential candidates. We expect that our principal means of identifying potential target businesses will be through the extensive contacts and relationships of our sponsor, initial stockholders, officers and directors. While our officers and directors are not required to commit any specific amount of time in identifying or performing due diligence on potential target businesses, our officers and directors believe that the relationships they have developed over their careers will generate a number of potential business combination opportunities that will warrant further investigation. We also anticipate that target business candidates will be brought to our attention from various unaffiliated sources, including investment bankers, venture capital funds, private equity funds, leveraged buyout funds, management buyout funds and other members of the financial community. These sources may also introduce us to target businesses they think we may be interested in on an unsolicited basis. \nOur officers and directors must present to us all target business opportunities that have a fair market value of at least 80% of the assets held in the trust account at the time of the agreement to enter into the initial business combination, subject to any fiduciary or contractual obligations. While we do not presently anticipate engaging the services of professional firms or other individuals that specialize in business acquisitions on any formal basis (other than EarlyBirdCapital as described elsewhere in this report), we may engage these firms or other individuals in the future, in which event we may pay a finders fee, consulting fee or other compensation to be determined in an arms length negotiation based on the terms of the transaction. In no event, however, will our sponsor, initial stockholders, officers, directors or their respective affiliates be paid any compensation prior to, or for any services they render in order to effectuate, the consummation of an initial business combination (regardless of the type of transaction that it is) other than the $10,000 per month administrative fee, the payment of consulting, success or finder fees in connection with the consummation of our initial business combination, the repayment of loans and reimbursement of any out-of-pocket expenses. Our audit committee will review and approve all reimbursements and payments made to our sponsor, officers, directors or our or their respective affiliates, with any interested director abstaining from such review and approval. \nWe have no present intention to enter into a business combination with a target business that is affiliated with any of our officers, directors or sponsor. However, we are not restricted from entering into any such transactions and may do so if (i) such transaction is approved by a majority of our disinterested independent directors and (ii) we obtain an opinion from an independent investment banking firm, or another independent entity that commonly renders valuation opinions, that the business combination is fair to our unaffiliated stockholders from a financial point of view. \n\nSubject to our management teams fiduciary obligations and the limitations that a target business have a fair market value of at least 80% of the balance in the trust account at the time of the execution of a definitive agreement for our initial business combination, as described below in more detail, and that we must acquire a controlling interest in the target business, our management will have virtually unrestricted flexibility in identifying and selecting a prospective target business. In evaluating a prospective target business, our management may consider a variety of factors, including one or more of the following: financial condition and results of operation; growth potential; capital requirements; competitive position; barriers to entry; proprietary aspects of products and the extent of intellectual property or other protection for products or formulas; \nAny evaluation relating to the merits of a particular business combination will be based, to the extent relevant, on the above factors as well as other considerations deemed relevant by our management in effecting a business combination consistent with our business objective. In evaluating a prospective target business, we will conduct an extensive due diligence review which will encompass, among other things, meetings with incumbent management and inspection of facilities, as well as review of financial and other information which is made available to us. This due diligence review will be conducted either by our management or by unaffiliated third parties we may engage, although we have no current intention to engage any such third parties. \nThe time and costs required to select and evaluate a target business and to structure and complete the business combination cannot presently be ascertained with any degree of certainty. Any costs incurred with respect to the identification and evaluation of a prospective target business with which a business combination is not ultimately completed will result in a loss to us and reduce the amount of capital available to otherwise complete a business combination. \n\nNasdaq listing rules require that the target business or businesses that we acquire must collectively have a fair market value equal to at least 80% of the balance of the funds in the trust account at the time of the execution of a definitive agreement for our initial business combination. Notwithstanding the foregoing, if we are not then listed on Nasdaq for whatever reason, we would no longer be required to meet the foregoing 80% fair market value test. \n\n\n\nWe may seek to effect a business combination with more than one target business, although we expect to complete our business combination with just one business. Therefore, at least initially, the prospects for our success may be entirely dependent upon the future performance of a single business operation. \n\n\nAdditionally, we cannot assure you that our officers and directors will have significant experience or knowledge relating to the operations of the particular target business. \n\nStockholders May Not Have the Ability to Approve an Initial Business Combination \nIn connection with any proposed business combination, we will either (1) seek stockholder approval of our initial business combination at a meeting called for such purpose at which stockholders may seek to convert their shares, regardless of whether they vote for or against the proposed business combination or dont vote at all, into their pro rata share of the aggregate amount then on deposit in the trust account (net of taxes payable), or (2) provide our stockholders with the opportunity to sell their shares to us by means of a tender offer (and thereby avoid the need for a stockholder vote) for an amount equal to their pro rata share of the aggregate amount then on deposit in the trust account (net of taxes payable), in each case subject to the limitations described herein. If we determine to engage in a tender offer, such tender offer will be structured so that each stockholder may tender all of his, her or its shares rather than some pro rata portion of his, her or its shares. Whether we seek stockholder approval or engage in a tender offer, we will consummate our initial business combination only if we have net tangible assets of at least $5,000,001 either immediately prior to or upon consummation of such business combination and, if we seek stockholder approval, a majority of the outstanding shares of common stock voted are voted in favor of the business combination. We have no specified maximum percentage threshold for conversions in our amended and restated certificate of incorporation and even those public stockholders who vote in favor of our initial business combination have the right to convert their public shares. As a result, this may make it easier for us to consummate our initial business combination. \nWe chose our net tangible asset threshold of $5,000,001 to ensure that we would avoid being subject to Rule 419 promulgated under the Securities Act of 1933, as amended. However, if we seek to consummate an initial business combination with a target business that imposes any type of working capital closing condition or requires us to have a minimum amount of funds available from the trust account upon consummation of such initial business combination, we may need to have more than $5,000,001 in net tangible assets either immediately prior to or upon consummation and this may force us to seek third party financing which may not be available on terms acceptable to us or at all. Public stockholders may therefore have to wait 21 months from the closing of our initial public offering in order to be able to receive a pro rata share of the trust account. \nOur sponsor, initial stockholders, officers and directors have agreed (1) to vote any shares of common stock owned by them in favor of any proposed business combination, (2) not to convert any shares of common stock in connection with a stockholder vote to approve a proposed initial business combination and (3) not sell any shares of common stock in any tender in connection with a proposed initial business combination. \nIf we hold a meeting to approve a proposed business combination and a significant number of stockholders vote, or indicate an intention to vote, against such proposed business combination or that they wish to convert their shares, our officers, directors, sponsor, initial stockholders or their affiliates could make such purchases in the open market or in private transactions in order to influence the vote and reduce the number of conversions. Notwithstanding the foregoing, our officers, directors, sponsor, initial stockholders and their affiliates will not make purchases of shares of common stock if the purchases would violate Section 9(a)(2) or Rule 10b-5 of the Exchange Act, which are rules designed to stop potential manipulation of a companys stock. \n### Conversion Rights \n\nOur sponsor, initial stockholders and our officers and directors will not have conversion rights with respect to any shares of common stock owned by them, directly or indirectly, whether acquired prior to our initial public offering or purchased by them in our initial public offering or in the aftermarket. \nWe may require public stockholders, whether they are a record holder or hold their shares in street name,<|endoftext|>The purchaser and receive the purchasers written agreement to the transaction. The transaction costs associated with penny stocks are high, reducing the number of broker-dealers who may be willing to engage in the trading of our shares. These additional penny stock disclosure requirements are burdensome and may reduce all the trading activity in the market for our common shares. As long as our common shares are subject to the penny stock rules, holders of our common shares may find it more difficult to sell their common shares. \nHolders of our common shares may not be entitled to a jury trial with respect to claims arising under our operating agreement, which could result in less favorable outcomes to the plaintiffs in any such action. \nOur operating agreement governing our common shares provides that, to the fullest extent permitted by law, holders of our common shares waive the right to a jury trial of any claim they may have against us arising out of or relating to our operating agreement, including any claim under the U.S. federal securities laws. \nIf we opposed a jury trial demand based on the waiver, the court would determine whether the waiver was enforceable based on the facts and circumstances of that case in accordance with the applicable state and federal law. To our knowledge, the enforceability of a contractual pre-dispute jury trial waiver in connection with claims arising under the federal securities laws has not been finally adjudicated by the United States Supreme Court. However, we believe that a contractual pre-dispute jury trial waiver provision is generally enforceable, including under the laws of the State of Delaware, which govern our operating agreement, by a federal or state court in the State of Delaware, which has non-exclusive jurisdiction over matters arising under the operating agreement. In determining whether to enforce a contractual pre-dispute jury trial waiver provision, courts will generally consider whether a party knowingly, intelligently and voluntarily waived the right to a jury trial. We believe that this is the case with respect to our operating agreement. It is advisable that you consult legal counsel regarding the jury waiver provision before entering into the operating agreement. \nIf you or any other holders or beneficial owners of our common shares bring a claim against us in connection with matters arising under our operating agreement, including claims under federal securities laws, you or such other holder or beneficial owner may not be entitled to a jury trial with respect to such claims, which may have the effect of limiting and discouraging lawsuits against us. If a lawsuit is brought against us under our operating agreement, it may be heard only by a judge or justice of the applicable trial court, which would be conducted according to different civil procedures and may result in different outcomes than a trial by jury would have, including results that could be less favorable to the plaintiffs in any such action. \nNevertheless, if this jury trial waiver provision is not permitted by applicable law, an action could proceed under the terms of the operating agreement with a jury trial. No condition, stipulation or provision of the operating agreement serves as a waiver by any holder or beneficial owner of our common shares or by us of compliance with the U.S. federal securities laws and the rules and regulations promulgated thereunder. \nITEM 1B. \nUNRESOLVED STAFF COMMENTS. \nNot applicable. \nITEM 2. \n### PROPERTIES. \nOur principal office is located at 590 Madison Avenue, 21st Floor, New York, NY 10022. We entered into an office service agreement withRegusManagement Group, LLC for use of office space at this location effective January 22, 2013. Under the agreement, in exchange for our right to use the office space at this location, we are required to paya monthly fee of $479 (excluding taxes). \nNeese is headquartered at 303 Division St. E., Grand Junction, Iowa 50107. Neese operates from one facility totaling 9,150-square feet on an eight-acre property. The layout consists of a 5,400-square foot wash bay and 3,750-square feet of shop and office space. Neese leases this facility pursuant to an agreement of lease entered into with K&A Holdings, LLC, which is owned by Neeses founders, on March 3, 2017. The lease is for a term of ten (10) years and provides for a base rent of $8,333 per month. \nAsiens is located at 1801 Piner Rd., Santa Rosa, CA 95401. The site is approximately 11,000 square feet in total and consists of a 6,000 square foot showroom display area as well as a general office, accounting office, service department and 4,000 square foot warehouse. Asiens leases this site on a month-to-month basis for approximately $9,700 per month. Asiens also rents an additional 3,000 square feet of warehouse and office space in an adjacent building for $2,000 per month. \nKyles is located at 10849 W. Emerald St. Boise, ID 83713. Kyles operates from one standalone 6,600 square foot facility, which includes corporate offices, administration, production floor, warehouse, and employee areas. and Rita Mallatt, the sellers of Kyles. \n\nITEM 3. \n### LEGAL PROCEEDINGS. \nWe are not currently aware of any such legal proceedings or claims that we believe will have a material adverse effect on our business, financial condition or operating results. \nITEM 4. \nMINE SAFETY DISCLOSURES. \nNot applicable. \nPART II \nITEM 5. \n\n### Market Information \nOur common shares are eligible for quotation on the OTCQB Market under the symbol EFSH. The following table sets forth, for the periods indicated, the high and low closing prices of our common shares. These prices reflect inter-dealer prices, without retain mark-up or commission, and may not represent actual transactions. \nNumber of Holders of Our Common Stock \nAs of April 14, 2021, there were approximately [*] shareholders of record of our common shares. In computing the number of holders of record of our common shares, each broker-dealer and clearing corporation holding shares on behalf of its customers is counted as a single shareholder. \n### Dividend Policy \nHolders of our series A senior convertible preferred shares are entitled to dividends at a rate per annum of 14.0% of the stated value of $2.00 per share (subject to adjustment). Dividends shall be payable quarterly in arrears on each dividend payment date in cash or common shares at our discretion. Dividends payable in common shares shall be calculated based on a price equal to eighty percent (80%) of the volume weighted average price for the common shares on our principal trading market during the five (5) trading days immediately prior to the applicable dividend payment date; provided that if our common shares are not registered any dividends payable in common shares shall be calculated based upon the fixed price of $1.57; and provided further that we may only elect to pay dividends in common shares based upon such fixed price if the volume weighted average price for the common shares on our principal trading market during the five (5) trading days immediately prior to the applicable dividend payment date is $1.57 or higher. \nWe intend to pursue a policy of making regular monthly distributions on our outstanding common shares, subject to our operating subsidiaries generating sufficient cash flow to support such regular cash distributions. Our distribution policy will be based on the liquidity and capital of our businesses and on our intention to pay out as distributions to our shareholders most of the cash resulting from the ordinary operation of the businesses, and not to retain significant cash balances in excess of what is prudent for our company or our businesses, or as may be prudent for the consummation of attractive acquisition opportunities. If our strategy is successful, we expect to maintain and increase the level of monthly distributions to common shareholders in the future. \nThe declaration and payment of any monthly distribution to our common shareholders will be subject to the approval of our board of directors. Our board of directors will take into account such matters as general business conditions, our financial condition, results of operations, capital requirements and any contractual, legal and regulatory restrictions on the payment of distributions by us to our shareholders or by our subsidiaries to us, and any other factors that the board of directors deems relevant. However, even if our board of directors were to decide to declare and pay distributions, our ability to pay such distributions may be adversely impacted due to unknown liabilities, government regulations, financial covenants of the debt of our company, funds needed for acquisitions and to satisfy short- and long-term working capital needs of our businesses, or if our operating subsidiaries do not generate sufficient earnings and cash flow to support the payment of such distributions. In particular, we may incur debt in the future to acquire new businesses, which debt will have substantial debt commitments, which must be satisfied before we can make distributions. These factors could affect our ability to continue to make monthly distributions to our common shareholders. \nWe may use cash flow from our operating subsidiaries, capital resources of our company, including borrowings under any third-party credit facilities that we establish, or reduction in equity to pay a distribution. See Material U.S. Federal Income Tax Considerations for more information about the tax treatment of distributions to our shareholders. \nOn October 23, 2020, we completed a distribution of all shares of the common stock of Goedeker that we held to our shareholders. Our common shareholders received 2,660,007 shares, which were distributed on a pro rata basis, and our manager, as the holder of all of our allocation shares, received 664,993 shares, which it then distributed to its members. \n\n\n\n\n\nNo repurchases of our common shares were made during the fourth quarter of 2020. \nITEM 6. \nSELECTED FINANCIAL DATA. \nNot applicable. \nITEM 7. \n\nThe following discussion and analysis should be read in conjunction with our financial statements and the related notes thereto included elsewhere in this report. Actual results could differ materially from those discussed in or implied by forward-looking statements as a result of various factors, including those discussed below and elsewhere in this report, particularly in the sections titled Risk Factors and Special Note Regarding Forward-Looking Statements. \n### Overview \n\nIn March 2017, our subsidiary 1847 Neese acquired Neese. \nIn April 2019, our subsidiary Goedeker acquired substantially all of the assets of Goedeker Television, a one-stop e-commerce destination for home furnishings, including appliances, furniture, home goods and related products. \nIn May 2020, our subsidiary 1847 Asien acquired Asiens. \nIn September 2020, our subsidiary 1847 Cabinet acquired Kyles. \nIn March 2021, our subsidiary 1847 Wolo, acquired Wolo. \n\n### Recent Developments \n\n\n\n\n\n\n\n\n### Garden Signing \nOn February 9, 2021, 1847 Hydroponic entered into a securities purchase agreement with the Garden Companies and the sellers named therein, pursuant to which 1847 Hydroponic agreed to acquire all of the issued and outstanding capital stock or other equity securities of the Garden Companies for an aggregate purchase price of $100,000,000, subject to adjustment, consisting of (i) $90,000,000 in cash and (ii) a three-year 8% secured subordinated convertible promissory note in the aggregate principal amount of $10,000,000. \nWolo Closing \nOn March 30, 2021, our newly formed wholly-owned subsidiary 1847 Wolo acquired all of the issued and outstanding capital stock of Wolo for an aggregate purchase price of $7,400,000 (subject to adjustment) consisting of (i) $6,550,000 in cash and (ii) the issuance of a 6% secured promissory note in the principal amount of $850,000. \nThe purchase price is subject to a post-closing working capital adjustment provision.Under this provision, the sellers of Wolo (who we refer to as the Wolo Sellers) delivered to 1847 Wolo at the closing an unaudited balance sheet of Wolo as of that date. \n6% Secured Promissory Note \n\n\nOn March 30, 2021, 1847 Wolo and Wolo entered into a credit agreement with Sterling National Bank, or Sterling, for (i) revolving loans in an aggregate principal amount that will not exceed the lesser of the borrowing base (as defined below) or $1,000,000 and (ii) a term loan in the principal amount of $3,550,000. \n\n\n\n### Unit Offering \nOn March 26, 2021,<|endoftext|>The 2014 incentive plan. \n(3) \nThe transitional plan was previously approved by our board of directors and our former parent company, Qurate Retail, as sole stockholder, in connection with the Spin-Off. The transitional plan governs the terms and conditions of awards with respect to our companys common stock that were granted in connection with adjustments made to awards granted by Qurate Retail with respect to its former Liberty Ventures common stock. As a result, no further grants are permitted under this plan. \nItem 13. \nUnder our Code of Business Conduct and Ethics and Corporate Governance Guidelines, if a director or executive officer has an actual or potential conflict of interest (which includes being a party to a proposed related party transaction (as defined by Item 404 of Regulation S-K)), the director or executive officer should promptly inform the person designated by our board to address such actual or potential conflicts. No related party transaction may be effected by our company without the approval of the audit committee of our board or another independent body of our board designated to address such actual or potential conflicts. \n### Investment Agreement \nOn March26, 2020, pursuant to the Investment Agreement, dated as of March15, 2020 (the \nInvestment Agreement \n), among our company, Certares Holdings, Certares Blockable and Certares Optional (collectively, \n### Assignor \n) and solely for the purposes of certain provisions specified therein, Gregory B. Maffei, as assigned pursuant to the Assignment and Assumption Agreement, dated as of March26, 2020, by and among the Assignor and Certares LTRIP (the \nPurchaser \n, and together with Assignor, \n### Certares \n), we issued and sold to the Purchaser 325,000 shares of \nLTRPP \n, for a purchase price of $1,000 per share. Effective as of March29, 2021, the Repurchase Agreement, among other things, amended certain terms of the Investment Agreement. For more information regarding such amended terms of the Investment Agreement, see Stock Repurchase Agreement. \nThe Investment Agreement contains certain covenants of our company and Certares, including, among other things, a covenant that, subject to certain exceptions, Certares will not transfer, or agree to transfer, any of its shares of \n### LTRPP \nBoard Matters. \nPursuant to the Investment Agreement, for so long as at least 25% of the original aggregate liquidation value of the LTRPP shares remains outstanding (the \n### Threshold Amount \n), the holders of a majority of the LTRPP shares may appoint one director (the \nSeriesA Preferred Threshold Director \n) to our board of directors. Upon the closing of the transactions pursuant to the Investment Agreement, Mr.M. Gregory OHara, Founder and Senior Managing Director of Certares Management LLC, was appointed as the SeriesA Preferred Threshold Director and Vice Chairman of our board of directors. Pursuant to the Repurchase Agreement, effective as of March29, 2021, Mr.OHara resigned as the SeriesA Preferred Threshold Director and the Purchaser permanently waived its right to appoint the SeriesA Preferred Threshold Director. As a condition to the transfer of any LTRPP shares, the transferee must agree to such waiver. For more information regarding board matters with respect to the Repurchase Agreement, see Stock Repurchase AgreementMatters Relating to the Board. \n### Consent Rights. \nFor so long as the Threshold Amount remains outstanding, we will not pay any dividends on or repurchase shares of our common stock without the prior written consent of the holders of a majority of the \n### LTRPP shares \n(subject to certain exceptions). \nIn addition, for so long as the Purchaser beneficially owns a number of shares of LTRPP with an aggregate liquidation value at least equal to the Threshold Amount, we are required to obtain the prior written consent of the holders of at least a majority of the LTRPP shares prior to incurring certain indebtedness, issuing any stock which ranks on a parity basis with or senior to the LTRPP shares, issuing LTRPB shares, subject to certain exceptions, entering into certain affiliate transactions and transferring shares of Tripadvisor ClassB and \nTRIP. \n### Sales Process. \nIf our board of directors approves the initiation of a sale process to effect a change in control of itself or the entry into negotiations with a third party for a change in control, and, at such time, the Purchaser beneficially owns a number of shares of \nLTRPP with an aggregate liquidation value equal to at least the Threshold Amount, the Investment Agreement requires us to provide notice of such intent to the Purchaser, designate a nationally recognized investment bank to act as financial advisor, and provide the Purchaser the opportunity to participate as a potential buyer. In addition, if the Purchaser owns a number of shares of \nLTRPP with an aggregate liquidation value equal to at least the Threshold Amount, subject to certain exceptions, the Purchaser is entitled to certain rights to match offers consisting of at least 90% of cash consideration to acquire our company or LTRPB shares owned by Mr.Maffei, as the case may be. \nConsultation. \nFor so long as the Purchaser owns shares of LTRPP having a liquidation value equal to at least the Threshold Amount, the Purchaser is entitled to certain consultation rights with our company with respect to any matter on which we vote our shares of Tripadvisor equity and with Mr.Maffei with respect to any matter on which he votes his LTRPB shares. \n### Tripadvisor Board. \nThe Investment Agreement also required our company, upon closing, to nominate an individual designated by the Purchaser to the board of directors of Tripadvisor for so long as (i) the Purchaser beneficially owns a number of shares with an aggregate liquidation value equal to at least the Threshold Amount and (ii)we have a right to nominate at least two directors to Tripadvisors board of directors under the Governance Agreement among Tripadvisor, Qurate Retail and Barry Diller, dated as of December20, 2011, as amended by the Assignment and Assumption of Governance Agreement among Tripadvisor, our company and Qurate Retail, dated August12, 2014. On March27, 2020, Mr.OHara was appointed to the board of directors of Tripadvisor. \nThe description of the Investment Agreement is qualified in its entirety by reference to the full text of the Investment Agreement \n, w hich is incorporated by reference herein and filed as Exhibit4.1 to our Current Report on Form8-K filed with the SEC March16, 2020. \n### Stock Repurchase Agreement \nOn March29, 2021, pursuant to the First Closing (as defined in the Repurchase Agreement) under the Repurchase Agreement, we, among other things, repurchased from the Purchaser 126,921 LTRPP shares at a per share price of $2,174.29, which represented 39% of the LTRPP shares held by the Purchaser, for an aggregate value of approximately $344 million. The aggregate consideration consisted of a combination of a portion of the net proceeds of our private offering of $300 million aggregate principal amount of exchangeable senior debentures due 2051 ( \nDebentures \n), which closed on March25, 2021, and 1,713,859 shares of TRIP. On April6, 2021, pursuant to the Second Closing (as defined in the Repurchase Agreement) under the Repurchase Agreement, we repurchased from the Purchaser an additional 10,665 LTRPP shares at a per share price of $2,174.29, which represented an additional 3% of the LTRPP shares held by the Purchaser prior to the completion of the transactions contemplated by the Repurchase Agreement. The consideration for the Second Closing consisted of the net proceeds from the sale of additional Debentures following the exercise in full by the initial purchasers of their option to purchase additional Debentures. Following the completion of the Second Closing, we have outstanding 187,414 LTRPP shares with a redemption value, as of March22, 2021, of approximately $509 million based on the last reported sale price of TRIP on the Nasdaq Global Select Market on March22, 2021. \nThe Repurchase Agreement contains customary representations, warranties and covenants of the parties. In addition, the Repurchase Agreement provides as follows: \n### Permanent Waiver of Put Right \nThe Purchaser permanently waived its put right with respect to our \nLTRPP shares contained in the Certificate of Designations (the \nPut Right \n). \n### Liberty TripAdvisor Call Right \nWe have the option, from time to time commencing on March27, 2024, to call and repurchase (the \nOptional Repurchase Right \n) any and all of the outstanding LTRPP shares at the Optional Repurchase Price (as such term is defined in the Repurchase Agreement). \n### Restriction on Transfer of LTRPP Shares \nSubject to exceptions contained in the Investment Agreement and the Repurchase Agreement, the LTRPP shares generally are non-transferable; provided that we have agreed not to unreasonably withhold our consent to certain transfers of up to 49% of the remaining LTRPP shares outstanding following the completion of the repurchase pursuant to the Repurchase Agreement (so long as there are no more than six holders of the LTRPP shares at any one time). Any transferee of LTRPP shares must agree to the permanent waiver of the Put Right, the permanent waiver of the right to appoint the SeriesA Preferred Threshold Director (as described below) and to the Optional Repurchase Right. \nLock-up on TRIP \nPursuant to the Repurchase Agreement, and subject to the limited exceptions described therein, the Purchaser will be restricted from transferring TRIP shares for a period of six months commencing on March22, 2021. \n### Matters Relating to the Board \nPursuant to the Repurchase Agreement, (i)Mr.OHara delivered a resignation to our board of directors as the SeriesA Preferred Threshold Director, (ii)the Purchaser permanently waived its right to appoint the SeriesA Preferred Threshold Director, (iii)the authorized size of our board of directors increased by two members (the \nLTRP New Board Seats \n) and (iv)Mr.OHara was appointed to one of the LTRP New Board Seats as a ClassIII member with a term expiring at our 2021 annual meeting of stockholders (the \n### LTRP 2021 Annual Meeting \n) and Vice Chairman of our board of directors. Pursuant to the Repurchase Agreement, the Purchaser has nominated Mr.OHara to be included in the slate of nominees recommended by our board of directors to our stockholders for election as directors at the 2021 Annual Meeting and to be included in any future slate of such nominees for ClassIII directors for so long as Purchaser beneficially owns LTRPP shares equal to at least the Threshold Amount. In the event Mr.OHara is not elected as a director of our board of directors, we will appoint Mr.OHara as a non-voting observer of our board of directors, subject to certain customary conditions, for so long as the Purchaser beneficially owns LTRPP shares equal to at least the Threshold Amount. In the event the Purchaser ceases to beneficially own LTRPP shares equal to at least the Threshold Amount, the Purchaser will cause Mr.OHara to immediately resign from our board of directors or, if applicable, his non-voting board observer position, which will automatically terminate at such time. \nThe description of the Repurchase Agreement is qualified in its entirety by reference to the full text of the Repurchase Agreement \n, which is incorporated by reference herein and filed as Exhibit7(f)to our Amendment No.4 to Schedule 13D filed with the SEC on March24, 2021. \n\nOur company and the Purchaser entered into a at the closing of the sale of the \n### LTRPP shares under the Investment Agreement (the \n\n). Under the Registration Rights Agreement, the Purchaser is entitled to demand and piggyback registration rights with respect to the shares of \nLTRPP and any shares of common stock of our company paid to satisfy our obligations under the Investment Agreement and the Certificate of Designations. The Purchaser will be entitled to four demand registration rights, subject to certain limitations, including that each demand must cover at least $15,000,000 in value of shares to be registered and that we will not be required to effect more than one underwritten shelf takedown during any 180 day period. We will pay the costs associated with such registrations (other than underwriting discounts, fees and commissions). \nThe description of the is qualified in its entirety by reference to the full text of the \n, which is incorporated by reference herein and filed as Exhibit 4.2 to our Current Report on Form<|endoftext|>All of his interest, including but not limited to a 35% back-in after payout interest in Calihoma Partners LLC which has 60% ownership in West Lenapah Project including the assets and project definition as described in the agreement. Foster hereby agrees to transfer one hundred (100%) percent of his membership interests in Calihoma Partners LLC, in exchange for 5,000,000 shares of common stock to be issued to him and an additional 5,000,000 shares to be issued pursuant to a specified timeframe. \nDuring the initial period of this Agreement if either party hereto for reasonable cause determines that membership interests in Calihoma Partners LLC should no longer be held by NMEX Natural Gas LLC. Foster shall exchange his shares in Northern for the membership interests in NMEX Natural Gas LLC, and Northern will convey such membership interests to Foster in exchange for his stock in Northern, and NMEX Natural Gas LLC shall become wholly owned by Foster. Foster shall serve as Manager of NMEX Natural Gas LLC until Northern determines to convey the interests in Calihoma Partners or one year whichever is shorter. As of July 31, 2021, the initial 5,000,000 shares of common stock have been issued but are being held by the transfer agent pending final confirmation that the agreement is finalized. \n### NOTE 11 - RELATED PARTY TRANSACTIONS \nFor the years ended \nAs of \n### July 31, 2021 \n\nAs of \n\nAs of \n### July 31, 2021 \nThis loan is in default. \n\nMr. The 600,000 shares have not been issued by the transfer agent as of July 31, 2021, so are disclosed as common stock to be issued. \n### NOTE 12 - INCOME TAX \nThe U.S. federal income tax rate of 21% is being used for 2017 due to the new tax law recently enacted. \nThe provision for Federal income tax consists of the following July 31: \n\nAt July 31, 2021, the Company had net operating loss carry forwards of approximately $964,100 that maybe offset against future taxable income.No tax benefit has been reported in the July 31, 2021 or 2020 financial statements since the potential tax benefit is offset by a valuation allowance of the same amount. \nOn December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cut and Jobs Act (the Tax Act). The Tax Act establishes new tax laws that affects 2018 and future years, including a reduction in the U.S. federal corporate income tax rate to 21% effective January 1, 2018. For certain deferred tax assets and deferred tax liabilities. \n\n\nAs of July 31, 2021, the Company had no accrued interest or penalties related to uncertain tax positions. The Company is subject to examination by the various taxing authorities beginning with the tax year ended December 31, 2017 (or the tax year ended December 31, 2003 if the Company were to utilize its NOLs) \n### NOTE 13 - SUBSEQUENT EVENTS \nManagement has evaluated subsequent events pursuant to the requirements of ASC Topic 855, from the balance sheet date through the date the financial statements were available to be issued, and has determined that no material subsequent events exist other than the following. \nSubsequent to July 31, 2021, the Company issued the 600,000 due to \nMr. Miranda. In addition, Mr. Miranda purchased as an additional 2,100,000 shares for $63,000. \nSubsequent to July 31, 2021, the Company sold 50,000 shares of common stock for total proceeds of $5,000. \nSubsequent to July 31, 2021, note holders converted $48,400 into 484,000 shares of common stock. \nI \nTEM 9. \nNone \nI \n### TEM 9A. CONTROLS AND PROCEDURES \n\nWe carried out an evaluation, under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, of the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)).Based upon that evaluation, our principal executive officer and principal financial officer concluded that, as of the end of the period covered in this report, our disclosure controls and procedures were ineffective to ensure that information required to be disclosed in reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the required time periods specified in the Commissions rules and forms and is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure. \nOur principal executive officer and principal financial officer, do not expect that our disclosure controls and procedures or our internal controls will prevent all error or fraud.A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs.Due to the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected.During the fourth quarter of the fiscal year ended July 31, 2020, we carried out an evaluation, under the supervision and with the participation of our principal executive officer and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures.Based on that evaluation and due to the identified material weaknesses discussed below, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were ineffective as of the end of the period covered by this report. \nTo address the material weaknesses, we performed additional analysis and other post-closing procedures in an effort to ensure our financial statements included in this annual report have been prepared in accordance with generally accepted accounting principles.Accordingly, management believes that the financial statements included in this report fairly present in all material respects our financial condition, results of operations and cash flows for the periods presented. \n\n\nBased on this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our internal control over financial reporting was not effective as of July 31, 2021. \n\n\n\nI nherent limitations on effectiveness of controls \n\n\nThere have been no changes in our internal controls over financial reporting that occurred during the fourth quarter of the fiscal year ended July 31, 2021, that have materially or are reasonably likely to materially affect, our internal controls over financial reporting. \nI \n### TEM 9B. OTHER INFORMATION \nNone \nP \nART III \nI \nTEM 10. \n\n### BUSINESS EXPERIENCE \n\nNoel Schaefer, Director, Secretary & Chief Operations Officer, \n(COO) has served in a variety of executive and director positions in his 30 plus year career with both domestic and international companies. His emphasis has been with startups by setting up market profiles, developing strategic market placement and refining corporate objectives. Mr. Schaefer has successfully helped to raise funds from both the public and private sectors. He has worked extensively in Far East and Latin America with a particular focus on Mexico. He holds a Bachelor of Science degree from Brigham Young University with an emphasis in Marketing and Finance. \nVictor Miranda, Director, is the CEO of an insurance broker firm, passionate about ventures developing USA/MEXICO cross border opportunities. He has 15 years of hands on experience in the sales management for the financial sector, with particular focus on developing a savers culture through employee benefits, and 7 years developing successful real estate development projects in Quintana Roo. Quintana Roo is the State in Mexico where the Pemer Bacalar property is located. \nIvan Webb, Chief Executive Officer, is a seasoned and successful entrepreneur, with over 35 years of experience in the oil and gas industry internationally and in the United States. He is experienced with acquiring oil and gas concessions and leases, drilling of new wells and reworking/ re-completing existing wells, production management, working with service companies and regulatory compliance. Internationally, he has successfully leased more than 18,000,000 acres. Domestically he has been involved with the acquisition and or management of more than 250 wells in Kansas, Oklahoma and Texas. \nMr. Webb has also over 30 years of experience in managing or assisting public companies in both the US and Canada with regulatory compliance. His public company experience includes assisting companies with initial public offerings, reverse mergers, obtaining listings, and assisting with ongoing regulatory compliance. \nRachel Boulds \n, \nMs. Boulds currently works for the Company on a part-time basis while also operating her sole accounting practice which she has led since 2009 and which provides all aspects of consulting and accounting services to clients, including the preparation of full disclosure financial statements for public companies to comply with GAAP and SEC requirements. Ms. Boulds also currently provides outsourced chief financial officer services for two other companies. From August 2004 through July 2009, she was employed as a Senior Auditor for HJ & Associates, LLC, where she performed audits and reviews of public and private companies, including the preparation of financial statements to comply with GAAP and SEC requirements. From 2003 through 2004, Ms. Boulds was employed as a Senior Auditor at Mohler, Nixon and Williams. Boulds worked as an ABAS Associate for PriceWaterhouseCoopers. From April 2000 through February 2001, Ms. Boulds was employed as an e-commerce Accountant for the Walt Disney Groups GO.com. Ms. Boulds earned a B.S. in Accounting from San Jose University in 2001 and is licensed as a CPA in the state of Utah. \n### Family Relationships \n\n\n\n### Code of Ethics \nThe Company has not yet adopted a Code of Ethics. \nI \n### TEM 11. EXECUTIVE COMPENSATION \n\nOther than as set out below, there are no arrangements or plans in which we provide pension, retirement or similar benefits for directors or executive officers. \n### Stock Option Grants \nWe have not granted any stock options to the executive officers since our inception. \n\nFor the year ended July 31, 2021, no director or executive officer has received compensation from us pursuant to any compensatory or benefit plan. There is no plan or understanding, express or implied, to pay any compensation to any director or executive officer pursuant to any compensatory or benefit plan. \n\nNo member of our Board of Directors received any compensation for his services as a director during the year ended July 31, 2021 and 20220. \nI \nTEM 12. \nThe following table sets forth, as of October 10, 2021, certain information with respect to the beneficial ownership of our common shares by each shareholder known by us to be the beneficial owner of more than 5% of our common shares, as well as by each of our current directors and executive officers as a group. \nI \nTEM 13. \nExcept as disclosed herein, no director, executive officer, shareholder holding at least 5% of shares of our common stock, or any family member thereof, had any material interest, direct or indirect, in any transaction, or proposed transaction since the year ended July 31, 2021, in which the amount involved in the transaction exceeded or exceeds the lesser of $120,000 or one percent of the average of our total assets at the year-end for the last three completed fiscal years. \n### For the years ended \nAs of \n### July 31, 2021 \n\nAs of \n\nAs of \n### July 31, 2021 \nThis loan is in default. \n\nMr. \n### Director Independence \nWe currently act with two directors, Noel Schaefer and Victor Miranda. We have determined that we do not have an independent director as defined in NASDAQ Marketplace Rule 4200(a)(15). \nWe do not have a standing audit, compensation or nominating committee, but our directors and officer act in such capacities. Our sole director does not believe that it is necessary to have an audit committee because we believe that the functions of an audit committee can be adequately performed by the sole director. In addition, we believe that retaining an independent director who would qualify as an audit committee financial expert would be overly costly and burdensome and is not warranted in our circumstances given the early stages of our<|endoftext|>On your behalf. Among other things, the Board reviews our long-term strategic plans and exercises direct decision-making authority on key issues, including the appointment of our executive officers and setting the scope of their authority in managing the Companys day-to-day operations. Our Board is currently comprised of John McKowen and Louise Lowe. \nBoard Committees and Meetings \nBoard meetings are called when the CEO deems it necessary. At present there are no standing committees. \n### Code of Ethics \nThe Board of Directors has not adopted a Code of Ethics to provide guidance to all of our directors, officers and employees, including our principal executive officer, principal financial and accounting officers, and persons performing similar functions. \nBoard Structure and Risk Oversight \nJohn McKowen serves as Chairman of the Board. Our Board has overall responsibility for risk oversight. Throughout the year, the Board dedicates a portion of their meetings to review and discuss specific risk topics in greater detail. Strategic and operational risks are presented and discussed in the context of the Presidents report on operations to the Board at regularly scheduled board meetings and at presentations to the Board by our other employees and consultants. The Boards risk oversight process builds upon managements risk assessment and mitigation processes. The small size of the Company allows our Board to develop in-depth knowledge of different facets of the business. This in-depth knowledge, coupled with exposure to and frequent communication with our management, assists the Board in performing its oversight responsibilities, including risk management, in an effective manner. \n\nStockholders and other interested parties may communicate with the Board or any individual director, by writing to: \nVETANOVA INC \nAttention: Board of Directors c/o Corporate Secretary \n335 A Josephine Street \n### Denver, CO 80206 \nIf the letter is from a stockholder, the letter should state that the sender is a stockholder. Under a process approved by the Board, depending on the subject matter, management will: forward the letter to the director or directors to whom it is addressed; or attempt to handle the matter directly (as where information about our business or our stock is requested); or not forward the letter if it is primarily commercial in nature or relates to an improper or irrelevant topic. \nA summary of all relevant communications that are received after the last meeting of the full Board and which are not forwarded will be presented at each Board meeting along with any specific communication requested by a director. \nAll communications will be handled in a confidential manner, to the degree the law allows. Communications may be made on an anonymous basis; however, in these cases the reporting individual must provide sufficient details for the matter to be reviewed and resolved. The Company will not tolerate any retaliation against an employee who makes a good faith report. \n\nSection 16(a) of the Securities Exchange Act of 1934 (the Exchange Act) requires our executive officers and directors, and persons who own more than 10% of our common stock (herein collectively, our Section 16 insiders) to file with the SEC certain forms reporting their ownership and changes in beneficial ownership of our common stock and other equity with the SEC, and to furnish us with copies of these filings. However, since as of the date of this filing, the Companys prior filing of its Form 10 has yet to be deemed effective. Therefore, until the effective date is issued, the Company is not required to file the beneficial ownership reporting forms. Upon the acceptance of our Form 10 filing by the SEC, we plan to timely file the beneficial ownership reporting forms. \n### Item 11. Executive Compensation \nWe did not pay any compensation for 2019 to our Chief Executive Officer, President and Treasurer, who was our sole executive officer during 2019. In 2020, we did not pay any compensation with the exception of a stock award to our Chief Executive Officer, President and Treasurer, who was our sole executive officer during 2020. \nThere are no Employment Agreements. \n### Base Salary \nJohn R. McKowen was did not receive a salary or bonus for either year, 2019 or 2020. \nIncentive Compensation \nThe Company does not have any established policy with regard to equity incentive bonuses for our executive officers. The board of directors may decide to pay equity incentive bonuses to compensate executive officers for the achievement of specific business objectives, profitability, and individual performance and objectives established by the board or its compensation committee. \n### Equity Plans \nThe Company does not currently have any adopted Equity Plans. \nDirector Compensation \nThe Company does not have any established policy with regard to cash or equity-based compensation of non-employee members of the board. \n\nThe following table sets forth information regarding all forms of compensation received by McKowen and Lowe during the years ended December 31, 2020 and December 31, 2019: \nNotes: \n(1) \nThe Company granted John McKowen 88,107,690 common shares of which 58,738,460 are subject to claw back. 29,369,230 shares will be released from claw back if the Warrant Performance Metric is satisfied. 29,369,230 additional shares will be released from claw back if, prior to December 31, 2022, the Company completes a sale lease back of a solar powered property and receives gross proceed of a least $6,000,000 from the sale. \n(2) \nThe Company granted Louise Lowe 3,019,455 common shares of which 2,012,970 are subject to claw back. 1,006,485 shares will be released from claw back if the Warrant Performance Metric is satisfied. 1,006,485 additional shares will be released from claw back if, prior to December 31, 2022, the Company completes a sale lease back of a solar powered property and receives gross proceed of a least $6,000,000 from the sale. On February 5, 2021, Ms. Lowe resigned her position as a board member and the Companys Secretary. No replacement has yet to be appointed/elected. \nDirectors McKowen and Lowe did not receive any additional compensation, except as noted above, for their Board service. \nItem 12. \nThe following table sets forth information with respect to the beneficial ownership of The Company outstanding common stock by: each person who is known by us to be the beneficial owner of 5 percent or more of our common stock; our chief executive officer, our other executive officers, and each director as identified in the Management-Executive Compensation section below, and all of our directors and executive officers as a group. \nShares of common stock and options, warrants and convertible securities that are currently exercisable or convertible within 60 days of this information statement into shares of our common stock are deemed to be outstanding and to be beneficially owned by the person holding the options, warrants or convertible securities for the purpose of computing the percentage ownership of any other person. \nTo the extent our directors and officers owned shares of the Company common stock at the time of the distribution, they will participate in the distribution on the same terms as other holders of the Company common stock. \nThe information below is based on the number of shares of the Company common stock issued to each person with 5% ownership. \nDIRECTORS AND EXECUTIVE OFFICERS AND FIVE PERCENT HOLDERS OWNERSHIP \n### Item 13. \n\nName \nAge \n### Title \nJohn R. McKow en \n### Chair of the Board, Chief Executive \nOfficer, President and Treasurer \nLouise Lowe \n### Director and Secretary \nJohn R. McKowen was appointed as Chairman of the Board and became our Chief Executive Officer in June 2018 and became our President and Treasurer in July 2020. Prior to joining us, Mr. \nLouise Lowe was a member of the board of directors and the Companys Secretary from July 2020 until she resigned both positions on February 5, 2021. \nItem 14. \nOn December 1, 2020 John R. McKowen purchased 88,107,690 Shares of Common Stock of the Company and Louise Lowe purchased 3,019,455 shares of Common Stock of the Company. Of those shares, 66⅔% are deemed restricted. Mr. McKowens and Mrs. Lowes restricted Common Stock are subject to 50% of each holders restricted shares are subject to repurchase by The Company for a price of $0.0001 per share if the Warrant Performance Metric is not satisfied, and the other 50% are subject to repurchase at such price if the Secondary Performance Metric is not satisfied. \nAs used above, the Warrant Performance Metric will be satisfied if Warrants issued in Companys 2020 Private Placement are exercised to acquire at least 42,140,266 shares of Common Stock; and the Secondary Performance Metric will be satisfied if, prior to December 31, 2022, The Company completes a sale lease back of a solar powered property and receives gross proceed of a least $6,000,000 from the sale. McKowen is deemed to beneficially own 56,052,837 purchased by VitaNova because of his ability to control VitaNova, as an officer and member of VitaNova. \nVitaNova is paid $456,000 annually for its management services. Payments are made in 12 monthly installments of $38,000. On December 15, 2020 the consulting agreement was amended to reduce payments to $19,000 a month effective January 1, 2021. \n### Issuance of the Company Shares to Consultants \nWe did not issue any shares to Consultants for the year ended December 31, 2019. For the year ended December 31, 2020, the Company issued the following shares to Consultants: \n9,495,700 shares to George McCaffrey, and \n3,000,000 shares to Heather Burshten. \n### Director Independence \nOur Company has no independent directors. \nItem 15. \nOn October 16, 2020, the board of directors approved the appointment of BF Borgers CPA PC, or BF Borgers, as our new independent registered public accounting firm, effective immediately, to perform independent audit services for the fiscal years ending December 31, 2020, 2019 and 2018. The appointment of BF Borgers was effective immediately. \nDuring the fiscal years ended December 31, 2019 and 2018 and in the subsequent interim periods through September30, 2020, neither we nor anyone on our behalf consulted with BF Borgers (Borgers) with respect to either (a)the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered with respect to our consolidated financial statements, and no written report or oral advice was provided to us by BF Borgers that was an important factor that we considered in reaching a decision as to any accounting, auditing or financial reporting issue or (b) any matter that was the subject of a disagreement (as defined in Item 304(a)(1)(iv) of Regulation SK of the Securities and Exchange Commission and the related instructions) or a reportable event (as defined in Item 304(a)(1)(v) of Regulation SK). \nThere are not and have not been any disagreements between us and our independent accountants on any matter of accounting principles, practices or financial statement disclosure. \nAggregate fees billed by Borgers for the years ended December 31, 2020 and 2019 are as follows: \n### Audit Fees: \nThis category includes the audit of our annual financial statements included in our Annual Report on Form 10-K, review of quarterly financial statements included in our Quarterly Reports on Form 10-Q, audit performed for the filing of our Form 10 and if and when required or requested, the audit of the effectiveness of our internal controls. \nAudit-related fees: \nThis category consists of assurance and related services provided by the independent registered public accounting firm that are reasonably related to the performance of the audit or review of our financial statements and are not reported above under Audit Fees. \n### Tax fees: \nThis category consists of professional services rendered primarily in connection with our tax planning and compliance activities, including the preparation of tax returns. We did not engage Borgers for any tax services. \nAll other fees: \nThis category consists of fees for other corporate services, primarily the review of SEC reports other than annual and quarterly reports. \nItem 16. \n(a) Financial Statements. \n\n(b) Exhibits. \nExhibit No. \nDescription \n3.1 * \nArticles of Incorporation of VETANOVA INC \n3.2 * \nCertificate of Amendment dated June 11, 2018 \n3.3 * \nCertificate of Amendment dated June 21, 2018 \n3.4 * \nAmended and Restated Bylaws of VETANOVA INC \n4.1 *<|endoftext|>Augusta Gold Corp. (the Company, we, us, our, or Augusta Gold ) is filing this Amendment No. 1 on Form 10-K/A (this Amendment) to amend our Annual Report on Form 10-K for the fiscal year ended December 31, 2020 (the Original 10-K), as originally filed with the United States Securities and Exchange Commission (the SEC) on March 16, 2021. The purpose of this Amendment is to include Part III information which was to be incorporated by reference from our definitive proxy statement for our 2021 Annual General Meeting of Shareholders. This information was previously omitted from the Original 10-K in reliance on General Instruction G(3) to Form 10-K, which permits the Part III information to be incorporated in our Form 10-K by reference from our definitive proxy statement if such statement is filed no later than 120 days after our fiscal year-end. We are filing this Amendment to include Part III information in our Form 10-K because a definitive proxy statement containing such information will not be filed by the Company within 120 days after the end of the fiscal year covered by our Form 10-K. The reference on the cover to the Form 10-K to the incorporation by reference to portions of our definitive proxy statement into Part III of the Form 10-K is hereby deleted. This Amendment hereby amends and restates the cover page and Part III, Items 10 through 14 in their entirety. \nIn accordance with Rule 12b-15 under the United States Securities Exchange Act of 1934, as amended (the Exchange Act), the cover page to the Form 10-K, Part III, Items 10 through 14 of our Form 10-K and Part IV of our Form 10-K are hereby amended and restated in their entirety. In addition, new certifications of our principal executive officer and principal financial officer are attached, each as of the filing date of this Amendment. This Amendment does not amend or otherwise update any other information in our Original 10-K. Accordingly, this Amendment should be read in conjunction with our Original 10-K and with our filings with the SEC subsequent to our Original 10-K. \nPART III \nITEM 10. \n\nThe following persons are our executive officers and directors and hold the positions set forth opposite their respective names. \nRichard Warke (appointed January 7, 2021) \n### Executive Chairman \nRichard Warke is a Vancouver-based Canadian business executive with more than 35years of experience in the international resource sector. In 2005, Mr. Warke founded the Augusta Group of Companies which has an unrivaled track record of value creation in the mining sector. \nFrom 2006 and until 2018, the Augusta Group founded, managed, and funded three world class mineral discoveries. Ventana Gold, discovered the La Bodega gold deposit in Colombia, now reported to host over 10Moz of gold, the Augusta Group sold the company for $1.3B in 2011. Augusta Resource, advanced the Rosemont copper project in Arizona through drilling, feasibility and permitting to become one of the largest copper deposits in United States, it was sold for $667M in 2014. Arizona Mining, discovered the Taylor deposit and grew the Hermosa-Taylor deposit into one of the top five primary zinc deposits globally, largest in United States, prior to its sale for $2.1B in 2018. \nCurrently, the Augusta Group is comprised of private businesses and public companies that currently includes Titan Mining Corporation, Augusta Gold Corp. and Solaris Resources Inc. Titan Mining operates a zinc mine in New York State, Augusta Gold is exploring for a gold mine in a prolific mining district in Nevada, and Solaris Resources is advancing a portfolio of copper and gold assets in the Americas, including a high-grade, world-class resource at its copper and gold project Warintza in Ecuador. \nIn addition, in 2017 Mr. Warke co-founded Equinox Gold which has now become a mid-tier gold producer and one of the fastest growing gold companies in the Americas growing to over a $3.0B market cap with mines in US, Mexico and Brazil. \nDuring the course of his career, Mr. Warke has established a reputation for building successful companies by generating pioneering transactions in the mining sector through prudent investing in earlier stages of the mine cycle. His specialization is surfacing value through award-winning exploration efforts and rapidly advancing projects with consistent access to low-cost capital through exploration, feasibility, and permitting to point of sale or into production. His expertise, combined with his extensive relationships across the global mining sector, have resulted in rapid growth and a proven track record of success making him a widely-recognized strategic partner and a sought after industry expert for commentary on business, mining and related topics. \n### John Boehner (appointed January 7, 2021) \nDirector \nJohn Boehner served as the 53rd Speaker of the United States House of Representatives from 2011 to 2015. A member of the Republican Party, Mr. Boehner was the U.S. Representative from Ohios 8th congressional district, serving from 1991 to 2015. He previously served as the House Minority Leader from 2007 until 2011, and House Majority Leader from 2006 until 2007. Following his career in government service, Mr. Boehner joined Squire Patton Boggs, a global law and public policy firm. He earned a Bachelor of Arts in business administration from Xavier University. \n### Daniel Earle \nDirector \nDaniel Earle has over 17 years of experience in the mining sector and capital markets, covering projects ranging from early stage exploration through feasibility and engineering to production. Mr. Earle is currently the President and CEO of Solaris Resources and also serves on its Board of Directors. Prior to joining Solaris in November 2019, he was a Vice President and Director at TD Securities where he covered the mining sector for over 12 years and established himself as a thought leader in the space. Prior to joining TD Securities in 2007, Mr. Earle was a senior executive with a number of Canadian and U.S. public mineral exploration and mining companies. He is a graduate and scholar of the Lassonde Mineral Engineering Program at the University of Toronto. \n### Poonam Puri (appointed January 7, 2021) \nDirector \nPoonam Puri is an experienced corporate director and professor of business law at Osgoode Hall Law School in Toronto. She is also a practising lawyer and affiliated scholar at Davies Ward Phillips & Vineberg LLP. Ms. Puri currently serves on the boards of Canadian Apartment Properties Real Estate Investment Trust, the Canada Infrastructure Bank and Holland Bloorview Kids Rehabilitation Hospital. Ms. Puri has been recognized as one of the top 25 most influential lawyers in Canada by Canadian Lawyer Magazine. She has been named one of the 100 Most Powerful Women in Canada, and she is a past recipient of Canadas Top 40 under 40 Award. Ms. Puri earned her Bachelor of Laws degree from the University of Toronto, and she holds a Master of Laws degree from Harvard Law School. \n### Lenard Boggio (appointed January 20, 2021) \nDirector \nLen Boggio was formerly a partner of PricewaterhouseCoopers LLP (PwC) where he served for more than 30 years until his retirement in May 2012. During that time, he was Leader of the B.C. Mining Group of PwC, a senior member of PwC's Global Mining Industry Practice and an auditor of Canadian, U.S. U.K. and other internationally-listed mineral resource and energy clients. Mr. Boggio is a Fellow of the Chartered Professional Accountants of Canada (FCPA, FCA) and has served as president of the British Columbia Institute of Chartered Accountants and chairman of the Canadian Institute of Chartered Accountants. \nDonald R. Taylor, P.G. (appointed CEO April 13, 2021) \n### President, CEO and Director \nDonald R. Taylor has 30 years of mineral exploration experience with precious and base metals on five continents, taking projects from exploration to mine development. He is the recipient of the Prospectors and Developers Association of Canadas 2018 Thayer Lindsley Award for the 2014 discovery of the Taylor lead-zinc-silver deposit in Arizona. Mr. Taylor has worked extensively for large and small cap companies, including Arizona Mining, BHP Minerals, Bear Creek Mining, American Copper and Nickel, Doe Run Resources and Westmont Mining Company. He is a Licensed Professional Geologist in several eastern and western states and a qualified person as defined by National Instrument 43-101. Mr. Taylor has a Bachelor of Science degree in Geology from Southeast Missouri State University and a Master of Science degree from the University of Missouri at Rolla. \nMichael McClelland, CPA, CA \nCFO \nMichael McClelland has over 15 years of experience in accounting and finance. He was formerly the Chief Financial Officer of Bisha Mining Share Company, an operating subsidiary of Nevsun Resources. Prior to that he worked for Goldcorp as the Mine General Manager at Wharf Resources (now owned by Coeur Mining), and prior to that was Director of Finance, Canada and USA. Mr. McClelland started his career at KPMG LLP as a Senior Accountant with the mining group. He is a Chartered Accountant and has a Bachelor of Arts in Economics from Simon Fraser University in British Columbia, Canada. \n### Purni Parikh \nSenior Vice President, Corporate Affairs \nPurni Parikh has over 25 years of public company experience in the mining sector including corporate affairs and finance, legal and regulatory administration, and governance. Ms. Parikh joined Augusta Gold in October, 2020. She is President of the Augusta Group of Companies including Titan Mining Corporation, and Senior Vice President, Corporate Affairs of Solaris Resources Inc. Ms. Parikh was previously Senior Vice President, Corporate Affairs and Corporate Secretary of Arizona Mining Inc. and Newcastle Gold Ltd., and Vice President, Corporate Secretary Augusta Resource Corporation and Ventana Gold Corp. prior to their acquisition. Ms. Parikh obtained a Certificate in Business from the University of Toronto and a Gemology degree. She holds the ICD.D designation from the Institute of Corporate Directors, and has worked extensively with boards. \n### Lynette Gould, CFA \nSenior Vice President, Investor Relations & Corporate Development \nLynette Gould has over 20 years experience in investor relations and finance roles. Most recently she was Vice President, Investor Relations at Galiano Gold, a junior gold mining company with an operation in Ghana, West Africa. Prior to that she was with Alio Gold a junior gold mining company with operations in Mexico and Nevada and prior to that she was Director, Investor Relations at Goldcorp Inc. where she played a critical role in positioning Goldcorp's new business strategy under its new leadership team. Ms. Gould has built robust IR strategies and developed deep relationships within the investment community. She holds a Chartered Financial Analyst (CFA) designation and has a Bachelor of Business degree. \n### Johnny Pappas \nVice President, Environmental & Permitting \nJohnny Pappas has a distinguished career in the field of environmental management and permitting. Mr. Pappas recently, from January 2016 to August 2018, held the position of Vice-President, Environmental and Permitting for Arizona Mining where he directed the permitting of the Hermosa Taylor Deposit Project, Director of Environmental Affairs for Romarco Minerals Inc., from September 2009 to December 2015, where he was instrumental in directing the federal and state permitting of the Haile Gold Mine; the first gold mine permitted east of the Mississippi in the last 20 years. He was previously, from May 2008 to August 2009, the Environmental Manager of the Climax Mine. In addition, he has held several Senior Environmental Engineer positions with PacifiCorp, Plateau Mining and Santa Fe Pacific Gold. Mr. Pappas holds a B.Sc. degree in Geology and Business Administration. Mr. Pappas is recognized as a leader in his field and has won numerous awards including: the 2003 Best of the Best Award awarded by the Department of Interiors Office of Surface Mining in recognition for extraordinary personal commitment and outstanding contribution for the reclamation success at the Castle Gate Mine and the 2003 Excellence in Surface Coal Mining Reclamation Award. \n### Scott Burkett \nVice President, Exploration \nScott Burkett has over 10 years of experience in mineral exploration, ore control, geologic modeling, resource estimation and database management. Mr. Burkett earned his BSc in Geology from the University of Idaho, and has since worked on a number of base and precious metal<|endoftext|>And any target business with which we ultimately consummate a business combination, may be materially adversely affected by the COVID-19 outbreak and other events, and the status of debt and equity markets. \n\n\n\nIf we pursue a target business in the aerospace or defense industries, we would be subject to a variety of risks that may negatively impact our operations. \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n### Risk Factors \n\n\nAccordingly, we may complete our initial business combination even if holders of a majority of our shares of common stock do not approve of the business combination we complete. \n\nSince our board of directors may complete a business combination without seeking stockholder approval, our public stockholders may not have the right or opportunity to vote on the business combination, unless we seek such stockholder vote. Accordingly, your only opportunity to affect the investment decision regarding our initial business combination may be limited to exercising your conversion rights within the period of time (which will be at least 20 business days) set forth in our tender offer documents mailed to our public stockholders in which we describe our initial business combination. \n\nOur initial stockholders and management team also may from time to time purchase shares of our Class A common stock prior to our initial business combination. As a result, in addition to our initial stockholders founder shares, we would need 6,468,751, or 37.5%, of the 17,250,000 public shares sold in our IPO to be voted in favor of an initial business combination in order to have our initial business combination approved (assuming all outstanding shares are voted). \n\nWe may seek to enter into a business combination transaction agreement with a prospective target business that requires as a closing condition that we have a minimum net worth or a certain amount of cash. If too many of our public stockholders exercise their conversion rights, we would not be able to meet such closing condition and, as a result, would not be able to proceed with the business combination. Consequently, if accepting all properly submitted conversion requests would cause our net tangible assets to be less than $5,000,001 or such greater amount necessary to satisfy a closing condition as described above, we would not proceed with such conversion and the related business combination and may instead search for an alternate business combination. \nThe ability of our public stockholders to exercise conversion rights with respect to a large number of our shares may not allow us to complete the most desirable business combination or optimize our capital structure. \nAt the time we enter into an agreement for our initial business combination, we will not know how many stockholders may exercise their conversion rights, and therefore will need to structure the transaction based on our expectations as to the number of shares that will be submitted for conversion. In addition, if a larger number of shares are submitted for conversion than we initially expected, we may need to restructure the transaction to reserve a greater portion of the cash in the trust account or arrange for third party financing. Furthermore, this dilution would increase to the extent that the anti-dilutionprovision of our Class B common stock result in the issuance of Class A shares on a greater than one-to-onebasis upon conversion of our Class B common stock at the time of our business combination. The amount of the deferred underwriting commissions payable to the underwriters of our IPO will not be adjusted for any shares that are converted in connection with an initial business combination. The per-shareamount we will distribute to stockholders who properly exercise their conversion rights will not be reduced by the deferred underwriting commission and after such conversions, the amount held in trust will continue to reflect our obligation to pay the entire deferred underwriting commissions. \nThe ability of our public stockholders to exercise conversion rights with respect to a large number of our shares could increase the probability that our initial business combination would be unsuccessful and that you would have to wait for liquidation in order to redeem your shares. \nIn either situation, you may suffer a material loss on your investment or lose the benefit of funds expected in connection with the conversion until we liquidate or you are able to sell your shares in the open market. \nIf we seek stockholder approval of our initial business combination, our sponsor,members of our management team,special advisorsortheir respective affiliates may elect to purchase shares or public warrants from our public stockholders, which may influence a vote on a proposed business combination and reduce the public float of our Class A common stock. \nIf we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our sponsor, members of our management team, special advisors or their respective affiliates may purchase shares or public warrants in privately negotiated transactions or in the open market either prior to or following the completion of our initial business combination, although they are under no obligation to do so. \nIn the event that our sponsor, members of our management team, special advisors or their respective affiliates purchase shares in privately negotiated transactions from our public stockholders who have already elected to exercise their conversion rights, such selling stockholders would be required to revoke their prior elections to convert their shares. The purpose of any such purchases of shares could be to vote such shares in favor of the business combination and thereby increase the likelihood of obtaining stockholder approval of the business combination or to satisfy a closing condition in an agreement with a target business that requires us to have a minimum net worth or a certain amount of cash at the closing of our initial business combination, where it appears that such requirement would otherwise not be met. \nIn addition, if such purchases are made, the public float of our Class A common stock or public warrants and the number of beneficial holders of our securities may be reduced, possibly making it difficult to maintain or obtain the quotation, listing or trading of our securities on a national securities exchange. \n\nWe may require our public stockholders who wish to convert their shares in connection with a proposed business combination to either (i) tender their certificates (if any) to our transfer agent or (ii) deliver their shares to the transfer agent electronically using the Depository Trust Companys DWAC (Deposit/Withdrawal At Custodian) System, at the holders option, prior to the vote on the business combination with the specific deadline set forth in the proxy materials sent in connection with the proposal to approve the business combination. In order to obtain a physical share certificate, a stockholders broker and/or clearing broker, DTC and our transfer agent will need to act to facilitate this request. \nIf, in connection with any stockholder meeting called to approve a proposed business combination, we require our public stockholders who wish to convert their shares to comply with specific requirements for conversion, such converting stockholders may be unable to sell their securities when they wish to in the event that the proposed business combination is not approved. \nIf we require our public stockholders who wish to convert their shares to comply with specific delivery requirements for conversion and such proposed business combination is not consummated, we will promptly return such certificates to the tendering public stockholders. \nIf a stockholder fails to receive notice of our offer to redeem our public shares in connection with our initial business combination, or fails to comply with the procedures for tendering its shares, such shares may not be converted. \nWe will comply with the proxy rules or tender offer rules, as applicable, when conducting conversions in connection with our initial business combination. Despite our compliance with these rules, if a stockholder fails to receive our proxy solicitation or tender offer materials, as applicable, such stockholder may not become aware of the opportunity to convert its shares. In addition, the proxy solicitation or tender offer materials, as applicable, that we will furnish to holders of our public shares in connection with our initial business combination will describe the various procedures that must be complied with in order to validly convert or tender public shares. In the event that a stockholder fails to comply with these or any other procedures disclosed in the proxy or tender offer materials, as applicable, its shares may not be converted to cash. \n\nOur public stockholders will be entitled to receive funds from the trust account only upon the earlier to occur of: (i) our completion of an initial business combination, and then only in connection with those shares of our Class A common stock that such stockholder properly elected to convert, subject to the limitations described herein, (ii) the redemption of any public shares properly tendered in connection with a stockholder vote to amend our amended and restated certificate of incorporation (A) to modify the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial business combination within 24months from the closing of our IPO or (B) with respect to any other material provisions relating to stockholders rights or pre-initialbusiness combination activity and (iii) the redemption of our public shares if we are unable to complete an initial business combination within 24months from the closing of our IPO, subject to applicable law and as further described herein. \nThe requirement that we complete our initial business combination within 24 months after the closing of our IPO may give potential target businesses leverage over us in negotiating a business combination and may limit the time we have in which to conduct due diligence on potential business combination targets as we approach our dissolution deadline, which could undermine our ability to complete our initial business combination on terms that would produce value for our stockholders. \n\nWe may not be able to complete our initial business combination within 24 months after the closing of our IPO, in which case we would cease all operations except for the purpose of winding up and we would redeem our public shares and liquidate. \nWe may not be able to find a suitable target business and complete our initial business combination within 24months after the closing of our IPO. If we have not completed our initial business combination within such time period, we will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-shareprice, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the trust account not previously released to us to pay our tax obligations and less up to $50,000 of interest to pay dissolution expenses, divided by the number of then outstanding public shares, which redemption will completely extinguish our public stockholders rights as stockholders (including the right to receive further liquidation distributions, if any) and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject in the case of clauses (ii) and (iii), to our obligations under Delaware law to provide for claims of creditors and in all cases subject to the other requirements of applicable law. \n\nIf we seek stockholder approval of our initial business combination and we do not conduct conversions in connection with our initial business combination pursuant to the tender offer rules, our amended and restated certificate of incorporation provides that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a group (as defined under Section 13 of the Exchange Act), will be restricted from seeking conversion rights with respect to more than an aggregate of 20% of the shares sold in our IPO without our prior consent, which we refer to<|endoftext|>1 to Form 10-K/A for the year ended March 31, 2017, is for the following purposes: \n1) \nRemove assets that had been written off and/or consumed during the year; \n2) \nCorrect accounts payable; \n3) \nCorrect accounting for operating expenses and remove the expense for stock for services. \ni \nPART I \nITEM 1. BUSINESS. \n\nFactors which could have a material adverse effect on our operations and future prospects include, but are not limited to: changes in economic conditions, legislative/regulatory changes, availability of capital, interest rates, competition, and generally accepted accounting principles. \nCompany Overview \nis a company that is actively seeking out new opportunities in the Organic and Bio-technology space. \n### ITEM 1A. RISK FACTORS. \n\nITEM 1B. UNRESOLVED STAFF COMMENTS. \n\nITEM 2. PROPERTIES. \nNone. \n### ITEM 3. LEGAL PROCEEDINGS. \nThere are no claims, actions, suits, proceedings, or investigations that are currently pending or, to the Companys knowledge, threatened by or against the Company or respecting its operations or assets, or by or against any of the Companys officers, directors, or affiliates. \nITEM 4. MINE SAFETY DISCLOSURE. \nNot applicable. \nPART II \nITEM 5. \nOur common stock trades on the over-the-counter Bulletin Board. It currently trades under the symbol LBTD. \n### Dividends \nWe have not declared any cash dividends, nor do we intend to do so. We are not subject to any legal restrictions respecting the payment of dividends, except that they may not be paid to render us insolvent. Dividend policy will be based on our cash resources and needs, and it is anticipated that all available cash will be needed for our operations in the foreseeable future. \nSection 15(g) of the Securities Exchange Act of 1934 \nOur shares are covered by section 15(g) of the Securities Exchange Act of 1934, as amended that imposes additional sales practice requirements on broker/dealers who sell such securities to persons other than established customers and accredited investors (generally institutions with assets in excess of $5,000,000 or individuals with net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their spouses). \nterms important to in understanding of the function of the penny stock market, such as ID and offer quotes, a dealers spread and broker/dealer compensation; the customers rights and remedies in cases of fraud in penny stock transactions; and, FINRAs toll free telephone number and the central number of the North American Administrators Association, for information on the disciplinary history of broker/dealers and their associated persons. \n\nWe have no equity compensation plans and accordingly we have no shares authorized for issuance under an equity compensation plan. \n\nNone \nIssuer Purchase of Securities \nThe Company did not repurchase any of its securities during the fiscal years ended March 31, 2017 and 2016. \n### ITEM 6. SELECTED FINANCIAL DATA. \n\nITEM 7. \n### Plan of Operation \nWe are a start-up company, actively seeking out new opportunities in the Organic and Bio-technology space. \n### Results of Operations \nYear Ended March 31, 2017 compared to the Year Ended March 31, 2016 \nWe have not yet recognized any revenue as of March 31, 2017. \nFor the year ended March 31, 2017 our net loss was $19,550 compared to $781,105 for the year ended March 31, 2016. In the prior year we incurred $765,000 of stock-based compensation. \n\nAs of March 31, 2017, we have no available cash, liabilities of $80,859 and an accumulated deficit of $948,949. During the year ended March 31, 2017 we used $17,755 of cash. \nOur sole officer and director is willing to advance funds to us on an as needed basis until such time as we can sustain our operations without his assistance. If we need additional cash and cant raise it, or Mr. \n\nWe will be able to stay in business for at least one year by drop shipping oil and gas equipment to our customers since the customer is responsible for payment in full of all equipment prior to delivery of the same. To meet our need for cash for oil and gas exploration, we will attempt to raise money from a private placement and our profits from the sale of oil and gas equipment. \nOur sole officer and sole director is willing to advance funds to us on an as needed basis until such time as we can sustain our operations without his assistance. If we need additional cash and cant raise or Mr. \nITEM 7A. \n\nITEM 8. \n\n\nCERTIFIED PUBLIC ACCOUNTANTS \n10544 ALTON AVE NE \nSEATTLE, WA 98125 \n206.353.5736 \n\n### To the Shareholders & Board of Directors \n\n\nWe have audited the accompanying restated balance sheets of as of March 31, 2017 (restated) and 2016 and the related statements of operations, changes in stockholders deficit, cash flows, and the related notes (collectively referred to as financial statements) for the years then ended. In our opinion, the restated financial statements present fairly, in all material respects, the financial position of the Company as of March 31, 2017 (restated) and 2016 and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America. \n### Going Concern \nAs discussed in Note #3 to the financial statements, although the Company has limited operations it has yet to attain profitability. Managements plan in regard to these matters is also described in Note #3. \nBasis for Opinion \n\n\n\n/S/ \n\n### Seattle, Washington \nDecember 31, 2020 \n\n### BALANCE SHEETS \n\n\n### STATEMENTS OF OPERATIONS \n\n\n\n### FOR THE YEARS ENDED MARCH 31, 2016 AND 2017 \n\n\n### STATEMENTS OF CASH FLOWS \n\n\nNOTES TO RESTATED FINANCIAL STATEMENTS \nMARCH 31, 2017 \n### NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS \nThe company is actively seeking out new opportunities in the Organic and Bio-technology space. \n\n### Basis of presentation \nThe accompanying restated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP). \nUse of estimates \nSignificant estimates include the estimated useful lives of property and equipment. \n### Property and equipment \nWhen property and equipment is retired or otherwise disposed of, the net carrying amount is eliminated with any gain or loss on disposition recognized in earnings at that time. As of March 31, 2017, the Company deemed its software that had been previously capitalized was fully impaired and recognized a $5,458 loss on impairment. Depreciation expense for the years ended March 31, 2017 and 2016, was $0 and $1,092, respectively. \n\n\n### Level 1: \n\nLevel 2: \n\n### Level 3: \n\nThe Companys notes payable approximates the fair value of such instruments based upon managements best estimate of interest rates that would be available to the Company for similar financial arrangements at March 31, 2017 and 2016. \n### Income taxes \n\n\n### Stock-based Compensation \n505-50, \n\n(ASC 505-50). \n\n\n\n\nThe Companys diluted loss per share is the same as the basic loss per share for the years ended March 31, 2017 and 2016, as the inclusion of any potential shares would have had an anti-dilutive effect due to the Company generating a loss. \n\n\nLeases (Topic842) \nASU 2016-02 requires lessees to recognize lease assets and lease liabilities on the balance sheet and requires expanded disclosures about leasing arrangements. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018 and interim periods in fiscal years beginning after December15, 2018, with early adoption permitted. The Company has adopted this accounting standard update. \n\n\nThe guidance is effective for interim and annual periods beginning after December15, 2018. \nIn November 2019, the FASB issued ASU 2019-10, Financial InstrumentsCredit Losses (Topic 326), Derivative and Hedging (Topic 815, and Leases (Topic 841). This new guidance will be effective for annual reporting periods beginning after December 15, 2019, including interim periods within those annual reporting periods. While the Company is continuing to assess the potential impacts of ASU 2019-10, it does not expect ASU 2019-10 to have a material effect on its financial statements. \nThe Company has implemented all new accounting pronouncements that are in effect and applicable. \n### NOTE 3 - GOING CONCERN \nThe Companys financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern that contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not established any source of revenue to cover its operating costs and has an accumulated deficit of $948,949, ($765,00 of which is from non-cash stock compensation expense). The Companys existence is dependent upon managements ability to develop profitable operations. These conditions raise substantial doubt that the Company will be able to continue as a going concern. These restated financial statements do not include any adjustments that might result from this uncertainty. Activities to date have been supported by equity financing and demand loans from the Companys major shareholder. Management continues to seek funding from its shareholders and other qualified investors to pursue its business plan and new course of action. \nNOTE 4 LOAN PAYABLE \nAs of March 31, 2017, the Company owed the former CEO $6,450 for cash advances used to pay certain administrative expenses. The advance is unsecured, non-interest bearing and due on demand. \n\nDuring the year ended March 31, 2016, the majority shareholder, on behalf of the Company, purchased $6,550 of software from a third party. Further, the Company borrowed $17,025 from the majority shareholder and repaid $3,537. \nDuring the years ended March 31, 2017 and 2016, the majority shareholder of the Company paid $11,301 and $8,438 of its operating expenses, respectively. \nAs of March 31, 2017 and 2016, the balance due to the former CEO was $6,450 and $0, respectively. \nAs of March 31, 2017 and 2016, the balance due to the CEO is $62,759 and $51,458, respectively. \n### NOTE 6 COMMON STOCK TRANSACTIONS \nOn March 30, 2016, the board of directors of the Company, agreed to cancel 100,000,000 of Mr. Nagys, the former officer of the Company, previously issued shares for no consideration. \nOn November 24, 2015, the Company issued to a third-party consultant 1,500,000 common shares for services rendered. The fair value of the common shares issued was $765,000 and was recorded by the Company as stock-based compensation. \n### NOTE 7 PREFERRED STOCK \nThe Company has 100,000,000 shares of preferred stock authorized. The preferred stock may be divided into and issued in series and designated at the authorization of the Board when deemed necessary. \nNOTE 8 INCOME TAXES \nAt March 31, 2017, the Company had net operating loss carry forwards of approximately $64,383 that may be offset against future taxable income.No tax benefit has been reported in the March 31, 2017 or 2016 financial statements since the potential tax benefit is offset by a valuation allowance of the same amount. \nThe provision for Federal income tax consists of the following for the years ended March 31, 2017 and 2016: \nThe cumulative tax effect at the expected rate of 35% for the years ended March 31, 2017 and 2016, of significant items comprising our net deferred tax amount is as follows as of March 31, 2017 and 2016: \n\n\nAs of March 31, 2017, the Company had no accrued interest or penalties related to uncertain tax positions. \n### NOTE 9 RESTATEMENT \nThe March 31, 2017 financial statements are being restated to correct errors in accounting for assets, accounts payable, operating expenses and removing the accounting for stock for services. \nThe following table summarizes changes made to the March 31, 2017 balance sheet. \nThe following table summarizes changes made to the year ended March 31, 2017 Statement of Operations. \n### NOTE 10 - SUBSEQUENT EVENTS \n\nThe Company accepted the resignation of Zoltan Nagy on June 19, 2017, resigning his position on the Board of Directors, as well as his positions as the sole officer, including principal executive officer and principal financial officer. \nEffective June 19, 2017 the Board of Directors appointed William Ko to the Board of Directors and as sole officer, including principal executive officer and principal financial officer. \nOn August 30, 2017, the Company issued 150,000,000 shares of common stock to Mr. Nagy for services rendered. \nEffective November 21, 2017, the Company increased its authorized<|endoftext|>Joined the Company and became a named executive officer in May 2018. Mr.Koch presently services as Executive Vice President Real Estate and Artistree. Mr.Koch received a 2020 Bonus Plan award of $383,522 and a long-term performance-based cash incentive award of $440,000, which vests ratably over four years if the performance measure is met by March31, 2021. \n(12) \nMr.Cheatham received a pro-rated \n2020 Bonus Plan award of $278,214 and a long-term time-based cash incentive award, which vests ratably over four years. \n\nFor 2020, the total compensation of Mr.Buchanan, the Companys Chief Executive Officer as of the end of fiscal 2020, was $3,181,430, as presented in the Summary Compensation Table, and approximately 298 times the total compensation of the Companys median employee of $10,661 calculated in the same manner. \nThe employee population was determined as of January30, 2021. On that date, the Company had a total employee population of 44,414 employees in the United States, Canada, China and Hong Kong. With a total of 121 employees in China and Hong Kong, the de minimis exemption under SEC regulations was applied. The median employee was determined from the active employee population of the United States and Canada on the determination date, excluding Mr.Buchanan, the Chief Executive Officer as of the determination date. All active Company employees were included, whether employed on a full-time or part-time or seasonal basis. Adjustments were made to annualize the compensation of employees who were not employed by the Company for the entire year. The median employee, a part-time employee in our stores, was identified by reviewing the wages of our employees as reflected in our payroll records for 2020. We converted earnings paid in Canadian dollars to U.S. dollars using the published exchange rate as of January30, 2021. After identifying the median employee, the 2020 annual total compensation was calculated for the median employee using the same methodology used for the Companys Chief Executive Officer as presented in the Summary Compensation Table above. \nApproximately 75% of our employees are part-time and / or seasonal employees in our stores or distribution centers. In comparison, the total compensation of the Companys Chief Executive Officer was approximately 88 times the total compensation of the Companys median full-time employee of $36,050, calculated in the same manner as described above for the Chief Executive Officer. \nThe SEC rules allow us the flexibility to select a methodology for identifying our median employee in a manner that is most appropriate based on our size, organizational structure, policies and procedures. As such, the pay ratios reported by other companies, including by our peer companies or other companies in the arts and craft specialty retail industry, which may have employed other permitted methodologies or assumptions, may not be comparable to our pay ratio. \n### Grants of Plan-Based Awards for Fiscal 2020 \nThe following table sets forth the plan-based awards granted to our Named Executive Officers pursuant to Company plans during fiscal 2020. \n(1) \nThe maximum payout level for fiscal 2020 annual bonuses under the 2020 Bonus Plan was reduced to 125% of target in August 2020 by the Compensation Committee in view of the impact of the global pandemic \nCOVID-19 on the Companys revenue and EBIT results achieved at that time. Please see note entitled Annual Bonuses. The threshold, target, and maximum amounts in these columns show the range of payouts targeted for fiscal 2020 for performance under the 2020 Bonus Plan as discussed in further detail in Compensation Discussion and Analysis Compensation Elements Annual Bonuses. \n(2) \nRepresents the aggregate grant date fair value of the restricted stock unit awards, as calculated in accordance with FASB ASC Topic 718. Please see the note entitled Stock-Based Compensation in the notes to the Companys consolidated financial statements in our 2020 Annual Report for a discussion of the assumptions underlying these calculations. \n(3) \nReflects Mr.Cosbys annual bonus while he was CEO from the beginning of fiscal 2020 until April1, 2020. Mr.Cosbys letter agreement of April9, 2020, revised Mr.Cosbys bonus for fiscal 2020 to be equal to $330,000 upon his transition to Senior Advisor as discussed in further detail in Compensation Discussion and Analysis Compensation Elements Annual Bonuses. \n(4) \nRestricted stock units were granted effective on these dates, vesting at the rate of 25% per year on each of the first through fourth anniversaries of the date of grant, or immediately upon the termination of the applicable Named Executive Officers employment without cause within 12 months following a Change of Control (as defined in the Restated Plan and the applicable award agreement for such Named Executive Officer). \n(5) \nLong-term performance-based and time-based cash incentive awards were granted effective on these dates, vesting as described under Summary Compensation Table above. \n\nYear-End \nThe following table sets forth information regarding equity awards held by our Named Executive Officers as of January30, 2021. \n(1) \nAll stock option awards granted prior to June27, 2014, our first day of listing on The Nasdaq Global Select Market, have an exercise price determined by us to be equal to or greater than the fair market value of our Common Stock on the date of grant. Because prior to June27, 2014, the Company was privately-held and there was no public market for our Common Stock, the fair market value of our Common Stock was determined by our Board based on available information that was material to the value of our Common Stock at the time such determination was made, including any third-party valuation reports, the principal amount of the Companys indebtedness, the Companys actual and projected financial results, and fluctuations in the market value of publicly traded companies in the retail industry. All stock option awards granted on or after June27, 2014 have an exercise price equal to the closing price of our Common Stock on The Nasdaq Global Select Market on the date of grant. \n(2) \nAll stock option awards granted prior to the approval of the Amended and Restated 2014 Omnibus Long-Term Incentive Plan (the Original Omnibus Plan) by our stockholders on June6, 2014, have an eight-year term, and all stock option awards granted after the approval of the Original Omnibus Plan have a ten-year term. \n(3) \nMarket values reflect the closing price of our Common Stock on The Nasdaq Global Select Market on January29, 2021 (the last business day of fiscal 2020), which was $15.50. \n(4) \nStock options were granted to Mr.Buchanan on January6, 2020, vesting at the rate of 25% per year on each of the first through fourth anniversaries of January6, 2020. The Company granted 795,000 unvested restricted stock units to Mr.Buchanan on January6, 2020, vesting at the rate of 50% on each of the first and second anniversaries of the date of grant. Mr.Buchanans equity awards may also vest upon the termination of Mr.Buchanans employment without cause or resignation for good reason within 12 months following a Change of Control (as defined in the Omnibus Plan and Mr.Buchanans applicable award agreement) if the awards are assumed or substituted in the transaction. \n(5) \nStock options were granted to Mr.Cosby on October21, 2019, vesting at the rate of 25% per year on each of the first through fourth anniversaries of October21, 2019. Mr.Cosbys award of 18,943 restricted shares, of which 2,368 restricted shares are unvested, vests 12.5% every three months after February28, 2019. Mr.Cosbys award of 33,333 restricted shares, of which 4,166 restricted shares are unvested, vests 12.5% on the last day of each subsequent quarter after May6, 2019. Mr.Cosbys award of 55,310 restricted shares, of which 13,826 restricted shares are unvested, vests 12.5% on the last day of each subsequent quarter after August5, 2019. Mr.Cosbys award of 75,000 restricted stock units, of which 37,500 restricted stock units are unvested, vests 50% on the first and second anniversary of October21, 2019. Mr.Cosbys award of 40,584 restricted stock units, of which 15,219 restricted stock units are unvested, vests 12.5% on the last day of each subsequent quarter after November4, 2019. Mr.Cosbys award of 75,000 restricted stock units, of which 37,500 restricted stock units are unvested, vests 12.5% every three months after February3, 2020. Each of Mr.Cosbys equity awards (other than the 860,000 options and 75,000 restricted shares granted on October21, 2019) also vest upon a Qualifying Termination (as defined in Mr.Cosbys applicable award agreement) of his roles as Chief Executive Officer and as a member of the Board. A portion of his October 2019 restricted stock unit awards will also vest upon the termination of his role as Chief Executive Officer without cause (as defined in Mr.Cosbys applicable award agreement) and the cessation of his service on the Board. A portion of his October 2019 stock options will vest upon the termination of his role as Chief Executive Officer without cause (as defined in Mr.Cosbys applicable award agreement). \n(6) \nThe Company granted restricted stock units to Mr.Diamond on September1, 2020, vesting at the rate of 25% per year on each of the first through fourth anniversaries of the date of grant. \n(7) \nStock options were granted to Mr.Sullivan effective (i)June13, 2014, (ii) August12, 2014, (iii) September30, 2015, (iv) December15, 2015, (v) September14, 2016, (vi) March31, 2017, (vii) March29, 2018, and (viii)March29, 2019 each vesting at the rate of 25% per year on each of the first through fourth anniversaries of the date of grant. Mr.Sullivans award of 7,481 restricted share units, of which 1,870 restricted share units are unvested, vests 25% per year on each of the first through fourth anniversaries of the date of grant March31, 2017. Mr.Sullivans award of 12,747 restricted share units, of which 6,373 restricted share units are unvested, vests 25% per year on each of the first through fourth anniversaries of the date of grant March29, 2018. Mr.Sullivans award of 33,001 restricted share units, of which 24,751 restricted share units are unvested, vests 25% per year on each of the first through fourth anniversaries of the date of grant March29, 2019. Mr.Sullivans award of 41,358 restricted stock units, of which 41,358 restricted stock units are unvested, vests 25% per year on each of the first through fourth anniversaries of the date of grant March31, 2020. Mr.Sullivans award of 20,138 unvested restricted stock units vest as certain award performance criteria are met. \n(8) \nThe Company granted restricted stock units to Mr.Wang on July31, 2020, vesting at the rate of 25% per year on each of the first through fourth anniversaries of the date of grant. \n(9) \nThe Company granted stock options to Mr.Koch on June29, 2018 and March29, 2019, each vesting at the rate of 25% per year on each of the first through fourth anniversaries of the date of grant. Mr.Kochs award of 17,388 restricted stock units, of which 8,694 restricted stock units are unvested, vests 25% on each of the first through fourth anniversaries of June29, 2018. Mr.Kochs award of 14,127 restricted stock units, of which 10,595 restricted stock units are unvested, vests 25% on each of the first through fourth anniversaries of March29, 2019. Mr.Kochs award of 50,000 restricted stock units, of which 37,500 restricted stock units are unvested, vests 25% on each of the first through fourth anniversaries of October21, 2019. Mr.Kochs award of 67,901 unvested restricted stock units vests 25% on each of the first through fourth anniversaries of March31, 2020. Mr.Kochs award of 57,537 restricted stock units, of which 40,276 restricted stock units are unvested, vests as certain award performance criteria are met. Each of Mr.Kochs equity awards may also vest upon the termination of Mr.Kochs employment without cause within 12 months following a Change of Control (as defined in the Omnibus Plan and Mr.Kochs applicable award agreement) if the awards are assumed or substituted in the transaction. \n(10) \nThe Company did not grant any equity to Mr.Cheatham upon his employment during fiscal 2020. Instead, Mr.Cheatham received a long-term time-based cash incentive award vesting at the rate of 25% per year on each of the first through fourth anniversaries of the date of grant. \n\nThe following table shows the number of stock options exercised by our Named Executive Officers, and stock awards held by our Named Executive<|endoftext|>Repaid in connection with the 2019-2 Debt Securitization. \n### Credit Fund Warehouse II Facility \nOn August 16, 2019, Credit Fund Warehouse II closed on a revolving credit facility (the \"Credit Fund Warehouse II Facility\") with lenders. The Credit Fund Warehouse II Facility provides for secured borrowings during the applicable revolving period up to an amount equal to $150,000. The Credit Fund Warehouse II Facility is secured by a first lien security interest in substantially all of the portfolio investments held by the Credit Fund Warehouse II Facility. The maturity date of the Credit Fund Warehouse II Facility is August 16, 2022. Amounts borrowed under the Credit Fund Warehouse II Facility bear interest at a rate of LIBOR plus 1.15% until August 2021. Amounts borrowed under the Credit Fund Warehouse II Facility during the first 12 months bore interest at a rate of LIBOR plus 1.05%, and amounts borrowed in the final 12 months will bear interest at LIBOR plus 1.50%. \n2017-1 Notes \nOn December 19, 2017, Credit Fund completed the 2017-1 Debt Securitization. The notes offered in the 2017-1 Debt Securitization (the 2017-1 Notes) were issued by the 2017-1 Issuer, a wholly owned and consolidated subsidiary of Credit Fund, and are secured by a diversified portfolio of the 2017-1 Issuer consisting primarily of first and second lien senior secured loans. The 2017-1 Debt Securitization was executed through a private placement of the 2017-1 Notes, consisting of: \n$231,700 of Aaa/AAA ClassA-1 Notes, which bear interest at the three-month LIBOR plus 1.17%; \n$48,300 of Aa2/AA ClassA-2 Notes, which bear interest at the three-month LIBOR plus 1.50%; \n$15,000 of A2/A ClassB-1 Notes, which bear interest at the three-month LIBOR plus 2.25%; \n$9,000 of A2/A ClassB-2 Notes which bear interest at 4.30%; \n$22,900 of Baa2/BBB ClassC Notes which bear interest at the three-month LIBOR plus 3.20%; and \n$25,100 of Ba2/BB ClassD Notes which bear interest at the three-month LIBOR plus 6.38%. \nThe 2017-1 Notes were scheduled to mature on January15, 2028. Credit Fund received 100% of the preferred interests issued by the 2017-1 Issuer (the 2017-1 Issuer Preferred Interests) on the closing date of the 2017-1 Debt Securitization in exchange for Credit Funds contribution to the 2017-1 Issuer of the initial closing date loan portfolio. The 2017-1 Issuer Preferred Interests do not bear interest and had a nominal value of $47,900 at closing. \nThe 2017-1 Notes were fully redeemed during the year ended December31, 2020. \n2019-2 Notes \nOn May 21, 2019, Credit Fund completed the 2019-2 Debt Securitization. The notes offered in the 2019-2 Debt Securitization (the 2019-2 Notes) were issued by the 2019-2 Issuer, a wholly owned and consolidated subsidiary of Credit Fund, and are secured by a diversified portfolio of the 2019-2 Issuer consisting primarily of first and second lien senior secured loans. The 2019-2 Debt Securitization was executed through a private placement of the 2019-2 Notes, consisting of: \n$233,000 of Aaa/AAA ClassA-1 Notes, which bear interest at the three-month LIBOR plus 1.50%; \n$48,000 of Aa2/AA ClassA-2 Notes, which bear interest at the three-month LIBOR plus 2.40%; \n$23,000 of A2/A ClassB Notes, which bear interest at the three-month LIBOR plus 3.45%; \n$27,000 of Baa2/BBB- ClassC Notes which bear interest at the three-month LIBOR plus 4.55%; and \n$21,000 of Ba2/BB- ClassD Notes which bear interest at the three-month LIBOR plus 8.03%. \nThe 2019-2 Notes are scheduled to mature on April15, 2029. Credit Fund received 100% of the preferred interests issued by the 2019-2 Issuer (the 2019-2 Issuer Preferred Interests) on the closing date of the 2019-2 Debt Securitization in exchange for Credit Funds contribution to the 2019-2 Issuer of the initial closing date loan portfolio. The 2019-2 Issuer Preferred Interests do not bear interest and had a nominal value of $48,300 at closing. \nAs of December31, 2020, the 2019-2 Issuer was in compliance with all covenants and other requirements of the indenture. \n### MIDDLE MARKET CREDIT FUND II, LLC \nOverview \nOn November 3, 2020, the Company and CCLF entered into a limited liability company agreement to co-manage Credit Fund II, a Delaware limited liability company that is not consolidated in the Company's consolidated financial statements. Credit Fund II primarily invests in senior secured loans of middle market companies. Credit Fund II is managed by a four-member board, on which the Company and CCLF have equal representation. Establishing a quorum for Credit Fund II's board requires at least one of the Company's representatives and one of CCLF's representatives. The Company and CCLF have 84.13% and 15.87% economic ownership of Credit Fund II, respectively. By virtue of its membership interest, each of the Company and CCLF indirectly bears an allocable share of all expenses and other obligations of Credit Fund II. \nCredit Fund II's initial portfolio consists of 45 senior secured loans of middle market companies with an aggregate principal balance of approximately $250 million. Credit Fund II's initial portfolio was funded on November 3, 2020 with existing senior secured debt investments contributed by the Company and as part of the transaction, the Company determined that the contribution met the requirements under ASC 860, \n### Transfers and Servicing \nCredit Fund II is expected to make only limited new investments in senior secured loans of middle market companies. Portfolio and investment decisions with respect to Credit Fund II must be unanimously approved by a quorum of Credit Fund IIs board members consisting of at least one of the Company's representatives and one of CCLF's representatives. Therefore, although the Company owns more than 25% of the voting securities of Credit Fund II, the Company does not believe that it has control over Credit Fund (other than for purposes of the Investment Company Act). \nMiddle Market Credit Fund II SPV, LLC (Credit Fund II Sub), a Delaware limited liability company, was formed on September 4, 2020. Credit Fund II Sub is a wholly owned subsidiary of Credit Fund II and is consolidated in Credit Fund IIs consolidated financial statements commencing from the date of its formation. Credit Fund II Sub primarily holds investments in first lien loans of middle market companies, which are pledged as security for the Credit Fund II Senior Notes (see below). \nCredit Fund II, the Company and CCLF entered into an administration agreement with Carlyle Global Credit Administration L.L.C., the administrative agent of Credit Fund II (in such capacity, the Credit Fund II Administrative Agent), pursuant to which the Credit Fund II Administrative Agent is delegated certain administrative and non-discretionary functions, is authorized to enter into sub-administration agreements at the expense of Credit Fund II with the approval of the board of managers of Credit Fund II, and is reimbursed by Credit Fund II for its costs and expenses and Credit Fund IIs allocable portion of overhead incurred by the Credit Fund II Administrative Agent in performing its obligations thereunder. \n### Credit Fund II Senior Notes \nOn November 3, 2020, Credit Fund II Sub closed on the Credit Fund II Senior Notes (the Credit Fund II Senior Notes) with lenders. The Credit Fund II Senior Notes provides for secured borrowings totaling $157,500 with two tranches, \nA-1 and A-2 outstanding. The facility is secured by a first lien security interest in substantially all of the portfolio investments held by Credit Fund II Sub. The maturity date of the Credit Fund II Senior Notes Sub Facility is November 3, 2030. Amounts issued for the Class A-1 notes totaled $147,500 and bear interest at a rate of LIBOR plus 2.70%, and amounts issued for the Class A-2 notes totaled $10,000 and bear interest at LIBOR plus 3.20%. The A-1 Notes were rated AAA, and the A-2 Notes were rated AA by DBRS Morningstar. The terms of the Credit Fund II Senior Notes provide that as loans pay down, up to $50,000 is available from principal proceeds for reinvestment, and then the investment principal proceeds are used to directly pay down the principal balance on the Credit Fund II Senior Notes. As of December31, 2020, Credit Fund II Sub was in compliance with all covenants and other requirements of its respective credit agreements. \n### Selected Financial Data \nSince inception of Credit Fund II and through December31, 2020, the Company and CCLF each made capital contributions of $78,096 and $12,709 in members equity, respectively, to Credit Fund II. Below is certain summarized consolidated information for Credit Fund II as of December31, 2020. \n(1) As of December31, 2020, the fair value of the Company's ownership interest in the members' equity was $77,395. \nBelow is a summary of Credit Fund IIs portfolio, followed by a listing of the loans in Credit Fund IIs portfolio as of December31, 2020: \n(1) \nAt par/principal amount. \n(2) \nWeighted average yields include the effect of accretion of discounts and amortization of premiums and are based on interest rates as of December31, 2020. \n(3) \n\n(4) \n\nII Sub. Credit Fund II Sub has entered into the Credit Fund II Sub Notes. The lenders of the Credit Fund II Sub Notes have a first lien security interest in substantially all of the assets of Credit Fund II Sub. Accordingly, such assets are not available to creditors of Credit Fund II. \n(1)As of December31, 2020, the geographical composition of investments as a percentage of fair value was 3.6% in Canada, 1.6% in Luxembourg, 2.3% in the United Kingdom and 92.5% in the UnitedStates. \n(2) \nFor each such loan, Credit Fund II has indicated the reference rate used and provided the spread and the interest rate in effect as of December31, 2020. As of December31, 2020, the reference rates for Credit Fund II's variable rate loans were the 30-day LIBOR at 0.15%, the 90-day LIBOR at 0.25% and the 180-day LIBOR at 0.26%. \n(3) \n\n(4) \n\n(5) \nFair value is determined in good faith by or under the direction of the board of managers of Credit Fund II, pursuant to Credit Fund IIs valuation policy, with the fair value of all investments determined using significant unobservable inputs, which is substantially similar to the valuation policy of the Company provided in Note 3, Fair Value Measurements, to these consolidated financial statements. \n(6) \nRepresents a corporate mezzanine loan, which is subordinated to senior secured term loans of the portfolio company \n\nWe generate cash from the net proceeds of offerings of our common stock and through cash flows from operations, including investment sales and repayments as well as income earned on investments and cash equivalents. We may also fund a portion of our investments through borrowings under the Credit Facility, as defined below, the issuance of debt, and through securitization of a portion of our existing investments. The primary use of existing funds and any funds raised in the future is expected to be for investments in portfolio companies, repayment of indebtedness, cash distributions to our stockholders and for other general corporate purposes. \nWhile aggregate economic activity continued to improve through the fourth quarter of 2020, the dispersion in performance across industries and geographies has been substantial. The slower than anticipated global vaccination rollout, combined with uncertainties regarding new variants of the virus, will prolong the risk of continued disruption deeper into the year, and we expect that the pace and magnitude of economic recovery will be uneven. This continued market and business disruption may impact certain aspects of our liquidity. Depreciation in the valuations of our investments may adversely impact collateral eligibility, which would reduce the availability under the Credit Facility. We are therefore continuously and critically monitoring our operating results, liquidity and anticipated capital requirements, and taking action to fortify our balance sheet and provide capital flexibility. For example, in December 2020, we issued an additional $75.0 million aggregate principal amount of senior unsecured notes, and used the proceeds for the repayment of our secured debt, which provides enhanced balance sheet flexibility. We believe our current cash position, available capacity under the Credit Facility which is well in excess of our unfunded commitments and net cash provided by operating activities will provide us with sufficient resources to meet our obligations and continue to support our investment objectives, including reserving for the capital needs<|endoftext|>The appointment or removal of directors prior to our initial business combination may only be amended by a special resolution passed by not less than 90% of our ordinary shares who attend and vote at our shareholder meeting which shall include the affirmative vote of a simple majority of our Class B ordinary shares. Our initial shareholders and their permitted transferees, if any, who will collectively beneficially owned, on an as-converted basis, 20% of our ClassA ordinary shares upon the closing of our initial public offering, will participate in any vote to amend our amended and restated memorandum and articles of association and/or trust agreement and will have the discretion to vote in any manner they choose. \n\n\nThe current economic environment has made it difficult for companies to obtain acquisition financing. \n\nWe issued public warrants to purchase an aggregate 12,131,500 of our ClassA ordinary shares as part of the units offered in our initial public offering and upon the exercise of the over-allotment and, simultaneously with the closing of our initial public offering and the exercise of the over-allotment, we issued in a private placement an aggregate 6,185,933 private placement warrants, each exercisable to purchase one ClassA ordinary share at $11.50 per share, subject to adjustment. In addition, if the sponsor, its affiliates or a member of our management team or of our board of directors makes any working capital loans, it may convert up to $4,500,000 of such loans into up to an additional 3,000,000 private placement warrants, at the price of $1.50 per warrant. \n\n\nUnlike most blank check companies, if (i)we issue additional ClassA ordinary shares or equity-linked securities for capital raising purposes in connection with the closing of our initial business combination at an issue price or effective issue price of less than $9.20 per ordinary share (with such issue price or effective issue price to be determined in good faith by our board of directors and, in the case of any such issuance to our sponsor or its affiliates, without taking into account any founder shares held by our sponsor or such affiliates, as applicable, prior to such issuance) (the Newly Issued Price), (y)the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of our initial business combination on the date of the consummation of our initial business combination (net of redemptions), and (z)the volume weighted average trading price of our ClassA ordinary shares during the 20 trading day period starting on the trading day prior to the day on which we consummate our initial business combination (such price, the Market Value) is below $9.20 per share, then the exercise price of the warrants will be adjusted to be equal to 115% of the higher of the Market Value and the Newly Issued Price, and the $18.00 per share redemption trigger price will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price, and the $10.00 per share redemption trigger price will be adjusted (to the nearest cent) to be equal to the higher of the Market Value and the Newly Issued Price. \n\n\n\n\n\n\n\nThe loss of key personnel could negatively impact the operations and profitability of our post- combination business. \nAlthough some of our key personnel may remain with the target business in senior management, director or advisory positions following our initial business combination, it is likely that some or all of the management, including our board of directors, of the target business will remain in place. \n\n\n\n\n\n\n\nCertain of our officers and directors presently have, and any of them in the future may have, additional fiduciary or contractual obligations to other entities pursuant to which such officer or director is or will be required to present a business combination opportunity to such entity, subject to his or her fiduciary duties under Cayman Islands law. \n\n\n\n\n\nOur sponsor, officers and directors are not currently aware of any specific opportunities for us to complete our initial business combination with any entities with which they are affiliated. \nSince our sponsor, executive officers, and directors will lose their entire investment in us if our initial business combination is not completed (other than with respect to public shares they may have acquired during or may acquire after our initial public offering), a conflict of interest may arise in determining whether a particular business combination target is appropriate for our initial business combination. \nOn December4, 2020, our sponsor automatically surrendered 245,125 founder shares to the Company for no consideration, triggered by the expiration of the option of the underwriter of the initial public offering to purchase additional units, resulting in a decrease in the total number of Class B ordinary shares outstanding from 9,343,750 to 9,098,625. In addition, as of the initial public offering, our sponsor consummated a private placement and purchased an aggregate of 5,666,667 private placement warrants, each exercisable to purchase one ClassA ordinary share at $11.50 per share, subject to adjustment, at a price of $1.50 per warrant or $8.5 million in the aggregate. On November25, 2020, the underwriters partially exercised the over-allotment option, and the closing of the issuance and sale of the additional 3,894,500 over- allotment units occurred on December1, 2020. If we do not consummate an initial business combination within 24 months from the closing of our initial public offering, the private placement warrants will expire worthless. \nOur management and our board of directors may not be able to maintain control of a target business after our initial business combination. \nAccordingly, this may make it more likely that our management and board of directors will not be able to maintain control of the target business. \nWe may seek acquisition opportunities in industries or sectors which may or may not be outside of our managements and our board of directors area of expertise. \nWe will consider a business combination outside of our managements and our board of directors area of expertise if a business combination target is presented to us and we determine that such candidate offers an attractive acquisition opportunity for our company. Although our management and our board of directors will endeavor to evaluate the risks inherent in any particular business combination target, we cannot assure you that we will adequately ascertain or assess all of the significant risk factors. We also cannot assure you that an investment in our units will not ultimately prove to be less favorable to investors in the initial public offering than a direct investment, if an opportunity were available, in a business combination target. In the event we elect to pursue an acquisition outside of the areas of our managements and our board of directors expertise, our managements and our board of directors expertise may not be directly applicable to its evaluation or operation, and the information contained in this report regarding the areas of our managements and our board of directors expertise would not be relevant to an understanding of the business that we elect to acquire. As a result, our management and our board of directors may not be able to adequately ascertain or assess all of the significant risk factors. \n\nfederal courts may be limited. \n\n\nFor a foreign judgment to be enforced in the \nCayman Islands, such judgment must be final and conclusive and for a liquidated sum, and must not be in respect of taxes or a fine or penalty, inconsistent with a Cayman Islands judgment in respect of the same matter, impeachable on the grounds of fraud or obtained in a manner, or be of a kind the enforcement of which is, contrary to natural justice or the public policy of the Cayman Islands (awards of punitive or multiple damages may well be held to be contrary to public policy). \n\n\n\n\n\n\n\n\n\n\n\n\n\n\nAccordingly, we may amend the terms of the public warrants in a manner adverse to a holder if holders of at least 65% of the then-outstanding public warrants approve of such amendment and, solely with respect to any amendment to the terms of the private placement warrants or any provision of the warrant agreement with respect to the private placement warrants, 65% of the number of the then outstanding private placement warrants. \nWe have not registered the ClassA ordinary shares issuable upon exercise of the warrants under the Securities Act or any state securities laws at this time, and such registration may not be in place when an investor desires to exercise warrants, thus precluding such investor from being able to exercise its warrants and causing such warrants to expire worthless. \nWe have not registered the ClassA ordinary shares issuable upon exercise of the warrants under the Securities Act or any state securities laws at this time. \n### General Risk Factors \n\nFollowing the issuance of the SEC Staff Statement on April12, 2021, after consultation with our independent registered public accounting firm, our management and our audit committee concluded that, in light of the SEC Statement, it was appropriate to restate our previously issued and audited financial statements as of and for the period ended December31, 2020. \n\nAs described elsewhere in this Annual Report on Form 10K/A, we have identified a material weakness in our internal control over financial reporting related to the accounting for the warrants we issued in connection with our initial public offering in October 2020. This material weakness resulted in a material misstatement of our derivative warrant liabilities, change in fair value of derivative warrant liabilities, ClassA ordinary shares subject to possible redemption, accumulated deficit and related financial disclosures for the Affected Period. For a discussion of managements consideration of the material weakness identified related to our accounting for the warrants we issued in connection with the October 2020 initial public offering, seeNote 2Restatement of Previously Issued Financial Statements to the accompanying financial statements, as well as PartII,Item 9A: Controls and Procedures included in this Annual Report. \nFor a discussion of managements consideration of the material weakness identified related to our accounting for a significant and unusual transaction related to the Warrants we issued in connection with the October 2020 initial public offering, see Note 2Restatement of Previously Issued Financial Statements to the accompanying consolidated financial statements, as well as Part II, Item9A: Controls and Procedures included in this Annual Report on Form 10-K/A. \n\n\nAs a result of the SEC Statement, we reevaluated the accounting treatment of our 12,131,500 Public Warrants and 6,185,934 Private Placement Warrants, and determined that the Warrants should be reclassified as derivative liabilities measured at fair value, with changes in fair value each period reported in earnings. \nAs a result, included on our balance sheet as of December31, 2020 contained elsewhere in this Form 10-K/A are derivative liabilities related to embedded features contained within our Warrants. Accounting Standards Codification 815-40, Derivatives and Hedging Contracts on an Entitys Own Equity, provides for the remeasurement of the fair value of such derivatives at each balance sheet date, with a resulting non-cash gain or loss related to the change in the fair value being recognized in earnings in the statement of operations. \n\nAfter completion of our initial public offering, only holders of our founder shares have the right to vote on the election of directors. and we have nominating and corporate governance committees of our board that are comprised entirely of independent directors each with a written charter addressing the committees purpose and responsibilities. \n\nProvisions in our amended and restated memorandum and articles of association may inhibit a takeover of us, which could limit the price investors might be willing to pay in the future for our ClassA ordinary shares and could entrench management and our board of directors. \nThese provisions will include a staggered board of directors and the ability of the board of directors to designate the terms of and issue new series of preference shares, and the fact that prior to the completion of our initial business combination only holders of our Class B ordinary shares, which have been issued to our<|endoftext|>Shares determined based on the redemption date and the fair market value of our ordinary shares. The value received upon exercise of the warrants (1) may be less than the value the holders would have received if they had exercised their warrants at a later time where the underlying share price is higher and (2) may not compensate the holders for the value of the warrants, including because the number of ordinary shares received is capped at 0.361 ordinary shares per warrant (subject to adjustment) irrespective of the remaining life of the warrants. None of the private placement warrants will be redeemable by us, except as set forth elsewhere in this Annual Report, so long as they are held by our sponsor or its permitted transferees. \n\nIf we call our public warrants for redemption after the redemption criteria described elsewhere in this Annual Report have been satisfied, our management will have the option to require any holder that wishes to exercise its warrant (including any warrants held by our sponsor, officers, directors or their permitted transferees) to do so on a cashless basis. \n\nFor instance, the U.S. of a cashless exercise of warrants is unclear under current law. holders holding period for purposes of determining whether any gain or loss realized by such holder on the sale or exchange of ordinary shares is long-term capital gain or loss and for determining whether any dividend we pay would be considered qualified dividends for U.S. federal income tax purposes. \n\nPast performance by our management team and their affiliates may not be indicative of future performance of an investment in our company. \nYou should not rely on the historical record of our management team and their affiliates as indicative of our future performance of an investment in the company or the returns the company will, or is likely to, generate going forward. \n\nOur operations are dependent upon a relatively small group of individuals and in particular, Ivan Tavrin, our founder, Chairman and Chief Executive Officer, and our directors Per Brilioth, Verdi Israelyan and Clifford Tompsett. In addition, our executive officers and directors are not required to commit any specified amount of time to our affairs and, accordingly, will have conflicts of interest in allocating their time among various business activities, including amongst management time needed for Kismet Two and Kismet Three, and for identifying potential business combinations and monitoring the related due diligence. \nThe loss of our or our targets key personnel could negatively impact the operations and profitability of our post-combination business. \nOur ability to successfully effect our initial business combination is dependent upon the efforts of our key personnel, including, in particular, Ivan Tavrin with regard to our selection of a target company. \n\nThe personal and financial interests of such individuals may influence their motivation in identifying and selecting a target business, subject to his fiduciary duties under British Virgin Islands law. \n\nOur executive officers and directors are not required to, and will not, commit their full time to our affairs, which may result in a conflict of interest in allocating their time between our operations and our search for an initial business combination and their other businesses. Each of our executive officers is engaged in several other business endeavors for which he or she may be entitled to substantial compensation and our executive officers are not obligated to contribute any specific number of hours per week to our affairs. Mr. Tavrin, who serves as our Chairman and Chief Executive Officer, also serves as Chairman and Chief Executive Officer of both Kismet Two and Kismet Three. \nOur executive officers and directors may in the future become, affiliated with entities engaged in business activities similar to those intended to be conducted by us and, accordingly, may have conflicts of interest in allocating their time and determining to which entity a particular business opportunity should be presented. \nOur executive officers and directors may in the future become affiliated with entities that are engaged in business activities similar to those intended to be conducted by us. In addition, our sponsor and certain of our directors have, and our sponsor, officers and directors may in the future, participate in the formation of, or become an officer or director of, any other blank check company prior to completion of our initial business combination. As a result, our sponsor, officers or directors could have conflicts of interest in determining whether to present business combination opportunities to us or to any other blank check company with which they may become involved, subject to our officers and directors fiduciary duties under British Virgin Islands law. In particular, an affiliate of our sponsor currently sponsors two other blank check companies, Kismet Two and Kismet Three and Mr. Tavrin is Chairman and Chief Executive Officer of both Kismet Two and Kismet Three. Any such companies, including Kismet Two and Kismet Three, may present additional conflicts of interest in pursuing an acquisition target. However, we do not believe that any potential conflicts with Kismet Two or Kismet Three would materially affect our ability to complete our initial business combination, because we have priority with respect to acquisition opportunities until we complete our initial business combination. In addition, our management team has significant experience in identifying and executing multiple acquisition opportunities simultaneously, and we believe there are multiple potential opportunities within the industries and geographies of our primary focus. \n\nIn fact, we may enter into an initial business combination with a target business that is affiliated with our sponsor, our directors or executive officers, although we do not intend to do so. \nIf this were the case, it would be a breach of their fiduciary duties to us and we or our shareholders might have a claim against such individuals for infringing on our shareholders rights. \nWe may engage in an initial business combination with one or more target businesses that have relationships with entities that may be affiliated with our sponsor, executive officers, directors or existing holders which may raise potential conflicts of interest. \nOur executive officers and directors also serve as officers and/or board members for other entities. In particular, Mr. Tavrin is Chairman and Chief Executive Officer of Kismet Two and Kismet Three. \nOur directors have a statutory and fiduciary duty to act in the best interests of our company whether or not a conflict of interest may exist. \nDespite our agreement to obtain an opinion from an independent investment banking firm that is a member of FINRA, or from an independent accounting firm, regarding the fairness to our company from a financial point of view of an initial business combination with one or more domestic or international businesses affiliated with our sponsor, executive officers or directors, potential conflicts of interest still may exist and, as a result, the terms of the business combination may not be as advantageous to our public shareholders as they would be absent any conflicts of interest. \nSince our sponsor will lose its entire investment in us if our initial business combination is not completed, a conflict of interest may arise in determining whether a particular business combination target is appropriate for our initial business combination. \nThe founder shares held by our sponsor included an aggregate of up to 937,500 shares subject to forfeiture to the extent that the underwriters option to purchase additional units was not exercised in full. The number of founder shares issued was determined based on the expectation that such founder shares would represent 20% of the outstanding public shares and founder shares after our initial public offering plus the number of ordinary shares that were to be sold pursuant to the forward purchase agreement. The founder shares will be worthless if we do not complete our initial business combination. In addition, our sponsor purchased 6,750,000 private placement warrants, each of which such warrants will be exercisable for one ordinary share at $11.50 per share, that will also be worthless if we do not complete a business combination. The sponsor has agreed (A) to vote any shares owned by it in favor of any proposed business combination and (B) not to redeem any shares in connection with a shareholder vote or tender offer to approve or in connection with a proposed initial business combination. The personal and financial interests of our sponsor may influence its motivation in identifying and selecting a target business combination, completing an initial business combination and influencing the operation of the business following the initial business combination. This risk may become more acute as August 10, 2022 nears, which is the deadline for the completion of our initial business combination. \n\n\nOur public shareholders will be entitled to receive funds from the trust account only upon the earlier to occur of: (i) our completion of an initial business combination, and then only in connection with those ordinary shares that such shareholder properly elected to redeem, subject to the limitations described elsewhere in this Annual Report, (ii) the redemption of any public shares properly tendered in connection with a shareholder vote to amend our amended and restated memorandum and articles of association (A) to modify the substance or timing of our obligation to allow redemption in connection with our initial business combination or to redeem 100% of our public shares if we do not complete an initial business combination by August 10, 2022 or (B) with respect to any other provision relating to shareholders rights or pre-initial business combination activity, and (iii) the redemption of our public shares if we have not completed an initial business combination by August 10, 2022, subject to applicable law. Public shareholders who redeem their ordinary shares in connection with a shareholder vote described in clause (ii) in the preceding sentence will not be entitled to funds from the trust account upon the subsequent completion of an initial business combination or liquidation if we have not completed an initial business combination by August 10, 2022, with respect to such ordinary shares so redeemed. \n\nAlthough we will seek to have all vendors, service providers, prospective target businesses and other entities with which we do business, except our independent registered public accounting firm, execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account for the benefit of our public shareholders, such parties may not execute such agreements, or even if they execute such agreements they may not be prevented from bringing claims against the trust account, including, but not limited to, fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain advantage with respect to a claim against our assets, including the funds held in the trust account. \nAccordingly, the per-share redemption amount received by public shareholders could be less than the $10.00 per share initially held in the trust account, due to claims of such creditors. In order to protect the amounts held in the trust account, our sponsor has agreed it will be liable to us if and to the extent any claims by a third party for services rendered or products sold to us, or a prospective target business with which we have discussed entering into a transaction agreement, reduce the amount of funds in the trust account. We have not independently verified whether our sponsor has sufficient funds to satisfy its indemnity obligations and we have not asked our sponsor to reserve for such indemnification obligations. \n\nwith a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act, which invest only in direct U.S. While short-term U.S. \n\nIn the event that the proceeds in the trust account are reduced and our sponsor asserts that it is unable to satisfy its obligations or that it has no such indemnification obligations related to a particular claim, our disinterested directors would determine whether to take legal action against our sponsor to enforce<|endoftext|>"},"task":{"kind":"string","value":"{\"file\": \"/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz\"}"}}},{"rowIdx":92,"cells":{"text":{"kind":"string","value":"<|endoftext|>For Mr. Keller. \n### Executive Employment Agreement with Curtis Smith \nPre-Merger Smith Employment Agreement \nPursuant to his employment agreement, effective March 8, 2018, and to subsequent actions by AYRO Operatings board of directors, Curtis E. Smith was entitled to a base salary of $200,000 and a target annual bonus in the amount of 25% of his annual base salary. The target annual bonus was based on Mr. Smiths performance, as determined by AYRO Operatings board of directors in its sole discretion, against fundamental corporate and/or individual objectives to be determined by AYRO Operatings board of directors. Mr. Smith was eligible to participate in the AYRO Operating Equity Plan (as defined below), subject to the discretion of AYRO Operatings board of directors, if and when the board of directors determined to make a grant to him. Pursuant to Mr. Smiths employment agreement, as consideration for entering into the employment agreement, AYRO Operating granted nonqualified options to acquire 109,072 shares of AYRO Operating common stock (giving effect to the Exchange Ratio and Reverse Split) with an exercise price of $2.446 in March 2018. \n### Smith Employment Agreement Amendment \nOn May 28, 2020, immediately prior to the effective time of the Merger, AYRO Operating entered into an amendment to its executive employment agreement with Mr. Smith (the Smith Amendment). The Smith Amendment provides that if Mr. Smiths employment is terminated upon either partys failure to renew or by Mr. Smith without good reason, then all of Mr. Smiths vested, outstanding stock options will remain exercisable until the earlier of the expiration of the options term or the date that is two years following the termination. The Smith Amendment further provides that if Mr. Smiths employment is terminated by AYRO Operating without cause or by Mr. Smith for good reason, then all outstanding equity awards granted to Mr. Smith pursuant to his employment agreement shall be fully and immediately vested, to the extent not previously vested, and all of his then vested, outstanding stock options shall remain exercisable until the earlier of the expiration of the options term or the date that is two years following termination. On September 29, 2020, Mr. Smith was awarded options to purchase 169,906 shares of our common stock, at an exercise price of $3.17 per share. One-third of the shares underlying the options vest on the first anniversary of the date of grant, and the remaining optioned shares vest in twenty-four substantially equal monthly installments on each of the next twenty-four monthly anniversaries of the initial vesting date, provided that Mr. Smith has remained continuously employed by or has been providing services to us through the applicable vesting date. \nIndependent Contractor Agreement with Brian Groh \nAYRO Operating and 2196005 Ontario, Inc., an Ontario corporation owned and controlled by Mr. Groh (the Groh Entity), entered into an independent contractor agreement on September 16, 2019. Pursuant to the agreement, the Groh Entity agreed to provide services as chief of business development for a term of 12 months, which has been renewed by the parties each year. \nAYRO Operating initially paid the Groh Entity $8,333 per month, based on 50% normal business hours utilization, upon receipt of invoice, which was later increased to $16,667 per month on October 1, 2019 when Mr. Groh became a full-time associate. AYRO Operating was to pay to the Groh Entity quarterly management by objectives (MBO) targeted at $12,500 per quarter, based on MBOs mutually agreed upon by the parties, payment of which was scheduled to commence after the completion of the Merger. The Groh Entity was also eligible to participate in a commission pooling plan with the other sales team participants. Groh options to purchase 54,536 shares of AYRO Operating common stock pursuant to the AYRO Operating Equity Plan (as defined below). \nEither the Groh Entity or AYRO Operating may have terminated the independent contractor agreement at any time and for any reason with 90 days advance written notice. \nIf AYRO Operating terminated the contract for cause or the Groh Entity terminated the contract without good reason, the Groh Entity would have received its earned fees, commissions and quarterly MBO payment. If the contract was terminated by the Groh Entity for good reason or by AYRO Operating without cause, the Groh Entity would have received its earned fees, commissions and quarterly MBO payment and continued payments of fees, quarterly MBO payment and commissions owned based on the mutually agreed commission plan for six months following their termination date in an aggregate amount equal to the greater of (1) the Groh Entitys monthly fees, quarterly MBO and qualifying commissions for the year in which the termination date occurs, or (2) the Groh Entitys monthly fees, quarterly MBO and qualifying commissions averaged for 6 months prior to the termination date. Groh, upon termination by AYRO Operating not for cause (as defined in such option agreements), Mr. Groh may have exercised the options vested as of the date of his termination by the earlier of (i) the date that was 3 months following Mr. Grohs termination or (ii) the expiration date (unless being exercised by his estate). \n\nOn September 29, 2020, Mr. Groh was awarded options to purchase 56,147 shares of our common stock.at an exercise price of $3.17 per share. Groh has remained continuously employed by or has been providing services to us through the applicable vesting date. \nIndependent Contractor Agreement with Richard Perley \nOn September 9, 2019, AYRO Operating appointed Mr. Perley as Chief Marketing Officer. AYRO Operating initially paid Mr. Perley $8,333 per month, based on 50% normal business hours utilization, upon receipt of invoice, which was later increased to $16,667 per month on October 1, 2019 when Mr. Perley became a full-time associate. AYRO Operating was to pay Mr. Perley quarterly MBO targeted at $12,500 per quarter, based on MBOs mutually agreed upon by the parties, payment of which will commence after the completion of the Merger. Mr. Perley was also eligible to participate in a commission pooling plan with the other sales team participants. Perley options to purchase 54,536 shares of AYRO Operating common stock pursuant to the AYRO Operating Equity Plan (as defined below), with such share numbers giving effect to the Exchange Ratio and Reverse Split. \nEither Mr. Perley or AYRO Operating may have terminated the independent contractor agreement at any time and for any reason with 90 days advance written notice. \nIf AYRO Operating terminated the contract for cause or if Mr. Perley terminated the contract without good reason, Mr. Perley would have received his earned fees, commissions and quarterly MBO payment. If the contract was terminated by Mr. Perley for good reason or by AYRO Operating without cause, Mr. Perley would have received his earned fees, commissions and quarterly MBO payment and continued payments of fees, quarterly MBO payment and commissions owned based on the mutually agreed commission plan for six months following their termination date in an aggregate amount equal to the greater of (1) Mr. Perleys monthly fees, quarterly MBO and qualifying commissions for the year in which the termination date occurred, or (2) Mr. Perleys monthly fees, quarterly MBO and qualifying commissions averaged for 6 months prior to the termination date. Perley, upon termination by AYRO Operating not for cause (as defined in such option agreements), Mr. Perley may have exercised the options vested as of the date of his termination by the earlier of (i) the date that was 3 months following Mr. Perleys termination or (ii) the expiration date (unless being exercised by his estate). \n\nOn September 29, 2020, Mr. Perley was awarded options to purchase 56,147 shares of our common stock.at an exercise price of $3.17 per share. Perley has remained continuously employed by or has been providing services to us through the applicable vesting date. \n### Employment Agreement with Spencer Richardson \nRichardson pursuant to which he served as DropCars Chief Executive Officer until his resignation at the effective time of the Merger. \nMr. Richardson was also entitled to annual option grants equivalent to 1% of the outstanding shares of DropCar. Richardson was eligible to receive additional option grants based on DropCars achievement of certain specified milestones. \nIn the event that Mr. Richardsons employment with DropCar was terminated (a) by DropCar without cause (including as a result of death or disability) following the end of the initial term, (b) by Mr. Richardson for good reason, or (c) due to non-renewal of the initial term by DropCar, then DropCar would pay or provide (x) 24 months of salary continuation, (y) $100,000 (such amount representing the guaranteed quarterly bonus for 24 months), and (z) to the extent unvested, full acceleration of the vesting of any outstanding options. \nIn addition, Mr. Richardson entered into a non-solicitation and non-competition agreement that applies during the term of employment and for 12 months thereafter. \nRichardson tendered his resignation from his positions as officer and director of DropCar. Richardson, on January 30, 2020, Mr. Richardson was entitled to receive a grant of options to purchase shares of DropCars stock in an amount equal to 1% of the then-outstanding shares of Company common stock on a fully diluted basis (which would have been equal to options to purchase 25,140 shares). Richardson, DropCar issued to Mr. Richardson a grant of 12,500 restricted shares. \n### Employment Agreement with David Newman \nNewman pursuant to which he served as DropCars Chief Business Development Officer until his resignation at the effective time of the Merger. \nMr. Newman was also entitled to annual option grants equivalent to 1% of the outstanding shares of DropCar. Newman was eligible to receive additional option grants based on DropCars achievement of certain specified milestones. \nIn the event that Mr. Newmans employment with DropCar was terminated (a) by DropCar without cause (including as a result of death or disability) following the end of the initial term, (b) by Mr. Newman for good reason, or (c) due to non-renewal of the initial term by DropCar, then DropCar would pay or provide (x) 24 months of salary continuation, (y) $100,000 (such amount representing the guaranteed quarterly bonus for 24 months), and (z) to the extent unvested, full acceleration of the vesting of any outstanding options. \nIn addition, Newman entered into a non-solicitation and non-competition agreement that applied during the term of employment and for 12 months thereafter. \nNewman tendered his resignation from his positions as officer and director of DropCar. His resignation did not contain any statements describing disagreements with DropCar related to its operations, policies or practices, nor did any disagreements lead to his resignation. Newman, on January 30, 2020, Mr. Newman was entitled to receive a grant of options to purchase shares of DropCars stock in an amount equal to 1% of the then-outstanding shares of Company common stock on a fully diluted basis (which would have been equal to options to purchase 25,140 shares). Newman, DropCar issued to Mr. Newman a grant of 12,500 restricted shares. \n### Equity Compensation \nAYRO, Inc. 2020 Long-Term Incentive Plan \nOn April 21, 2020, our Board adopted the AYRO, Inc. 2020 Long-Term Incentive Plan (the Plan), subject to stockholder approval, which was obtained on May 28, 2020. Our outside directors and our employees, including the principal executive officer, principal financial officer and other named executive officers, and certain contractors are all eligible to participate in the Plan. The Plan was amended by stockholder vote on November 9, 2020 to increase the total number of shares of our common stock authorized for issuance under the Plan to 4,089,650 shares. \n### Purpose \nThe purpose of the Plan is to enable us to remain competitive and innovative in our ability to attract and retain the services of key employees, key contractors, and non-employee directors of the Company or any of our subsidiaries. The Plan provides for the granting of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock, restricted stock units, performance awards, dividend equivalent rights, and other awards, which may be granted singly, in combination, or in tandem, and which may be paid in cash or<|endoftext|>Of control of a company by a non-Canadian to government review if the value of such companys assets, as calculated pursuant to the legislation, exceeds a threshold amount. A reviewable acquisition may not proceed unless the relevant minister is satisfied that the investment is likely to result in a net benefit to Canada. \nThese provisions may make it difficult and expensive for a third party to pursue a tender offer, change in control or takeover attempt that is opposed by our management or our board of directors. Shareholders who might desire to participate in these types of transactions may not have an opportunity to do so, even if the transaction is favorable to them. These anti-takeover provisions could substantially impede your ability to benefit from a change in control or change in our management and our board of directors and, as a result, may adversely affect the market price of our common shares and your ability to realize any potential change of control premium. \n\nThe trading market for our common shares may depend, in part, on the research and reports that securities and industry analysts publish about us and our business. Securities and industry analysts do not currently, and may never, cover us. If securities and industry analysts do not commence coverage of us, the trading price of our common shares would likely be negatively impacted. In the event securities or industry analysts initiate coverage, if one or more of the analysts who cover us downgrade our common shares or publish inaccurate or unfavorable research about our business, the price of our common shares would likely decline. If one or more of these analysts cease coverage of us or fail to publish reports on us regularly, demand for our common shares could decrease, which might cause the price of our common shares and trading volume to decline. \n\nOur warrants are issued in registered form under the Warrant Agreement (as amended) between the Company and the warrant agent. The Warrant Agreement provides that the terms of the warrants may be amended without the consent of any holder to cure any ambiguity or correct any defective provision, but requires the approval by the holders of at least a majority of the then outstanding warrants to make any change that adversely affects the interests of the registered holders. Accordingly, we may amend the terms of the warrants in a manner adverse to a holder if holders of at least a majority of the then outstanding warrants approve of such amendment. Although our ability to amend the terms of the warrants with the consent of at least a majority of the then outstanding warrants is unlimited, examples of such amendments could be amendments to, among other things, increase the exercise price of the warrants, shorten the exercise period or decrease the number of common shares purchasable upon exercise of a warrant. \n\nThe exercise price for the outstanding warrants is $11.50 per common share, and the exercise period commenced 30 days after the Closing and expires five years following the Closing. There can be no assurance that the warrants will be in the money at or following the time they become exercisable and prior to their expiration, and as such, the warrants may expire worthless. \n\nWe have the ability to redeem outstanding warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01 per warrant in the case that the last reported sales price of our common shares 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 we send the notice of such redemption to the warrant holders. In addition, we may redeem your warrants after they become exercisable for a number of common shares determined based on the redemption date and the fair market value of our common shares. \n\nOur Articles provide for the exclusive jurisdiction of the provincial courts located in British Columbia, Canada for the following civil actions: any action between us and our shareholders; and any action between two or more shareholders or groups of shareholders regarding any matters relating to the Company. \nThis exclusive forum provision provided for in our Articles, including the exclusive U.S. federal forum provision and the exclusive British Columbia forum provision (each described in further detail below), may, as a whole, limit a shareholders ability to bring a claim in a judicial forum that it finds favorable for disputes with us or any of our directors, officers, other employees or shareholders, which may discourage lawsuits with respect to such claims, although our shareholders will not be deemed to have waived our compliance with U.S. federal securities laws and the rules and regulations thereunder applicable to foreign private issuers. Alternatively, if a court were to find the exclusive jurisdiction provision contained in our Articles to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, operating results and financial condition. The exclusive U.S. federal forum provision in our Articles requires claims arising under the Securities Act to be brought in U.S. federal court. Pursuant to the Exchange Act, U.S. federal courts have exclusive jurisdiction for claims arising under the Exchange Act. Investors cannot waive compliance with the U.S. federal securities laws and the rules and regulations thereunder. The exclusive British Columbia forum provision in our Articles would not prevent derivative shareholder actions based on claims arising under U.S. federal securities laws under the Securities Act or the Exchange Act from being raised in a U.S. federal court. The BCA restricts derivative actions brought pursuant to the BCA to the Supreme Court of the Province of British Columbia, Canada. There is uncertainty whether a U.S. court would enforce the exclusive British Columbia forum provision in our Articles. \n\nSubstantially all of our assets are located outside of the United States and certain of our officers and directors reside outside of the United States. As a result, it may be difficult, or in some cases impossible, for investors in the United States to enforce their legal rights against or to effect service of process upon certain of our directors or officers or to enforce judgments of United States courts predicated upon civil liabilities under United States laws. Our Articles also provide for the exclusive jurisdiction of provincial courts in British Columbia, Canada for certain shareholder lawsuits. See \nOur Articles provide for the exclusive forum of the provincial courts in British Columbia, Canada for substantially all disputes between us and our shareholders \n(except claims arising under the Securities Act and the Exchange Act), which could limit our shareholders ability to obtain a favorable judicial forum for disputes with us or our directors, officers, other employees or shareholders. \ncorporation for U.S. federal income tax purposes. \nUnder Section 7874 of the Code, a corporation created or organized outside the United States that acquires, directly or indirectly, substantially all of the assets held, directly or indirectly, by a U.S. corporation, may in certain circumstances be treated as a U.S. corporation, rather than treated as a foreign corporation, for U.S. federal income tax purposes, or may be subject to certain other adverse tax consequences. The Company does not expect these rules to apply to it, notwithstanding its acquisition of SAMA through the Merger, and the Company expects to be respected, for U.S. federal income tax purposes, as a foreign corporation. If the Company were to be treated as a U.S. corporation for such purposes, which the Company does not expect, the Company could be subject to substantial U.S. tax liability and its non-U.S. shareholders could be subject to U.S. withholding tax on any dividends. \n\nEnforcement of U.S. \nDespite our absence from even the state legal cannabis markets in the United States and regardless of the federal governments lack of criminal enforcement against state legal cannabis companies, federal prohibition can negatively affect businesses involved in the global cannabis industry for several reasons, including that businesses trafficking in, or even involved with, cannabis: have fewer banking options, making banking and other financial transactions difficult; have fewer options for capital, which is important for a company in an emerging space; have restricted intellectual property rights particularly with respect to obtaining trademarks and enforcing patents; cannot avail themselves of federal bankruptcy protection; and face fewer and generally more expensive options for insurance coverage. A change in the momentum in legalization could impact any or all of these and possibly other factors. Moreover, a significant shift to the U.S. government enforcing strictly or broadly the federal laws against cannabis could make all of those factors far worse, harm our business prospects, and theoretically threaten those not directly involved in trafficking in cannabis in the U.S. even for seemingly immaterial or remote violations of U.S. law. \nAccordingly, any increased enforcement of current U.S. federal laws could cause significant financial damage to us and our shareholders. While several bills in the U.S. Congress would end federal cannabis prohibition, the prospects of these bills are uncertain, and there can be no assurance that any of those or future bills will pass Congress or be signed by the President. Furthermore, we do not know exactly to what extent or how the United States will legalize cannabis, the barriers to entry to that legal market, and how U.S. legalization will impact the competitive state-legal markets. \nAny of these adverse actions could have a material adverse effect on us, including our reputation and ability to conduct business, our ability in the future to hold (directly or indirectly) cannabis licenses in the U.S., our stock exchange listing, our financial position, operating results, profitability or liquidity or the market price of our common shares. In addition, it is difficult to estimate the time or resources that would be needed for the investigation of any such matters or our final resolution because, in part, the time and resources that may be needed are dependent on the nature and extent of any information requested by the applicable authorities involved, and such time or resources could be substantial. \nOur original business plan included investing in a state-legal cannabis company. In June 2017, we made a minority convertible debt investment in a management company engaged to provide services to a non-profit organization provisionally licensed to own Massachusetts medical marijuana facilities. We also provided management and advisory services to that management company. We exited this investment in March 2018. To our knowledge, at the time of our exit from the investment the start-up company had not launched any business operations or sales or completed the licensing process to commence operations. We made this investment through two subsidiaries, one of which has since been dissolved and the other of which we spun off, given that our business plan and mission evolved substantially from 2017. \nWith respect to hemp, we have recently imported CBD into the U.S. for product development purposes, in compliance with U.S. law, and eventually plan to commercialize products containing CBD. We acknowledge that the legality of products with CBD and the enforcement of laws on that subject are evolving. That regulatory uncertainty could cause us to wait longer than ideal to enter that market or to misinterpret the evolving law to permit a product to which a federal agency, such as the FDA, objects. \n\nBecause the use of cannabis is illegal under U.S. federal law, courts have refused to extend federal bankruptcy protection to businesses with any cannabis related assets, thus making it very difficult for lenders to recoup their investments in the cannabis industry in the event of a bankruptcy. , which would have a material adverse effect. \n\nBecause certain of our contracts involve cannabis and other activities that are not legal under U.S. federal law and in some jurisdictions, we may face difficulties in enforcing our contracts in U.S. \nOur wholly owned U.S. \nHerbal Brands, whose brands have<|endoftext|>Reflect the grant-date fair value of RSUs awarded under our Equity Incentive Plan (which we refer to as our Equity Plan), computed in accordance with the Financial Accounting Standards Boards Accounting Standards Codification Topic 718 (which we refer to as FASB ASC Topic 718). No RSUs were granted in 2020. \nThe amounts shown under \nStock Awards for 2019 and 2018 represent the grant date fair value of RSUs granted to the named executive officer on April1, 2019 and April1, 2018 (and, with respect to Mr.Kornblau, on July1, 2018), respectively, as applicable. In each case, a target number of performance-vesting RSUs was granted to the named executive officer, determined based on a target grant date value and the volume-weighted average price per share of our common stock on the NYSE for the 10 consecutive trading days immediately preceding the date of grant, which we refer to as VWAP. In addition, time-vesting RSUs were granted to named executive officers other than Mr.Edwards, determined based on a grant date value and the VWAP. \nThe number of performance-vesting and time-vesting RSUs awarded to the named executive officers in 2019 were as follows: \nThe number of performance-vesting and time-vesting RSUs awarded to the named executive officers in 2018 were as follows: \nThe performance-vesting RSUs awarded to Mr.Edwards and the other named executive officers during 2019 and 2018 cliff vested in three years upon the attainment of the three-year financial, operating and business development performance goals specified in their respective award agreements. Half of the time-vesting RSUs granted to the named executive officers during 2019 and 2018 vested two years after the grant date and half vested three years after the grant date. In all cases, the RSUs were subject to forfeiture if the applicable vesting conditions were not met. \nUnder the terms of the RSU award agreements for the performance-vesting RSUs awarded to each named executive officer in 2019 and 2018, the maximum number of performance-vesting RSUs that could vest regardless of how far our company exceeded the applicable performance goals, and the grant-date value of the awards of performance-vesting RSUs to each named executive officer in 2019 and 2018 assuming the highest level of performance conditions were achieved and the maximum number of performance-vesting RSUs would vest, would have been as set forth in the table below: \nThe RSU and long-term cash incentive award agreements also obligate each named executive officer to comply with certain restrictive covenants, including obligations of confidentiality, a prohibition on solicitation of our employees for a period of two years after termination of employment and a prohibition on competition for a period of one year after termination of employment. For a discussion of the valuation assumptions for the RSU awards, see Note 6, \n### Stock-Based \nCompensation \n\nIn April 2020, we approved an amendment to the terms of our outstanding long-term cash incentive awards granted in 2018 and 2019 to provide for a prorated portion of the awards to vest and pay out based on service and actual company performance achieved through April1, 2020. As a condition to participating in the KEIP in connection with our chapter 11 reorganization, in June 2020 each named executive officer forfeited his (i)unpaid rights under outstanding long-term cash incentive awards granted in 2018 and 2019, (ii) unvested RSU awards granted in 2018 and 2019 and (iii)outstanding awards of SARs. \n### Non-Equity \nIncentive Plan Compensation Column \nAll amounts in the \n### Non-Equity \nIncentive Plan Compensation column for 2020 consist of (a)quarterly cash payments awarded and earned under the KEIP for 2020, including an award payment made in February 2021 for the fourth calendar quarter of 2020, and (b)cash payments received in April 2020 pursuant to the accelerated vesting of outstanding performance-vesting long-term cash incentive awards granted in 2018 and 2019 based on service and actual company performance achieved through April1, 2020. The amounts received for the accelerated vesting of 2018 and 2019 performance-vesting long-term cash incentive awards were as follows: \n\nThe amounts received for quarterly cash payments awarded and earned under the KEIP for 2020, including an award payment made in February 2021 for the fourth calendar quarter of 2020, were as follows: \n### All amounts in the \nNon-Equity \nIncentive Plan Compensation column for 2019 and 2018 reflect payments of annual cash incentive awards earned and paid pursuant to our Incentive Compensation Plan. \n### All Other Compensation Column \nThe amounts shown in the All Other Compensation column for 2020 consist of the following: \n\nUnder our SERP, in past years we have contributed to participants any portion of the applicable percentage of the base salary contribution and the matching contribution that cannot be contributed under the Retirement Plan because of the limitations within the Code. As a result of our chapter 11 reorganization, during 2020 we did not make any SERP contributions to participants. Participants in this plan are fully vested in all amounts paid into the plan. The following table summarizes 2020 nonqualified deferred compensation of our named executive officers under our SERP. \nFor a discussion of the employment agreement between our company and Marc Edwards, our former President and CEO, see Employment Agreements above. \n\n(1) \nThese amounts represent interest earned on contributions under our SERP. These amounts are also included in the \n### All Other Compensation column of the \nand in the \n### SERP column of the \n\nThese earnings were calculated by applying a fixed interest rate based on the annual yield on \n10-year \nU.S. Treasury Securities to current year and deferred contributions. \n(2) \nThese amounts represent the aggregate balance as of December31, 2020 for each of the named executive officers pursuant to our SERP. The deferred balances related to our SERP were reported in the Summary Compensation Table in each contribution year. \n\n(1) \nAll incentive plan awards granted in 2020 were cash incentive awards pursuant to the KEIP. See \n\n- \nKey Employee Incentive Plan \n(2) \nThese amounts represent threshold, target and maximum awards, as applicable, under the cash incentive awards granted in 2020 pursuant to our KEIP. Each of the named executive officers was eligible to earn a performance-driven cash incentive payment following the completion of each of the second, third and fourth calendar quarters of 2020 and the first calendar quarter of 2021, depending upon the extent to which the KEIPs performance goals had been achieved for each such quarter. The KEIP provided that 80% of the KEIP payments earned based on quarterly performance would be paid in cash on a quarterly basis after each applicable quarter, and the remaining 20% of the award amount would be held back and paid in cash to participants upon our emergence from our chapter 11 reorganization. \nFor actual KEIP cash incentive awards paid for 2020, see the \n### Non-Equity \nIncentive Plan Compensation column in the \nabove and related notes. \n### Equity Plan \nOur Equity Plan authorizes the issuance of awards including stock options, SARs, RSUs and other stock-based awards (including dividend equivalents) to acquire up to 7,500,000 shares of our common stock, of which 2,211,147 shares had been issued as of December31, 2020. Stock options have a maximum term of 10years, subject to earlier termination under certain conditions, and, unless otherwise specified at the time of the grant, vest in four equal, annual installments over four years. SARs represent the right to receive stock or cash, or a combination of stock and cash, equal in value to the difference between the exercise price of the SAR and the market price of the corresponding amount of common stock on the exercise date. SARs have a maximum term of 10 years, subject to earlier termination under certain conditions, and vest as specified at the time of the grant. During 2020, 7,000 SARs were granted under our Equity Plan. We did not grant any RSUs under our Equity Plan in 2020. \nNote Regarding Outstanding Equity Awards at Fiscal \n### Year-End \n2020 Table \n: As a condition to participating in the KEIP, the named executive officers and all other KEIP participants forfeited (i)their unpaid rights under outstanding long-term cash incentive awards granted in 2018 and 2019, (ii) their unvested RSU awards granted in 2018 and 2019 and (iii)their outstanding awards of stock appreciation rights. As a result, as of December31, 2020, none of the named executive officers held any outstanding equity incentive plan awards. Consequently, the Outstanding Equity Awards at Fiscal \n### Year-End \n2020 table has been omitted from this Annual Report. \n\n(1) \nThe values realized upon vesting of RSU awards contained in the table are based on the market value of our common stock on the date of vesting. \n\nUnder the terms of our compensation plans and award agreements, our named executive officers are entitled to certain payments and benefits upon the occurrence of specified events, including termination of employment. The following summary and tables describe the specific terms of these arrangements and the estimated payments payable to each of our named executive officers upon termination of employment under our compensation programs as if his employment had terminated for these reasons on December31, 2020. As of such date, except with respect to amounts payable to our former CEO, Mr.Edwards, pursuant to his employment agreement, we did not have any plans, programs or agreements under which the named executive officers would have been entitled to receive either a severance payment or a payment triggered by a change in control of our company or a retirement by the employee. For a discussion of the employment agreement between our company and Mr.Edwards, see Employment Agreements above. \nFor purposes of the following tables, dollar amounts are estimates based on annual base salary as of December31, 2020 and benefits paid to the named executive officer in fiscal year 2020. As a condition to participating in the KEIP in connection with our chapter 11 reorganization, in June 2020 each named executive officer forfeited his (i)unpaid rights under outstanding long-term cash incentive awards, (ii)unvested RSU awards and (iii)outstanding awards of SARs. As a result, as of December31, 2020, no named executive officer held any cash incentive awards, RSUs or SARs other than pursuant to the KEIP. In order to earn a KEIP payment for any quarter, the named executive officer must remain employed by us through the payment date for that quarterly payment. A KEIP participant whose employment terminates due to death or disability, by us without cause or by the KEIP participant for good reason (as such terms are defined in the KEIP) prior to the end of the applicable quarter would be entitled to a pro-rata portion of his KEIP payment that would otherwise have been earned for such quarter based on the percentage of the quarter such participant was employed by us. The actual KEIP payment that each named executive officer would be entitled to receive upon his termination may be different from the estimated amount included in the below tables, depending on the achievement of payment criteria under the KEIP. \nThe actual amounts to be paid to the named executive officers can only be determined at the time of each executives separation from the company. In addition to the amounts in the below summaries, if the named executive officer resigns or his employment is terminated for any reason, he may be paid for his unused vacation days. The summaries assume that there is no earned but unpaid base salary or unpaid business expense reimbursements as of the time of termination. \nThe amounts of potential future payments and benefits as set forth in the tables below, and the descriptions of the assumptions upon which such future payments and benefits are based and derived, may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are estimates of payments and benefits to certain of our executives upon their termination of employment, and actual payments and benefits may vary materially from these estimates. Actual amounts can only be determined at the time of such executives actual separation from our company. Factors that could affect these amounts and assumptions include, among others, the timing during the year of any<|endoftext|>1993. Mr. Weinberger attended Temple University and the Benjamin N. Cardozo School of Law. He is well qualified to serve on our Board due to his investment, operational and board experience. \nMarc Mazur, one of our directors since May 2019, has served as an Industry Advisor for Brightwood Capital Advisors, LLC, a private debt fund, since 2014. From 2006 until 2008, Mr. Mazur served as the Chief Executive Officer of Brevan Howard U.S. Asset Management, a London-based global macro hedge fund, and a senior advisor of this company until 2010. From 2010 through December 2019, Mr. Mazur served as a member of the board of directors for Fibrocell Science, Inc. (NASDAQ: FCSC), an autologous cell and gene therapy company. Mr. Mazur also served as chairman of the audit committee and a member of the valuation committee of Sutter Rock Capital (NASDAQ:SSSS) (formerly GSV Capital Corp (NASDAQ:GSVC)), a business development company that invests in late-stage venture-backed private companies since 2017. He served a senior advisor to Tsinghua Venture Capital from 2001 to 2005. Mr. Mazur served as a Vice President at Salomon Brothers, Inc from 1984 to 1987 and served as a Vice President in the Fixed Income Division of The Goldman Sachs Group, Inc. from 1987 until 1996, and served as a consultant for Goldman from 1997 to 1999. Between 2010 and 2014, he served as a director of Staywell Health and as a director of DeVilbiss Health, private companies in the wellness and medical device fields. Mr. Mazur received his B.A. in Political Science from Columbia University and a J.D. He is well qualified to serve on our Board due to his senior executive-level experience in finance, healthcare consulting and business strategy, as well as his board experience. \nPaul S. Levy, one of our directors since May 2019, is a Managing Director of JLL Partners, Inc., a private equity firm focused on leveraged buyout transactions and leveraged recapitalizations of middle-market companies, which he founded in 1988. He is a director of Builders FirstSource (NASDAQ: BLDR), a supplier of building supplies and materials, since 1998, and LOAR Group, a business platform specializing in the design and manufacture of aerospace components, since 2011. He is also a director of private portfolio companies on behalf of JLL Partners, Inc. Additionally, in the last five years he served on the boards of the following companies: Patheon, Inc., a pharmaceutical contract development and manufacturing organization, PGT Innovations, Inc. (NYSE: PGTI) a manufacturer of building materials, IASIS Healthcare LLC and The J.G. Wentworth Company (OTCQX: JGWEQ). Mr. Levy received his B.A. summa cum laude and Phi Beta Kappa, from Lehigh University and his J.D. from the University of Pennsylvania Law School. He is well qualified to serve on our Board due to his experience in investing, finance and his public company board experience. \n\nWe currently have five (5) directors. Levy, will expire at our 2023 annual meeting of stockholders. Weinberger and Mazur, will expire at our 2021 annual meeting of stockholders. Bloom and Kehler, will expire at our 2022 annual meeting of stockholders. \n\n### Director Independence \n\n\n\n### Audit Committee \nMessrs. Weinberger, Mazur and Levy serve as members of our audit committee, and Mr. Mazur chairs the audit committee. Each of Messrs. Weinberger, Mazur and Levy meet the independent director standard under Nasdaq listing standards and under Rule 10-A-3(b)(1) of the Exchange Act. \nMazur qualifies as an audit committee financial expert as defined in applicable SEC rules. \n\n### Compensation Committee \nMessrs. Weinberger and Levy serve as members of our compensation committee. Messrs. Weinberger and Levy are independent, and Mr. Weinberger chairs the compensation committee. \n\nNotwithstanding the foregoing, as indicated above, other than the payment to an affiliate of our sponsor of $10,000 per month, for up to 24 months, for office space, utilities and secretarial and administrative support and reimbursement of expenses, no compensation of any kind, including finders, consulting or other similar fees, will be paid to any of our existing stockholders, officers, directors or any of their respective affiliates, prior to, or for any services they render in order to effectuate the consummation of an initial business combination. \n\n### Director Nominations \nWeinberger, Mazur and Levy. \n\n\n\n\n\n\nCode of Ethics \n\n\n\nItem11. \nExecutive Compensation. \n\nWe pay our sponsor a total of$10,000 per month for office space, utilities and secretarial and administrative support. \n\n\n### Item12 \n\nThe following table sets forth information regarding the beneficial ownership of our common stock as of March 1, 2021 based on information obtained from the persons named below, with respect to the beneficial ownership of shares of our common stock, by: each person known by us to be the beneficial owner of more than 5% of our outstanding shares of common stock; \nThe following table does not reflect record or beneficial ownership of the private placement warrants as these warrants are not exercisable within 60 days of the date hereof. \nIn September 2018, our sponsor purchased 8,625,000 founder shares for an aggregate purchase price of $25,000, or approximately $0.003 per share. \n(1) \nUnless otherwise noted, the business address of each of the following entities or individuals is c/o GX Acquisition Corp., 1325 Avenue of the Americas, 25 th \nFloor, New York, New York, 10019. \n(2) \n\n(3) \nGX Sponsor LLC, our sponsor is the record holder of such shares. Cooper Road, LLC, an entity controlled by Jay R. Bloom, and Dean C. Kehler, our co-Chairmen and Chief Executive Officers, are the managing members of our sponsor, and as such have voting and investment discretion with respect to the common stock held of record by our sponsor and may be deemed to have shared beneficial ownership of the common stock held directly by our sponsor. \n(4) \n\n(5) \nPursuant to a Schedule 13G filed by BlueCrest Capital Management Limited with the SEC on January 15, 2021 (BlueCrest Capital Management), BlueCrest Capital Management, a company incorporated under the laws of Jersey, Channel Islands, serves as investment advisor to Millais Limited, a Cayman islands exempted company, with respect to the such shares which are directly held by Millais Limited. \n(6) \nPursuant to a Schedule 13G filed by such persons as a group with the SEC on February 13, 2020, as of December 31, 2019, each of Magnetar Financial, Magnetar Capital Partners, Supernova Management and Mr. Litowitz held 1,500,000 Units. The amount consists of (A) 585,000 Units held for the account of Magnetar Constellation Master Fund, Ltd; (B) 30,000 Units held for the account of Magnetar Capital Master Fund Ltd; and (C) 375,000 Units held for the account of Magnetar Xing He Master Fund Ltd; (D) 180,000 Units held for the account of Magnetar Constellation Fund II, Ltd; (E) 135,000 Units held for the account of Magnetar SC Fund Ltd; and (F) 195,000 Units held of the account of Magnetar Structured Credit Fund, LP. The Units held by the Magnetar Funds represent approximately 5.22% of the total number of Units outstanding (calculated pursuant to Rule 13d-3(d)(1)(i)) of the outstanding Units of the Issuer). \n(7) \nPursuant to a Schedule 13G filed by HGC Investment Management Inc. (HGC), with the SEC on February 14, 2020, serves as the investment manager to HGC Arbitrage Fund LP, an Ontario limited partnership (the Fund), with respect to such shares held by HGC on behalf of the Fund. The principal business office of each of the above entities is 366 Adelaide, Suite 601, Toronto, Ontario M5V 1R9. \n(8) \nPursuant to a Schedule 13G filed by RP Investment Advisors LP (RP) with the SEC on February 14, 2020, RP Select Opportunities Master Fund Ltd., RP Debt Opportunities Fund Ltd. and RP Alternative Global Bond Fund are the record and direct beneficial owners of the securities. RP Investment Advisors LP is the investment advisor of, and may be deemed to beneficially own securities owned by, RP Select Opportunities Master Fund Ltd., RP Debt Opportunities Fund Ltd. and RP Alternative Global Bond Fund. The principal business office of each of the entities named herein is 39 Hazelton Avenue, Toronto, Ontario, Canada M5R 2E3. \n(9) \nPursuant to a Schedule 13G filed by AQR Capital Management, LLC with the SEC on February 14, 2020, AQR Capital Management, LLC is a wholly owned subsidiary of AQR Capital Management Holdings, LLC. CNH Partners, LLC is deemed to be controlled by AQR Capital Management, LLC. AQR Capital Management, LLC, and CNH Partners, LLC act as investment manager to AQR Absolute Return Master Account, L.P. AQR Principal Global Asset Allocation, LLC is the general partner of AQR Absolute Return Master Account, L.P. The principal business office of each of the entities named herein is 2 Greenwich Plaza, Greenwich, CT 06830. \n### Changes in Control \nNot applicable. \nItem13. \n\nIn September 2018, we issued an aggregate of 8,625,000 founder shares to our sponsor for an aggregate purchase price of $25,000 in cash, or approximately $0.003 per share. The founder shares (including the Class A common stock issuable upon exercise thereof) may not, subject to certain limited exceptions, be transferred, assigned or sold by the holder. \nOur sponsor purchased an aggregate of 7,000,000 private placement warrants for a purchase price of $1.00 per warrant in a private placement that occurred simultaneously with the closing of our initial public offering. As such, our sponsors interest in this transaction is valued at $7,000,000, depending on the number of private placement warrants purchased. Each private placement warrant entitles the holder thereof to purchase one share of our Class A common stock at a price of $11.50 per share. \nIf any of our officers or directors becomes aware of an initial business combination opportunity that falls within the line of business of any entity to which he or she has then-currentfiduciary or contractual obligations, he or she will honor his or her fiduciary or contractual obligations to present such business combination opportunity to such other entity. \nCommencing on the date of this prospectus, we have agreed to pay Trimaran Holdings, Inc, an affiliate of our sponsor, a total of $10,000 per month for office space, utilities and secretarial and administrative support. \nWe do not have a policy that prohibits our sponsor, executive officers or directors, or any of their respective affiliates, from negotiating for the reimbursement of out-of-pocketexpenses by a target business. \nOn February 23, 2021, the Sponsor advanced $50,000 to us. \n\nWe will enter into a registration rights agreement with respect to the private placement warrants, the warrants issuable upon conversion of working capital loans (if any) and the shares of Class A common stock issuable upon exercise of the foregoing and upon conversion of the founder shares, which is described under the section of this prospectus entitled Description of Securities Registration Rights. \n### Related Party Policy \nUnder our code of ethics, conflict of interest situations includes any financial transaction, arrangement or relationship (including any indebtedness or guarantee of indebtedness) involving the company. \nIn addition, our audit committee, pursuant to its written charter is responsible for reviewing and approving related party transactions to the extent that we enter into such transactions. A form of the audit committee charter was filed as an exhibit to our registration statement on Form S-1. \n\nTo further minimize conflicts of interest, we have agreed not to consummate an initial business combination with an entity that is affiliated with any of our sponsor, officers or directors unless we, or a committee of independent directors, have obtained an opinion from independent investment banking firm or from another independent entity that commonly renders valuation opinions that our initial business combination is fair to our company from a financial point of view. Furthermore, no finders fees, reimbursements, consulting fee, monies in respect of any payment of a loan or other compensation will be paid by us to our sponsor, officers or directors, or any affiliate of our sponsor or officers, for services rendered to us prior to, or in connection with any services rendered in order to effectuate, the consummation of our initial business combination (regardless of the type of transaction that it is). \n\n\nand \nRepayment of non-interestbearing loans which may be made by our sponsor or an affiliate<|endoftext|>Be acquired and if the number of shares of common stock to be issued, or if the number of shares of common stock into which the securities may be convertible or exercisable, exceeds either (a) 1% of the number of shares of common stock or 1% of the voting power outstanding before the issuance in the case of any of our directors or officers or (b) 5% of the number of shares of common stock or 5% of the voting power outstanding before the issuance in the case of any substantial security holders; \nThe stockholder votes required for our proposed initial business combination with BlackSky are described above under The BlackSky Merger. \n\nIn the event we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our sponsor, directors, officers, advisors or any of their affiliates may purchase public shares in privately negotiated transactions or in the open market either prior to or following the completion of our initial business combination. Subsequent to the consummation of the initial public offering, we adopted an insider trading policy which requires insiders to: (i)refrain from purchasing securities during certain blackout periods and when they are in possession of any material non-public information; and (ii)to clear all trades with our legal counsel prior to execution. \n\n\nIn the event that our sponsor, directors, officers, advisors or any of their affiliates purchase public shares in privately negotiated transactions from public stockholders who have already elected to exercise their redemption rights or submitted a proxy to vote against our initial business combination, such selling stockholders would be required to revoke their prior elections to redeem their shares and any proxy to vote against our initial business combination. \n\n\nOur sponsor, directors, officers, advisors and/or any of their affiliates anticipate that they may identify the stockholders with whom our sponsor, directors, officers, advisors or any of their affiliates may pursue privately negotiated purchases by either the stockholders contacting us directly or by our receipt of redemption requests submitted by stockholders following our mailing of proxy materials in connection with our initial business combination. To the extent that our sponsor, directors, officers, advisors or any of their affiliates enter into a private purchase, they would identify and contact only potential selling stockholders who have expressed their election to redeem their shares for a pro rata share of the trust account or vote against our initial business combination, whether or not such stockholder has already submitted a proxy with respect to our initial business combination but only if such shares have not already been voted at the stockholder meeting related to our initial business combination. Our sponsor, officers, directors, advisors or any of their affiliates will select which stockholders to purchase shares from based on the negotiated price and number of shares and any other factors that they may deem relevant, and will only purchase shares if such purchases comply with Regulation M under the Exchange Act and the other federal securities laws. \nAny purchases by our sponsor or its affiliates who are affiliated purchasers under Rule \n\n10b-18, which is a safe harbor from liability for manipulation under Section9(a)(2)and Rule \n10b-5 of the Exchange Act. Rule \nOur sponsor, officers, directors and/or any of their affiliates will not make purchases of common stock if the purchases would violate Section9(a)(2)or Rule \n10b-5 of the Exchange Act. \n\nWe will provide our public stockholders with the opportunity to redeem all or a portion of their shares of common stock upon the completion of our initial business combination (including BlackSky) at a per share price, payable in cash, equal to the aggregate amount then on deposit in the trust account as of two business days prior to the consummation of the initial business combination, including interest (which interest shall be net of taxes payable), divided by the number of then outstanding public shares, subject to the limitations described herein. The per share amount we will distribute to investors who properly redeem their shares will not be reduced by the deferred underwriting fees we will pay to the underwriters. \n\nWe will provide our public stockholders with the opportunity to redeem all or a portion of their shares of ClassA common stock upon the completion of our initial business combination (including BlackSky) either (i)in connection with a stockholder meeting called to approve the business combination or (ii)by means of a tender offer. \n\n\n\n\n14e-5 under the Exchange Act. \n\n\n\n\nOur sponsor will count towards this quorum and has agreed to vote its founder shares and any public shares it may acquire in favor of our initial business combination. Our directors and officers also have agreed to vote in favor of our initial business combination with respect to any public shares acquired by them (if any). These quorum and voting thresholds, and the voting agreements of our sponsor, may make it more likely that we will consummate our initial business combination. \n\n\nNotwithstanding the foregoing, if we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our amended and restated certificate of incorporation provides that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a group (as defined under Section13 of the Exchange Act), will be restricted from seeking redemption rights with respect to Excess Shares. Absent this provision, a public stockholder holding more than an aggregate of 15% of the shares issued in the initial public offering could threaten to exercise its redemption rights if such holders shares are not purchased by our sponsor or its affiliates at a premium to the then-current market price or on other undesirable terms. By limiting our stockholders ability to redeem no more than 15% of the shares issued in the initial public offering, we believe we will limit the ability of a small group of stockholders to unreasonably attempt to block our ability to complete our initial business combination, particularly in connection with a business combination with a target that requires as a closing condition that we have a minimum net worth or a certain amount of cash. \n\nWe may require our public stockholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in street name, to either tender their certificates to our transfer agent prior to the date set forth in the tender offer documents or proxy materials mailed to such holders or up to two business days prior to the vote on the proposal to approve the business combination in the event we distribute proxy materials or to deliver their shares to the transfer agent electronically using The Depository Trust Companys DWAC (Deposit and Withdrawal at Custodian) System, at the holders option. \n\n\n\n\n\n\nOur sponsor, officers and directors have agreed that we will have until November5, 2021 to complete our initial business combination. If we are unable to complete our business combination within such \n24-month period, we will: (i)cease all operations except for the purpose of winding up, (ii)as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account including interest earned on the funds held in the trust account and not previously released to us to pay our franchise and income taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii)as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect to our warrants, which will expire worthless if we fail to complete our business combination within the \n24-month time period. \nOur sponsor, officers and directors have entered into a letter agreement with us, pursuant to which they have waived their rights to liquidating distributions from the trust account with respect to any founder shares held by them if we fail to complete our initial business combination within 24 months from the closing of the initial public offering. However, if our sponsor, officers and directors acquired public shares in or after the initial public offering, they will be entitled to liquidating distributions from the trust account with respect to such public shares if we fail to complete our initial business combination within the allotted \n24-month time period. \nOur sponsor, officers and directors have agreed, pursuant to a written agreement with us, that they will not propose any amendment to our amended and restated certificate of incorporation (a)that would modify the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of the initial public offering or (b)with respect to any other provision relating to stockholders rights or pre-initial business combination activity, unless we provide our public stockholders with the opportunity to redeem their shares of ClassA common stock upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account including interest earned on the funds held in the trust account and not previously released to us to pay our franchise and income taxes divided by the number of then outstanding public shares. \nWe expect that all costs and expenses associated with implementing our plan of dissolution, as well as payments to any creditors, will be funded from amounts remaining out of the approximately $399,516 of proceeds held outside the trust account, although we cannot assure you that there will be sufficient funds for such purpose. \n\nAlthough we will seek to have all vendors, service providers (other than our independent auditors), prospective target businesses or other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account for the benefit of our public stockholders, there is no guarantee that they will execute such agreements or even if they execute such agreements that they would be prevented from bringing claims against the trust account including but not limited to fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain an advantage with respect to a claim against our assets, including the funds held in the trust account. \n\nIn the event that the proceeds in the trust account are reduced below (i) $10.00 per public share or (ii)such lesser amount per public share held in the trust account as of the date of the liquidation of the trust account, due to reductions in value of the trust assets, in each case net of the amount of interest which may be withdrawn to pay our franchise and income taxes, and Mr.Cohen asserts that he is unable to satisfy his indemnification obligation or that he has no indemnification obligation related to a particular claim, our independent directors would determine whether to take legal action against Mr.Cohen to enforce his indemnification obligation. We have not asked Mr.Cohen to reserve for such indemnification obligation and we cannot assure you that he would be able to satisfy that obligation. \nWe seek to reduce the possibility that Mr.Cohen will have to indemnify the trust account due to claims of creditors by endeavoring to have all vendors, service providers (other than our independent auditors), prospective target businesses or other entities<|endoftext|>Expenses of $5,700,562 for the fiscal year ended June 30, 2021 as compared to net other income of $539,402 for the fiscal year ended June 30, 2020. The net variance of $6,239,964 between the two fiscal periods was primarily due to an increase of $69,638 in interest expenses, a decrease of $448,331 in other income, and an increase in other expenses in the amount of $5,721,995. The Company recognized $302,420 as other income in connection with derecognition of liabilities associated with derivatives and accrued interest, a gain in settlement of debt in the amount of $87,228, a refund of $10,650 and total adjustments of $6,458 from the accounts of the Luxembourg bank funds due to exchange rates during the fiscal year ended June 30, 2021 as compared to a total of 855,107 as other income from derivative gains during the same period in 2020. As for other expenses, the Company incurred $5,738,058 under this category during the fiscal year ended June 30, 2021, primarily due to loss on issuance of stock in the amount of $2,431,914, loss on conversion of notes in the amount of $2,558,325, loss on note discounts of $92,933, penalties of $174,987 and financing origination costs of $28,070 as compared to $16,063 in other expenses during the previous fiscal year. \n### Net income (loss): \nThe Company had a net loss of $6,553,178 for the fiscal ended June 30, 2021, as compared to a net loss of $1,321,805 for the fiscal year ended June 30, 2020, representing a variance of $5,231,373 in net loss between the two fiscal years. The net loss per share based on the basic and diluted weighted average number of common shares outstanding for the fiscal years ended June 30, 2021 and June 30, 2020 was both $(0.00). \nCASH FLOWS \nWe had in cash and cash equivalents of $95,344 as of June 30, 2021 as compared to $225,381 in cash and cash equivalents as of June 30, 2020, respectively. \nNet cash used in our operating activities was $79,446 for the fiscal year ended June 30, 2021 as compared to cash used in operating activities of $(720,125) for the fiscal year ended June 30, 2020. \nThe underlying reasons for the variance in net cash provided by and used in operating activities between the two fiscal year periods were mainly due to an increase in net loss from operations of $5,231,373, a net increase of $6,507,913 due to conversion of notes, a net decrease in assets and prepaid expenses of $770,632 and a net decrease in accounts payable and accrued expenses of $39,617 between the two fiscal years. \nThere was $441,995 in cash used in investing activities during the fiscal year ended June 30, 2021, compared to no cash provided by or used in investing activities during the same period ended June 30, 2020. \nNet cash provided by financing activities was $391,404 for the fiscal year ended June 30, 2021 as compared with $873,827 for the fiscal year ended June 30, 2020. The net cash provided by financing activities for the current fiscal year consist of $24,049 from loans from an officer, $254,825 from short-term notes and loans and $112,530 from issuance of common stock for cash. \nHISTORICAL FINANCING ARRANGEMENTS \nSHORT TERM NOTES PAYABLE AND ISSUANCE OF COMMON STOCK \n(Notes 8 & 13). \n\nThe Company has also from time to time issued convertible promissory notes to various private investment funds for short-term working capital and special projects. Typically, these notes bear interest rates from 5% to 12% per annum, mature within one year, are convertible to common stock of the Company at a discount ranging from 42% to 50%, and may be repaid within 180 days at a prepayment premium ranging from 130% to 150%. (Note 8) \nCOMPANYS PLAN OF OPERATION FOR THE FOLLOWING 12 MONTHS \nIn the next twelve months the Companys goals are to create a number of sub-funds under PHILUX Global Funds SCA, SICAV-RAIF for investment in real estate, renewable energy, agriculture, infrastructure, and healthcare, as well as develop the Asia Diamond Exchange in Vietnam. In addition, the Company will continue to carry out its merger and acquisition program by acquiring target companies for roll-up strategy and also invest in special situations. In particular, the Company will complete the acquisition of Five-Grain Treasure Spirits Co., Ltd. under Empire Spirits, Inc. and develop a private baiju brand to increase revenues. Moreover, the Company will continue to provide advisory and consulting services to international clients through its wholly owned subsidiary PHILUX Capital Advisors, Inc. (formerly known as PHI Capital Holdings, Inc.) \n### FINANCIAL PLANS \nMATERIAL CASH REQUIREMENTS: We must raise substantial amounts of capital to fulfill our plans for PHILUX Global Funds and for acquisitions. We intend to use equity, debt and project financing to meet our capital needs for acquisitions and investments. \nManagement has taken action and formulated plans to meet the Companys operating needs through June 30, 2022 and beyond. The working capital cash requirements for the next 12 months are expected to be generated from operations, sale of marketable securities and additional financing. The Company plans to generate revenues from its consulting services, merger and acquisition advisory services, and acquisitions of target companies with cash flows. \nAVAILABLE FUTURE FINANCING ARRANGEMENTS: The Company may use various sources of funds, including short-term loans, long-term debt, equity capital, and project financing as may be necessary. The Company believes it will be able to secure the required capital to implement its business plan. \n### EQUITY LINE FACILITY \nOn March 6, 2017, PHI Group, Inc., a Nevada corporation (the Company) and Azure Capital, a Massachusetts Corporation (the Investor) entered into an Investment Agreement (the Investment Agreement) and a Registration Rights Agreement (the Registration Rights Agreement), each dated March 6, 2017 between the Company and the Investor. \nPursuant to the Investment Agreement, the Investor committed to purchase, subject to certain restrictions and conditions, up to $10,000,000 worth of the Companys common stock, over a period of 36 months from the effectiveness of the registration statement registering the resale of shares purchased by the Investor pursuant to the Investment Agreement. The Company agreed to initially reserve 20,000,000 shares of its Common Stock for issuance to the Investor pursuant to the Investment Agreement. In the event the Company cannot register a sufficient number of shares of its Common Stock for issuance pursuant to the Investment Agreement, the Company will use its best efforts to authorize and reserve for issuance the number of shares required for the Company to perform its obligations in connection with the Investment Agreement as soon as reasonably practical. \nThis Investment Agreement was amended on August 3, 2017 to allow for the reservation of 65,445,000 shares of the Companys Common Stock for issuance to the Investor pursuant to the corrected Investment Agreement. \nThe Company has filed a S-1 Registration Statement with the Securities and Exchange Commission to include 7,936,600 shares of its Common Stock for issuance in connection with the first tranche of the Equity Line Facility. The S-1 Registration Statement, as amended, was declared effective by the Securities and Exchange Commission on January 11, 2018. \nAs of the day of this report, the Company has not accessed the Equity Line Facility for funding. The Company sent an official notice to Azure Capital on September 7, 2021 to terminate this Investment Agreement effective retroactively January 11, 2021. The Company intends to file an Offering Circular pursuant to Tier 2 of Regulation A of the United States Securities and Exchange Commission (the SEC) to raise capital for the acquisition of Five-Grain Treasure Spirits, Co., Ltd. in Jilin Province, China and to launch the Asia Diamond Exchange in Vietnam. \nITEM 7A. \nThe following discussion about PHI Group Inc.s market risk involves forward-looking statements. Actual results could differ materially from those projected in the forward-looking statements. \n### Currency Fluctuations and Foreign Currency Risk \nSome of our acquisition targets and partner companies are located outside of the United States and use currencies other than the U.S. dollar as the official currencies of those countries. The fluctuations of exchange rates in these countries may affect the value of our business. \nInterest Rate Risk \nWe do not have significant interest rate risk, as most of our debt obligations are primarily short-term in nature to individuals, with fixed interest rates. \n### Valuation of Securities Risk \nSince some of our income in the past was paid with the marketable securities, the value of our assets may fluctuate significantly depending on the market value of the securities we hold. \nITEM 8. FINANCIAL STATEMENTS \nPHI GROUP, INC. \n\n### AUDITORS REPORT \nM.S. Madhava Rao \n316, 1 st \n\nBlock, 4 th \n### Phase, BSK 3 rd \nStage, Bangalore 560085 \n\n\n\nPHI Group Inc. \n2323 Main Street, \n### Irvine, CA 92614 \n\nWe have audited the accompanying Consolidated balance sheet of PHI Group, Inc. (the Company) as of June 30, 2021, the related statements of operations, changes in shareholders deficit and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of June 30, 2021, and the results of its operations and its cash flows for the period June 30, 2021, in conformity with accounting principles generally accepted in the United States of America. \n### Basis for Opinion \n\n\n\nM.S. Madhava Rao \n316, 1 st \n\nBlock, 4 th \n### Phase, BSK 3 rd \nStage, Bangalore 560085 \n\nThe Company has an accumulated deficit of $50,563,530 and had a negative cash flow from operations amounting to $79,446 for the year ended June 30, 2021. These factors as discussed in Note 19 of the financial statements raise substantial doubt about the Companys ability to continue as a going concern. Managements plans in regard to these matters are also described in Note 19. \n### Critical Audit Matters \n\nRelated party transactions. \nAs discussed in Notes 7 and 16 to the financial statement, the Company has borrowed and accrued salaries from related parties in the amounts of $1,720,323 and $1,636,901 as of the date of June 30, 2021 respectively. The Company is relying on borrowings and contributions by shareholders as well as by selling stock. It is expected to incur losses and negative cash flow in the future. \n\n### Chartered Accountant \nBangalore, India \nNovember 7, 2021 \nPHI GROUP, INC. AND SUBSIDIARIES \n### CONSOLIDATED BALANCE SHEETS (AUDITED) \n\nPHI GROUP, INC. AND SUBSIDIARIES \nCONSOLIDATED STATEMENT OF OPERATIONS (AUDITED) \n### FOR THE YEARS ENDED \n\nPHI GROUP, INC. AND SUBSIDIARIES \n\nFOR THE YEARS ENDED JUNE 30, 2021 AND 2020 \n(AUDITED) \n\nPHI GROUP, INC. AND SUBSIDIARIES \nSTATEMENT OF STOCKHOLDERS EQUITY (DEFICIT) \nFOR THE YEARS ENDED JUNE 30, 2021 AND 2020 (AUDITED) \n\nPHI GROUP, INC. AND SUBSIDIARIES \n(FORMERLY PROVIDENTIAL HOLDINGS, INC.) \n\nNOTE 1 \n### NATURE OF BUSINESS \nPHI Group, Inc. \n) is primarily engaged in the operations of PHILUX Global Funds, SCA, SICAV-RAIF, a Reserved Alternative Investment Fund (RAIF) under the laws of Luxembourg, and the development of the Asia Diamond Exchange in Vietnam. (formerly PHI Capital Holdings, Inc.) ( www.philuxcap.com \n) and invests in selective industries as well as special situations aiming to potentially create significant long-term value for our shareholders. PHILUX Global Funds intends to hold a number of sub-funds for investment in agriculture, renewable energy, real estate, infrastructure, healthcare and the Asia Diamond Exchange in Vietnam. \n### BACKGROUND \nOriginally incorporated on June 8, 1982 as JR Consulting, Inc., a Nevada corporation, the Company operated as a Nevada corporation until June 30, 2020 when it filed a Certificate of Dissolution with the Secretary of State of Nevada and started to operate as a Wyoming corporation pursuant to the Articles of Domestication filed with the Wyoming Secretary of State on September 20, 2017. In the beginning, the Company was foremost engaged in mergers and acquisitions and had an operating subsidiary, Diva Entertainment, Inc., which operated modeling agencies in New York and California. In February 2000 the Company then changed its name to Providential Holdings, Inc. In October 2011, the Company discontinued the operations of Providential Vietnam Ltd., Philand Ranch Limited, a United Kingdom corporation listed<|endoftext|>The material weakness identified related to our accounting for a significant and unusual transaction related to the Warrants we issued in connection with the August 2020 initial public offering, see Note 2Restatement of Previously Issued Financial Statements to the accompanying financial statements, as well as Part II, Item 9A: Controls and Procedures included in this Annual Report on Form 10-K/A. \n\n\nOur warrants are accounted for as derivative liabilities with changes in fair value each period included in earnings, which may have an adverse effect on the market price of our Class A ordinary shares or may make it more difficult for us to consummate an initial business combination. \n\n\n\nIn evaluating a prospective target business for our initial business combination, our management may consider the availability of funds from the sale of the forward purchase shares, which may be used as part of the consideration to the sellers in the initial business combination. \nWe have entered into forward purchase agreements pursuant to which the forward purchase parties have agreed to purchase an aggregate of $100million of forward purchase shares for $10.00 per share in private placements that will close simultaneously with the closing of our initial business combination. The funds from the sale of the forward purchase shares are expected to be used as part of the consideration to the sellers in our initial business combination, and to pay expenses in connection with our initial business combination and may be used for working capital in the post-transaction company. \nThe obligations under the forward purchase agreements will not depend on whether any public shareholders elect to redeem their shares in connection with our initial business combination. However, if the sale of the forward purchase shares does not close, for example, by reason of the failure of each forward purchase party to fund the purchase price for its forward purchase shares, we may lack sufficient funds to consummate our initial business combination. Each forward purchase partys obligation to purchase the forward purchase shares will, among other things, be conditioned on each forward purchase party giving us its irrevocable written consent confirming its commitment to purchase the forward purchase shares no later than five days after we notify it of our board of directors intention to meet to consider entering into a definitive agreement for a proposed business combination and on a requirement that such initial business combination is approved by a majority of our board and a majority of the independent directors of our board. Accordingly, if each forward purchase party does not consent, or if the initial business combination is not approved by a majority of our board and a majority of the independent directors of our board, each forward purchase party would not be obligated to purchase any forward purchase shares. \nAdditionally, each forward purchase partys obligations to purchase the forward purchase shares will be subject to termination prior to the closing of the sale of such shares by mutual written consent of us and each forward purchase party, or automatically: (i)if our initial business combination is not consummated within the completion window or (ii)if we become subject to any voluntary or involuntary petition under the United States federal bankruptcy laws or any state insolvency law, in each case which is not withdrawn within 60 days after being filed, or a receiver, fiscal agent or similar officer is appointed by a court for business or property of us or each forward purchase party, in each case which is not removed, withdrawn or terminated within 60 days after such appointment. In addition, each forward purchase partys obligations to purchase the forward purchase shares will be subject to fulfillment of customary closing conditions, including that our initial business combination must be consummated substantially concurrently with the purchase of the forward purchase shares. In the event of any such failure to fund by each forward purchase party, any obligation is so terminated or any such condition is not satisfied and not waived by such party, we may not be able to obtain additional funds to account for such shortfall on terms favorable to us or at all. Any such shortfall would also reduce the amount of funds that we have available for our initial business combination or for working capital of the post-business combination company. \n\n\n\nImmediately following the completion of the initial public offering, our initial shareholders owned 20% of our issued and outstanding ordinary shares. Our amended and restated memorandum and articles of association provides that, if we seek shareholder approval of an initial business combination, such initial business combination will be approved if we receive the approval of an ordinary resolution under Cayman Islands law, which requires the affirmative vote of a majority of the shareholders who attend and vote at a general meeting of the company, including the founder shares. As a result, in addition to our initial shareholders founder shares, we would need 21,562,501 or 37.5% of the 57,500,000 public shares sold in the initial public offering to be voted in favor of an initial business combination in order to have our initial business combination approved (assuming all issued and outstanding shares are voted). Accordingly, if we seek shareholder approval of our initial business combination, the agreement by our initial shareholders and management team to vote in favor of our initial business combination will increase the likelihood that we will receive the approval of an ordinary resolution, being the requisite shareholder approval for such initial business combination. \n\n\n\n\n\n\n\nOn January31, 2020, the U.S. Health and Human Services Secretary at the time, Alex M. \nThis outbreak of \n\nThe extent to which \n\n\nIf the disruptions posed by \n\n### COVID-19 and other events. \n\n\n\n\n\nWe may not be able to find a suitable target business and complete our initial business combination within the completion window. If we have not completed our initial business combination within such time period, we will: (i)cease all operations except for the purpose of winding up, (ii)as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (which interest shall be net of taxes payable and up to $100,000 to pay dissolution expenses) earned on funds in the trust account and not previously released to us to pay our taxes, divided by the number of then issued and outstanding public shares, which redemption will completely extinguish public shareholders rights as shareholders (including the right to receive further liquidation distributions, if any) and (iii)as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders and our board of directors, liquidate and dissolve, subject in the case of clauses (ii)and (iii), to our obligations under Cayman Islands law to provide for claims of creditors and in all cases subject to the other requirements of applicable law. \n\n\n\n\n\n\n\nOur public shareholders will be entitled to receive funds from the trust account only upon the earliest to occur of: (i)our completion of an initial business combination, and then only in connection with those ClassA ordinary shares that such shareholder properly elected to redeem, subject to the limitations and on the conditions described herein, (ii)the redemption of any public shares properly submitted in connection with a shareholder vote to amend our amended and restated memorandum and articles of association (A)to modify the substance or timing of our obligation to allow redemption in connection with our initial business combination or to redeem 100% of our public shares if we have not consummated an initial business combination within the completion window or (B)with respect to any other material provisions relating to shareholders rights or pre-initial business combination activity, and (iii)the redemption of our public shares if we are unable to complete an initial business combination within the completion window, subject to applicable law and as further described herein. \n\n\n\n, and, as a result, are covered securities. Further, if we were no longer listed on the NYSE, our securities would not be covered securities under the statute and we would be subject to regulation in each state in which we offer our securities. \n\n\n\n\nIf we seek shareholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our amended and restated memorandum and articles of association provides that a public shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a group (as defined under Section13 of the Exchange Act), will be restricted from seeking redemption rights with respect to more than an aggregate of 20% of the shares sold in the initial public offering (such shares, the Excess Shares). \n\n\n\nRedBird, which owns an interest in our sponsor, currently invests and plans to continue to invest third-party capital in a wide variety of investment opportunities globally. There may be overlap of investment opportunities with RedBird entities that are actively investing and similar overlap with future RedBird entities. In particular, investment opportunities that may otherwise be suitable for us may not be presented to us by RedBird or our sponsor. \nCertain members of our management team may be involved in and have a greater financial interest in the performance of other RedBird entities, and such activities may create conflicts of interest in making decisions on our behalf. \nCertain members of our management team may be subject to a variety of conflicts of interest relating to their responsibilities to RedBird and its other affiliates. Such individuals may serve as members of management or a board of directors (or in similar such capacity) to various other RedBird entities. Furthermore, certain of our principals and employees may have a greater financial interest in the performance of such other RedBird entities than our performance. \nIf the net proceeds of the initial public offering and the sale of the private placement warrants not being held in the trust account are insufficient to allow us to operate for at least the completion window, it could limit the amount available to fund our search for a target business or businesses and complete our initial business combination, and we will depend on loans from our sponsor or management team to fund our search and to complete our initial business combination. \nOf the net proceeds of the initial public offering, approximately $1,850,000 was made available to us initially outside the trust account to fund our working capital requirements. We believe that the funds available to us outside of the trust account will be sufficient to allow us to operate at least until the end of the completion window; \n\n\n\n\nAlthough we will seek to have all vendors, service providers, prospective target businesses and other entities (other than our independent registered public accounting firm) with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account for the benefit of our public shareholders, such parties may not execute such agreements, or even if they execute such agreements they may not be prevented from bringing claims against the trust account, including, but not limited to, fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain advantage with respect to a claim against our assets, including the funds held in the trust account. \nPursuant to the letter agreement the form of which is filed as an exhibit to this Annual Report on Form \n10-K, our sponsor has agreed that it will be liable to us if and to the extent any claims by a third party for services rendered or products sold to us, or a prospective target business with which we have entered into a written letter of intent, confidentiality or other similar agreement or business combination agreement, reduce the amount of funds in the trust account to below the<|endoftext|>Shareholder Matters. \nInformation relating to securities authorized for issuance under the Companys equity compensation plans is included in Part II of this Amended Report under Item 5. \nThe following table sets forth as of January 14, 2021, which is the record date for the 2021 annual meeting of shareholders, certain information as to the common stock beneficially owned by (i)each person or entity, including any group as that term is used in Section 13(d)(3) of the Exchange Act, who or which was known to us to be the beneficial owner of more than 5% of the issued and outstanding common stock, (ii)the directors and director nominees of Malvern Bancorp, (iii)the Named Executive Officers of Malvern Bancorp, and (iv)all current directors, director \n- \n145- nominees and executive officers of Malvern Bancorp as a group. \n* \nRepresents less than 1.0% of our outstanding common stock. \n(1) \nBased upon filings made with the SEC pursuant to the Exchange Act and information furnished by the respective individuals. Under regulations promulgated pursuant to the Exchange Act, shares of common stock are deemed to be beneficially owned by a person if he, she or it directly or indirectly has or shares (i)voting power, which includes the power to vote or to direct the voting of the shares, or (ii)investment power, which includes the power to dispose or to direct the disposition of the shares. Unless otherwise indicated, the named beneficial owner has sole voting and dispositive power with respect to the shares. \n- \n146- \n(2) \nAccording to a filing under the Exchange Act made on August7, 2020 by PL Capital Advisors, LLC and certain affiliates, PL Capital Advisors as of such filing has shared voting and dispositive power over 746,461 shares of common stock. \n(3) \nAccording to a filing under the Exchange Act made on February9, 2021 by The Banc Funds Company, L.L.C., Banc Fund X L.P., Banc Fund VIII L.P. and Banc Fund IX L.P., the reporting persons as of such filing have voting and dispositive power over an aggregate of 698,699 shares of common stock (with Banc Fund X L.P. having sole voting and dispositive power over 207,242 of such shares, Banc Fund VIII L.P having sole voting and dispositive power over 173,605 of such shares, and Banc Fund IX L.P. having sole voting and dispositive power over 317,852 of such shares). \n(4) voting and dispositive power over 705,782 shares of common stock. Mr.Seidman, (i)as the manager of Seidman and Associates, L.L.C. (SAL), may be deemed the beneficial owner of the 144,699 shares owned by SAL, (ii)as the sole officer of Veteri Place Corporation (Veteri), the general partner of each of Seidman Investment Partnership, L.P. (SIP) and Seidman Investment Partnership II, L.P. (SIPII), may be deemed the beneficial owner of the 104,034 shares owned by SIP and the 136,047 shares owned by SIPII, (iii)as the managing member of JBRC I, LLC, a co-general partner of Seidman Investment Partnership III, L.P. (SIP III), may be deemed the beneficial owner of the 33,473 shares owned by SIPIII, (iv)as the sole officer of Veteri, the trading advisor of LSBK06-08, L.L.C. (LSBK) and CBPS, LLC (CBPS), may be deemed the beneficial owner of the 81,025 shares owned by LSBK and the 90,572shares owned by CBPS, and (v)as the investment manager for each of Broad Park Investors, L.L.C. (Broad Park) and Chewy Gooey Cookies, L.P. (Chewy), may be deemed the beneficial owner of the 92,292 shares owned by Broad Park and the 23,640 shares owned by Chewy. Accordingly, Mr.Seidman may be deemed the beneficial owner of an aggregate of 705,782 shares. In the foregoing capacities, Mr.Seidman has sole and exclusive investment discretion and voting authority with respect to all such shares. \n(5) \nAccording to a filing under the Exchange Act made on February14, 2018 by EJF Capital LLC, Emanuel J. Friedman and EJF Sidecar Fund, Series LLCSeries E, the reporting persons as of such filing have shared voting and dispositive power over 640,587 shares of common stock. \n(6) \nIncludes 2,028 shares subject to restricted stock awards which have not yet vested as of February1, 2021 and 1,268 shares subject to options which are exercisable as of February1, 2021, for Mr.Feinstein. \n(7) \nIncludes 2,028 shares subject to restricted stock awards which have not yet vested as of February1, 2021 and 1,268 shares subject to options which are exercisable as of February1, 2021, for Mr.Fish. \n(8) \nIncludes 2,028 shares subject to restricted stock awards which have not yet vested as of February1, 2021 and 1,268 shares subject to options which are exercisable as of February1, 2021, for Mrs.Leitzell. \n(9) \nIncludes 2,028 shares subject to restricted stock awards which have not yet vested as of February1, 2021 and 2,068 shares subject to options which were exercisable as of February1, 2021, for Mr.Scartozzi. \n(10) \nIncludes 9,847 shares subject to a restricted stock award which has not yet vested as of February 1, 2021, 1,731 shares held in the 401(k) Plan and 4,985 shares allocated to Mr.Weagley in the ESOP. \n(11) \nIncludes 2,028 shares subject to restricted stock awards which have not yet vested as of February1, 2021 and 2,068 shares subject to options which were exercisable as of February1, 2021 for Mr.Kent. \n(12) \nIncludes 1,260 shares subject to restricted stock awards which have not yet vested as of February1, 2021 and 200 shares subject to options which were exercisable as of February1, 2021 for Mrs.Corelli. \n(13) \nIncludes 700 shares subject to a restricted stock award which has not yet vested as of February1, 2021 for Mr.Barrett. \n(14) \nIncludes 360 shares held in the 401(k) Plan, 900 shares held in trust for Mr.Gangemis children, 1,306 shares subject to a restricted stock award which have not yet vested as of February1, 2021 and 3,869 shares allocated to Mr.Gangemi in the ESOP. \n(15) \nIncludes 13 shares held in the 401(k) Plan; 3,406 shares allocated to Mr.Boylan in the ESOP and 1,134 shares subject to a restricted stock award which have not yet vested as of February1, 2021. \n(16) \nIncludes an aggregate of 2,103 shares allocated to the 401(k) Plan accounts of executive officers. \n\n### Director Independence \nNo director or nominee for director is related to any other director or executive officer of the Company by blood, \n- \n147- marriage or adoption. Shareholders are not permitted to use cumulative voting for the election of directors. Our Board of Directors has determined each of Messrs. Barrett, Feinstein, Fish, Kent, Scartozzi, Mrs.Corelli and Mrs.Leitzell is an independent director, as defined in the Nasdaq listing standards. In determining the independence of the directors, the Board of Directors considered certain amounts paid for property and legal services provided by certain directors or entities in which they have interests. This includes the following relationship that Mrs.Corelli has with the Company outside of her director position: Troutman Pepper Hamilton Sanders LLP, a law firm of which Mrs.Corelli is a partner, has been engaged by the Bank for legal services. During the fiscal year ended September30, 2020, the law firm was paid approximately $119,000 for its services. This also includes the following relationship that Mr.Scartozzi has with the Company outside of his director position: The Hardware Store, a company of which Mr.Scartozzi is president, sells consumer goods to the Bank. During the fiscal year ended September30, 2020, The Hardware Store was paid approximately $2,250 for consumer goods. After considering these relationships, the Board of Directors determined that such transactions and relationships would not interfere with the directors exercise of independent judgment in carrying out the responsibilities of a director. \n\nMalvern Bank has made, and expects to make in the future, in the ordinary course of business, loans to directors, officers, principal shareholders and their associates. All loans to such persons were made, and will be made, on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable loans with persons not related to the Company or the Bank. \n\nAudit Fees \nThe following table sets forth the aggregate fees paid by us to Baker Tilly for professional services rendered by the firm in connection with the audit of Malvern Bancorps consolidated financial statements for the fiscal years ended September30, 2020 and 2019, respectively, as well as the fees paid by us to Baker Tilly for audit-related services, tax services and all other services rendered by the firm to us during the fiscal years ended September30, 2020 and 2019, respectively. \n(1) \nAudit fees consist of fees incurred in connection with the audit of the Companys annual financial statements and review of financial statements included in Form 10-Qs, or services normally provided in connection with statutory and regulatory filings (i.e., attest services required by FDICIA or Section 404 of the Sarbanes-Oxley Act), including out-of-pocket expenses. \n(2) \nAudit related fees consist of fees incurred in connection with the audit of our employee benefit plan. \n(3) \nTax fees include fees billed for the preparation of state and federal tax returns and assistance with calculating estimated tax payments. \nThe Audit Committee selects our independent registered public accounting firm and pre-approves all audit services to be provided by it to Malvern Bancorp. The Audit Committee also reviews and pre-approves all audit-related and non-audit related services rendered by our independent registered public accounting firm in accordance with the Audit Committees charter. In its review of these services and related fees and terms, the Audit Committee considers, among other things, the possible effect of the performance of such services on the independence of our independent registered public accounting firm. The Audit Committee pre-approves certain audit-related services and certain non-audit related tax services which are specifically described by the Audit Committee on an annual basis, and separately approves other individual engagements as necessary. \nEach new engagement of the Companys independent registered public accounting firm was approved in advance by the Audit Committee or its Chair, and none of those engagements made use of the de minimis exception to pre-approval contained in the SECs rules. \n- \n148- \n### PART IV. \nItem 15. \n(a)( \n1) \nThe following financial statements are incorporated by reference from Item 8 hereof: \n\n### \n\n(Loss) \n\n\n\n(2) \nAll schedules are omitted because they are not required or applicable, or the required information is shown in the consolidated financial statements or the notes thereto. \n(3) \nExhibits \n- \n149- \n\n* \nDenotes a management contract or compensatory plan or arrangement. \n** \nAttached as Exhibit 101 to this report are the following documents formatted in Inline XBRL (Extensible Business Reporting Language): (i) the Consolidated Statement of Financial Condition at September 30, 2020 and 2019, (ii) the Consolidated Statement of Operations for the years ended September 30, 2020 and 2019, (iii) the Consolidated Statement of Comprehensive Income (Loss) for the years ended September 30, 2020 and 2019, (iv) the Consolidated Statement of Changes in Shareholders Equity for the years ended September 30, 2020 and 2019, (v) the Consolidated Statement of Cash Flows for the years ended September 30, 2020 and 2019 (vi) the Notes to Condensed Consolidated Financial Statements, tagged as detailed footnote tagging. \n(1) \nIncorporated by reference from Exhibit 3.1 to the Current Report on Form 8-K of Malvern Bancorp, Inc. \n(2) \nIncorporated by reference from Exhibit 3.2 to the Current Report on Form 8-K of Malvern Bancorp, Inc. \n(3) \nIncorporated by reference from Exhibit 4.0 to Malvern Bancorp, Inc.s Registration Statement Form S-1, filed May 31, 2012 (SEC File No. 333-181798). \n- \n150- \n(4) \n### Incorporated by reference from Exhibit \n1 to Malvern Bancorp, Inc.s Current Report on Form 8-K, filed on February 8, 2017. \n(5) \nIncorporated by reference from Exhibit 10.1 to Malvern Bancorp, Inc.s Current Report on Form 8-K, filed on February 8, 2017 \n(6) \nIncorporated by reference from Appendix A of the definitive proxy statement filed by Malvern Bancorp, Inc. with the SEC on January 2, 2015. \n(7) \nIncorporated by reference from Exhibit 10.1 to Malvern Bancorp, Inc.s Current Report on Form 8-K, filed on May 27, 2016. \n( \n) \nIncorporated by reference from Exhibit 10.2 to Malvern Bancorp, Inc.s Current Report on Form 8-K, filed on May 27, 2016. \n( \n) \nIncorporated by reference from<|endoftext|>Be earned with respect to that performance metric. Because the LTIP is based on a three-year performance period, none of the performance share units will be earnable until the performance period closes following our 2022 fiscal year. See \nCompensation Discussion and Analysis section of this Amendment No. for additional discussion of the LTIP. \n(4) \nRepresents RSUs that vest, so long as the executive continues to be employed with us, in six equal installments over three years beginning approximately nine months after the date of issuance. \n(5) \nRepresents stock options that vest, so long as the executive continues to be employed with us, in eight equal installments over four years beginning approximately nine months after date of issuance. \n(6) \nIn the case of RSUs and LTIP PSUs, represents the fair value of the awards, measured at the grant date. In the case of stock options, the grant date fair value is equal to the number of shares subject to the option multiplied by the fair value of our options on the date of grant determined using the Black-Scholes option valuation model. The methodology and assumptions used to calculate the Black-Scholes value of our options are described in Note11 of the consolidated financial statements contained in our Annual Report. The closing price of our stock on January 21, 2020 was $47.16. The closing price of our stock on March 30, 2020 was $31.49. \nNarrative Description of Summary Compensation Table and Grants of Plan-Based Awards Table \nThe material terms of our named executive officers annual compensation, including base salaries, cash incentive plan, time-based RSUs, stock options and Long-Term Incentive Plan PSUs and the explanations of the amounts of salary, cash incentives, and equity values in proportion to total compensation are described under \n\n\n, the 2020 non-equity incentive awards were granted pursuant to the fiscal 2020 Corporate Bonus Plan, with amounts to be earned based on the achievement of certain financial targets. In fiscal 2020, following adjustments made in light of the COVID-19 pandemic as discussed above, we exceeded the target level of performance under our bonus plan with respect to the non-GAAP operating income and the adjusted free cash flow metrics, but fell short of the target level of performance with respect to the non-GAAP revenue metric, which resulted in an overall payout percentage of 94% with respect to the annual cash bonus. \n\n, the PSUs awarded under the Long-Term Incentive Plan will be earned based on the results achieved during the three year performance period as determined following our 2022 fiscal year, contingent upon each named executive officers continued service. \nThe RSUs granted to our named executive officers in 2020 vest in equal installments every six months over three years, subject to continued employment. There is no purchase price associated with PSU or RSU awards. The stock options granted to our named executive officers in 2020 vest in equal installments every six months over four years, subject to continued employment. The stock options have an exercise price equal to the closing price of our common stock on the date of grant. \n-54- \n\nThe following table sets forth certain information with respect to the outstanding equity awards at November 30, 2020 for each of the named executive officers. We have omitted Mr. Jalbert from the table below because he retired as Chief Financial Officer on January 31, 2020 and his employment with the Company terminated on April 2, 2020. Jalbert that would otherwise have vested on October 1, 2020 accelerated and became fully exercisable on April 2, 2020, as detailed in the section entitled \" \nSeverance and Change in Control Agreements \n\" below. All other unvested equity awards terminated as of such date. \n-55- \nOUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END 2020 \n_____________ \n(1) \nThe unvested awards shown in this column are RSUs subject to service-based vesting, unless otherwise noted. \n-56- \n(2) \nThe market value of unvested RSUs was calculated as of November 30, 2020 (the last trading day of our fiscal 2020) based on the closing price of our common stock on Nasdaq of $40.10 on that date. \n(3) \nThe unvested awards shown in this column are PSUs subject to performance-based vesting. PSUs are reported assuming payout at target award levels, unless otherwise noted. \n(4) \nThe market value of unvested PSUs was calculated as of November 30, 2020 based on the closing price of our common stock on Nasdaq of $40.10 on that date. \n(5) \nVest in eight equal semi-annual installments beginning April 1, 2018. \n(6) \nVest in eight equal semi-annual installments beginning October 1, 2017. \n(7) \nVest in eight equal semi-annual installments beginning October 1, 2018. \n(8) \nVest in six equal semi-annual installments beginning October 1, 2018. \n(9) \nVest on February 1, 2021, subject to the Company meeting total shareholder return and operating income criteria over the three-year period ending November 30, 2020. \n(10) \nVest in eight equal semi-annual installments beginning October 1, 2019. \n(11) \nVest in six equal semi-annual installments beginning October 1, 2019. \n(12) \nVest on February 1, 2022, subject to the Company meeting total shareholder return and operating income criteria over the three-year period ending November 30, 2021. \n(13) \nVest in eight equal semi-annual installments beginning October 1, 2020. \n(14) \nVest in six equal semi-annual installments beginning October 1, 2020. \n(15) \nVest on February 1, 2023, subject to the Company meeting total shareholder return and operating income criteria over the three-year period ending November 30, 2022. \n(16) \nVest 33% on October 1, 2019 and 16.67% semi-annually thereafter. \n-57- \n\nThe following table sets forth certain information regarding the number of stock options exercised and RSUs that vested in the fiscal year ended November 30, 2020 under our equity incentive plans and the corresponding amounts realized by the named executive officers. The value realized on exercise of stock option awards is calculated as the difference between the closing price of our common stock on the Nasdaq Global Select Market on the exercise date and the exercise price of the applicable stock option award. The value realized on vesting for RSUs is calculated as the product of the number of shares subject to the RSUs that vested and the closing price of our common stock on the Nasdaq Global Select Market on the vesting date. \nOption Exercises and Stock Vested - Fiscal 2020 \n\nWe have agreements with, or guidelines applicable to, our executive officers that provide the benefits described below in connection with certain terminations of employment or a change in control of our company. We do not provide excise tax gross-ups to our executive officers under these or any other agreements. \nMr. Guptas Executive Employment Agreement \nIn connection with his appointment as our President and Chief Executive Officer, we and Mr. Gupta entered into an employment agreement, effective as of October 10, 2016, setting forth Mr. Guptas compensation and certain other terms. Mr. Guptas employment agreement provides that if his employment is terminated because of an involuntary termination, he will be entitled to: \n(1) the payment of cash severance equal to 18 months of total target cash compensation as of the date of termination, which will be paid over 18 months; \n(2) the payment of his annual target cash bonus on a pro-rata basis with respect to the elapsed part of the relevant fiscal year; \n(3) the continuation, for a period of 18 months, of benefits that are substantially equivalent to the benefits (medical, dental, and vision) that were in effect immediately prior to termination; and \n(4) \n18 months of acceleration of unvested stock options and RSUs (but not unvested performance equity). \n-58- \nGuptas execution of a standard separation and release agreement. Separation payments upon any involuntary termination within twenty-four months following a change in control would be governed by the Employee Retention and Motivation Agreement described below and not by Mr. Guptas employment agreement. \nAn involuntary termination is defined in the employment agreement as a termination of employment by us other than for cause, disability or death or a termination by Mr. Gupta as a result of certain events occurring without his consent such as an assignment to him of duties or a significant reduction of his duties, either of which is materially inconsistent with his position prior to the assignment or reduction, or the removal of Mr. Gupta from that position, a material reduction in Mr. Gupta's base salary or target bonus, a relocation of Mr. Gupta to a facility or location more than fifty miles from his then present location, or a material breach of the employment agreement by us. \nMr. Guptas employment agreement also includes non-competition and related covenants. The non-competition covenant relates to certain businesses with similar product areas and activities as our company. \nMr. Guptas Employee Retention and Motivation Agreement \nWe and Mr. Gupta have also entered into an Employee Retention and Motivation Agreement (the Gupta ERMA), which provides certain compensation and benefits if his employment is involuntarily terminated within 24 months of a change in control of our company. If an involuntary termination of Mr. Guptas employment occurs under other circumstances, the severance terms of his employment agreement, as described above, would control and not the Gupta ERMA. \n### Change in Control Benefits \nUnder the Gupta ERMA, upon a change in control of our company, Mr. Gupta would be entitled to: \n(1) the payment of his annual target cash bonus on a pro-rata basis with respect to the elapsed part of the relevant fiscal year; and \n(2) \n18 months of acceleration of unvested stock options and RSUs (but not unvested performance equity, which will vest in accordance with its terms), unless the acquirer assumes all such options and restricted equity. If such outstanding stock options and shares of restricted equity held by Mr. Gupta are continued by us or assumed by our successor entity, then vesting will continue in its usual course. \nInvoluntary Termination Following Change in Control \nIn the event of an involuntary termination within twenty-four (24) months following a change in control, Mr. Gupta would be entitled to: \n(1) a lump-sum payment of cash severance equal to 24 months of total target cash compensation as of the date of termination; \n(2) the continuation, for a period of 24 months, of benefits that are substantially equivalent to the benefits (medical, dental, and vision) that were in effect immediately prior to termination; and \n(3) accelerated vesting of all unvested stock options and RSUs (but not unvested performance equity, which will vest in accordance with its terms). \n-59- \nIn the event that any amounts provided for under the Gupta ERMA or otherwise payable to Mr. Gupta would constitute parachute payments within the meaning of Section 280G of the Internal Revenue Code and be subject to the related excise tax, Mr. Gupta would be entitled to receive either full payment of the benefits under the agreement or such lesser amount that would result in no portion of the benefits being subject to the excise tax, whichever results in the greatest amount of after-tax benefits to Mr. Gupta. \n### Mr. Folgers Executive Employment Agreement \nIn connection with his appointment as Chief Financial Officer, we and Mr. Folger entered into an employment agreement, effective January 31, 2020, setting forth Mr. Folgers compensation and certain other terms. Mr. Folgers employment agreement provides that in the event that his employment is terminated as a result of an involuntary termination, he will be entitled to: the payment of cash severance equal to 12 months of total target cash compensation as of the date of termination, which will be paid over 12 months; and \n12 months accelerated vesting of all unvested stock options and RSUs (but not unvested performance equity). \nFolgers execution of a standard separation and release agreement, which will also include non-competition and related covenants. The non-competition covenant relates to certain businesses with similar product area and activities as the Company. Separation payments upon any involuntary termination within twelve months following a change in control would be governed by the Employee Retention and Motivation Agreement described below and not by Mr. Folgers employment agreement. \nAn involuntary termination is defined in<|endoftext|>Manager for any compensation paid to Mr. Roberts in his capacity as our Chief Executive Officer. We pay our manager a quarterly management fee, and our manager may use the proceeds from the management fee, in part, to pay compensation to Mr. Roberts. For the years ended December 31, 2020 and 2019, the management fee expense for our manager amounted to $503,022 and $433,784, respectively, of which $253,022 and $120,137, respectively, was paid in cash. \nMr. Roberts did not receive any compensation as an employee of our manager for the years ended December 31, 2020 and 2019. However, Mr. Roberts, as a holder of limited liability company interests in our manger, received $0 and $40,000 for the years ended December 31, 2020 and 2019, respectively, as a result of distributions from our manger to its interest holders, which is included in Other Compensation in the table above. See Item 1 \nBusinessOur ManagerOverview of Our Manager for information regarding the ownership of our manager. \n### Employment Agreements \nAs noted above, Mr. Roberts is not an employee of our company. \nOn January 14, 2021, we entered into an employment agreement with Mr. Amond setting forth the terms of Mr. Amonds employment as our Chief Financial Officer. Pursuant to the terms of the employment agreement, we agreed to pay Mr. Amond an annual base salary of $240,000, consisting of $80,000 for each of our three portfolio companies (Asiens, Kyles and Neese), up to a maximum aggregate annual base salary of $300,000 upon the addition of a fourth portfolio company. Mr. Amond is also eligible for a bonus of up to 50% of his base salary, based on metrics in excess of present earnings targets to be agreed upon by Mr. Amond and our board of directors. If Mr. Amond is terminated by us without cause, he will be entitled to 6 months of base compensation, which will be paid in lump sum within two weeks of the separation date. The employment agreement also provides that Mr. Amond is entitled to twenty (20) working days of vacation per year and that he is eligible to participate in the standard benefits plans offered to similarly situated employees by us from time to time, subject to plan terms and generally applicable our policies. Pursuant to the employment agreement, Mr. Amond agreed not compete with our company during his employment or for one year after his employment ends, and he may not solicit any of our employees or consultants for a period of two years after his employment ends. The employment agreement also contains customary confidentiality provisions. Mr. Amonds employment is at-will and Mr. Amond may resign upon 90 days notice. \n### Other Compensation \nOur company does not provide any nonqualified deferred compensation arrangements or qualified or non-qualified pension plans to our named executive officers. The named executive officers have not been granted any options or other equity-based awards with respect to our common shares. As of December31, 2020, the named executive officers did not hold any options or other equity-based awards with respect to our common shares. \nDirector Compensation \nThe table below sets forth the compensation to our directors during the fiscal year ended December 31, 2020. \nITEM 12. \n\n\nThe following table sets forth certain information with respect to the beneficial ownership of our common shares as of April 14, 2021 by (i) each of our named executive officers and directors; and (iii) each person who is known by us to beneficially own more than 5% of our common shares. Unless otherwise specified, the address of each of the persons set forth below is c/o our company, 590 Madison Avenue, 21st Floor, New York, NY 10022. \n* \nLess than 1% \n(1) \nExcept as otherwise indicated, each of the beneficial owners listed above has direct ownership of and sole voting power and investment power with respect to our common shares. \n(2) \nA total of 4,842,851 common shares are considered to be outstanding pursuant to SEC Rule 13d-3(d)(1) as of April 14, 2021. \n(3) \nThe address of Edward J. Tobin is 235 West End Ave, #17B, New York, NY 10023. \n(4) \nThe address of Louis A. Bevilacqua is 1050 Connecticut Ave., NW, Suite 500, Washington, DC 20036. \n(5) \nThe address of Stephen Mallatt, Jr. and Rita Mallatt is 2950 E. Lucca Dr., Meridian, ID 83642. \n(6) \nAvi Geller is the Chief Investment Officer of Leonite Capital LLC and has voting and investment power over the securities held by it. Mr. Geller disclaims beneficial ownership of the shares held by Leonite Capital LLC except to the extent of his pecuniary interest, if any, in such shares. The address of Leonite Capital LLC is 1 Hillcrest Center Dr, Suite 232, Spring Valley, NY 10977. \n### Changes in Control \n\n\n\nITEM 13. \n\n\nThe following includes a summary of transactions since the beginning of our 2019 fiscal year, or any currently proposed transaction, in which we were or are to be a participant and the amount involved exceeded or exceeds the lesser of $120,000 or one percent of the average of our total assets at year end for the last two completed fiscal years, and in which any related person had or will have a direct or indirect material interest (other than compensation described under Executive Compensation above). \nOur Chief Executive Officer, Ellery W. Roberts, controls our manager. Our relationship with our manager is governed principally by the following two agreements: (1) the management services agreement and offsetting management services agreements relating to the management services our manager will perform for us and the businesses we own and the management fee to be paid to our manager in respect thereof; and (2) our companys operating agreement setting forth our managers rights with respect to the allocation shares it owns, including the right to receive payments of profit allocation from our company and our managers right to cause our company to purchase the allocation shares it owns. Our manager has also entered into an offsetting management services agreement with 1847 Neese, 1847 Asien, 1847 Cabinet and 1847 Wolo and we expect that our manager will enter into offsetting management services agreements and transaction services agreements with our future businesses directly. See Item 1 \nBusinessOur Manager for detailed descriptions of these agreements. \nPursuant to the management services agreement, our manager has granted our company a non-exclusive, royalty free right to use the following intellectual property in connection with our business and operations or as may be required to comply with applicable law: (i) 1847 Holdings LLC; (ii) 1847 Partners LLC; (iii) www.1847holdings.com; and (iv) www.1847partners.com. Our company is permitted to sublicense the use of this intellectual property to any of our subsidiaries to use in connection with their business or as may be required by law. Our company and any businesses that we acquire must cease using the intellectual property described above entirely in their businesses and operations within 180 days of our termination of the management services agreement. The sublicense provisions of the management services agreement would require our company and its businesses to change their names to remove any reference to the term 1847 or any reference to the intellectual property licensed to them by our manager. This also would require us to create and market a new name and expend funds to protect that name. \nand Rita Mallatt, who are officers of Kyles and significant shareholders of our company. See Item 2 \nProperties for more information regarding this lease. \n### Director Independence \nOur board of directors has determined that Paul A. Froning is independent within the meaning of the rules of the Nasdaq Stock Market. \nITEM 14. \n\n\n\nAudit Fees consisted of fees billed for professional services rendered by the principal accountant for the audit of our annual financial statements and review of the financial statements included in our Form 10-K and 10-Q or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements. \n\n\n\n\nIn accordance with its policies and procedures, our board of directors pre-approved the audit service performed by Sadler, Gibb & Associates, LLC for our financial statements as of and for the year ended December 31, 2020. \nPART IV \nITEM 15. \n\n(a) \n\n(1) \n### Index to Financial Statements: \n\nConsolidated Balance Sheets as of December 31, 2020 and 2019 \nConsolidated Statements of Operations for the Years Ended December 31, 2020 and 2019 \nConsolidated Statement of Shareholders Deficit for the Years Ended December 31, 2020 and 2019 \nConsolidated Statements of Cash Flows for the Years Ended December 31, 2020 and 2019 \n\n(2) \n### Index to Financial Statement Schedules: \nAll schedules have been omitted because the required information is included in the financial statements or the notes thereto, or because it is not required. \n(3) \n### Index to Exhibits: \n\n(b) \nExhibits: \n* \nFiled herewith \nITEM 16. \nFORM 10-K SUMMARY. \nNone. \nFINANCIAL STATEMENTS \n\nTo the Board of Directors and Shareholders of 1847 Holdings LLC: \n\nWe have audited the accompanying consolidated balance sheets of 1847 Holdings LLC (the Company) as of December 31, 2020 and 2019, the related consolidated statements of operations, shareholders deficit, and cash flows for each of the years in the two-year period ended December 31, 2020 and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2020, in conformity with accounting principles generally accepted in the United States of America. \nBasis for Opinion \n\n\nSuch procedures included examining on a test basis, evidence regarding the amounts and disclosures in the financial statements. \n### Critical Audit Matters \nThe critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) related to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgements. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. \nAcquisitions Refer to Note 10 to the financial statements \n\nDuring the year ended December 31, 2020, the Company completed two business acquisitions. On May 28, 2020, the Company acquired 100% of the outstanding capital stock of Asiens Appliance, Inc. for an aggregate purchase price of $2,125,000. On September 30, 2020, the Company acquired 100% of the outstanding capital stock of Kyles Custom Wood Shop, Inc. for an aggregate purchase price of $6,500,000. The Company accounted for these two acquisitions as business combinations. Accordingly, the purchase price was allocated to the assets acquired and liabilities assumed at fair value as of the transaction dates. The Company utilized a third-party valuation specialist to assist in determining the fair value of the consideration granted and identifiable intangible assets acquired in each acquisition. We identified the estimation of the fair value of the consideration transferred, assets acquired, and liabilities assumed in these acquisitions as a critical audit matter. \nWe identified the valuation of the consideration transferred, assets acquired, and liabilities assumed as a critical audit matter because of the significant estimates and assumptions management made to determine the fair value of certain of these assets. This required a high degree of auditor judgment and an increased extent of effort when performing audit procedures to evaluate the reasonableness of valuation methodologies applied and the assumptions used such as forecasted sales growth rates, cash flows, attrition rates, market-based royalty rates, and estimated discount rates. In addition, the audit effort involved the use of professionals with specialized skill and knowledge. \n\n\nWe evaluated managements and the valuation specialists identification of assets acquired and liabilities assumed. \nWe obtained managements purchase price allocation<|endoftext|>This Annual Report on Form 10-K/A (Form 10-K/A) is being filed as Amendment No. 1 (the Amendment) to our Annual Report on Form 10-K for the period ended December 31, 2020, which was filed with the U.S. This Form 10-K/A is being filed to restate the balance sheet, statement of operations, statement of changes in stockholders equity and statement of cash flows as of December 31, 2020 and for the period from March 6, 2020 (inception) through December 31, 2020. \nSince their issuance on June 30, 2020 at the time of the Companys initial public offering, our warrants were accounted for as equity within our balance sheet, and after discussion and evaluation, including with our independent auditors, we have concluded that our warrants should be presented as liabilities with subsequent fair value remeasurement. \nHistorically, our warrants were reflected as a component of equity as opposed to liabilities on the balance sheet and the statement of operations did not include the subsequent non-cash changes in estimated fair value of our warrants, based on our application of Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 815-40, Derivatives and Hedging, Contracts in Entitys Own Equity (ASC 815-40). We reassessed our accounting for our warrants issued on June 30, 2020, in light of the SEC Staffs published views. Based on this reassessment, we determined that our warrants should be classified as liabilities measured at fair value upon issuance, with subsequent changes in fair value reported in our Statement of Operations each reporting period. \nThe effects of this restatement to our financial statements are described in Note 2 to the financial statements. \nThe following sections have been amended from the Original 10-K as a result of the restatement described above: \nPart I - Item 7. \nPart I - Item 8. \n### Part II Item 9A. Controls and Procedures \n\n\nThis Form 10-K/A also includes as exhibits certifications from our Chief Executive Officer and Chief Financial Officer dated as of the date of this filing. Except as described above, no other sections have been amended from the Original 10-K. \ni \n\nThe Amendment contained in this report that are not purely historical are forward-looking statements. Forward- looking statements in the Amendment may include, for example, statements about: our ability to complete our initial business combination with MoneyLion Inc., or any other initial business combination; or our financial performance. \nThe forward-looking statements contained in the Amendment are based on our current expectations and beliefs concerning future developments and their potential effects on us. These risks and uncertainties include, but are not limited to, those factors described under the heading Risk Factors in the Form 10-K/A. \nii \n### PART I \nReferences in this report to we, us or the Company refer to Fusion Acquisition Corp. References to our management or our management team refer to our officers and directors, and references to the Sponsor refer to Fusion Sponsor LLC, a Delaware limited liability company. \nITEM 1. BUSINESS. \n### Introduction \nWe are a blank check company incorporated on March 6, 2020 as a Delaware corporation formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. \nOn June 30, 2020, we consummated our initial public offering (the Public Offering) of 35,000,000 units, including the issuance of 4,500,000 units as a result of the underwriters partial exercise of their over-allotment option. Each unit consists of one share of Class A common stock and one-half of one warrant. The units were sold at an offering price of $10.00 per unit, generating gross proceeds, before expenses, of $350,000,000. Prior to the consummation of the Public Offering, in March 2020, the Sponsor purchased 5,750,000 shares of Class B common stock (the Founder Shares) in exchange for a capital contribution of $25,000, or $0.0043 per share. On May 28, 2020, the Company effected a 1:1.25 stock split with respect to the Founder Shares, on June 24, 2020, the Company effected a 1:1.20 stock split with respect to the Founder Shares and on June 25, 2020, the Company effected a 1:1.01666 stock split with respect to the Founder Shares, resulting in the Sponsor holding an aggregate of 8,768,750 Founder Shares. The number of Founder Shares issued was determined based on the expectation that the Public Offering would be a maximum of 35,075,000 units and therefore that such Founder Shares would represent, on an as-converted basis, 20% of the outstanding shares of Class A common stock under the Public Offering. In connection with the underwriters partial exercise of their over-allotment option prior to the closing of the Public Offering, on June 30, 2020, the Sponsor surrendered an aggregate of 18,750 Founder Shares to us for no consideration, resulting in the Sponsor holding 8,750,000 Founder Shares. \nSimultaneously with the consummation of the Public Offering, we consummated the private sale of an aggregate of 8,100,000 warrants, each exercisable to purchase one share of Class A common stock at $11.50 per share, to the Sponsor at a price of $1.00 per warrant, generating gross proceeds, before expenses, of approximately $8,100,000 (the Private Placement). The warrants sold in the Private Placement, or the private placement warrants, are identical to the warrants included in the units sold in the Public Offering, except that, so long as they are held by their initial purchasers or their permitted transferees, (i) they will not be redeemable by the Company, (ii) they (including the shares of Class A common stock issuable upon exercise of these warrants) may not, subject to certain limited exceptions, be transferred, assigned or sold until 30 days after the Company completes its initial business combination and (iii) they may be exercised by the holders on a cashless basis. \nUpon the closing of the Public Offering and the Private Placement, $350,000,000 was placed in a trust account with Continental Stock Transfer& Trust Company acting as trustee (the Trust Account). Except with respect to interest earned on the funds held in the Trust Account that may be released to the Company to pay its taxes, if any, the funds held in the Trust Account will not be released from the Trust Account until the earliest of (i) the completion of the Companys initial business combination, (ii) the redemption of our public shares if we are unable to complete our initial business combination by December 31, 2021, subject to applicable law, or (iii) the redemption of 100% of the public shares if we are unable to complete an initial business combination by December 31, 2021. The proceeds held in the Trust Account may only be invested in United States government securities within the meaning of Section 2(a)(16) of the Investment Company Act of 1940, as amended (the Investment Company Act), having a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act which invest only in direct U.S. \nAfter the payment of underwriting discounts and commissions (excluding the deferred portion of $13,150,000 in underwriting discounts and commissions, which amount will be payable upon consummation of our initial business combination if consummated) and approximately $2 million in expenses relating to the Public Offering, approximately $1,250,000 of the net proceeds of the Public Offering and Private Placement was not deposited into the Trust Account and was retained by us for working capital purposes. As of December 31, 2020, there was approximately $350,000,000 in investments and cash held in the Trust Account and approximately $950,000 of cash held outside the Trust Account available for working capital purposes. \nOn February 11, 2021, we entered into an agreement and plan of merger by and among the Company, ML Merger Sub Inc., a wholly owned subsidiary of the Company (Merger Sub), and MoneyLion (as it may be amended and/or restated from time to time, the Merger Agreement), which provides for Merger Sub to merge with and into MoneyLion with MoneyLion surviving the merger as a wholly owned subsidiary of the Company (the Business Combination). \n\n\n\nGeneral \n\nIf our initial business combination is paid for using equity or debt securities, or not all of the funds released from the Trust Account are used for payment of the consideration in connection with our initial business combination or used for redemptions of our shares of Class A common stock, we may apply the balance of the cash released to us from the Trust Account for general corporate purposes, including for maintenance or expansion of operations of the post-transaction company, the payment of principal or interest due on indebtedness incurred in completing our initial business combination, to fund the purchase of other companies or for working capital. \n\nWhile we may pursue an acquisition in any business industry or sector, we intend to concentrate our efforts identifying businesses in the financial services industry with an enterprise value of approximately $750 million to $3 billion, with particular emphasis on businesses that are providing or changing technology for traditional financial services (FinTech), or those in the wealth, financial advice, investment, and asset management sectors. In addition, we intend to capitalize on the ability of our management team to identify, acquire, and manage a business in the financial services industry that can benefit from their experience and differentiated global network. \nNYSE rules require that we must consummate an initial business combination with one or more operating businesses or assets with a fair market value equal to at least 80% of the net assets held in the trust account (net of amounts disbursed to management for working capital purposes, if permitted, and excluding the amount of any deferred underwriting commissions). \n\n\n\nWe will not pay any consulting fees to members of our management team, or any of their respective affiliates, for services rendered to or in connection with our initial business combination. \n\nWe will provide our public stockholders with the opportunity to redeem all or a portion of their shares of Class A common stock upon the completion of our initial business combination at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account calculated as of two business days prior to the consummation of the initial business combination, including interest earned on the funds held in the trust account (which interest shall be net of taxes payable), divided by the number of then outstanding public shares, subject to the limitations and on the conditions described herein. Our Sponsor, officers and directors have entered into a letter agreement with us, pursuant to which they have agreed to waive their redemption rights with respect to any founder shares and public shares they may hold in connection with the completion of our initial business combination. \n\nIf a stockholder vote is not required and we do not decide to hold a stockholder vote for business or other legal reasons, we will (a) conduct the redemptions pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, which regulate issuer tender offers, and (b) file tender offer documents with the SEC prior to completing our initial business combination, which contain substantially the same financial and other information about the initial business combination and the redemption rights as is required under Regulation 14A of the Exchange Act, which regulates the solicitation of proxies. \n\n\nIn such case, our Sponsor, officers and directors have agreed to vote their Founder Shares and any public shares purchased during or after the Public Offering in favor of our initial business combination. Each public stockholder may elect to redeem their public shares irrespective of whether they vote for or against the proposed transaction. In addition, our Sponsor, officers and directors have entered into a letter agreement with us, pursuant to which they have agreed to waive their redemption rights with respect to their Founder Shares and public shares in connection with the completion of our initial business combination. \nIf we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules,<|endoftext|>The opportunity to redeem all or a portion of their ordinary shares upon the completion of our initial business combination at a per-shareprice, payable in cash, equal to the aggregate amount then on deposit in the trust account as of two business days prior to the consummation of the initial business combination, including interest (which interest shall be net of taxes payable) divided by the number of then issued and outstanding public shares, subject to the limitations described herein. The amount in the trust account as of December 31, 2020 was $595,120,073, or $10.00 per public share. FWD Life Insurance Public Company Limited and FWD Fuji Life Insurance Company Limited purchased an aggregate of $50,000,000 of units in our initial public offering, with the same redemption rights as the public shareholders with respect to any units they purchased in the offering. \n\nAsset acquisitions and share purchases would not typically require shareholder approval while direct mergers with our company where we do not survive and any transactions where we issue more than 20% of our issued and outstanding ordinary shares or seek to amend our amended and restated memorandum and articles of association would require shareholder approval. If we structure a business combination transaction with a target company in a manner that requires shareholder approval, we will not have discretion as to whether to seek a shareholder vote to approve the proposed business combination. We currently intend to conduct redemptions in connection with a shareholder voteunless shareholder approval is not required by applicable law or stock exchange listing requirement and we choose to conduct redemptions pursuant to the tender offer rules of the SEC for business or other legal reasons. So long as we maintain a listing for our securities on the Nasdaq, we are required to comply with Nasdaq rules. \nIf shareholder approval of the transaction is required by law or stock exchange listing requirement, or we decide to obtain shareholder approval for business or other legal reasons, we will, pursuant to our amended and restated memorandum and articles of association: conduct the redemptions in conjunction with a proxy solicitation pursuant to Regulation14A of the Exchange Act, which regulates the solicitation of proxies, and not pursuant to the tender offer rules; \nWe expect that a final proxy statement would be mailed to public shareholders at least 10days prior to the shareholder vote. Although we are not required to do so, we currently intend to comply with the substantive and procedural requirements of Regulation14A in connection with any shareholder vote even if we are not able to maintain our Nasdaq listing or Exchange Act registration. \n\nIf we seek shareholder approval, we will complete our initial business combination only if we obtain the approval of an ordinary resolution under Cayman Islands law, being the affirmative vote of a majority of the ordinary shares represented in person or by proxy and entitled to vote thereon and who vote at a general meeting in favor of the business combination. In such case, pursuant to the terms of a letter agreement entered into with us, our sponsor, officers and directors have agreed (and their permitted transferees will agree) to vote any founder shares held by them and any public shares purchased during or after our initial public offering in favor of our initial business combination. We expect that at the time of any shareholder vote relating to our initial business combination, our initial shareholders and their respective permitted transferees will own at least 20% of our issued and outstanding ordinary shares entitled to vote thereon. \nIf a shareholder vote is not required and we do not decide to hold a shareholder vote for business or other legal reasons, we will, pursuant to our amended and restated memorandum and articles of association: conduct the redemptions pursuant to Rule13e-4and Regulation14E of the Exchange Act, which regulate issuer tender offers; and file tender offer documents with the SEC prior to completing our initial business combination which contain substantially the same financial and other information about the initial business combination and the redemption rights as is required under Regulation14A of the Exchange Act, which regulates the solicitation of proxies. \nUpon the public announcement of our initial business combination, we or our sponsor will terminate any plan established in accordance with Rule10b5-1to purchase our ClassA ordinary shares in the open market if we elect to redeem our public shares through a tender offer, to comply with Rule14e-5under the Exchange Act. \nIn addition, the tender offer will be conditioned on public shareholders not tendering more than a specified number of public shares which are not purchased by our sponsor, which number will be based on the requirement that we will only redeem our public shares so long as (after such redemption) our net tangible assets will be at least $5,000,001 either immediately prior to or upon consummation of our initial business combination and after payment of underwriters fees andcommissions (so that we are not subject to the SECs penny stock rules) or any greater net tangible asset or cash requirement which may be contained in the agreement relating to our initial business combination. \n\n\nNotwithstanding the foregoing, if we seek shareholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our amended and restated memorandum and articles of association provides that a public shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a group (as defined under Section13 of the Exchange Act), will be restricted from seeking redemption rights with respect to Excess Shares. We believe this restriction will discourage shareholders from accumulating large blocks of shares, and subsequent attempts by such holders to use their ability to exercise their redemption rights against a proposed business combination as a means to force us or our sponsor or its affiliates to purchase their shares at a significant premium to the then-currentmarket price or on other undesirable terms. Absent this provision, a public shareholder holding more than an aggregate of 15% of the shares sold in our initial public offering could threaten to exercise its redemption rights if such holders shares are not purchased by us or our sponsor or its affiliates at a premium to the then-currentmarket price or on other undesirable terms. We may waive this restriction in our sole discretion. \n\nAccordingly, a public shareholder wouldhave from the time we send out our tender offer materials until the close of the tender offer period, or up to two days prior to the vote on the business combination if we distribute proxy materials, as applicable, to tender its shares if it wishes to seek to exercise its redemption rights. Pursuant to the tender offer rules, the tender offer period will be not less than 20 business days and, in the case of a shareholder vote, a final proxy statement would be mailed to public shareholders at least 10days prior to the shareholder vote. \n\nAny request to redeem such shares, once made, may be withdrawn at any time up to the date set forth in the tender offer materials or the date of the general meeting set forth in our proxy materials, as applicable. \n\nIf our initial proposed business combination is not completed, we may continue to try to complete a business combination with a different target by October20, 2022. \n\nOur sponsor, officers and directors have agreed that we will have only until October20, 2022 to complete our initial business combination. If we are unable to complete our initial business combination by October20, 2022, we will: (i)cease all operations except for the purpose of winding up, (ii)as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-shareprice, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (less up to $100,000 of interest to pay dissolution expenses (which interest shall be net of taxes payable) divided by the number of then issued and outstanding public shares, which redemption will completely extinguish public shareholders rights as shareholders (including the right to receive further liquidation distributions, if any), subject to applicable law, and (iii)as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders and our board of directors, liquidate and dissolve, subject in each case to our obligations under Cayman Islands law toprovide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect to our warrants, which will expire worthless if we fail to complete our initial business combination by October20, 2022. \nOur sponsor, officers and directors have entered into a letter agreement with us, pursuant to which they have waived their rights to liquidating distributions from the trust account with respect to their founder shares if we fail to complete our initial business combination by October20, 2022. However, if our sponsor, officers or directors acquire public shares after our initial public offering, they will be entitled to liquidating distributions from the trust account with respect to such public shares if we fail to complete our initial business combination by October20, 2022. \nOur sponsor, officers and directors have agreed, pursuant to a written letter agreement with us, that they will not propose any amendment to our amended and restated memorandum and articles of association that would (i)modify the substance or timing of our obligation to allow redemption in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination by October20, 2022 or (ii)with respect to the other provisions relating to shareholders rights or pre-business combination activity, unless we provide our public shareholders with the opportunity to redeem their ClassA ordinary shares upon approval of any such amendment at a per-shareprice, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (which interest shall be net of taxes payable) divided by the number of then issued and outstanding public shares. \nFWD Life Insurance Public Company Limited and FWD Fuji Life Insurance Company Limited purchased an aggregate of $50,000,000 of units in our initial public offering will be entitled to liquidating distributions similar to the public shareholders with respect to any units that it may purchase in the offering. \nWe expect to use the amounts held outside the trust account ($1,500,497 as of December 31, 2020) to pay for all costs and expenses associated with implementing our plan of dissolution, as well as payments to any creditors, if we do not complete an initial business combination prior to October 20, 2022, although we cannot assure you that there will be sufficient funds for such purpose. \nIf we were to expend all of the net proceeds of our initial public offering and the sale of the private placement warrants, other than the proceeds deposited in the trust account, and without taking into account interest, if any, earned on the trust account, the per-shareredemption amount received by shareholders upon our dissolution would be approximately $10.00. We cannot assure you that the actual per-shareredemption amount received by shareholders will not be substantially less than $10.00. \nAlthough we have sought and will continue to seek to have all vendors, service providers (other than our independent auditors), prospective target businesses or other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account for the benefit of our public shareholders, there is no guarantee that they will execute such agreements or even if they execute such agreements that they would be prevented from bringing claims against the trust account including but not limited to fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain<|endoftext|>"},"task":{"kind":"string","value":"{\"file\": \"/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz\"}"}}},{"rowIdx":93,"cells":{"text":{"kind":"string","value":"<|endoftext|>Significant number of shares from stockholders who elect redemption in connection with our initial business combination or the terms of negotiated transactions to purchase shares in connection with our initial business combination, we may be required to seek additional financing or to abandon the proposed business combination. \n\n\n\n\ntariffs and trade barriers; longer payment cycles; rates of inflation; employment regulations; corruption; terrorist attacks and wars; \n\n\nsecurities laws. \n\n\nThe pro rata portion of the funds in our trust account distributed to our public stockholders upon the redemption of our public shares in the event we do not complete our initial business combination within 24 months from the closing date of our Initial Public Offering may be considered a liquidating distribution under Delaware law. \n\n\nHowever, it is our intention to redeem our public shares as soon as reasonably possible following the 24th month from the closing date of our Initial Public Offering in the event we do not complete our initial business combination and, therefore, we do not intend to comply with the foregoing procedures. \nFurthermore, if the pro rata portion of the funds in our trust account distributed to our public stockholders upon the redemption of our public shares in the event we do not complete our initial business combination within 24 months from the closing date of our Initial Public Offering is not considered a liquidating distribution under Delaware law and such redemption distribution is deemed to be unlawful (potentially due to the imposition of legal proceedings that a party may bring or due to other circumstances that are currently unknown), then pursuant to Section174 of the DGCL, the statute of limitations for claims of creditors could then be six years after the unlawful redemption distribution, instead of three years, as in the case of a liquidating distribution. \n\n\n\n\n\n\n\n\n\nHolders of warrants may only be able to exercise their public warrants on a cashless basis under certain circumstances, and if they do so, they will receive fewer shares of ClassA common stock from such exercise than if they were to exercise such warrants for cash. \nThe warrant agreement provides that in the following circumstances holders of warrants who seek to exercise their warrants will not be permitted to do so for cash and will, instead, be required to do so on a cashless basis in accordance with Section3(a)(9) of the Securities Act: (i)if the shares of ClassA common stock issuable upon exercise of the warrants are not registered under the Securities Act in accordance with the terms of the warrant agreement; As a result, warrant holders would receive fewer shares of ClassA common stock from such exercise than if they were to exercise such warrants for cash. \n\n\n\nBecause our units, ClassA common stock and warrants are currently listed on Nasdaq, our units, ClassA common stock and warrants qualify as covered securities under the statute. \nHolders of our securities are not be entitled to protections normally afforded to investors of many other blank check companies. \nBecause we have net tangible assets in excess of $5,000,000 and timely filed a Current Report on \nForm8-K after the closing date of our Initial Public Offering, including an audited balance sheet demonstrating this fact, we are exempt from rules promulgated by the SEC to protect investors in blank check companies, such as Rule419. Moreover, if we became subject to Rule 419, that rule would prohibit the release of any interest earned on funds held in the trust account to us unless and until the funds in the trust account were released to us in connection with our completion of an initial business combination. \n\nIf we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our certificate of incorporation provides that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a group (as defined under Section13 of the Exchange Act), will be restricted from seeking redemption rights with respect to more than an aggregate of 20% of the shares without our prior consent, which we refer to as the Excess Shares. \n\n\n\nAlthough we do not intend to issue any notes or other debt securities, or to otherwise incur outstanding debt, we may choose to incur substantial debt to complete our initial business combination. \nOur founders control a substantial interest in us and thus may exert a substantial influence on actions requiring a stockholder vote, potentially in a manner that you do not support. \nOur founders own 20% of our issued and outstanding common stock. Accordingly, they may exert a substantial influence on actions requiring a stockholder vote, potentially in a manner that you do not support, including amendments to our certificate of incorporation. If our founders purchase any additional ClassA common stock in the market or in privately negotiated transactions, this would increase their control. Neither our founders nor, to our knowledge, any of our officers or directors, have any current intention to purchase additional securities, other than as disclosed \n10-K/A. \nIf there is an annual meeting, as a consequence of our staggered Board of Directors, only a minority of the Board of Directors will be considered for election and our founders, because of their ownership position, will have considerable influence regarding the outcome. Accordingly, our founders will continue to exert control at least until the completion of our initial business combination. The forward purchase shares will not be issued until completion of our initial business combination, and, accordingly, will not be included in any stockholder vote until such time. \n\nThe warrant agreement provides that the terms of the warrants may be amended without the consent of any holder for the purpose of (i)curing any ambiguity or to correct any defective provision or mistake, including to conform the provisions of the warrant agreement to the description of the terms of the warrants and the warrant agreement set forth in the prospectus related to our Initial Public Offering, (ii)adjusting the provisions relating to cash dividends on shares of common stock as contemplated by and in accordance with the warrant agreement or (iii)adding or changing any provisions with respect to matters or questions arising under the warrant agreement as the parties to the warrant agreement may deem necessary or desirable and that the parties deem to not adversely affect the rights of the registered holders of the warrants, provided that the approval by the holders of at least 50% of the then-outstanding public warrants is required to make any change that adversely affects the interests of the registered holders of public warrants. \n\nWe have the ability to redeem outstanding warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01 per warrant, provided that the closing price of our ClassA common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within a \n\nRedemption of the outstanding warrants could force holders of the warrants to (i)exercise their warrants and pay the exercise price therefor at a time when it may be disadvantageous for them to do so, (ii)sell their warrants at the then-current market price when they might otherwise wish to hold their warrants or (iii)accept the nominal redemption price which, at the time the outstanding warrants are called for redemption, is likely to be substantially less than the market value of their warrants. \n\nIn connection with our Initial Public Offering, we issued warrants to purchase 20,700,000 ClassA common shares and an aggregate of 10,280,000 Private Placement Warrants, each exercisable to purchase one share of ClassA common stock at $11.50 per share, subject to adjustments. \n\n\n\nIn the event we are deemed to be a large accelerated filer or an accelerated filer, and no longer qualify as an emerging growth company, will we be required to comply with the independent registered public accounting firm attestation requirement on our internal control over financial reporting. \nProvisions in our certificate of incorporation and Delaware law may inhibit a takeover of us, which could limit the price investors might be willing to pay in the future for our shares of ClassA common stock and could entrench management. \n\n\nThe grant of registration rights to our founders and holders of our Private Placement Warrants and forward purchase securities may make it more difficult to complete our initial business combination, and the future exercise of such rights may adversely affect the market price of our shares of ClassA common stock. \nPursuant to the registration rights agreement which was entered into in connection with the closing of our Initial Public Offering and is filed as exhibit to this Annual Report on Form \n10-K/A, our founders and their permitted transferees can demand that we register the shares of ClassA common stock into which founder shares are convertible, holders of our Private Placement Warrants and their permitted transferees can demand that we register the Private Placement Warrants and the ClassA common stock issuable upon exercise of the Private Placement Warrants, holders of our forward purchase securities and their permitted transferees can demand that we register the forward purchase shares and the forward purchase warrants (and the underlying ClassA common stock) and holders of warrants that may be issued upon conversion of working capital loans may demand that we register such warrants or the ClassA common stock issuable upon conversion of such warrants. This is because the stockholders of the target business may increase the equity stake they seek in the combined entity or ask for more cash consideration to offset the negative impact on the market price of our ClassA common stock that is expected when the shares of common stock owned by our founders, holders of our Private Placement Warrants, holders of our working capital loans or holders of our forward purchase securities or their respective permitted transferees are registered. \n\n\n\nWe may engage our sponsor or an affiliate of our sponsor as an advisor or otherwise with respect to our business combinations and certain other transactions. Any fee in connection with such engagement may be conditioned upon the completion of such transactions. This financial interest in the completion of such transactions may influence the advice such entity provides. \nWe may engage our sponsor or an affiliate of our sponsor as an advisor or otherwise in connection with our initial business combination and certain other transactions and pay such entity a fee in an amount that constitutes a market standard for comparable transactions. Pursuant to any such engagement, such entity may earn its fee upon closing of the initial business combination. The payment of such fee would likely be conditioned upon the completion of the initial business combination. Therefore, such entities may have additional financial interests in the completion of the initial business combination. These financial interests may influence the advice such entity provides us, which advice would contribute to our decision on whether to pursue a business combination with any particular target. \n\n\n\n\n\n\n\n\n\nOur executive officers and directors are not required to, and do not, commit their full time to our affairs, which may result in a conflict of interest in allocating their time between our operations and our search for a business combination and their other businesses. We currently do not and do not intend to have any full-time employees prior to the completion of our initial business combination. \n10-K/A. \n\nIn fact, we may enter into a business combination with a target business that is affiliated with our sponsor, our directors or executive officers, although we do not intend to do so, or we may acquire a target business through an affiliated joint acquisition with one or more affiliates of Hudson Executive Capital and/or one or more investors in Hudson Executive Capital or one of its affiliates. \n\n\nOn February14, 2020, our sponsor purchased an aggregate of 8,625,000 founder shares in exchange for a capital contribution of $25,000, or approximately $0.0029 per share. The number of founder<|endoftext|>Depending on the price at which such securities are sold. Such issuance may cause a reduction in the proportionate ownership and voting power of all other shareholders. The dilution may result in a decline in the price of our Common Shares or a change in control. \n### GENERAL RISK FACTORS \nWe do not expect to pay dividends for the foreseeable future. \nWe have not paid any cash dividends to date and we do not intend to declare dividends for the foreseeable future, as we anticipate that we will reinvest future earnings, if any, in the development and growth of our business. Therefore, investors will not receive any funds unless they sell their Common Shares, and shareholders may be unable to sell their shares on favorable terms or at all. We cannot assure you of a positive return on investment or that you will not lose the entire amount of your investment in our Common Shares. Prospective investors seeking or needing dividend income or liquidity should not purchase our Common Shares. \nIt may be difficult for non-Canadian investors to obtain and enforce judgments against us because of our Canadian incorporation and presence. \nWe are a corporation existing under the laws of Canada. Some of our directors and officers, and many of the experts named in this Annual Report on Form 10-K, are residents of Canada, and all or a substantial portion of their assets, and a substantial portion of our assets, are located outside the United States. Consequently, although we have appointed an agent for service of process in the United States, it may be difficult for holders of our Common Shares who reside in the United States to effect service within the United States upon our directors and officers and experts who are not residents of the United States. It may also be difficult for holders of our Common Shares who reside in the United States to realize in the United States upon judgments of courts of the United States predicated upon our civil liability and the civil liability of our directors, officers, and experts under the United States federal securities laws. Investors should not assume that Canadian courts (i)would enforce judgments of United States courts obtained in actions against us or our directors, officers or experts predicated upon the civil liability provisions of the United States federal securities laws or the securities or blue sky laws of any state within the United States or (ii)would enforce, in original actions, liabilities against us or our directors, officers or experts predicated upon the United States federal securities laws or any such state securities or blue sky laws. In addition, we have been advised by our Canadian counsel that in normal circumstances, only civil judgments and no other rights arising from United States securities legislation are enforceable in Canada and that the protections afforded by Canadian securities laws may not be available to investors in the United States. \nThere is no assurance the Company will continue to meet the listing standards of the Nasdaq and the TSX. \nWe must meet continuing listing standards to maintain the listing of our Common Shares on the Nasdaq and the TSX. If we fail to comply with listing standards and the Nasdaq or the TSX delists our Common Shares, we and our shareholders could face significant material adverse consequences, including: (i)a limited availability of market quotations for our Common Shares; (ii) reduced liquidity for our Common Shares; (iii) a determination that our Common Shares are penny stock, which would require brokers trading in the Common Shares to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our Common Shares; (iv) a limited amount of news and analyst coverage of us; and (v) a decreased ability for us to issue additional equity securities or obtain additional equity or debt financing in the future. \nAs a public company, we are subject to evolving corporate governance and public disclosure regulations that may from time to time increase both the Companys compliance costs and the risk of non-compliance, which could adversely impact the price of the Common Shares. \nWe are an emerging growth company, and we cannot be certain if the reduced reporting requirements applicable to emerging growth companies will make our Common Shares less attractive to investors. \nFor as long as we continue to be an emerging growth company, we may take advantage of exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including not being required to comply with the auditor attestation requirements of Section404 of the Sarbanes-Oxley Act of 2002 (SOX), reduced disclosure obligations regarding executive compensation in our periodic reports and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. \nWe will cease to be an emerging growth company upon the earliest of: (i) the last day of the fiscal year during which we have total annual gross revenues of $1.07billion (as such amount is indexed for inflation every five years by the SEC) or more; (ii) the last day of our fiscal year following the fifth anniversary of the completion of our first sale of our Common Shares pursuant to an effective registration statement under the \n### Securities Act of 1933 \n, as amended; (iii) the date on which we have, during the previous three-year period, issued more than $1,000,000,000 in non- convertible debt; or (iv) the date on which we are deemed to be a large accelerated filer, as defined in Rule 12b2 of the Exchange Act, which would occur if the market value of our Common Shares that are held by non-affiliates exceeds $700,000,000 as of the last day of our most recently-completed second fiscal quarter. \n\nAny failure to maintain an effective system of internal controls may result in material misstatements of our consolidated financial statements or cause us to fail to meet our reporting obligations or fail to prevent fraud; \nSection404(a) of the SOX requires that our management assess and report annually on the effectiveness of our internal controls over financial reporting and identify any material weaknesses in our internal controls over financial reporting. Although Section404(b) of the SOX requires our independent registered public accounting firm to issue an annual report that addresses the effectiveness of our internal controls over financial reporting, we have opted to rely on the exemptions provided to us by virtue of being an emerging growth company, and consequently will not be required to comply with SEC rules that implement Section404(b) of SOX until we lose our emerging growth company status. \nIf we fail to maintain an effective system of internal controls, we might not be able to report our financial results accurately or prevent fraud; While we believe that we have sufficient personnel and review procedures to allow us to maintain an effective system of internal controls, we cannot assure you that we will not experience potential material weaknesses in our internal control. Even if we conclude that our internal control over financial reporting provides reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with U.S. generally accepted accounting principles (GAAP), because of its inherent limitations, internal control over financial reporting may not prevent or detect fraud or misstatements. Failure to implement required new or improved controls, or difficulties encountered in their implementation, could harm our results of operations, or cause us to fail to meet our future reporting obligations. \nIf we fail to timely achieve and maintain the adequacy of our internal control over financial reporting, we may not be able to produce reliable financial reports or help prevent fraud. Our failure to achieve and maintain effective internal control over financial reporting could prevent us from complying with our reporting obligations on a timely basis, which could result in the loss of investor confidence in the reliability of our consolidated financial statements, harm our business and negatively impact the trading price of our Common Shares. \nITEM1B. \n\nNone. \nITEM2. \n### PROPERTIES \nOur headquarters are located at 4700-80th Street Delta, British Columbia, Canada V4K 3N3. \nThe following table outlines the Companys operating greenhouse facilities. \nWe believe that our existing facilities are adequate for our needs. Should we require additional facilities in the future, we believe that such facilities can be acquired or leased on commercially reasonable terms. \nITEM3. \n### LEGAL PROCEEDINGS \n\nITEM4. \n### MINE SAFETY DISCLOSURES \nNot applicable. \nPAR \nT II \nITEM5. \n\nOur Common Shares are currently traded on The NASDAQ Capital Market and on the Toronto Stock Exchange under the symbol VFF. \n### Holders of Record \nAs of March 12, 2021, there were approximately 8 shareholders of record of our Common Shares, which included Cede& Co., a nominee for Depository Trust Company, or DTC, and CDS& Co., a nominee for The Canadian Depository for Securities Ltd., or CDS. Common shares that are held by financial institutions as nominees for beneficial owners are deposited into participant accounts at either DTC or CDS and are considered to be held of record by Cede& Co. or CDS& Co. as one shareholder. \nDividend Policy \nWe have not paid any cash dividends or distributions on any class of our securities and we have no current plans to pay dividends as we are growth focused. \n\nOn October22, 2019, the Company closed an equity offering. This public offering in Canada raised approximately C$28.8 million (net proceeds) through the issuance of 3,059,000 Common Shares, which includes a full exercise of the underwriters over-allotment option of 399,000 Common Shares, at a price of C$9.40 per Common Share for aggregate gross proceeds to the Company of C$28,754,600. The offering was conducted by a syndicate of underwriters co-led by Beacon Securities Limited, as sole bookrunner, and GMP Securities L.P. Upon closing of the offering, the Company paid the underwriters a cash commission equal to 6% of the gross proceeds of the offering. The Common Shares were not offered or sold in the United States to, or for the account or benefit of, United States persons and were not registered under the Securities Act, pursuant to Regulation S. \nThe Company intended to use the net proceeds for working capital and general corporate purposes. \n\nInformation about securities authorized under our equity compensation plan is incorporated herein by reference to Item 12 of Part III of this Annual Report on Form10-K. \n\nThere were no repurchases of equity securities during the year ended December 31, 2020. \nExchange and Foreign Ownership Controls \nWe are not aware of any Canadian federal or provincial laws, decrees, or regulations that restrict the export or import of capital, including foreign exchange controls, or that affect the remittance of dividends, interest, or other payments to non-Canadian holders of the Common Shares. There are no limitations under the laws of Canada or by the charter or our other constituent documents on ownership of our voting shares by non-Canadians, except the \nInvestment Canada Act which may require review and approval by the Minister of Innovation (Canada) of certain acquisitions of control of us by non-Canadians. The threshold for acquisitions of control is generally defined as being one-third or more of our voting shares, provided certain financial thresholds are also exceeded. If the investment is potentially injurious to national security, it may be subject to review under the \nInvestment Canada Act notwithstanding the percentage interest acquired or amount of the investment. Non-Canadian generally means an individual who is not a Canadian citizen, or a corporation, partnership, trust, or joint venture that is ultimately controlled by non-Canadians. \nCertain Canadian Federal Income Tax Considerations for U.S. Residents \nThe following is a summary of the principal Canadian federal income tax considerations generally applicable under the \n### Income Tax Act \n(Canada) (together with the regulations thereto, the Tax Act) to a beneficial holder of our Common Shares who, for the purposes of the Tax Act and the \nCanada-United States Income Tax Convention \n(1980) (the Treaty), and at all<|endoftext|>Unpaid interest and other fees, to be immediately due and payable. In these circumstances, our assets may not be sufficient to repay in full that indebtedness and our other indebtedness then outstanding. \nThe amount of borrowings permitted at any time under our credit facility is subject to compliance with limits based on a periodic borrowing base valuation of the collateral thereunder. As a result, our access to credit under the credit facility is subject to potential fluctuations depending on the value of the borrowing base of eligible assets as of any measurement date, as well as certain discretionary rights of the agent in respect of the calculation of such borrowing base value. As a result of any change in valuation, the availability under the credit facility may be reduced, or we may be required to make a repayment of the credit facility, which may be significant. The inability to borrow under the credit facility or the use of available cash to repay the credit facility as a result of a valuation change may adversely affect our liquidity, results of operations and financial position. \nThe uncertainty regarding the potential phase-out of LIBOR may negatively impact our operating results. \nLIBOR, the interest rate benchmark used as a reference rate on our variable rate debt, including our credit facility and interest rate swaps, is expected to be phased out after 2021, when private-sector banks are no longer required to report the information used to set the rate. Without this data, LIBOR may no longer be published, or the lack of quality and quantity of data may cause the rate to no longer be representative of the market. At this time, no consensus exists as to what rate or rates will become accepted alternatives to LIBOR, although the US Federal Reserve, in connection with the Alternative Reference Rates Committee (\"ARRC\"), a steering committee comprised of large US financial institutions, is considering replacing US dollar LIBOR with the Secured Overnight Financing Rate (\"SOFR\"). SOFR is a more generic measure than LIBOR and considers the cost of borrowing cash overnight, collateralized by US Treasury securities. Given the inherent differences between LIBOR and SOFR or any other alternative benchmark rate that may be established, there are many uncertainties regarding a transition from LIBOR, including but not limited to the need to amend all contracts with LIBOR as the referenced rate and how this will impact our cost of variable rate debt and derivative financial instruments. We will also need to consider new contracts and if they should reference an alternative benchmark rate or include suggested fallback language, as published by the ARRC. The consequences of these developments with respect to LIBOR cannot be entirely predicted and span multiple future periods but could result in an increase in the cost of our variable rate debt or derivative financial instruments which may be detrimental to our financial position or operating results. \nOur largest stockholder may have the ability to influence our business and matters requiring approval by our stockholders. \n### Sapphire Holding \n, which is controlled by TDR Capital, beneficially owns approximately 26% of the issued and outstanding shares of our Common Stock and warrants giving it the right to buy 2,425,000 additional shares of our Common Stock. Pursuant to a stockholders agreement entered into on July 1, 2020, by and among us and TDR Capital and c ertain of its affiliates, including Sapphire Holding, TDR Capital has the right to nominate two directors to our Board of Directors, for so long as TDR Capital beneficially owns at least 15% of our Common Stock and one director for so long as TDR Capital beneficially owns at least 5% of our Common Stock. Two directors nominated by Sapphire Holding currently serve on our Board of Directors. Sapphire Holding may have the ability to influence matters requiring approval by our stockholders, including the election and removal of directors, amendments to our certificate of incorporation and bylaws, any proposed merger, consolidation or sale of all or substantially all of our assets and certain other corporate transactions. Sapphire Holding may have interests that are different from those of other stockholders. \nIn August 2018, Sapphire Holding pledged all of the shares of WillScots Class A Common Stock that it owned as security for a margin loan under which Sapphire Holding borrowed $125.0 million (the \"Margin Loan\"). The Margin Loan was scheduled to mature on August 23, 2020. On August 21, 2020, Sapphire Holdings entered into an amended and restated margin loan agreement which, among other things, extends the maturity date of the Margin Loan to August 29, 2022. \nAs of December 31, 2020, 59,725,558 shares of Common Stock are pledged to secure repayment of amounts outstanding under the Margin Loan. An event of default under the Margin Loan could result in the foreclosure on the pledged securities and another stockholder beneficially owning a significant amount of our Common Stock. There can be no assurance that Sapphire Holdings will be able to extend, repay or refinance the loan on terms acceptable to it or at all. \nThe historical market price of WillScot Mobile Minis Common Stock has been volatile and the market price of our Common Stock may continue to be volatile and the value of your investment may decline. \nThe historical market price of our Common Stock has been volatile and the market price of our Common Stock may continue to be volatile moving forward. Volatility may cause wide fluctuations in the price of our Common Stock on Nasdaq. The market price of our Common Stock is likely to be affected by: changes in general conditions in the economy, geopolitical events or the financial markets; variations in our quarterly operating results; our share repurchase or dividend policies; other developments affecting us, our industry, customers or competitors; changes in demand for our products or the prices we charge due to changes in economic conditions, competition or other factors; the cyclical nature of our customers businesses and certain end markets that we service; rental rate changes in response to competitive factors; bankruptcy or insolvency of our customers, thereby reducing demand for our used units; seasonal rental patterns; acquisitions or divestitures and related costs; labor shortages, work stoppages or other labor difficulties; possible unrecorded liabilities of acquired companies; possible writeoffs or exceptional charges due to changes in applicable accounting standards, goodwill impairment, or divestiture or impairment of assets; the operating and stock price performance of companies that investors deem comparable to us; the number of shares available for resale in the public markets under applicable securities laws; and the composition of our shareholder base. \n\nNone. \nITEM 2.Properties \nOur corporate headquarters are located in Phoenix, Arizona. Prior to the Merger with Mobile Mini, WillScot's corporate headquarters were located in Baltimore, Maryland. Our executive, financial, accounting, legal, administrative, management information systems, and human resources functions operate from these two leased offices. \nWe operate approximately 275 branch locations and additional drop lots across the US, Canada, Mexico, and the UK. Collectively, we lease approximately 84% of our branch properties and own the remaining balance. \nOur management believes that none of our properties, on an individual basis, is material to our operations, and we also believe that satisfactory alternative properties could be found in all of our markets, if ever necessary. \nSubject to certain exceptions, substantially all of our owned real and personal property in the US and Canada is encumbered under our credit facility and our secured notes. We do not believe that the encumbrances will materially detract from the value of our properties, or materially interfere with their use in the operation of our business. \n### ITEM 3.Legal Proceedings \nWe are involved in various lawsuits, claims, and legal proceedings that arise in the ordinary course of business. These matters involve, among other things, disputes with vendors or customers, personnel and employment matters, and personal injury. We asses s these matters on a case-by-case basis as they arise and establish reserves as required. \nAs of December 31, 2020, th ere were no material pending legal proceedings in which we or any of our subsidiaries are a party or to which any of our property is subject. \n\nNot applicable. \nPART II \n\n### Common Stock \nOur Common Stock is listed on the Nasdaq Capital Market under the symbol WSC. Our certificate of incorporation authorizes the issuance of 500,000,000 shares of Common Stock with a par value of $0.0001 per share. The Company had 229,038,158 shares of Common Stock issued and outstanding as of \nDecember 31, 2020 \n\n### Preferred Stock \nOur certificate of incorporation authorizes the issuance of 1,000,000 shares of Preferred Stock with a par value of $0.0001 per share. As of \nDecember 31, 2020 \n, no shares of Preferred Stock were issued and outstanding, and no designation of rights and preferences of preferred stock had been adopted. Our preferred stock is not quoted on any market or system, and there is not currently a market for our preferred stock. \n2015 Warrants \nThe Company issued warrants to purchase Common Stock as components of units sold in its initial public offering (the 2015 Public Warrants). The Company also issued warrants to purchase its Common Stock in a private placement concurrently with its initial public offering (the 2015 Private Warrants, and together with the 2015 Public Warrants, the \"2015 Warrants\"). The 2015 Private Warrants are identical to the 2015 Public Warrants, except that, if held by original investors (or their permitted assignees), the 2015 Private Warrants may be exercised on a cashless basis and are not subject to redemption. \nEach 2015 Warrant entitles its holder to purchase one half of one share of our Common Stock in accordance with its terms. The 2015 Warrants became exercisable on December 29, 2017 and expire on November 29, 2022. \nPursuant to the warrant agreement, dated as of September 10, 2015 between Double Eagle Acquisition Corp. (defined below) and Continental Stock Transfer & Trust Company (the 2015 Warrant Agreement), WillScots share price performance target was achieved on January 21, 2020 and, on January 24, 2020, WillScot delivered a notice (the \"Warrant Redemption Notice\") to redeem all of its 2015 Public Warrants that remained unexercised on February 24, 2020. As described in the Redemption Notice and permitted under the 2015 Warrant Agreement, holders of these 2015 Public Warrants who exercised them following the date of the Redemption Notice were required to do so on a cashless basis. From January 1, 2020 through January 24, 2020, 796,610 2015 Public Warrants were exercised for cash, resulting in WillScot receiving cash proceeds of $4.6 million and issuing 398,305 shares of Common Stock. Between January 24, 2020 and February 24, 2020, 5,836,048 2015 Public Warrants were exercised on a cashless basis. An aggregate of 1,097,162 shares of Common Stock was issued in connection with these cashless exercises. Thereafter, the Company completed the redemption of 38,509 remaining 2015 Public Warrants under the Redemption Notice for $0.01 per warrant. \nAs of December 31, 2020, no 2015 Public Warrants were outstanding. \n### A s of \nDecember 31, 2020 \n, there w er e 12,710,000 2015 Private \n### Warrants outstanding \nThe 2015 Private Warrants have not traded in an established public trading market within the two most recent fiscal years. \n2018 Warrants \nOn August 15, 2018, WillScot issued warrants (\"the 2018 Warrants\") to the former ModSpace shareholders as part of the acquisition of ModSpace \nOur 2018 Warrants are listed on an OTC Markets Group, Inc. Pink Open Market under the symbol \"WSCTW.\" Over-the-counter market quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission, and may not represent actual transactions. \nThe 2018 Warrants were not exercisable or transferable until February 11, 2019 and expire on November 29, 2022. As of December 31, 2020, \n2018 Warrants were outstanding. \n### Holders \nAs of December 31, 2020, there were 47 holders of record of our Common Stock, no holders of record of our Preferred Stock, 8 holders of record of our 2015 Warrants, and 37 holders of record of our 2018 Warrants. The number of holders of record does not<|endoftext|>Issued in connection with the Lineal Merger. Pursuant to the Redemption Agreement, effective as of December 31, 2019, ownership of 100% of Lineal was transferred back to the Preferred Holders, and, all of the Series E Preferred Stock and Series F Preferred Stock of the Company outstanding were cancelled through the redemption (the \n### Lineal Divestiture \n). \nPrior to the acquisition of Lineal, the Company sold a significant portion of its oil and gas production assets in Oklahoma to N&B Energy, LLC ( \n### N&B Energy \n) effective August 1, 2018 (see further discussion in Note 2 Liquidation and Going Concern Considerations). Additionally, as part of the sale of its assets to N&B Energy, the Company also retained a 12.5% production payment (effective until a total of $2.5 million has been received) and a 3% overriding royalty interest, in its then existing Okfuskee County, Oklahoma assets; and an overriding royalty interest on certain other undeveloped leasehold interests, pursuant to an Assignment of Production Payment and Assignments of Overriding Royalty Interests. No payments were received in regard to any of the retained items noted above through March 31, 2020 and the filing date of these financial statements. \nCamber retained its assets in Glasscock County and operated wells in Hutchinson County, Texas until completion of the Settlement Agreement discussed below. \n\n### Settlement Agreement \n\nPetroGlobe \n), Signal Drilling, LLC ( \n### Signal \n), Petrolia Oil, LLC ( \nPetrolia \n\n### PGCO \n\nCRTC \n). Pursuant to the Settlement Agreement, the Company agreed to pay PetroGlobe $250,000, of which $100,000 was due upon execution of the Settlement Agreement, which payment has been made, and $150,000 was paid to an escrow account, which will be released by the Company upon the successful transfer of all wells and partnership interests of the Companys prior wholly-owned subsidiary C E Energy LLC ( \nCE \n) to PetroGlobe which is expected to occur shortly. CE operates all of the wells and leases which we held prior to such transfer which are located in Hutchinson County, Texas. See also Note 11 Commitments and Contingencies \n### Legal Proceedings \nOn February 3, 2020, the Company entered into an Agreement and Plan of Merger (the \nMerger Agreement \n( \n### Viking \n). \nEffective Time \n\n### Viking Common Stock \n\nElysium \n) as part of a $5,000,000 investment in Vikings Rule 506(c) offering, which transaction was completed on February 3, 2020. \nOn March 1, 2018, the Company filed a Certificate of Amendment to the Companys Articles of Incorporation with the Secretary of State of Nevada to affect a 1-for-25 reverse stock split of all outstanding common stock shares of the Company. The reverse stock split was effective on March 5, 2018. The effect of the reverse stock split was to combine every 25 shares of outstanding common stock into one new share, with no change in authorized shares or par value per share. The reverse stock split was effective on December 24, 2018. The effect of the reverse stock split was to combine every 25 shares of outstanding common stock into one new share, with a proportionate 1-for-25 reduction in the Companys authorized shares of common stock, but no change in the par value per share of the common stock. Effective on April 10, 2019, the Company filed, with the Secretary of State of Nevada, a Certificate of Amendment to the Companys Articles of Incorporation to increase the number of the Companys authorized shares of common stock, $0.001 per value per share, from 20,000,000 shares to 250,000,000 shares. On July 3, 2019, the Company filed a Certificate of Amendment to the Companys Articles of Incorporation with the Secretary of State of Nevada to affect another 1-for-25 reverse stock split of all outstanding common stock shares of the Company. The reverse stock split was effective on July 8, 2019. The effect of the reverse stock split was to combine every 25 shares of outstanding common stock into one new share, with no change in authorized shares (250,000,000 shares of common stock) or par value per share. The result of the reverse stock split was to reduce, as of the effective date of the reverse stock split, the number of common stock shares outstanding from approximately 74.5 million shares to approximately 1.5 million shares (prior to rounding). Effective on April 16, 2020, Camber filed a Certificate of Amendment to its Articles of Incorporation to increase its authorized shares of common stock to 25 million shares of common stock. \nProportional adjustments were made to the conversion and exercise prices of the Companys outstanding convertible preferred stock, warrants and stock options, and to the number of shares issued and issuable under the Companys stock incentive plans in connection with each of the reverse splits described above. The reverse stock splits did not affect any stockholders ownership percentage of the Companys common stock, except to the limited extent that the reverse stock splits resulted in any stockholder owning a fractional share. Fractional shares of common stock were rounded up to the nearest whole share based on each holders aggregate ownership of the Company. All issued and outstanding shares of common stock, conversion terms of preferred stock, options and warrants to purchase common stock and per share amounts contained in the financial statements, in accordance with Staff Accounting Bulletin (SAB) TOPIC 4C, have been retroactively adjusted to reflect the reverse splits for all periods presented. \n### Note 2 Liquidity and Going Concern Considerations \nThe reduction from working capital of $2.2 million to a working capital deficit of $9.6 million is due to losses from continuing operations, costs incurred with the Lineal merger and ultimate divestiture with Lineal as discussed below under Note 13 - Merger Agreement and Divestiture, and $7.3 million of advances on long-term notes receivable relating to amounts loaned to Lineal and advanced to Viking, as discussed in greater detail above under Note 1 - Organization and Operations of the Company. \nNegative impacts could include, but are not limited to, the Companys ability to sell its oil and gas production, reduction in the selling price of the Companys oil and gas, failure of a counterparty to make required payments, possible disruption of production as a result of worker illness or mandated production shutdowns or stay-at-home orders, and access to new capital and financing. \nThe factors above raise substantial doubt about the Companys ability to continue to operate as a going concern for the twelve months following the issuance of these financial statements. The Company believes that it may not have sufficient liquidity to meet its operating costs unless it can raise new funding, which may be through the sale of debt or equity or unless it closes the Viking Merger (discussed below), which is the Companys current plan, which Merger is anticipated to close in the third calendar quarter of 2020, and which required closing date is currently September 30, 2020, but can be extended until up to December 31, 2020, pursuant to certain conditions in the Merger Agreement. \nThe Company had no secured debt outstanding as of March 31, 2020. \nDuring the years ended March 31, 2020 and 2019, the Company sold 525 shares and 1,577 shares, respectively, of Series C Preferred Stock pursuant to the terms of various Stock Purchase Agreements, for total proceeds of $5 million and $15 million, respectively. \n### N&B Energy Asset Disposition Agreement \nOn July 12, 2018, the Company entered into an Asset Purchase Agreement (as amended by the First Amendment to the Sale Agreement dated August 3, 2018 and the Second Amendment to Sale Agreement dated September 24, 2018, the \nSale Agreement \n), as seller, with N&B Energy as purchaser, which entity is affiliated with Richard N. Azar II, the Companys former Chief Executive Officer and former director ( \n### Azar \n), and Donnie B. Seay, the Companys former director ( \nSeay \n). Pursuant to the Sale Agreement, the Company agreed to sell to N&B Energy a substantial portion of its assets, including all of the assets acquired pursuant to the terms of the December 31, 2015 Asset Purchase Agreement and certain other acquisitions, other than the production payment and overriding royalty interests discussed below (the \n### Disposed Assets \n). In consideration for the Disposed Assets, N&B Energy agreed to pay the Company $100 in cash to assume the Companys liabilities and contractual obligations in connection with the Disposed Assets (including lease and bonus payments), to assume all of the Companys obligations and debt owed under its outstanding loan agreement with International Bank of Commerce ( \nIBC Bank \n\n### Assumption Agreement \n\nAssumption Agreement \n) with IBC Bank; \n### CE Operating \nN&B Energy; Azar; \nRAD2 \n); Seay; \n### Guarantors \n\nIBC Obligations \n). Finally, pursuant to the Assumption Agreement, IBC Bank released and forever discharged the Company and CE Operating and each of their current and former officers, directors, and stockholders, from all covenants, agreements, obligations, claims and demands of any kind, whether in law or at equity, which IBC Bank then had, arising out of or related to the amounts which the Company owed to IBC Bank under the Note, Loan Agreement or mortgages and/or under such documents or agreements, and further agreed to release the lien which IBC Bank then held on certain of the Companys properties located in west Texas. \n### N&B Energy Sale Agreement Closing \nOn September 26, 2018, the transactions contemplated by the Sale Agreement closed and N&B Energy assumed all of the IBC Obligations (pursuant to the Assumption Agreement described above) and paid the Company $100 in cash, and the Company transferred ownership of the Assets to N&B Energy. \nNotwithstanding the sale of the Assets, the Company retained its assets in Glasscock and Hutchinson Counties, Texas and also retained a 12.5% production payment (effective until a total of $2.5 million has been received) and a 3% overriding royalty interest, in its prior Okfuskee County, Oklahoma assets; \n\n\nThe following table summarizes the net assets sold and gain recognized in connection with the Assumption Agreement and Sale Agreement: \n\nPrinciples of Consolidation \nThe financial statements of Camber Energy include the accounts of its wholly-owned subsidiaries, Camber Permian LLC, a Texas limited liability company, which is wholly-owned, CE Operating, LLC, an Oklahoma limited liability company, which is wholly-owned, and C E Energy LLC, a Texas limited liability company, which is wholly-owned, and which will be assigned to PetroGlobe shortly after the date of this report, as discussed below under Note 11 Commitments and Contingencies \n### Legal Proceedings \nAll material intercompany accounts and transactions have been eliminated in consolidation. \nReclassifications \nCertain reclassifications have been made to the prior year financial statements to conform them with the current year presentation. These reclassifications had no effect on the reported results of operations. \n### Use of Estimates \n\nCambers financial statements are based on a number of significant estimates, including oil and natural gas reserve quantities which are the basis for the calculation of depreciation, depletion and impairment of oil and natural gas properties, and timing and costs associated with its asset retirement obligations, as well as those related to the fair value of stock options, stock warrants and stock issued for services. While the Company believes that its estimates and assumptions used in preparation of the financial statements are appropriate, actual results could differ from those estimates. \n\nCash and cash equivalents include cash in banks and financial instruments which mature within three months of the date of purchase. The Company maintains cash and cash equivalents in bank deposit accounts, which at times may exceed federally insured limits of $250,000. At March 31, 2020 and 2019, the Companys cash in excess of the federally insured limit was $399,833 and $7,463,944, respectively. Historically, the Company has not experienced any losses in such accounts. The Company had no cash equivalents at March 31, 2020 or 2019, respectively. \nAccounts Receivable \nAccounts receivable, net, include amounts due for oil and gas revenues from prior month production, accrued interest on the notes receivable due from Lineal and Viking and an estimate of amounts due from N&B Energy related to the September 2018 Sale Agreement. The<|endoftext|>Or other consideration. \nIn anticipation of the Merger, on June 15, 2020, we completed a private offering of $650.0 million in aggregate principal amount of the 2025 Secured Notes. The proceeds from the 2025 Secured Notes of $650.0 million were used to consummate the Merger and the related financing transactions, which included repayment of the 2022 Secured Notes, repayment of the Mobile Mini senior notes, and payment of certain fees and expenses related to the Merger and the related financing transactions. \nOn July 1, 2020, in connection with the completion of the Merger, Holdings, WSII, and certain of its subsidiaries, entered into the 2020 ABL Facility, which provides for revolving credit facilities in the aggregate principal amount of up to $2.4billion, consisting of: (i) a senior secured asset-based US dollar revolving credit facility in the aggregate principal amount of $2.0billion (the US Facility), available to WSII and certain of its subsidiaries (collectively, the US Borrowers), and (ii) a $400million senior secured asset-based multicurrency revolving credit facility (the \"Multicurrency Facility\") together with the US Facility (collectively, the 2020 ABL Facility), available to be drawn in US Dollars, Canadian Dollars, British Pounds Sterling or Euros by the US Borrowers, and certain of WSIIs wholly-owned subsidiaries organized in Canada and in the UK. \nBorrowing availability under the 2020 ABL Facility is equal to the lesser of \n$2.4billion and the applicable borrowing bases. The borrowing bases are a function of, among other things, the value of the assets in the relevant collateral pool of which our rental equipment represents the largest component. On July 1, 2020, in connection with the completion of the Merger, approximately $1.47 billion of proceeds from the 2020 ABL Facility were used to repay the 2017 ABL Facility, repay Mobile Mini's asset-backed lending facility, and pay fees and expenses related to the Merger and the related financing transactions. \nOn August 11, 2020, we redeemed $49.0 million of our 2023 Secured Notes at a redemption price of 103.0% plus accrued and unpaid interest using proceeds from the 2020 ABL Facility. \nAt December 31, 2020, we had $1.1 billion of available borrowing capacity under the 2020 ABL Facility. \nOn August 25, 2020, we completed a private offering of $500.0 million in aggregate principal amount of the 2028 Secured Notes. The 2028 Secured Notes mature on August 15, 2028 and bear interest at a rate of 4.625% per annum. Interest is payable semi-annually on August 15 and February 15 of each year, beginning February 25, 2021. \n### COVID-19 Impact on Liquidity \nAlthough there is uncertainty related to the continued impact of the COVID-19 pandemic on future results, we believe our predictable lease revenue streams underpinned by long lease durations, combined with steps we have taken to reduce cost and capital spending, increased our internally generated free cash flow in 2020, and we expect our free cash flow generation to continue to increase. Further, the approximately \n$1.1 billion of availability under our 2020 ABL Facility as of December 31, 2020, provides additional liquidity in excess of our free cash flow generation. We continue to manage all aspects of our business including, but not limited to, monitoring the financial health of our customers, suppliers and other third-party relationships, actively managing our cost structure, reducing or delaying capital spending and developing new opportunities for growth. We believe that the actions we have taken in recent years to increase our scale and competitive position and strengthen our balance sheet have positioned us well to manage through periods of economic disruption. \n### Cash Flows \nSignificant factors driving our liquidity include cash flows generated from operating activities and capex. Our ability to fund our capital needs will be affected by our ongoing ability to generate cash from operations and access to capital markets. \nThe following summarizes our change in cash and cash equivalents for the periods presented: \nCo mparison of the Years Ended December 31, 2020 and 2019 and December 31, 2019 and 2018 \n\nCash provided by operating activities for the year ended December 31, 2020 was $304.8 million as compared to $172.6 million for the year ended December 31, 2019, an increase of $132.2 million. The increase in cash provided by operating activities was driven by an increase of $136.7 million of net income, adjusted for non-cash items, primarily due to the impact of the Merger on revenues and gross profit. This was partially offset by a decrease of $4.4 million in the net movements of the operating assets and liabilities which was primarily attributable to a decrease in accounts payable and other accrued liabilities of $20.9 million, an increase in prepaid and other assets of $12.7 million, and a decrease in accrued interest of $7.7 million, compared to the same period in 2019. This was partially offset by a decrease in cash used from accounts receivable of $36.9 million compared to the same period in 2019. \nCash provided by operating activities for the year ended December 31, 2019 was $172.6million as compared to \n$37.1million for the year ended December 31, 2018, an increase of $135.5million. This increase was primarily due to an increase in net income of $159.1, million, adjusted for non-cash items, in 2019 as compared to 2018, as a result of the impact of the ModSpace acquisition on operations, which is reflected in our result s for all of 2019, but is only included for four and a half months in 2018. This increase in net income, adjusted for non-cash items, was partially offset by a decrease of $23.7million in the net movements of the operating assets and liabilities. The decrease in operating assets and liabilities was attributable to an increase in trade receivables and an increase in cash interest payments during the year ended December 31, 2019, partially offset by an increase in accounts payable and accrued liabilities. \n\nCash used in investing activities for the year ended December 31, 2020 was $125.4 million as compared to $152.6 million for the year ended December 31, 2019, a decrease of $27.2 million. The decrease in cash used in investing activities was driven by a $32.7 million decrease in cash used for purchase of rental equipment and refurbishments. Cash used for purchase of rental equipment and refurbishments decreased compared to 2019 as fleet was less constrained due to reduced utilization and reduced demand for new project deliveries as a result of the COVID-19 pandemic and the current period impact of prior year spend. Additionally, $17.2 million of cash was acquired as part of the Merger. This increase was partially offset by an $11.4 million decrease in proceeds from sale of property, plant and equipment, an increase of $8.2 million on purchases of property, plant and equipment and a $3.2 million decrease in proceeds from the sale of rental equipment. Proceeds from sale of rental equipment decreased compared to the prior year due to lower sales demand. \nCash used in investing activities for the year ended December 31, 2019 was $152.6 million as compared to $1,217.2 million for the year ended December 31, 2018, a decrease of $1,064.6 million. The decrease in cash used in investing activities was driven by a $1,083.1 million decrease in cash used for business acquisitions, an $11.3 million increase in proceeds from the sale of rental equipment, and an $18.1 million increase in proceeds from the sale of property, plant, and equipment. The decrease in cash used in business acquisitions was due to the acquisition of ModSpace during the year ended December 31, 2018, with no business acquisitions during the year ended December 31, 2019. Proceeds from the sale of rental equipment increased due to increased sales volume as a result of the acquisition of ModSpace. Proceeds from the sale of property, plant and equipment increased primarily as a result of the sale of non-operating branch locations during the year ended December 31, 2019, as part of the ongoing integration and consolidation process following the acquisition of ModSpace. The overall decrease in cash used in investing activities for the year ended December 31, 2019 was partially offset by an increase in capex of $44.2 million in 2019, which was primarily driven by increased refurbishments of existing fleet, following our recent acquisitions, and purchases of VAPS to drive revenue growth. \n\nCash used in financing activities for the year ended December 31, 2020 was $159.0million as compared to $26.1 millioncash provided by financing activities for the year ended December 31, 2019, an increase of $132.9 million cash used. The increase in cash used in financing activities was driven by an increase of $62.9 million for payment of financing costs, an increase of $27.4 million for payment of debt extinguishment costs, payment of $21.8 million for the repurchase and cancellation of warrants, payment of $4.2 million for Common Stock issuance costs, an increase of $12.8 million of taxes paid on employee stock awards, and an increase of $8.4 million of principal payments on finance lease obligations. Additionally, there was a net increase of $5.1 million of payments on borrowings, comprised of an increase in repayments of borrowings of $2,239.7 million that was partially offset by an increase receipts from borrowings of $2,234.6 million. The cash used in financing activities was partially offset by an increase in receipts from the issuance of Common Stock from the exercise of options and warrants of $9.7 million. \nCash used in financing activities for the year ended December 31, 2019 was $26.1 million as compared to $1,180.0 million cash provided by financing activities for the year ended December 31, 2018, an increase of $1,206.1 million cash used. The increase in cash used by financing activities is primarily due to a reduction in borrowings, net of repayments of $1,086.0 million, a decrease in receipts from the issuance of Common Stock of $146.3 million primarily related to the financing of the ModSpace acquisition and an increase in debt extinguishment costs of $7.1 million. In connection with the ModSpace acquisition, in 2018 we borrowed an aggregate of $1,097.1 million related to the issuance of the 2023 Secured Notes and the Unsecured Notes, and through the up-sized 2017 ABL Facility. The 2018 stock issuance was used to finance the acquisition of ModSpace. We paid redemption premium costs of $7.1 million in 2019 as a result of the redemption of the Unsecured Notes and the $30.0 million prepayment on the 2022 Secured Notes. The decrease in cash provided by financing activities was partially offset by a decrease in financing fees payments of $34.0 million due to the significant fees incurred in 2018 as part of the financing activities noted above in connected with the acquisition of ModSpace. \n### Contractual Obligations \nThe following table presents information relating to our contractual obligations and commercial commitments as of \nDecember 31, 2020 \n: \nAt \n### December 31, 2020 \n, in addition to the above contractual obligations, we had $14.5 million o f potential long-term tax liabilities, including interest and penalties, related to uncertain tax positions. Because of the high degree of uncertainty regarding the future cash flows associated with these potential long-term tax liabilities, we are unable to estimate the years in which settlement will occur with the respective taxing authorities. \n\nWe have no off-balance sheet arrangements that have or are reasonably likely to have a current or future material effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capex or capital resources. \n\nOur discussion and analysis of our financial condition, results of operations, liquidity and capital resources is based on our consolidated financial statements, which have been prepared in accordance with GAAP. GAAP requires that we make estimates and judgments that affect the reported amount of assets, liabilities, revenue, expenses and the related disclosure of contingent assets and liabilities. We base these estimates on historical experience and on various other assumptions that we consider reasonable under the circumstances and reevaluate our estimates and judgments as appropriate. The actual results exp erienced by us may differ materially and adversely from our estimates. We believe that the following critical accounting policies involve a higher<|endoftext|>EXPLANATORY \n### NOTE \nCentury Cobalt Corp.(the Company) is filing this Amendment No. 1) to amend its Annual Report on Form 10-K for the year ended November 30, 2019, filed with the Securities and Exchange Commission (the SEC) on May 3, 2021 (the Original Form 10-K). \nThis Amendment No. 1 is being filed for the sole purpose of reclassifying a portion of the annual mining claims renewal fees from operating expense in the consolidated statements of operations to prepaid expenses in the consolidated balance sheets. The amount reclassified was $99,683. \nAs required by the SEC, this Amendment No. 1 includes new certifications pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002, filed as Exhibits 31.1 and 32.1 hereto. \nExcept as described above, the Company has not modified or updated the Original Form 10-K or the financial statements included therein or modified any disclosures contained in the Original Form 10-K. 1, with the exception of the foregoing, does not reflect events occurring after the date of filing of the Original Form 10-K, or modify or update any disclosures affected by subsequent events. Consequently, all other information not affected by the correction described above is unchanged and reflects the disclosures and other information made at the date of the filing of the Original Form 10-K and should be read in conjunction with our filings with the SEC subsequent to the filing of the Original Form 10-K, including amendments to those filings, if any. \nPART 1 \n### ITEM 1. BUSINESS \nIn some cases, you can identify forward-looking statements by terminology such as \"may\", \"should\", \"expects\", \"plans\", \"anticipates\", \"believes\", \"estimates\", \"predicts\", \"potential\" or \"continue\" or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled \"Risk Factors\" that may cause our or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. \nAlthough we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. \nOur financial statements are stated in United States Dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles. \nIn this annual report, unless otherwise specified, all dollar amounts are expressed in United States dollars and all references to \"common shares\" refer to the common shares in our capital stock. \nAs used in this annual report, the terms \"we\", \"us\", \"our\", and \"company\" mean Century Cobalt Corp., unless the context clearly requires or states otherwise. \n### CORPORATE OVERVIEW \nWe are an exploration stage company engaged in the acquisition, exploration and development of mineral properties. \nThe address of our principal executive office is located at 10100 Santa Monica Blvd., Suite 300, Century City, CA 90067 USA. \nOur common stock is quoted on the OTC Bulletin Board under the symbol \"CCOB\". \n### CORPORATE HISTORY \nWe were incorporated in the State of Nevada on April 29, 2008, under the name \"Mayetok, Inc.\". As Mayetok, Inc. we were engaged in the development of a website to market vacation properties in the Ukraine. \nOn June 8, 2010, we initiated a one (1) old for 35 new forward stock splits of our issued and outstanding common stock. As a result, our authorized capital increased from 100,000,000 to 3,500,000,000 shares of common stock and the issued and outstanding increased from 2,200,000 shares of common stock to 77,000,000 shares of common stock, all with a par value of $0.001. \nAlso, on June 8, 2010 we changed our name from \"Mayetok, Inc.\" to \"First American Silver Corp.\", by way of a merger with our wholly owned subsidiary First American Silver Corp., which was formed solely for the change of name. We changed the name of our company to reflect the new direction of our company in the business of acquiring, exploring and developing mineral properties. \nOn June 18, 2018, we changed our name from \"First American Silver Corp.\" to Century Cobalt Corp., by way of a merger with our wholly owned subsidiary Century Cobalt Corp., which was formed solely for the change of name. We changed the name of our company to reflect the new direction of our company in the business of acquiring, exploring and developing cobalt mineral properties. Our name change became effective with the Over-the-Counter Markets at the opening of trading on June 18, 2018, on which date we adopted the new stock symbol \"CCOB. \n### OUR CURRENT BUSINESS \n\nThe claims comprising the property (649 claims) initially totaled approximately 12,980 acres, subject to an option under the purchase agreement for the acquisition of additional claims. \nOriental Rainbow has assigned its interest in the property to us in consideration for 2,500,000 restricted shares of common stock (the Consideration Shares). We have assumed all of Oriental Rainbows obligations under the purchase agreement, which material obligations include: the issuance of up to 500,000 restricted shares of common stock to Plateau upon listing on a recognized stock exchange; paying pending BLM fees for the claims in the amount of $108,000; and paying Plateau $1,000,000 in four equal staged payments upon completion of a positive feasibility study on the property. \nCentury Cobalts, acreage, known as the Emperium Cobalt Project, as noted above totals 12,980 Acres/ 5,625 Hectares, making it larger than the combined land claims of the 5 largest publicly traded companies currently active in the Idaho Cobalt Belt. The project is located approximately 16 miles (26 km) southwest of Salmon, Idaho. As of March 2020, the Companys land position has been reduced to 694 claims. \nOn March 17, 2021 we executed on an opportunity to expand our asset base and change our strategic focus. Pursuant to this, the company, together with Block Commodities Limited, it entered into an option agreement to acquire 70 percent interest (the Acquisition) in a Medicinal Cannabis license granted to Magnus Cannabis Group (Private) Limited (Magnus) by the government of Zimbabwe. Block Commodities Ltd.islistedon the AquisStockExchange, trading withtickercode BLCC.PL (BLCC). \n\n\n\nPayment by BLCC of 1,500,000 (approximately $2,095,000) through the issue of 2,142,857,142 fully paid ordinary shares in BLCC (calculated at 0.07p per share) upon exercise of the option, and contemporaneously the payment by CCOB of 1.5m of CCOB fully paid ordinary shares, price based on a 30-day VWAP (using the US$/GB closing middle market exchange rate published by Bloomberg on the day immediately prior to completion). \nWe believe that this opportunity will enhance shareholder value over the longer term. \nGiven the foregoing, we had been exploring further options regarding the monetization of its Emperium Cobalt Project, which may include the sub-licensing or sale of the assets. Further to these efforts, on March 17, 2021, we signed an MOU and entered into discussions with UK-based Technology Minerals Limited (Technology Minerals) for Technology Minerals to acquire the Companys entire interest (the assets) in the Emperium Cobalt Project. \nTechnology Minerals is comprised of mining assets and a major recycling group, laying the foundations for the UKs first meaningful green circular economy in the battery industry and is currently in the process of becoming a UK-listed Company on the on the Standard List of the London Stock Exchange, by way of a Reverse Take Over. \nTechnology Minerals will extract the raw materials required for Li-ion Battery cathodes and then help solve the ecological issue of spent Li-ion batteries by recycling them for reuse by battery manufacturers. \nTo date, as noted herein, Century Cobalt has focused on exploring and developing its large Emperium Cobalt Project to take advantage of the growing demand for secure, domestic cobalt supplies, but the Directors believe that a sale of its assets to Technology Minerals represents an attractive and quicker route to monetize the Project. \nIf the negotiations are successful and the sale of the Project is completed, the Company will change its strategic direction and focus on the above noted medicinal cannabis license opportunity in partnership with its UK listed partner, Block Commodities Limited. \n### Property Information: \nThe Idaho Cobalt Belt is a northwest-southeast trending belt of cobalt- and copper-bearing mineral deposits and prospects. \nThe belt is at least 40 miles long (64 km) and up to 6 miles (10 km) wide. \nBetween 1902 and 1968, millions of tons of ore were mined in the Idaho Cobalt Belt within the Blackbird Mining area. \nTotal past production from the Blackbird Mine (to the immediate west of our Emperium Cobalt Project) was roughly 2.4 million tons of ore containing 19 thousand tons of cobalt, with the mine reaching its maximum production in 1958 at annual output of 2,000 tons cobalt. \nAs the only primary cobalt mine in the US to date, the mine site became a superfund site and was cleaned up in the 1990s. \n2018 Exploration Program \nThe company completed a preliminary 2018 exploration program in the Idaho Cobalt Belt. During the 2018 campaign, the location of two known historic mineral prospects on our property were confirmed and sampled. In addition, a number of previously unknown prospects were also discovered by our exploration team and sampled. By 2018 year-end the Century field crew had collected over 800 soil samples and 150 rock samples, with the majority of the samples being sent for analysis to ALS Labs in Reno (NV). The results so far include: \n### Rock Samples: \n0.1525% Co, 3.27 g/t Au, 27.7 g/t Ag, 4.38% Cu \n149ppm Co, 12.9 g/t Au, 162 g/t Ag, 1.224% Cu \n255 ppm Co, 4.89 g/t Au, 80.3 g/t Ag, 17.15% Cu \n337ppm Co, 1.2 g/t Au, 62.2 g/t Ag, 16.85% Cu \n6.93 g/t Au, 2690 g/t Ag, 2.62 % Cu, 5.53% Pb, 3.54% Zn \n0.769 g/t Au, 522 g/t Ag, 13.15% Pb, 12% Zn \n### Soils Samples: \n0.1175% Co, 11 ppm Cu and 299 ppm As \n1.525% Cu, 0.2 g/t Au, 5.8g/t Ag and 1430 ppm As \n0.998% Cu, 5 g/t Ag and 1630 ppm As \n0.628% Cu, 0.188 g/t Au, 1.5g/t Ag and 1320 ppm As \n0.278% Cu, 0.28 g/t Au, 13g/t Ag and 2180 ppm As \n### Cobalt Plus Co-Products \nThese early results confirm the strong Cobalt potential of the properties, while the findings for Copper (Cu), Gold (Au) and Silver (Ag), along with Lead (Pb) and Zinc (Zn) suggests co-products that could ultimately positively impact project economics. Additionally, Arsenic (As), (like cobalt, a US Government-designated Critical Mineral), will be assessed as a potential co-product. Essential for the production of Gallium-Arsenide semiconductor chips, Arsenic is a key raw material for solar panels, telecoms applications, infrared and optical applications. \n2019 Exploration Program \nThe company completed a Satellite Thermal Study over its entire license area, the results of which will be integrated into the companys geological database and combined with the soil and rock samples to further define areas of interest. No other work was carried on the property. \nOn April 1, 2019, the Company granted to the optionor 163,132 unregistered shares of the Company stock. \nThis agreement lapsed and was not renewed. \n2020 Exploration Program \nDue to financial and COVID related constraints, no exploration activities were conducted on the property during the year. \n2021 Exploration Program \nExploration is expected to resume in Q3 2021. The current project data is being reviewed internally and an exploration program is being put together. It is anticipated that further soil sampling and geological mapping will take place around the known prospects to identify target areas for trenching and possible shallow drilling. \nIn addition, the Company is in advance discussions with another party to acquire the rights to 158 contiguous lode claims covering an area ofapproximately 1,285 ha (3,175 ac) within the Idaho Cobalt Belt. \n### COMPETITION \nThe mineral exploration industry is highly competitive. We are a new exploration-stage company and have a weak competitive position in the industry. We compete with junior and senior mineral exploration companies, independent producers and institutional and individual investors who are actively seeking to acquire mineral exploration properties throughout the world together with the equipment, labor and materials<|endoftext|>Based on information obtained from the persons named below, with respect to the beneficial ownership of common stock, by: each person known by us to be the beneficial owner of more than 5% of our outstanding common stock; \nIn the table below, percentage ownership is based on 9,680,736 shares of our common stock, consisting of (i) 7,774,836shares of our Class A common stock and (ii) 1,905,900shares of our Class B common stock, issued and outstanding as of December 31, 2020. The table below does not include the Class A common stock underlying the private placement warrants held or to be held by our officers or sponsor because these securities are not exercisable within 60 days of the Original Report. \n\n(1) \nUnless otherwise noted, the business address of each of the following entities or individuals is c/o , 5090 Richmond Ave, Suite 319, Houston, Texas 77056. \n(2) \n\n(3) \nRepresents shares held by Industrial Tech Partners, LLC, our sponsor. E. Scott Crist is the managing member of our sponsor and may be deemed to have beneficial ownership of the common stock held directly by our sponsor. \n(4) \nThis individual is a member of our sponsor but does not have voting or dispositive control over the shares held by our sponsor. \n(5) \nThe securities are owned directly by the accounts (the Accounts) managed Karpus Management, Inc., d/b/a Karpus Investment Management (Karpus), a registered investment adviser under Section 203 of the Investment Advisors Act of 1940. None of the Accounts has an interest in the securities constituting more than 5% of the shares outstanding. The address of the reporting person is 183 Sullys Trail, Pittsford, New York, 14534. \n(6) \nHudson Bay Capital Management LP (the Investment Manager) serves as the investment manager to HB Strategies LLC, in whose name the securities reported herein are held. As such, the Investment Manager may be deemed to be the beneficial owner of all securities held by HB Strategies LLC. Sander Gerber serves as the managing member of Hudson Bay Capital GP LLC, which is the general partner of the Investment Manager. Mr. Gerber disclaims beneficial ownership of these securities. Each person named in this note has an address at 777 Third Avenue, 30 th \nFloor, New York, NY 10017. \n(7) \nHeights Capital Management, Inc. is the investment manager to CVI Investments, Inc. and as such may exercise voting and dispositive power over these shares. The address for CVI Investments is P.O. Box 309GT, Ugland House, South Church Street, George Town, Grand Cayman, KY1-1104 Cayman Islands. \n\nNone. \n### Changes in Control \nNone. \nItem 13. \n\nOn June24, 2020, we issued an aggregate of 1,725,000 founder shares to our sponsor for an aggregate purchase price of $25,000 in cash, or approximately $0.014 per share. In August 2020, we effected a 0.25 for 1 stock dividend for each share of Class B common stock outstanding, resulting in our sponsor holding an aggregate of 2,156,250 founder shares (up to 281,250shares of which are subject to forfeiture depending on the extent to which the underwriters over-allotmentoption is exercised). Based on the final size of the initial offering and partial exercise by the underwriters of their over-allotment option, 250,350 founders shares were forfeited, resulting in our sponsor holding an aggregate of 1,905,900 shares. \nSimultaneously with the closing of our initial public offering, our sponsor purchased 3,075,000 warrants at a price of $1.00 per warrant, for an aggregate purchase price of $3,075,000. On October 13, 2020, in connection with the purchase of an additional 123,600 units sold pursuant to the underwriters over-allotment option, we sold an additional 37,080 private placement warrants to our sponsor at a price of $1.00 per private placement warrant, generating gross proceeds of $37,080. The private placement warrants are identical to the units sold in our public offering except that the private placement warrants, so long as they are held by our sponsor, the underwriters or their permitted transferees, (i)will not be redeemable by us, (ii)may not (including the ClassA common stock issuable upon exercise of these warrants), subject to certain limited exceptions, be transferred, assigned or sold by the holders until 30days after the completion of our initial business combination, (iii)may be exercised by the holders on a cashless basis and (iv)will be entitled to registration rights. The private placement warrants (including the shares of ClassA common stock issuable upon exercise thereof) may not, subject to certain limited exceptions, be transferred, assigned or sold by the holder. \nCommencing on the date of our initial public offering, we pay an affiliate of our sponsor a total of $10,000 per month for office space, utilities and secretarial and administrative support. \n\nThese loans were non-interestbearing, unsecured and were due at the earlier of December31, 2020 or the closing of our initial public offering. The outstanding loan balance of $175,000 was repaid on September 14, 2020 out of the estimated $700,000 of offering proceeds allocated to the payment of offering expenses (other than underwriting commissions). \nUp to $1,500,000 of such Working Capital Loans may be convertible into private placement-equivalentwarrants at a price of $1.00 per warrant (which, for example, would result in the holders being issued warrants to purchase 1,500,000shares if $1,500,000 of notes were so converted), at the option of the lender. \n\nSimultaneously with the closing of our initial public offering, we entered into a registration rights agreement with respect to the private placement warrants, the securities underlying the unit purchase option, the securities issuable upon conversion of Working Capital Loans (if any) and the shares of ClassA common stock issuable upon exercise or conversion or exercise of the foregoing and upon conversion of the founder shares. A copy of the registration rights agreement was filed with the SEC as an exhibit to our current report on Form 8-K filed on September 11, 2020. \n### Related Party Policy \n\n\nIn addition, our audit committee, pursuant to its written charter, is responsible for reviewing and approving related party transactions to the extent that we enter into such transactions. A majority of the members of the entire audit committee constitute a quorum. A form of the audit committee charter we adopted was filed as an exhibit to the registration statement for our initial offering. \n\nHowever, the following payments will be made to our sponsor, officers or directors, or our or their affiliates, none of which will be made from the proceeds of our offering held in the trust account prior to the completion of our initial business combination: \nPayment to an affiliate of our sponsor of $10,000 per month, for up to 15months (or up to 21months), for office space, utilities and secretarial and administrative support; \nand \nUp to $1,500,000 of such Working Capital Loans may be convertible into private placement-equivalent warrants at a price of $1.00 per warrant (which, for example, would result in the holders being issued 1,500,000 warrants if $1,500,000 of notes were so converted), at the option of the lender. \n\n### Director Independence \nMoore and Clark, and Ms. Viswanathan are independent directors as defined in the Nasdaq listing standards and applicable SEC rules. Our audit committee is entirely composed of independent directors meeting Nasdaqs additional requirements applicable to members of the audit committee. \n### Item 14 \n\nThe following is a summary of fees paid or to be paid to Marcum LLP or Marcum, for services rendered. \n### Audit Fees \nThe aggregate fees of Marcum for professional services rendered for the audit of our annual financial statements, review of the financial information included in our Forms 10-Q for the respective periods and other required filings with the SEC for the year ended December 31, 2020 totaled approximately $9,270. The aggregate fees of Marcum related to audit services in connection with our initial public offering totaled approximately $56,135. \nAudit-Related Fees \n\n### Tax Fees \nWe did not pay Marcum for tax services, planning or advice for the year ended December 31, 2020. \nAll Other Fees \nWe did not pay Marcum for any other services for the year ended December 31, 2020. \n### Pre-Approval Policy \n\nPART IV \n### Item 15. \n\n(a) \n\n(1) \nFinancial Statements \n(2) \n\nAll financial statement schedules are omitted because they are not applicable or the amounts are immaterial and not required, or the required information is presented in the financial statements and notes beginning on page F-1. \n(3) \n### Exhibits \n20549. \nItem 16. \n### Form 10-K Summary \nNot applicable. \n\n\n\n\n\nWe have audited the accompanying balance sheet of (the Company) as of December 31, 2020, the related statements of operations, changes in stockholders equity and cash flows for the period from June 2, 2020 (inception) through December 31, 2020, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020, and the results of its operations and its cash flows for the period from June 2, 2020 (inception) through December 31, 2020, in conformity with accounting principles generally accepted in the United States of America. \n\nAs discussed in Note 2 to the financial statements, the accompanying financial statements as of December 31, 2020 and for the period from June 2, 2020 (inception) through December 31, 2020, have been restated. \nBasis for Opinion \n\nAs part of our audit \n, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Companys internal control over financial reporting. \n\n/s/ Marcum llp \n### Marcum llp \n\nNew York, NY \nMarch 31, 2021, except for the effects of the restatements discussed for warrants in Note 2, for which the date is May 24, 2021 \n\nBALANCE SHEET \nDECEMBER 31, 2020 \n( \n### As Restated) \n\n\nSTATEMENT OF OPERATIONS \n\n( \nAs Restated) \n(1) \nExcludes 5,578,881 shares subject to possible redemption. (See Note 5) \n(2) \nExcludes interest income attributable to shares subject to possible redemption of $2,428. \n\n\n\n( \n### As Restated) \n\n\nSTATEMENT OF CASH FLOWS \n\n( \n### As Restated) \n\n\n\n### DECEMBER 31, 2020 \n\nOrganization and General \nis a newly organized blank check company formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses (Business Combination). \n\nAll activity for the period from June 2, 2020 (inception) through December 31, 2020 relates to the Companys formation and the Initial Public Offering (IPO) described below. The Company will generate non-operating income in the form of interest income on cash and cash equivalents from the proceeds derived from the IPO and will recognize changes in the fair value of warrant liability as other income (expense). \n### Financing \nThe registration statement for the Companys IPO was declared effective on September 8, 2020 (the Effective Date). On September 11, 2020, the Company consummated the IPO of 7,500,000 units (the Units and, with respect to the shares of Class A common stock included in the Units sold, the Public Shares), at $10.00 per Unit, generating gross proceeds of $75,000,000, which is described in Note 4. \nSimultaneously with the closing of the IPO, the Company consummated the sale of 3,075,000 warrants (the Private Placement Warrants) at a price of $1.00 per Private Placement Warrant in a private placement to Industrial Tech Partners, LLC, a Delaware limited liability company (the Sponsor), generating gross proceeds of $3,075,000, which is described in Note 5. \n\nTransaction costs amounted to $4,729,424 consisting of $1,149,720 of underwriting fee, $2,668,260 of deferred underwriting fee, the fair value of the option granted to the underwriters of $390,000, the fair value of the shares issued to the underwriters of $2,016 deemed as underwriters compensation, and $519,428 of other offering costs. \n### Trust Account \nFollowing the closing of the IPO on September 11, 2020 and the sale of Over-Allotment Units on October 13, 2020, an amount of $76,998,360 ($10.10 per Unit) from the net proceeds of the sale of the Units in the IPO, the sale of the Private Placement Warrants, and the sale of Over-Allotment Units was placed in a trust account (Trust Account) which will be<|endoftext|>Of the trust assets, in each case net of the amount of interest released to us to pay taxes and will not be liable as to any claims under our indemnity of the underwriters of our initial public offering against certain liabilities, including liabilities under the Securities Act. \n\nOur public stockholders will be entitled to receive funds from the trust account only upon the earlier to occur of: (i) the completion of our initial business combination, (ii) the redemption of any public shares properly submitted in connection with a stockholder vote to amend any provisions of our amended and restated certificate of incorporation to (A) modify the substance or timing of our obligation to provide for the redemption of our public shares in connection with an initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination prior to December 7, 2022 or (B) with respect to any other material provisions relating to stockholders rights or pre-initial business combination activity, and (iii) the redemption of all of our public shares if we are unable to complete our business combination prior to December 7, 2022, subject to applicable law. \n### Competition \nWe expect to encounter competition from other entities having a business objective similar to ours, including other blank check companies, private equity groups and leveraged buyout funds, public companies and operating businesses seeking strategic business combinations. \nEmployees \nOur executive offices are located at 4921 William Arnold Road, Memphis, TN 38117, and our telephone number is (901) 685-2865. \n\n\n\n\n\nWe will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of our initial public offering, (b) in which we have total annual gross revenue of at least $1.07 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our shares of Class A common stock that are held by non-affiliates exceeds $700 million as of the prior June 30 th \n\n### ITEM 1A. RISK FACTORS \nHowever, below is a summary of material risks, uncertainties and other factors that could have a material effect on the Company and its operations: \n\nOur public stockholders may not be afforded an opportunity to vote on our initial proposed business combination, which means we may complete our initial business combination even though a majority of our public stockholders do not support such a combination. \n\n\n\n\n\n\n\n\n\n\nWe may issue our shares to investors in connection with our initial business combination at a price that is less than the prevailing market price of our shares a t that time. \nIf we seek stockholder approval of our initial business combination, our sponsor, directors, officers or their affiliates may enter into certain transactions, including purchasing shares or warrants from the public, which may influence the outcome of a proposed business combination and reduce the public float of our securities. \n\n\n\n\n\n\n\n\n\n### Risk Factors \n\n\n\n\nFollowing the issuance of the SEC Staff Statement on April 12, 2021, our management and our audit committee concluded that, in light of the SEC Statement, it was appropriate to restate previously issued and audited financial statements as of and for the period ended December 31, 2020. \n\nFor a discussion of managements consideration of the material weakness identified related to our accounting for a significant and unusual transaction related to the warrants we issued in connection with the December 2020 initial public offering, see Note 2to the accompanying financial statements, as well as Part II, Item 9A: Controls and Procedures included in this Annual Report. \nAs described in Item 9A. Controls and Procedures. \n\n\nFollowing the issuance of the SEC Statement, after consultation with our independent registered public accounting firm, our management and our audit committee concluded that it was appropriate to restate our previously issued audited financial statements as of December 31, 2020 and for the period from August 12, 2020 (inception) through December 31, 2020. See \n\nFor the complete list of risks relating to our operations, see the section titled Risk Factors contained in our prospectus dated December 2, 2020, as the same may be updated from time to time. \nItem 1B. Unresolved Staff Comments. \nNone. \n### Item 2. Properties. \nWe currently maintain our executive offices at 4921 William Arnold Road, Memphis, TN, 38117. Our executive offices are provided to us by an affiliate of certain members of our management team. Commencing on December 7, 2020, we have agreed to pay an affiliate of our sponsor a total of $15,000 per month for office space, utilities and secretarial and administrative support. \nItem 3. Legal Proceedings. \nTo the knowledge of our management team, there is no material litigation, arbitration or governmental proceeding currently pending against us or any members of our management team in their capacity as such. \nItem 4. Mine Safety Disclosures. \nNot applicable. \n### PART II \nItem 5. \nMarket Information \nOur units, Class A common stock and warrants are each traded on the NYSE under the symbols LOKB.U, LOKB and LOKB WS, respectively. Our units commenced public trading on December 3, 2020, and our Class A common stock and warrants commenced separate public trading on January 25, 2021. \n### Holders \nOn March 24, 2021, there was one holder of record of our units, t holders of record of our Class A common stock and two holders of record of our warrants. \n\nNone. \n\nOn December 7, 2020, simultaneously with the closing of our initial public offering and the exercise in full of the over-allotment option, we consummated the private placement of an aggregate of 4,666,667 private placement warrants at a price of $1.50 per private placement warrant, generating gross proceeds of $7,000,000. \n\n\nNone. \n\n\n\nA total of $253,000,000 of the proceeds from our initial public offering and the sale of the private placement warrants was placed in a U.S.-based trust account at J.P. \nItem 6. Selected Financial Data. \n\nItem 7. \nReferences to we, us, our or the Company are to Live Oak Acquisition Corp. II,, except where the context requires otherwise. References to our management or our management team are to our officers and directors, and references to the sponsor are to Live Oak Sponsor Partners II LLC. \nIn addition, we are allocating offering costs to the Warrants which are expensed instead of being recorded as a reduction of equity. The impact of the restatement is more fully described in Note 2 to our financial statements included in Item 15 of PartIV of this Amendment and Item 9A: Controls and Procedures, both contained herein \n### Overview \nWe are a blank check company formed under the laws of the State of Delaware on August 12, 2020 for the purpose of effecting an initial business combination. \n\n### Results of Operations \nWe have neither engaged in any operations (other than searching for an initial business combination after our initial public offering) nor generated any revenues to date. Our only activities from August 12, 2020 (inception) through December 31, 2020 were organizational activities, those necessary to prepare for our initial public offering, described below. We expect to generate non-operating income in the form of interest earned on investments held after our initial public offering. \nFor the period from August 12, 2020 (inception) through December31, 2020, we had a net loss of 3,719,296, which consists of a $3,013,001 loss from changes in fair value of derivative warrant liabilities and $587,958 of transaction costs allocated to the warrants, operating costs of $137,268, offset by interest income from operating bank account of $690 and interest income on marketable securities held in the Trust Account of $18,241. \n\nOn December 7, 2020, we consummated our initial public offering of 25,300,000 Units at a price of $10.00 per unit, which includes the full exercise by the underwriters of their over-allotment option in the amount of 3,300,000 units, generating gross proceeds of $253,000,000. Simultaneously with the closing of our initial public offering, we consummated the sale of 4,666,667 private placement warrants at a price of $1.00 per private placement warrant in a private placement to our stockholders, generating gross proceeds of $7,000,000. \nFollowing our initial public offering, the full exercise of the over-allotment option by the underwriters and the sale of the private placement warrants, a total of $253,000,000 was placed in the Trust Account. We incurred $13,064,337 in transaction costs, including $4,610,000 of underwriting fees, $8,067,500 of deferred underwriting fees and $386,837 of other offering costs. \nFor the period from August 12, 2020 (inception) through December 31, 2020, cash used in operating activities was $159,974. Net loss of $3,719,296 was affected by a $3,013,001 loss from changes in fair value of derivative warrant liabilities, $587,958 of transaction costs allocated to the warrants, interest earned on investments held in the Trust Account of $18,241 and changes in operating assets and liabilities, which used $23,396 of cash from operating activities. \nAs of December31, 2020, we had cash and investments held in the Trust Account of $253,018,241. During the period from August 12, 2020 (inception) through December31, 2020, we did not withdraw any interest income from the Trust Account. \nAs of December31, 2020, we had $1,896,170 of cash held outside of the Trust Account. \nIn order to fund working capital deficiencies or finance transaction costs in connection with our initial business combination, our sponsor or an affiliate of our sponsor, or certain of the Companys officers and directors or their affiliates may, but are not obligated to, loan us funds as may be required. If we complete our initial business combination, we would repay the Working Capital Loans out of the proceeds of the Trust Account released to us. In the event that our initial business combination does not close, we may use a portion of proceeds held outside the Trust Account to repay the Working Capital Loans but no proceeds held in the Trust Account would be used to repay the Working Capital Loans. The Working Capital Loans would either be repaid upon consummation of our initial business combination, without interest, or, at the lenders discretion, up to $1,500,000 of such Working Capital Loans may be convertible into warrants of the post business combination entity. \n\n\n\nContractual Obligations \nWe do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities, other than an agreement to pay our sponsor a monthly fee of $15,000 for office space, utilities, and secretarial and administrative support services to us. We began incurring these fees on December 7, 2020 and will continue to incur these fees monthly until the earlier of the completion of our initial business combination and its liquidation. \nThe deferred fee will become payable to the underwriters from the amounts held in the Trust Account solely in the event that we complete our initial business combination, subject to the terms of the underwriting agreement. \n\n\n\n\n\n\nWe issued 8,433,333 common stock warrants to investors in our Initial Public Offering and issued 4,666,667 Private Placement Warrants. The fair value of warrants issued in connection with the Initial Public Offering were measured at fair value using a binomial/lattice model that assumes optimal exercise of the Companys redemption option, including the make whole table, at the earliest possible date. \n\n\nRecent Accounting Standards \n\nItem 7a. \nThrough December 31, 2020, our efforts have been limited to organizational activities, activities relating to our initial public offering and since the initial public offering, the search for a target business with which to consummate an initial business combination. We have not engaged in any hedging activities since our inception on July 7, 2020. \nThe net proceeds of our initial public offering and the sale of the private placement warrants were deposited into a trust account in the United States at J.P. Morgan Chase Bank, N.A., with Continental Stock Transfer & Trust Company acting as trustee, and have been invested in U.S. \nItem 8. \nReference is made to pages F-1 through F-23 comprising a portion of this annual report. \nItem 9. \nNone. \nItem 9a. Controls and Procedures. \n\nDisclosure controls are procedures that are designed with the objective<|endoftext|>And all of our assets will be located outside of the United States. \n\nOur public shareholders will be entitled to receive funds from the Trust Account only upon the earlier to occur of: (i)our completion of a Business Combination, and then only in connection with those ClassA Ordinary Shares that such shareholder properly elected to redeem, subject to the limitations described herein, (ii)the redemption of any public shares properly tendered in connection with a shareholder vote to amend our amended and restated memorandum and articles of association (A)to modify the substance or timing of our obligation to allow redemption in connection with our Business Combination or to redeem 100% of our public shares if we do not complete a Business Combination within 24 months from the IPO Closing Date or (B)with respect to any other provisions relating to the rights of our ClassA Ordinary Shares, and (iii)the redemption of our public shares if we have not completed a Business Combination within 24 months from the IPO Closing Date, subject to applicable law and as further described herein. Public shareholders who redeem their ClassA Ordinary Shares in connection with a shareholder vote described in clause (ii)in the preceding sentence shall not be entitled to funds from the Trust Account upon the subsequent completion of a Business Combination or liquidation if have not completed a Business Combination within 24 months from the IPO Closing Date, with respect to such ClassA Ordinary Shares so redeemed. \n\nAlthough we currently meet, on a pro forma basis, the minimum initial listing standards set forth in the Nasdaq listing standards, we cannot assure you that our securities will be, or will continue to be, listed on Nasdaq in the future or prior to our Business Combination. In order to continue listing our securities on Nasdaq prior to our Business Combination, we must maintain certain financial, distribution and share price levels. Additionally, in connection with our Business Combination, we will be required to demonstrate compliance with Nasdaqs initial listing requirements, which are more rigorous than Nasdaqs continued listing requirements, in order to continue to maintain the listing of our securities on Nasdaq. \nIf Nasdaq delists our securities from trading on its exchange and we are not able to list our securities on another national securities exchange, we expect our securities could be quoted on anover-the-countermarket. \na determination that our ClassA Ordinary Shares are a penny stock, which will require brokers trading in our ClassA Ordinary Shares to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities; \nBecause our Units and our ClassA Ordinary Shares and warrants are listed on Nasdaq, our Units, ClassA Ordinary Shares and warrants qualify as covered securities under the statute. \n\nBecause we have net tangible assets in excess of $5,000,001 as a result of the successful completion of the Initial Public Offering and the sale of the Private Placement Warrants and timely filed a Current Report on \n\nIf we seek shareholder approval of our Business Combination and we do not conduct redemptions pursuant to the tender offer rules, and if you or a group of shareholders are deemed to hold in excess of 15% of our ClassA Ordinary Shares, you will lose the ability to redeem all such shares in excess of 15% of our ClassA Ordinary Shares. \nIf we seek shareholder approval of our Business Combination and we do not conduct redemptions in connection with our Business Combination pursuant to the tender offer rules, our amended and restated memorandum and articles of association provide that a public shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a group (as defined under Section13 of the Exchange Act), will be restricted from seeking redemption rights with respect to Excess Shares. \n\nAlthough we have no commitments as of the date of this Annual Report on \nForm10-K/Ato issue any notes or other debt securities, we may choose to incur substantial debt (including from Marquee, The Raine Group and their respective affiliates) to complete our Business Combination. Nevertheless, the incurrence of debt could have a variety of negative effects, including: default and foreclosure on our assets if our operating revenues after a Business Combination are insufficient to repay our debt obligations; using a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends on our ClassA Ordinary Shares if declared, our ability to pay expenses, make capital expenditures and acquisitions and fund other general corporate purposes; \n\nAs of the IPO Closing Date, our initial shareholders owned, on anas-convertedbasis, \n20% of our issued and outstanding ClassA Ordinary Shares. In addition, the Founder Shares, all of which are held by our initial shareholders, will entitle the holders to elect all of our directors prior to our Business Combination. We may not hold an annual general meeting to appoint new directors prior to the completion of our Business Combination, in which case all of the current directors will continue in office until at least the completion of the Business Combination. Accordingly, our initial shareholders will continue to exert control at least until the completion of our Business Combination. \nWe may amend the terms of the warrants and the Private Placement Warrants in a manner that may be adverse to holders of warrants and the holders of Private Placement Warrants, respectively, with the approval by the holders of at least 65% of the then outstanding warrants, and the holders of at least 65% of the then outstanding Private Placement Warrants, respectively. \nThe warrant agreement will provide that the terms of the warrants may be amended without the consent of any holder to cure any ambiguity or correct any defective provision, but solely with respect to the terms of the warrants, any change that adversely affects the interests of the registered holders of the then outstanding warrants requires the approval by the holders of at least 65% of the then outstanding warrants and, solely with respect to the terms of the Private Placement Warrants, any change that adversely affects the interests of the registered holders of the then outstanding Private Placement Warrants requires the approval by the holders of at least 65% of the then outstanding Private Placement Warrants. Accordingly, we may amend the terms of the warrants and the Private Placement Warrants, respectively, in a manner adverse to a holder if holders of at least 65% of the then outstanding warrants and holders of at least 65% of the then outstanding Private Placement Warrants, respectively, approve of such amendment. Although our ability to amend the terms of the warrants and the Private Placement Warrants, respectively, with the consent of at least 65% of the then outstanding warrants and at least 65% of the Private Placement Warrants, respectively, is unlimited, examples of such amendments could be amendments to, among other things, increase the exercise price of such warrants, convert such warrants into cash, shorten the exercise period or decrease the number of ClassA Ordinary Shares purchasable upon exercise of such a warrant. \nOur warrant agreement designates the courts of the State of New York or the United States District Court for the Southern District of New York as the exclusive forums for certain types of actions and proceedings that may be initiated by holders of our warrants, which could limit the ability of warrant holders to obtain a favorable judicial forum for disputes with the Company. \n\n\n\n\nWe have the ability to redeem the outstanding warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01 per warrant, if, among other things, the Reference Value equals or exceeds $18.00 per share (as adjusted for share splits, share capitalizations, reorganizations, recapitalizations and the like). \nIn addition, we have the ability to redeem the outstanding warrants at any time after they become exercisable and prior to their expiration, at a price of $0.10 per warrant if, among other things, the Reference Value equals or exceeds $10.00 per share (as adjusted for share splits, share dividends, rights issuances, subdivisions, reorganizations, recapitalizations and the like). The value received upon exercise of the warrants (1)may be less than the value the holders would have received if they had exercised their warrants at a later time where the underlying share price is higher and (2)may not compensate the holders for the value of the warrants, including because the number of ClassA Ordinary Shares received is capped at 0.3611 ClassA Ordinary Shares per whole warrant (subject to adjustment) irrespective of the remaining life of the warrants. \nOur warrants and Founder Shares may have an adverse effect on the market price of our ClassA Ordinary Shares and make it more difficult to effectuate our Business Combination. \nWe issued warrants to purchase 9,343,750 ClassA Ordinary Shares in the Initial Public Offering and simultaneously with the closing of our Initial Public Offering, we issued Private Placement Warrants to our Sponsor to purchase 6,316,667 shares of our ClassA Ordinary Shares. Our initial shareholders currently own an aggregate of 9,343,750 Founder Shares. The Founder Shares are convertible into ClassA Ordinary Shares on aone-for-onebasis, subject to adjustment as set forth herein. \nTo the extent we issue ClassA Ordinary Shares for any reason, including to effectuate a Business Combination, the potential for the issuance of a substantial number of additional ClassA Ordinary Shares upon exercise of these warrants and conversion rights could make us a less attractive acquisition vehicle to a target business. Such warrants when exercised will increase the number of issued and outstanding ClassA Ordinary Shares and reduce the value of the ClassA Ordinary Shares issued to complete the Business Combination. \nThe Private Placement Warrants are identical to the warrants sold as part of the Units in our Initial Public Offering except that, so long as they are held by our Sponsor or its permitted transferees, (i)they will not be redeemable by us, (ii)they (including the ClassA Ordinary Shares issuable upon exercise of these warrants) may not, subject to certain limited exceptions, be transferred, assigned or sold by our Sponsor until 30 days after the completion of our Business Combination, (iii)they may be exercised by the holders on a net share (cashless) basis and (iv)are subject to registration rights. \nBecause each Unit containsone-fourthof one warrant and only a whole warrant may be exercised, the Units may be worth less than units of other blank check companies. \nEach Unit containsone-fourthof one warrant. This is different from other offerings similar to ours whose Units include one ClassA Ordinary Share and one warrant to purchase one whole share. We have established the components of the Units in this way in order to reduce the dilutive effect of the warrants upon completion of a Business Combination since the warrants will be exercisable in the aggregate forone-fourthof the number of shares compared to Units that each contain a whole warrant to purchase one share, thus making us, we believe, a more attractive merger partner for target businesses. \nThe changes in value of our warrants could have an adverse effect on the market price of our ClassA ordinary shares, an adverse effect on our financial results and/or make it more difficult for us to consummate an initial business combination. \nWe are subject to complex securities laws and regulations and accounting principles and interpretations. The preparation of our financial statements requires us to interpret accounting principles and guidance and to make estimates and judgments that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported expenses incurred during the reporting periods. We base our interpretations, estimates and judgments on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for the preparation of our financial statements. GAAP presentation is subject to interpretation by the SEC, the<|endoftext|>This Amendment No. 1 on Form 10-K/A amends the Ocean Power Technologies, Inc. (we, us, our or the Company) Annual Report on Form 10-K for the fiscal year ending April 30, 2021, as filed with the Securities and Exchange Commission (SEC) on July 19, 2021 (the Original Filing). 1 to include the information required by Items 10 through 14 of Part III of Form 10-K. This information was previously omitted from our Original Filing in reliance on General Instruction G(3) to Form 10-K, which permits the information in the above-referenced items to be incorporated in our Form 10-K by reference to our definitive proxy statement if such statement is filed within 120 days after the end of our fiscal year ended April 30, 2021. \nWe are filing this Amendment to include Part III information in our Form 10-K because the Companys definitive proxy statement containing such information will not be filed on or before 120 days after our fiscal year end. \nAs required by Rule 12b-15 under the Securities Exchange Act of 1934, as amended, new certificates of our principal executive officer and principal financial officer are being filed as exhibits to this Amendment No. 1 on Form 10-K/A as Exhibits 31.1 and 31.2. \nThe Original Filing continues to speak as of the date of the Original Filing, and we have not updated the disclosures contained therein to reflect any events which may have taken place at a date subsequent to the filing of the Original Filing. 1 should be read in conjunction with our filings with the SEC subsequent to the date of the Original Filing. \nOCEAN POWER TECHNOLOGIES, INC. \n\nPowerBuoy and the Ocean Power Technologies logo are trademarks of Ocean Power Technologies, Inc. All other trademarks appearing in this annual report are the property of their respective holders. \nPART III \nITEM 10. \n### Directors \nAll of the directors bring to our Board of Directors executive leadership experience from their service as executives and/or directors of our Company and/or other entities. The biography of each director contains information regarding the persons service as a director, business experience, director positions held currently or at any time during the last five years, and the experiences, qualifications, attributes and skills that caused the Nominating and Corporate Governance Committee and our Board of Directors to determine that the person should serve as a director, given our business and structure. \nTerence J. Cryan has been a member of our Board of Directors since October 2012 and Chairman of the board since June 2014. Mr. Cryan was our lead independent director from October 2013 to June 2014 when he became Chairman of the Board. Mr. Cryan currently serves as a Managing Director of MACCO Restructuring Group, LLC, which provides qualified interim leadership and advice to stakeholders across a broad spectrum of business sectors. Since August 2017, Mr. Cryan has served as the Chairman of the Board of Westwater Resources, Inc. Mr. Cryan has served on the boards of directors of a number of other publicly traded companies including Uranium Resources, Inc. from 2006 to 2016; Global Power Equipment Group Inc. from 2008 to 2017; Superior Drilling Products from May 2014 to 2016; Gryphon Gold Corporation from 2009 to 2012; and The Providence Service Corporation from 2009 to 2011. Mr. Cryan served as President and CEO of Global Power Equipment Group Inc., from March 2015 until July 2017. From September 2012 until April 2013, Mr. Cryan served as interim President and CEO of Uranium Resources, Inc., and was elected as Chairman of the Board of Directors of Uranium Resources, Inc. in June 2014 and served until March 2016. Mr. Cryan earned his Bachelor of Arts degree from Tufts University in 1983 and a Master of Science degree in Economics from The London School of Economics in 1984. In December 2014, Terence Cryan was named a Board Leadership Fellow by the National Association of Corporate Directors. We believe Mr. Cryans qualifications to sit on our Board of Directors include his significant experience in financial matters, his prior board and executive management experience at other companies, his broad energy industry background and his extensive expertise in financings, mergers and acquisitions. \nPhilipp Stratmann has served as our President, Chief Executive Officer and a member of our Board of Directors since June 2021. Prior to this, Mr. Stratmann served as Vice President Global Business Development of the Company since 2019. Prior to that, he was Vice President, Biofuels for Velocys, which he joined in 2015 as Business Development Director. He previously served as General Manager Global Development and West Africa for InterMoor and has held leadership positions with Acteon Group and Ernst & Young, in addition to experience with VT Group and Shell. He is a graduate of the United Kingdoms University of Southampton, where he received his Engineering Doctorate and his Master of Engineering degree in Ship Science. We believe Mr. Stratmanns significant leadership experience in the energy and maritime industries qualifies him to serve on our Board of Directors. \nClyde W. Hewlett has served on the Board of Directors since December 2020. Mr. Hewlett has over 40 years of experience in offshore engineering design, manufacturing, and operations. Mr. Hewlett has served on the Board of Directors of Seismic City, Inc. since April 2000. From 2015 until 2019, Mr. Hewlett served as Chief Operating Officer (COO) of Oceaneering International, Inc., a global provider of engineered services and products to the offshore energy industry as well as the defense, entertainment, and aerospace industries. Prior to his service as COO, Mr. Hewlett was the Senior Vice President for Projects (from 2007 to 2015) and a Vice President and Project Manager (1988 to 2007) with Oceaneering International, Inc. Prior to joining Oceaneering, Mr. Hewlett worked as in various project engineering and project management roles with Vetco Gray, Inc. (from 1987 to 1988), with Hughes Offshore (from 1985 to 1987), with CanOcean Resources, Ltd. (from 1979 to 1984) and with Esso Canada (from 1978 to 1979). Mr. Hewlett obtained his Bachelor of Engineering in Mechanical Engineering from Memorial University of Newfoundland, Canada in 1978. We believe that Mr. Hewletts significant engineering, manufacturing and operational experience in the offshore environment qualifies him to serve on our Board of Directors. \nDiana G. Purcel has served on the Board of Directors since December 2020. Ms. Purcel has 20 years of experience as a Chief Financial Officer (CFO) including 17 years with small cap publicly traded companies. Ms. Purcel currently serves on the Board of Directors for the Animal Humane Society (since 2017) and she previously served on the Board of Directors of Now Boarding (from 2019 to 2021 when the company was sold) and for Multicultural Foodservice and Hospitality Alliance (from 2005 to 2008), including service as the Chair of its Audit Committee. From 2018 until 2019, Ms. Purcel served as Executive Vice President and CFO for iMedia Brands, Inc. (formerly Evine Live, Inc.), an interactive video and digital commerce company. From 2014 until 2017, Ms. Purcel served as the CFO for Coopers Hawk Winery & Restaurants, LLC, which operated restaurants, manufactured private-label wines, and managed the largest wine club in the world. From 2003 until 2014, Ms. Purcel served as CFO, Chief Accounting Officer and Corporate Secretary for BBQ Holdings, Inc. (formerly Famous Daves of America, Inc.), which franchised and operated a casual dining restaurant chain in over 35 states. From 1999 until 2003, Ms. Purcel served as CFO, Chief Accounting Officer and Secretary for Paper Warehouse, Inc., a party-good retailer and franchisor in 10 states. Ms. Purcel has also worked with Arthur Andersen LLP (1988 to 1993) and with other companies including Target Corporation (from 1994 to 1998). Ms. Purcel obtained her Bachelor of Science in Management, with a concentration in Accounting, from Tulane University in 1988, and is a certified public accountant (inactive). We believe that Ms. Purcels significant financial experience as a CFO in numerous public and private entities qualifies her to serve on our Board of Directors. \nPeter E. Slaiby has served on the Board of Directors since December 2020. Mr. Slaiby has over 39 years of experience in the oil and gas industry including over 37 years working with Royal Dutch Shell. Mr. Slaiby serves on the Board of Directors for Glacier Oil and Gas (since 2019) and The Harris School in Houston, Texas (since 2017). Previously Mr. Slaiby served on the Board of Directors for the Alaska Oil & Gas Association (from 2009 to 2014) including as its Chairman (in 2014) and served on the Chancellors Advisory Board for University of Alaska Anchorage (from 2010 to 2013). Slaiby is serving as the Managing Director for Quartz Upstream (since 2017) and is serving as Managing Partner for Floris Energy (since April 2020). From 2019 to 2020, Mr. Slaiby was a co-founder for Novara Energy. From 1980 to 2017, Mr. Slaiby worked with Shell in various roles: as Vice President, Decommissioning and Restoration, as Vice President, Shell Alaska, and as Asset Manager Brunei and UK Shell Petroleum. Mr. Slaiby also worked with Pecten (a Shell subsidiary) as Technical Manager Cameroon, as Project and Technical Manager Brazil, and as Project Manager Syria. Mr. Slaiby began his professional career in 1980 working for Shell Oil Company in various production roles in the Gulf of Mexico. Mr. Slaiby obtained his Bachelor of Engineering in Mechanical Engineering from Vanderbilt University in 1980. We believe that Mr. Slaibys significant experience in the oil and gas industry qualifies him to serve on our Board of Directors. \n### Executive Officers \nWe have one executive officer who is not a director: \nName \nAge \nPosition with Ocean Power Technologies, Inc. \n### Matthew T. Shafer \nSenior Vice President, Chief Financial Officer and Treasurer \nMatthew T. Shafer joined the Company in 2016 as Chief Financial Officer and Treasurer of the Company and was promoted to Senior Vice President in June 2021. Mr. Shafer previously served as a Vice President of Finance for CBIZ (NYSE: CBZ), formerly CMF Associates, from May 2015 where he led teams in providing finance solutions for high-growth organizations within CMF. Prior to that Mr. Shafer served as a Business Unit Chief Financial Officer at Bausch Health Companies (NYSE: BHC), formerly Valeant Pharmaceuticals International, a large global publicly traded company that develops, manufactures, markets and sells specialty pharmaceuticals and medical devices. He held this Finance Leadership role for the Valeant Dentistry, Generics and Neurology business units, and had worked closely with commercial operations and corporate level teams on numerous product launches, sales force expansions, mergers and acquisitions, financial systems integrations, and internal controls. Mr. Shafer has a foundation in Public Accounting working at Arthur Andersen LLP. Mr. Shafer holds a Bachelor of Science in Accounting from The Stillman School of Business at Seton Hall University, an MBA in Finance from Rutgers Business School in New Brunswick, N.J. \n### Audit Committee \nThe members of our Audit Committee are Diana G. Purcel, Peter E. Slaiby, and Terence Cryan. Until December 23, 2020, the members of the Audit Committee were Dean J. Glover, Steven M. Fludder and Robert K. Winters. Messrs. Glover, Fludder and Winters did not stand for re-election at the December 2020 annual meeting. Ms. Purcel is the chair of the Audit Committee. Purcel is an audit committee financial expert within the meaning of the regulations of the Securities and Exchange Commission (the SEC). The Audit Committee met 4 times in fiscal 2021. Our Board has also determined that all Audit Committee members meet the independence requirements contemplated by 303A.02 of the NYSE American Rules and Rule 10A-3 under the Securities Exchange Act of 1934, as amended (the Exchange Act). \nOur Audit Committee assists our Board of Directors in its oversight of the integrity of our consolidated financial statements, our independent registered public accounting firms qualifications, independence and performance. \nOur Audit Committees responsibilities include: appointing, approving the compensation of, and assessing the independence of, our independent registered public accounting firm; overseeing the work of our independent registered public accounting firm, including through the receipt and consideration of reports from our<|endoftext|>Management, a Boston-based equity hedge fund, where he focused on researching small and micro-cap companies in the technology, healthcare and consumer discretionary sectors. He previously served as a data strategy consultant for an early-stage media and marketing analytics firm, beginning in July 2017. From 2018, Mr. J. Gabelli has been a part of the team responsible for the $594 million Teton Westwood Mighty Mites portfolio, as of June 30, 2020, reporting directly to Mario Gabelli, the Chief Investment Officer. \nJohn N. Givissis has served as our Chief Accounting Officer since our inception. Mr. Givissis serves as chief financial officer of Gabelli & Partners where he oversees accounting and financial reporting for clients invested in its hedge funds and alternative investment offerings, a position he has held since 2006. Prior to joining Gabelli & Partners, he was the financial and operations principal of Garban Giorgio Equity Trading (formerly a division of ICAP), an institutional brokerage firm, and controller at Gerard Klauer Mattison & Co., Inc., a boutique investment banking firm. Mr. Givissis began his career in public accounting at Weidenbaum Ryder & Company, a regional tax and audit firm. Mr. Givissis is a Licensed Certified Public Accountant in New York State and earned his B.S. in Accountancy and Economics from St. Peters College. \nPeter D. Goldstein has served as our Executive Vice President and Secretary since our inception. Mr. Goldstein initially started with Gabelli in 1997, and currently serves as the general counsel of Gabelli Funds. From 2004 until 2011, Mr. Goldstein served as the director of regulatory affairs and associate general counsel at GAMCO Investors Inc. and, prior to that, as chief compliance officer for the firms mutual funds complex. Mr. Goldstein previously served as the general counsel and chief compliance officer at Buckingham Capital Management, Inc. Earlier in his career, Mr. Goldstein was a litigation partner with the law firm Dorsey & Whitney in New York, and a branch chief in the enforcement division of the Securities & Exchange Commission. He was also previously a senior compliance officer at Goldman Sachs Asset Management. Mr. Goldstein holds a B.A., cum laude, from Brandeis University, an M.S. from Harvard University, and a J.D., magna cum laude, from Boston College Law School. \nDouglas R. Jamieson has served as our non-executive Co-Chairman of the Board since our inception. In addition to serving as our Non-Executive Co-Chairman, Mr. Jamieson also acts as a managing member of our Sponsor. Mr. Jamieson has served as president and chief executive officer of Associated Capital Group, Inc. since November 2016 and as a director since May 2017. He served as president and chief operating officer of GAMCO Investors, Inc. (GAMCO) from August 2004 to November 2016. He has served as a director of GAMCO Asset Management Inc., a wholly-owned subsidiary of GAMCO, since 1991, as its president and chief operating officer since 2004, and as its executive vice president and chief operating officer from 1986 to 2004. Mr. Jamieson also serves as president and a director of Gabelli & Company Investment Advisers, Inc. (f/k/a Gabelli Securities, Inc., GCIA), a director of Gabelli Securities International (UK) Ltd. and a director of GAMCO Asset Management (UK) Ltd. Mr. Jamieson served on the Board of Teton from 2005 through 2010. Mr. Jamieson also serves as a director of several investment funds that are managed by GCIA. Mr. Jamieson was a securities analyst with the predecessor of G.research, LLC from 1981 to 1986. He was a director of GGCP, Inc. from December 2005 through December 2009, and served as an advisor to the GGCP, Inc. board through 2010. \nPei-Yu Sandra Yu has served as our Executive Vice President and Chief Operating Officer since our inception. She is the former president of Mead Johnson Nutrition for Greater China and worked alongside our Chairman Kasper Jakobsen. During Meads integration into its acquirer Reckitt Benckiser, she was named chief advisor to establish Reckitts China advisory board. Prior thereto, Ms. Yu served as acting chief marketing officer and vice president of global marketing during Meads initial public offering following its separation from Bristol Myers Squibb. She also was employed as vice president of regional marketing for Asia. She began her career at Unilever and served as vice president of skin care Asia and as a marketing director for home and personal care. She is also a former chair of the Pediatric Nutrition Industry Association. She has over 25 years experience in the industry. Her career successes were focused on global brand management, corporate governance, and business transformations. She received an MBA in marketing and a Bachelor of International Business Management from National Taiwan University. She is also an alumnus of Harvards Advanced Management Program. \nJeffrey M. Illustrato has served as our Senior Vice President and Chief Administrative Officer since our inception. Mr. Illustrato serves as chief operating officer of Gabelli & Partners, LLC, an alternative investment manager, overseeing sales and marketing for its alternative and non-U.S. offerings since 2012. He has spent his entire 19-year career with Gabelli and has developed extensive administration and operations experience during that time. Mr. Illustrato received a B.S. \nManjit S. Kalha has been appointed as our Executive Vice President, Finance in connection with our initial public offering. Mr. Kalha has been a member of the board of directors of The LGL Group, Inc. since 2011. Mr. Kalha is chief executive officer of Jeet Associates Private Limited, a consulting firm based in New Delhi, India, that provides business strategy, finance, and taxation advisory services. He holds the role of managing partner with Horizon Research, a firm that provides investment management and consulting services. Between 2001 and 2006, Mr. Kalha was co-founder and chief operating officer of a manufacturer of high quality specialty plastic components. He began his career in Arthur Andersens New Delhi office and is a Chartered Accountant and a fellow member of the Institute of Chartered Accountants of India. Mr. Kalha holds a MBA from the Massachusetts Institute of Technology Sloan School of Management. Mr. Kalha has extensive experience in management and manufacturing operations, and in depth knowledge of global financial markets. \nClarence A. Davis has served as a member of our Board of Directors since September 2020. Mr. Davis served as the chief executive officer of Nestor, Inc. until January 2009 and a director of the company until it went into receivership in June 2009. Mr. Davis is currently a director and a member of the audit committee of Telephone & Data Systems, Inc. (NYSE:TDS) He is also a director of three funds advised by Gabelli FundsThe GDL Fund, The Gabelli ESG Fund and The Gabelli Capital Asset Fund, and is a member of the audit committee of The GDL Fund and The Gabelli ESG Fund. He formerly served as the chief operating officer and chief financial officer of the American Institute of Certified Public Accountants. Mr. Davis has served as an audit committee member and director of Oneida Ltd., Pennichuck Corp., and Sonesta International Hotels Corp. Mr. Davis founded Clarence A. Davis Enterprises, Inc., which provided financial and organizational consulting, due diligence for acquisitions, and forensic accounting for various industries for eight years. Mr. Davis is a certified public accountant and was a senior audit partner for twelve years, during a career of twenty-three years in public accounting, for Spicer & Oppenheim. He is a former chairman of the Accountants for Public Interest/Support Center of New York and the American Institute of Certified Public Accountants Minority Recruitment Committee. Mr. Davis was appointed to the American Red Cross Liberty Fund and September 11 Recovery Oversight Commission, the New York State Board of Public Accountancy, and the Future Issues Committee of the American Institute of Certified Public Accountants. He has served as a consultant for the American Red Cross National Office. Mr. Davis was also a faculty member of the Long Island University Brooklyn Center, the New York Institute of Finance, and the Foundation for Accounting Education. Mr. Davis received his Bachelors degree in Accounting from Long Island University. We believe Mr.Davis is qualified to serve on our board of directors due to his business and board experience, contacts and relationships. \nSusan V. Watson has served as a member of our Board of Directors since September 2020. She is an experienced business executive with diverse experience in multiple industries. Most recently, she was a member of the research team for Spencer Stuarts global executive search practice, specializing in placement of board of directors members. She is also a current director of the Gabelli Dividend & Income Trust. Ms. Watson has worked as an independent marketing consultant and as an investor relations executive for companies including MCI, Inc.; Interpublic Group; PepsiCo, Inc.; Nielsen Media Research; and Gannett Co. Her other experience includes roles as a senior media analyst at Morgan Stanley & Co; vice president (financial relations) at Metromedia, Inc.; senior media analyst and assistant vice president at EF Hutton & Co.; and vice president (research) at Scudder, Stevens & Clark. Ms. Watson is a member of the CFA Institute and a past president of the Investor Relations Association. She received her Bachelors degree from the University of Southern California and Master of Arts from City College of New York. She has been a Chartered Financial Analyst since 1980. We believe Ms.Watson is qualified to serve on our board of directors due to her business and board experience, contacts and relationships. \nDaniel E. Zucchi has served as a member of our Board of Directors since September 2020. He is president of Zucchi & Assoc., a marketing and communications consulting firm. He is also a director of three funds advised by Gabelli FundsThe Gabelli Multimedia Trust, the Gabelli Gold Fund and the Gabelli Capital Asset Fund. Mr. Zucchi served as a board member and an investor in Anduro Holdings Inc., a manufacturer of consumer packaging. He served as a board member and was one of the initial investors in Cypress Care LLC, a pharmacy benefit management company. In addition, Mr. Zucchi was a senior executive at Time Warner and the Hearst Corporation for over thirty years. In the public sector, Mr. Zucchi has served as a locally-elected government official, most recently as a member of the Westchester County Executives task force. Mr. Zucchi is a graduate of the University of Connecticut, Storrs and attended the Harvard Asian American Alumni Alliance program during his tenure at Time Warner. We believe Mr.Zucchi is qualified to serve on our board of directors due to his business and board experience, contacts and relationships. \n\nOur board of directors consists of five members and is divided into three classes, with only one class of directors being elected in each year, and with each class (except for those directors appointed prior to our first annual meeting of stockholders) serving a three-yearterm. The term of office of the first class of directors, consisting of Daniel E. Zucchi, will expire at our first annual meeting of stockholders. The term of office of the second class of directors, consisting of Clarence A. Davis and Susan V. Watson, will expire at our second annual meeting of stockholders. The term of office of the third class of directors, consisting of P. Kasper Jakobsen, will expire at our third annual meeting of stockholders. \n\n### Director Independence \nWe have determined thatClarence A. Davis, Susan V. Watson and Daniel E. Zucchi are independent directors under the NYSE listing rules. \n\n\n\nIn addition, our board of directors approved the formation of an advisory committee to be comprised of individuals who will assist management and the board in all aspects of our operations, including activities aimed at effecting our initial business combination. \n### Audit Committee \nEffective September 21, 2020, we established an audit committee of the board of directors, which consists of Clarence A. Davis, Susan V. Watson and Daniel E. and \nDuring the fiscal year ended December 31, 2020, our audit committee held one meeting. Each of our audit committee members attended such meeting. \n\nClarence A. Davis qualifies as an audit committee financial expert, as defined under rules<|endoftext|>Stock, debt or a combination of these in effecting our initial business combination. Although substantially all of the net proceeds of the Initial Public Offering and the private placement of private warrants are intended to be applied generally toward effecting a business combination as described in this Annual Report on Form 10-K, the proceeds are not otherwise being designated for any more specific purposes. Our initial business combination may involve the acquisition of, or merger with, a company which does not need substantial additional capital but which desires to establish a public trading market for its shares. \nSources of Target Businesses \nWhile we have not yet identified our initial business combination candidates, we believe based on our managements business knowledge and past experience that there are numerous business combination candidates. Target business candidates are being brought to our attention from various unaffiliated sources, including investment bankers, venture capital funds, private equity funds, leveraged buyout funds, management buyout funds and other members of the financial community. These sources may also introduce us to target businesses in which they think we may be interested on an unsolicited basis, since many of these sources will have read this Annual Report on Form10-K and know what types of businesses we are targeting. We may engage professional firms or other individuals that specialize in business acquisitions or mergers in the future, in which event we may pay a finders fee, consulting fee or other compensation to be determined in an arms length negotiation based on the terms of the transaction. In no event, however, will our insiders or any of the members of our management team be paid any finders fee, consulting fee or other compensation prior to, or for any services they render in order to effectuate, the consummation of our initial business combination (regardless of the type of transaction that it is). We have no present intention to enter into a business combination with a target business that is affiliated with any of our officers, directors, or insiders. However, we are not restricted from entering into any such transactions and may do so if (1)such transaction is approved by a majority of our disinterested and independent directors (if we have any at that time) and (2)we obtain an opinion from an independent investment banking firm that the business combination is fair to our unaffiliated stockholders from a financial point of view. As of the date of this Annual Report on Form10-K, there are no affiliated entities that we would consider as a business combination target. \n\nSubject to our management teams fiduciary duties and the limitation that one or more target businesses have an aggregate fair market value of at least 80% of the value of the trust account (excluding any deferred underwriting discounts and commissions and taxes payable on the income earned on the trust account) at the time of the execution of a definitive agreement for our initial business combination, as described below in more detail, our management will have virtually unrestricted flexibility in identifying and selecting a prospective target business. Additionally, there is no limitation on our ability to raise funds privately or through loans in connection with our initial business combination. \nAccordingly, there is no basis for investors to evaluate the possible merits or risks of the target business with which we may ultimately complete a business combination. To the extent we effect our initial business combination with a financially unstable company or an entity in its early stage of development or growth, including entities without established records of sales or earnings, we may be affected by numerous risks inherent in the business and operations of financially unstable and early stage or potential emerging growth companies. The valuation of a financially unstable company or early stage company can be more complicated than the calculation of a mature, stable company, and any valuation we make on such a company would be based, in part, on its prospects and how successful we believe the business will be once the company matures or is stabilized. growth potential; return on equity or invested capital; market capitalization or enterprise value; capital requirements; competitive position; barriers to entry; and/or macro competitive dynamics in the industry within which the company competes. \nOur management may not consider any of the above criteria in evaluating a prospective target business. The retention of our officers and directors following the completion of any business combination will not be a material consideration in our evaluation of a prospective target business. \n\nThe time and costs required to select and evaluate a target business and to structure and complete our initial business combination remain to be determined. \n\nPursuant to NYSE listing rules, our initial business combination must occur with one or more target businesses having an aggregate fair market value equal to at least 80% of the value of the funds in the trust account (excluding any deferred underwriting discounts and commissions and taxes payable on the income earned on the trust account), which we refer to as the 80% test, at the time of the execution of a definitive agreement for our initial business combination, although we may structure a business combination with one or more target businesses whose fair market value significantly exceeds 80% of the trust account balance. \nWe may, however, structure a business combination where we merge directly with the target business or where we acquire less than 100% of such interests or assets of the target business in order to meet certain objectives of the target management team or stockholders or for other reasons, but we will only complete such business combination if the post-transaction company owns 50% or more of the outstanding voting securities of the target or otherwise owns a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act. We are not required to obtain an opinion from an unaffiliated third party that the target business we select has a fair market value in excess of at least 80% of the balance of the trust account unless our board of directors cannot make such determination on its own. The board of directors, in light of its fiduciary obligation to stockholders, would be required to determine whether it is capable of valuing the target company based on the experience of its members in valuing companies and whether the board was actually able to reach a determination of value with respect to the particular target company. \n\nBy consummating our initial business combination with only a single entity, our lack of diversification may: subject us to negative economic, competitive and regulatory developments, any or all of which may have a substantial adverse impact on the particular industry in which we operate after our initial business combination, and result in our dependency upon the performance of a single operating business or the development or market acceptance of a single or limited number of products, processes or services. \nLimited Ability to Evaluate the Target Business Management Team \nAlthough we intend to scrutinize the management team of a prospective target business for, among other things, their ability to manage a company with securities that are publicly traded, when evaluating the desirability of effecting our initial business combination, our assessment of the target business management team may not prove to be correct. In addition, the future management team may not have the necessary skills, qualifications or abilities to manage a public company. Furthermore, the future role of our officers and directors, if any, in the target business following our initial business combination remains to be determined. While it is possible that some of our key personnel will remain associated in senior management or advisory positions with us following our initial business combination, it is unlikely that they will devote their full time efforts to our affairs subsequent to our initial business combination. Moreover, they would only be able to remain with the company after the consummation of our initial business combination if they are able to negotiate employment or consulting agreements in connection with the business combination. While the personal and financial interests of our key personnel may influence their motivation in identifying and selecting a target business, their ability to remain with the company after the consummation of our initial business combination will not be the determining factor in our decision as to whether or not we will proceed with any potential business combination. \nWe may not have the ability to recruit additional managers, or that any such additional managers we do recruit will have the requisite skills, knowledge or experience necessary to enhance the incumbent management. \n\nIn connection with any proposed business combination, we will either (1)seek stockholder approval of our initial business combination at a meeting called for such purpose at which public stockholders may seek to convert their public shares, regardless of whether they vote for or against the proposed business combination, into their pro rata share of the aggregate amount then on deposit in the trust account (net of taxes payable) or (2)provide our public stockholders with the opportunity to sell their public shares to us by means of a tender offer (and thereby avoid the need for a stockholder vote) for an amount equal to their pro rata share of the aggregate amount then on deposit in the trust account (net of taxes payable), in each case subject to the limitations described herein. \nWe chose our net tangible asset threshold of $5,000,001 to ensure that we would avoid being subject to Rule 419 promulgated under the Securities Act. Public stockholders may therefore have to wait 18 months from the Initial Public Offering in order to be able to receive a pro rata share of the trust account. \nOur initial stockholders and our officers and directors have agreed (1)to vote any shares of common stock owned by them in favor of any proposed business combination, (2)not to convert any shares of common stock in connection with a stockholder vote to approve a proposed initial business combination and (3)not sell any shares of common stock in any tender in connection with a proposed initial business combination. As a result, if we sought stockholder approval of a proposed transaction, we would need only 4,312,501 of our public shares (or approximately 37.5% of our public shares) to be voted in favor of the transaction in order to have such transaction approved (assuming that only a quorum was present at the meeting, that our sponsor votes in favor of the transaction, and that the initial stockholders do not purchase any units in the Initial Public Offering or units or shares in the after-market). \nNone of our officers, directors, initial stockholders or their affiliates has indicated any intention to purchase units or shares of common stock in the Initial Public Offering or from persons in the open market or in private transactions. However, if we hold a meeting to approve a proposed business combination and a significant number of stockholders vote, or indicate an intention to vote, against such proposed business combination, our officers, directors, initial stockholders or their affiliates could make such purchases in the open market or in private transactions in order to influence the vote. Notwithstanding the foregoing, our officers, directors, initial stockholders and their affiliates will not make purchases of common stock if the purchases would violate Section9(a)(2) or Rule 10b-5 of the Exchange Act, which are rules designed to stop potential manipulation of a companys stock. \n### Conversion/Tender Rights \n\n\nOur initial stockholders, officers and directors will not have conversion rights with respect to any shares of common stock owned by them, directly or indirectly, whether acquired prior to or in the Initial Public Offering or in the aftermarket. \n\n\n\n\n\nIf we do not complete a business combination within 18 months from the Initial Public Offering, we will (i)cease all operations except for the purpose of winding up, (ii)as promptly as reasonably possible but not more than ten business days thereafter, redeem 100% of the outstanding public<|endoftext|>"},"task":{"kind":"string","value":"{\"file\": \"/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz\"}"}}},{"rowIdx":94,"cells":{"text":{"kind":"string","value":"<|endoftext|>1 of the fair value hierarchy, as the primary component of the price is obtained from quoted market prices in an active market. The carrying amounts of the Companys cash and cash equivalents approximate their fair values due to the short maturities and highly liquid nature of these accounts. \nContingent Consideration \nContingent consideration relates to potential payments that the Company may be required to make associated with acquisitions. The contingent consideration is recorded at fair value based on estimates of discounted future cash flows associated with the acquired businesses. To the extent that the valuation of these liabilities is based on inputs that are less observable or not observable in the market, the determination of fair value requires more judgment. Accordingly, the fair value of contingent consideration is classified within \nLevel 3 of the fair value hierarchy, under ASC 820 \nThe change in fair value is re-measured at each reporting period with the change in fair value being recognized in accordance with ASC 805, \nBusiness Combinations \n(ASC 805). \nThe Company used a discount rate to determine the present value, based on a risk-free rate adjusted for a credit spread, of the contingent consideration in the simulation approach. A range of 6.6% to 7.0% and weighted average of 6.8% was applied to the simulated contingent consideration payments, in order to determine the fair value. \nThe following table provides a rollforward of the contingent consideration related to previous business acquisitions. Refer to Note 5 for more details. \n### Term loan \nThe carrying value of our term loan is net of unamortized debt discount and debt issuance costs. The fair value of our term loan was determined using a discounted cash flow model based on observable market factors, such as changes in credit spreads for comparable benchmark companies and credit factors specific to us. The fair value of our term loan is classified within Level 2 of the fair value hierarchy, as the inputs to the discounted cash flow model are generally observable and do not contain a high level of subjectivity. \nWarrant liabilities \nPublic warrants are classified as level 1 financial instruments, as their value is derived using quoted market prices as of the measurement date.Private Placement Warrants are classified as level 2, which are valued using a Black-Sholes-Merton pricing model at of the measurement date. \n### Tax Receivable Agreement \nUpon the completion of the Business Combination, the Company entered into the TRA with holders of Post-Merger Repay Units. As a result of the TRA, the Company established a liability in its consolidated financial statements. The TRA is recorded at fair value based on estimates of discounted future cash flows associated with the estimated payments to the Post-Merger Repay Unit holders. These inputs are not observable in the market; thus, the TRA is classified within Level 3 of the fair value hierarchy, under ASC 820. The change in fair value is re-measured at each reporting period with the change in fair value being recognized in accordance with ASC 805. \nThe Company used a discount rate, also referred to as the early termination rate, to determine the present value, based on a risk-free rate plus a spread, pursuant to the TRA. A rate of 1.34% was applied to the forecasted TRA payments as of December 31, 2020, in order to determine the fair value. The TRA balance increased as a result of exchanges of Post-Merger Repay Units for Class A common stock pursuant to the Exchange Agreement. In addition, the TRA balance increased $12.4 million through accretion expense and a valuation adjustment, related to a decrease in the discount rate, which was 3.00%, as of December 31, 2019. \nThe following table provides a rollforward of the TRA related to the Business Combination and subsequent acquisition of Post-Merger Repay Units held by Corsair, pursuant to the Unit Purchase Agreements. See Note 15 for further discussion on the TRA. \n### Interest rate swap \nIn October 2019, the Company entered into a$140.0million notional,fifty-seven month interest rate swap agreement, and in February 2020, the Company entered into a $30.0 million notional, sixty month interest rate swap agreement, then a revised notional amount of $65.0 million beginning on September 30, 2020. These interest rate swap agreements are to hedge changes in its cash flows attributable to interest rate risk on a combined $205.0 million of Companys variable-rate term loan to a fixed-rate basis, thus reducing the impact of interest rate changes on future interest expense. \nThese swaps involve the receipt of variable-rate amounts in exchange for fixed interest rate payments over the life of the agreement without an exchange of the underlying notional amount and was designated for accounting purposes as a cash flow hedge. The interest rate swap is carried at fair value on a recurring basis in the Consolidated Balance Sheets and is classified within Level 2 of the fair value hierarchy, as the inputs to the derivative pricing model are generally observable and do not contain a high level of subjectivity. The fair value was determined based on the present value of the estimated future net cash flows using implied rates in the applicable yield curve as of the valuation date. \n7. Property and equipment \n\nDepreciation expense for property and equipment was $1.2 million and $0.4 million for the year ended December 31, 2020 and the period from July 11, 2019 to December 31, 2019, respectively. Depreciation expense was $0.2 million and $0.4 million for the Predecessor period from January 1, 2019 to July 10, 2019 and the year ended December 31, 2018, respectively. \n8. Intangible assets \nThe Company holds definite and indefinite-lived intangible assets. As of December 31, 2020, the indefinite-lived intangible assets consist of trade names of $22.2 million, and this balance consists of six trade names, arising from the acquisitions of Hawk Parent, TriSource, APS, Ventanex, cPayPlus, and CPS in the Successor period from July 11, 2019 to December 31, 2020. As of December 31, 2019, the indefinite-lived intangible assets consist of trade names, of $21.2 million. This balance consists of three trade names, arising from the acquisitions of Hawk Parent, TriSource and APS Payments in the Successor period from July 11, 2019 to December 31, 2019. \nDefinite-lived intangible assets consisted of the following: \nThe Companys amortization expense for intangible assets was $59.7 million and $23.3 million for the year ended December 31, 2020 and the period from July 11, 2019 to December 31, 2019, respectively. Amortization expense for intangible assets was $5.9 million and $10.0 million for the Predecessor period from January 1, 2019 to July 10, 2019 and the year ended December 31, 2018, respectively. \nThe estimated amortization expense for the next five years and thereafter in the aggregate is as follows: \n9. Goodwill \nThe following table presents changes to goodwill for the years ended December31, 2020 and 2019: \n10. Borrowings \n### Predecessor Credit Agreement \nThe Predecessor entered into a Revolving Credit and Term Loan Agreement (the Predecessor Credit Agreement), with SunTrust Bank and the other lenders party thereto on September28, 2017, and amended December15, 2017, which included a revolving loan component, the term loan and a delayed draw term loan. The Predecessor Credit Agreement was collateralized by substantially all assets of the Predecessor, based on the Predecessor Credit Agreements collateral documents, and it included restrictive qualitative and quantitative covenants, as defined in the Predecessor Credit Agreement. The Predecessor was in compliance with its restrictive covenants under the Predecessor Credit Agreement as of December 31, 2018. \nThe Predecessor Credit Agreement provided for a maximum $10.0 million revolving loan at a variable interest rate. This facility was terminated upon the closing of the Business Combination and execution of the Successor Credit Agreement (defined below). At the closing of the Business Combination and December31, 2018, the outstanding balance on the revolving loan was $3.5 million. This balance was settled upon the closing of the Business Combination. Interest expense on the line of credit totaled $0.1 million for the period from January 1, 2019 to July 10, 2019. Interest expense on the line of credit totaled $0.2 million for the year ended December 31, 2018. \n\nThe Company entered into a Revolving Credit and Term Loan Agreement (the Successor Credit Agreement) on July 11, 2019, with Truist Bank (formerly SunTrust Bank) and the other lenders party thereto, which provided a revolving credit facility (the Revolving Credit Facility), a term loan A (the Term Loan), and a delayed draw term loan at a variable interest rate (3.65% as of December 31, 2020) (the Delayed Draw Term Loan). The Successor Credit Agreement provided for an aggregate revolving commitment of $20.0 million at a variable interest rate. \nOn February 10, 2020, as part of the financing for the acquisition of Ventanex, Repay entered into an agreement with Truist Bank and other members of its existing bank group to amend and upsize its previous credit agreement from $230.0 million to $346.0 million. \n### The Successor \nCredit Agreement was collateralized by substantially all of the Companys assets, and include d restrictive qualitative and quantitative covenants, as defined in the \n### Successor \nCredit Agreement. \nThe Company was in compliance with its restrictive covenants under the \n### Successor \nCredit Agreement a s of \n### December 31, 20 \nThe Successor Credit Agreement provided for a Term Loan of $256.0 million, a Delayed Draw Term Loan of $60.0 million, and a Revolving Credit Facility of $30.0 million. As of December 31, 2020, the Company had $14.4 million drawn against the Delayed Draw Term Loan and had $0.0 million drawn against the Revolving Credit Facility. The Company paid $231,168 in fees related to unused commitments for the year ended December 31, 2020. \nThe Companys interest expense on the line of credit totaled $62,008 and $0.1 million for the year ended December 31, 2020 and the period from July 11, 2019 to December 31, 2019, respectively. \nAs of December 31, 2020 and December31, 2019, total borrowings under the Successor Credit Agreement consisted of the following, respectively: \n(1) \nThe Term Loan, Delayed Draw Term Loan and Revolving Credit Facility bear interest, at variable rates, which were 3.65% and 5.26% as of December 31, 2020 and December 31, 2019, respectively \n(2) \nPursuant to the terms of the Successor Credit Agreement, the Successor was required to make quarterly principal payments equal to 0.625% of the initial principal amount of the Term Loan and Delayed Draw Term Loan (collectively the Term Loans). \n(3) \nThe Company incurred $1.4 million and $0.6 million of interest expense for the amortization of deferred debt issuance costs for the year ended December 31, 2020, and the period from July 11, 2020 to December 31, 2019, respectively. The Predecessor incurred $0.2 million for the period from January 1, 2019 to July 10, 2019. \nFollowing is a summary of principal maturities of the Term Loans outstanding as of December 31, 2020 for each of the next five years ending December31 and in the aggregate: \nThe Company incurred interest expense on the Term Loans of $11.5 million and $5.3 million for the year ended December 31, 2020 and the period from July 11, 2019 to December 31, 2019, respectively. The Predecessor incurred interest expense of $2.8 million and $5.5 million and $4.4 million for the period from January 1, 2019 to July 10, 2019 and the year ended December 31, 2018, respectively. \n11. Derivative Instruments \nThe Company does not hold or use derivative instruments for trading purposes. \n### Derivative Instruments Designated as Hedges \nInterest rate fluctuations expose the Companys variable-rate term loan to changes in interest expense and cash flows. As part of its risk management strategy, the Company may use interest rate derivatives, such as interest rate swaps, to manage its exposure to interest rate movements. \nIn October 2019, the Company entered into a$140.0million notional, five-year interest rate swap agreement to hedge changes in cash flows attributable to interest rate risk on$140.0million of its variable-rate term loan. This agreement involves the receipt of variable-rate amounts in exchange for fixed interest rate payments over the life of the agreement without an exchange of the underlying notional amount.<|endoftext|>) may be amended with the approval of holders of 65% of our common stock \nIt may be easier for us, therefore, to amend our amended and restated certificate of incorporation and the trust agreement to facilitate the completion of an initial b usiness c ombination that some of our stockholders may not support. \nOur amended and restated certificate of incorporation will provide that any of its provisions related to pre-business combination activity (including the requirement to deposit proceeds of the Public Offering and the private placement of warrants into the Trust Account and not release such amounts except in specified circumstances, and to provide redemption rights to public stockholders as described herein) may be amended if approved by holders of 65% of our common stock entitled to vote thereon, and corresponding provisions of the trust agreement governing the release of funds from our Trust Account may be amended if approved by holders of 65% of our common stock entitled to vote thereon. Our Initial Stockholders, who will collectively beneficially own up to 20% of our common stock upon the IPO Closing Date (assuming they do not purchase any units in the Public Offering), will participate in any vote to amend our amended and restated certificate of incorporation and/or trust agreement and will have the discretion to vote in any manner they choose. \nOur Sponsor, officers and directors have agreed, pursuant to a written agreement with us, that they will not propose any amendment to our amended and restated certificate of incorporation that would affect (i)the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the IPO Closing Date or (ii)any other provisions relating to stockholders rights or pre-initial business combination activity, unless we provide our public stockholders with the opportunity to redeem their shares of ClassA common stock upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, divided by the number of then outstanding public shares. \n\nAlthough we believe that the net proceeds of the Public Offering and the sale of the Private Placement Warrants will be sufficient to allow us to complete our initial business combination, including the Proposed Business Combination, we cannot guarantee that. If we are unable to complete our initial business combination, our public stockholders may only receive approximately $10.00 per share on the liquidation of our \n### Trust Account \n, and our warrants will expire worthless. \n\n\n\n\n\n\n\nAlthough we believe this provision benefits us by providing increased consistency in the application of New York law in the types of lawsuits to which it applies, the provision may have the effect of discouraging lawsuits against our directors and officers. \n\n\n\n\nWe issued warrants to purchase 6,900,000 shares of our Class A common stock in the Public Offering and simultaneously, we issued Private Placement Warrants to purchase an aggregate of 4,450,000 shares of Class A common stock at $11.50 per share. \nAny such issuance will increase the number of issued and outstanding shares of our C lass A c ommon s tock and reduce the value of the shares of our C lass A c ommon s tock issued to complete the business combination \nTherefore, our warrants and founder shares may make it more difficult to effectuate a b usiness c ombination or increase the cost of acquiring the target business. \nThe Private Placement Warrants are identical to the warrants sold as part of the units in our Public Offering except that, so long as they are held by our Sponsor or its permitted transferees, (i) they will not be redeemable by us (except as set forth under Description of SecuritiesWarrantsPublic Stockholders WarrantsRedemption of warrants for ClassA common stock), (ii) they (including the Class A common stock issuable upon exercise of these warrants) may not, subject to certain limited exceptions, be transferred, assigned or sold by our Sponsor until 30 days after the completion of our initial business combination and (iii) they may be exercised by the holders on a cashless basis and (iv) are subject to registration rights. \n\n\n\nAs described in our financial statements included in Part II, Item 8, of this Annual Report on Form 10-K/A, we are accounting for these warrants as a derivative liability and are recording that liability at fair value upon issuance and are recording any subsequent changes in fair value as of the end of each period for which earnings are reported, as we determine based upon a valuation report obtained from our independent third-party valuation firm. \n\nWe have restated our financial statements as of December 31, 2020 and for the period from June 2 \n, 2020 (inception) through December 31, 2020, as well as our financial data as of \n### December 15 \n, 2020, which may lead to additional risks and uncertainties, including loss of investor confidence and negative impacts on our stock price. \nOn May 17, 2021, we concluded that the Companys prior accounting for its outstanding warrants incorrectly reflected them as components of equity instead of as liabilities, and as a result thereof, our previous financial statements as of December 31, 2020 and for the period from June 29, 2020 (inception) through December 31, 2020, as well as our financial data as of December 15, 2020 (collectively, the Affected Periods), should no longer be relied upon. \n\nour capital structure; \n\nBecause we must furnish our stockholders with target business financial statements, we may lose the ability to complete an otherwise advantageous initial b usiness c ombination with some prospective target businesses. \n\n\n\n\n\nCompliance obligations under the Sarbanes-Oxley Act may make it more difficult for us to effectuate our initial b usiness c ombination, require substantial financial and management resources, and increase the time and costs of completing an acquisition. \n\n\n\n\n\n\n\n\n\n\n\n\nfederal income tax purposes. \nA U.S. \n\n\ntariffs and trade barriers; rates of inflation; employment regulations; \n\nITEM 2. \n### PROPERTIES \nOur executive offices are located at 6260 Lookout Road, Boulder, Colorado 80301 and our telephone number is (303) 531-3100. Commencing on October 5, 2020, we have agreed to pay an affiliate of our Sponsor a total of $20,000 per month for office space, utilities and secretarial and administrative support. \nITEM 3.LEGAL PROCEEDINGS \n\n\nNone. \nPART II \n\n(a) \n### Market Information \nOur Units began trading on the Nasdaq under the symbol GHVIU on December 15, 2020. On January 29, 2021, we announced that holders of our units could elect to separately trade the Class A common stock and warrants included in the units, or continue to trade the units without separating them. On February 1, 2021, the Class A common stock and warrants began trading on Nasdaq under the symbols GHVI and GHVIW, respectively. Business. \n(a) \n### Holders \nAs of March 12, 2021, there was one holder of record of our Units, one holder of record of our separately traded shares of Common Stock and two holders of record of our separately traded Warrants. \n(b) \n### Dividends \n\n(c) \n\nNone. \n(d) \n### Performance Graph \nThe graph below compares the cumulative total return for our Units from December 15, 2020 (the first day on which our Units began trading) through December 31, 2020 with the comparable cumulative return of three indices: the S&P 500 Index (S&P 500), the Dow Jones Industrial Average Index (DJIA) and Nasdaq. \n(e) \n\n### Unregistered Sales \n\nOur Public Offering was consummated on December 15, 2020. \nPrior to the IPO Closing Date, we completed the private sale of an aggregate of 4,450,000 Private Placement Warrants to our Sponsor at a price of $2.00 per Private Placement Warrant, generating total proceeds, before expenses, of $8,900,000. \n\n### Use of Proceeds \nOn December 10, 2020, our registration statement on Form S1 (File No. 333-249312) was declared effective by the SEC for the Public Offering pursuant to which we sold an aggregate of 34,500,000 Units at an offering price to the public of $10.00 per Unit, including 4,500,000 Units as a result of the underwriters full exercise of its over-allotment option, generating gross proceeds of $345,000,000. \nAfter deducting the underwriting discounts and commissions (excluding the Deferred Discount, which amount will be payable upon the consummation of our Business Combination, if consummated) and the estimated offering expenses, the total net proceeds from our Public Offering and the sale of the Private Placement Warrants were \n$ \n, of which $ \n5,000,000 (or $10.00 per share sold in the Public Offering) was placed in the Trust Account in the United States maintained by the trustee. \nThrough December 31, 2020, we incurred approximately $7,790,948 for costs and expenses related to the Public Offering. At the IPO Closing Date, we paid a total of $6,900,000 in underwriting discounts and commissions. In addition, the underwriter agreed to defer $12,075,000 in underwriting commissions, which amount will be payable upon consummation of our Business Combination, if consummated. There has been no material change in the planned use of proceeds from our Public Offering as described in our final prospectus dated December 14, 2020 which was filed with the SEC. \nOur Sponsor, officers and directors have agreed, and our amended and restated certificate of incorporation provides, that we will have only 24 months from the IPO Closing Date to complete our Business Combination. \nAs of December 31, 2020, after giving effect to our Public Offering and our operations subsequent thereto, approximately $345,008,625 was held in the Trust Account, and we had approximately $633,266 of unrestricted cash available to us for our activities in connection with identifying and conducting due diligence of a suitable Business Combination, and for general corporate matters. \n\n\nIncome Statement Data: \n### Per Share Data: \nBalance Sheet Data: \n(1) \nIncludes $633,266 in cash held outside of the Trust Account, plus $897,754 of other assets, less $18,690,703 of current liabilities. \n(2) \nIncludes $345,008,625 held in the Trust Account, plus $633,266 in cash held outside of the Trust Account, plus $924,027 of other assets. \nAs of December 31, 2020, the total assets amount includes $345,008,625 being held in the Trust Account, $332,933,625 of which is available to us for the purposes of consummating a Business Combination within the time period described in this Annual Report on Form 10-K (with $12,075,000 in deferred underwriting fees payable upon consummation of a Business Combination) and the remaining $633,266 being available to us for general working capital purposes. \n\nItem 7.\n\n### Overview \nWe are a blank check company incorporated on June 29, 2020 as a Delaware corporation and formed for the purpose of effecting a Business Combination with one or more target businesses. We completed our Public Offering on December 15, 2020. \n\n\n### Recent Developments \nProposed Matterport Business Combination \n\n\n### The Merger Agreement \nMerger Consideration \nPursuant to the terms of the Merger Agreement, the Company is required to use reasonable best efforts to cause the shares of Company ClassA common stock to be issued in connection with the transactions contemplated by the Merger Agreement (the Business Combination) to be listed on Nasdaq at the closing of the Business Combination. \n\n\n\n\n\n\n\nRecent Stockholder Action \nThe Company and the members of its Board of Directors have been named as defendants in a putative stockholder action filed in the Supreme Court of the State of New York, County of New York, captioned Jamin Quimby v. Gores Holdings VI, Inc., et al., Index No. 652761/2021, in connection with the proposed business combination of the Company with Matterport, Inc. (the Proposed Transaction).The complaint generally alleges breach of fiduciary duty and aiding and abetting claims relating to, among other things, alleged misstatements and omissions in the Form S-4 registration statement filed by the Company with the SEC on April 6, 2021 in connection with the Proposed Transaction (the Registration Statement).The complaint seeks, among other things, injunctive relief and an award of attorneys fees.The Company believes the claims asserted in the Quimby matter are without merit, and intends to vigorously defend against them. \n### Results of Operations \nFor the period from June 29, 2020 to December 31, 2020, we had a net loss of ($1,501,235), of<|endoftext|>The revolving credit facility was increased from $8.0 million to $15.0 million and the termination date of the credit facility was extended from October3, 2018 to August23, 2020. On October1, 2018, the parties to the amended credit agreement and 1095 Broken Sound Pkwy LLC, a newly-formed, wholly-owned subsidiary of Greenlane Holdings, LLC, entered into an amendment to the amended credit facility to provide for a $8.5 million term loan on such date from Fifth Third Bank to 1095 Broken Sound Pkwy LLC. The term loan amortizes over a period of seven years and matures on October1, 2025 with a final balloon payment of approximately $7,180,900. Interest accrues on borrowings under the credit facility at a rate equal to LIBOR plus 3.5% per annum and under the term loan at a rate equal to LIBOR plus 2.39% per annum. Our obligations under the credit facility and the term loan are guaranteed by Jacoby& Co. Inc. and all of our operating subsidiaries and are secured by a first priority security interest in substantially all of our assets. The amounts drawn under such credit facility have fluctuated over the term of the credit facility and at times the credit facility has been drawn in full. In August2020, the maturity date of the line of credit was further extended to November30, 2020. This line of credit was not renewed on November30, 2020. There were no borrowings outstanding on the line of credit at December31, 2020. \n### Greenlane Operating Agreement \nWe operate our business through Greenlane Holdings, LLC and its subsidiaries. We and the other members party thereto have entered into Greenlane Holdings, LLCs Third Amended and Restated Operating Agreement, which we refer to as the Greenlane Operating Agreement. Among the members who are a party to the Greenlane Operating Agreement are Aaron LoCascio, Adam Schoenfeld and Douglas Fischer, our Chief Executive Officer, Chief Strategy Officer and General Counsel, respectively. The operations of Greenlane Holdings, LLC, and the rights and obligations of the holders of common units, are set forth in the Greenlane Operating Agreement. \nAppointment as Manager \nUnder the Greenlane Operating Agreement, we are the sole manager of Greenlane Holdings, LLC. As the manager, control all of the day-to-day business affairs and decision-making of Greenlane Holdings, LLC without the approval of any other member, unless otherwise stated in the Greenlane Operating Agreement. As such, we, through our officers and directors, are responsible for all operational and administrative decisions of Greenlane Holdings, LLC and the day-to-day management of Greenlane Holdings, LLCs business. Pursuant to the terms of the Greenlane Operating Agreement, we cannot be removed as the sole manager of Greenlane Holdings, LLC by the other members. \n### Compensation \nWe are entitled to compensation for our services as the manager. We are entitled to reimbursement by Greenlane Holdings, LLC for all fees and expenses incurred on behalf of Greenlane Holdings, LLC, including all expenses associated with this offering and maintaining our corporate existence, and all fees, expenses and costs of being a public company (including expenses incurred in connection with public reporting obligations, proxy statements, stockholder meetings, stock exchange fees, transfer agent fees, legal fees, SEC and FINRA filing fees and offering expenses) and maintaining our corporate existence, including all costs of maintaining our Board and committees of the board, executive compensation and certain insurance policies. \nCapitalization \nThe Greenlane Operating Agreement provides for a single class of common membership units, which we refer to as the common units. The Greenlane Operating Agreement reflects a split of common units such that we acquired one common unit with the net proceeds received by us from our initial public offering from the sale of one share of our ClassA common stock. Each common unit entitles the holder to a pro rata share of the net profits and net losses and distributions of Greenlane Holdings, LLC. \n### Distributions \nThe Greenlane Operating Agreement requires tax distributions, as that term is defined in the Greenlane Operating Agreement, to be made by Greenlane Holdings, LLC to its members, as that term is defined in the Greenlane Operating Agreement. Tax distributions will be made at least annually to each member of Greenlane Holdings, LLC, including us, based on such members allocable share of the taxable income of Greenlane Holdings, LLC and at a commencing tax rate equal to the highest effective marginal combined federal, state and local income tax rate applicable to corporate or individual taxpayers that may potentially apply to any member for the relevant period taking into account (i)any deductions pursuant to Section199A of the Code, and (ii)the character of the relevant tax items (e.g., ordinary or capital), as we, as the sole manager of Greenlane Holdings, LLC, reasonably determine. For this purpose, the taxable income of Greenlane Holdings, LLC, and our allocable share of such taxable income, shall be determined without regard to any tax basis adjustments that result from our deemed or actual purchase of common units from the members (as described above under - Tax Receivable Agreement). The tax rate used to determine tax distributions will apply regardless of the actual final tax liability of any such member. Tax distributions will also be made only to the extent all distributions from Greenlane Holdings, LLC for the relevant period were otherwise insufficient to enable each member to cover its tax liabilities as calculated in the manner described above. The Greenlane Operating Agreement also allows for distributions to be made by Greenlane Holdings, LLC to its members on a pro rata basis out of distributable cash, as that term is defined in the Greenlane Operating Agreement. We expect Greenlane Holdings, LLC may make distributions out of distributable cash periodically to the extent permitted by the agreements governing its indebtedness and as required by Greenlane Holdings, LLC for its capital and other needs, such that we in turn are able to make dividend payments, if any, to the holders of our ClassA common stock. \nCommon Unit Redemption Right \nThe Greenlane Operating Agreement provides a redemption right to the members which entitles them to have their common units redeemed, at the election of each such person, for, at our option, as determined by or at the direction of the independent directors (within the meaning of the Nasdaq Marketplace Rules) of our Board who are disinterested, newly-issued shares of our ClassA common stock on a one-to-one basis or a cash payment equal to the five-day average volume weighted average market prices of one share of ClassA common stock for each common unit redeemed (subject to customary adjustments, including for stock splits, stock dividends and similar events affecting the ClassA common stock). If we decide to make a cash payment, the member has the option to rescind its redemption request within a specified time period. Upon the exercise of the redemption right, the redeeming member will surrender its common units to Greenlane Holdings, LLC for cancellation. The Greenlane Operating Agreement requires that we contribute cash or shares of our ClassA common stock to Greenlane Holdings, LLC in exchange for an amount of common units in Greenlane Holdings, LLC that will be issued to us equal to the number of common units redeemed from the member. Greenlane Holdings, LLC will then distribute the cash or shares of our ClassA common stock to such member to complete the redemption. In the event of such election by a member, we may, at our option, effect a direct exchange by us of cash or our ClassA common stock for such common units in lieu of such a redemption. Whether by redemption or exchange, we are obligated to ensure that at all times the number of common units that we own equals the number of shares of ClassA common stock issued by us (subject to certain exceptions for treasury shares and shares underlying certain convertible or exchangeable securities). \nIssuance of Common Units upon Exercise of Options or Issuance of Other Equity Compensation \nWe may implement guidelines to provide for the method by which shares of ClassA common stock may be exchanged or contributed between us and Greenlane Holdings, LLC (or any subsidiary thereof), or may be returned to us upon any forfeiture of shares of ClassA common stock, in either case in connection with the grant, vesting and/or forfeiture of compensatory equity awards granted by us, including under the 2019 Equity Incentive Plan, for the purpose of ensuring that the relationship between us and our subsidiaries remains at arms-length. \nMaintenance of One-to-One Ratio of Shares of ClassA Common Stock and Common Units Owned by Our Company \nOur amended and restated certificate of incorporation and the Greenlane Operating Agreement require that we and Greenlane Holdings, LLC, respectively, at all times maintain (i)a ratio of one common unit owned by us for each share of ClassA common stock issued by us (subject to certain exceptions for treasury shares and shares underlying certain convertible or exchangeable securities), (ii)a one-to-one ratio between the number of shares of ClassB common stock owned by the non-founder members and the number of common units owned by the non-founder members and (iii)a three-to-one ratio between the number of shares of ClassC common stock owned by the Founder Members and the number of common units owned by the founder members or their affiliates. \n### Transfer Restrictions \nThe Greenlane Operating Agreement generally does not permit transfers of common units by members, subject to limited exceptions or written approval of the transfer by the manager. Any transferee of common units must execute the Greenlane Operating Agreement and any other agreements executed by the holders of common units and relating to such common units in the aggregate. \nDissolution \nThe Greenlane Operating Agreement provides that the decision of the manager, with the approval of the holders of a majority of the outstanding common units, will be required to voluntarily dissolve Greenlane Holdings, LLC. In addition to a voluntary dissolution, Greenlane Holdings, LLC will be dissolved upon a change of control transaction under certain circumstances, as well as upon the entry of a decree of judicial dissolution or other circumstances in accordance with Delaware law. Upon a dissolution event, the proceeds of a liquidation will be distributed in the following order: (i)first, to pay all expenses of winding up Greenlane Holdings, LLC; and (ii)second, to pay all debts and liabilities and obligations of Greenlane Holdings, LLC. All remaining assets of Greenlane Holdings, LLC will be distributed to the members pro-rata in accordance with their respective percentage ownership interests in Greenlane Holdings, LLC (as determined based on the number of common units held by a member relative to the aggregate number of all outstanding common units). \n### Confidentiality \nEach member will agree to maintain the confidentiality of Greenlane Holdings, LLCs confidential information. This obligation excludes information independently obtained or developed by the members, information that is in the public domain or otherwise disclosed to a member, in either such case not in violation of a confidentiality obligation or disclosures required by law or judicial process or approved by us. \nIndemnification and Exculpation \nThe Greenlane Operating Agreement provides for indemnification for all expenses, liabilities and losses reasonably incurred by any person by reason of the fact that such person is or was a member or is or was serving at the request of Greenlane Holdings, LLC as the manager, an officer, an employee or an agent of Greenlane Holdings, LLC; provided, however, that there will be no indemnification for actions made not in good faith or in a manner which the person did not reasonably believe to be in or not opposed to the best interests of Greenlane Holdings, LLC, or, with respect to any criminal action or proceeding other than by or in the right of Greenlane Holdings, LLC, where the person had reasonable cause to believe the conduct was unlawful, or for breaches of any representations, warranties or covenants by such person or its affiliates contained in the Greenlane Operating Agreement or in other agreements with Greenlane Holdings, LLC. \nWe, as the manager, and our affiliates, will not be liable to Greenlane Holdings,<|endoftext|>### EXPLANATORY NOTE \nPar Pacific Holdings, Inc. (the Company, we, our, and us) is filing this Amendment No. 1 to Annual Report on Form 10-K/A (this Amended Form 10-K) to amend our Annual Report on Form 10-K for the fiscal year ended December 31, 2020, as originally filed with the U.S. Securities and Exchange Commission (the SEC) on March 8, 2021 (the Original Form 10-K), to include a revised consent of Deloitte & Touche LLP, our independent registered accounting firm, to correctly reflect the references to registration statements that incorporate by reference the reports of Deloitte & Touche LLP in the Original Form 10-K. \nThis Amended Form 10-K also updates, amends, and supplements Item 15 of the Original Form 10-K to include the filing of new Exhibits 31.3 and 31.4, certifications of our Chief Executive Officer and Chief Financial Officer, pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended. \nNo other changes have been made to the Original Form 10-K. This Amended Form 10-K does not amend or otherwise update any other information in the Original Form 10-K. Accordingly, this Amended Form 10-K should be read in conjunction with the Original Form 10-K and with our subsequent filings with the SEC. All capitalized terms used but not defined herein shall have the meanings ascribed to them in the Original Form 10-K. \n### PART IV \nItem15. \n(a) \n\n(1) \nConsolidated Financial Statements (Included under Item 8). The Index to the Consolidated Financial Statements is included on page F-1 of this Annual Report on Form 10-K and is incorporated herein by reference. \n(2) \n\n\n2.1 \nThird Amended Joint Chapter 11 Plan of Reorganization of Delta Petroleum Corporation and Its Debtor Affiliates dated August 16, 2012. Incorporated by reference to Exhibit 2.1 to the Companys Current Report on Form 8-K filed on September 7, 2012. \n2.2 \nContribution Agreement, dated as of June 4, 2012, among Piceance Energy, LLC, Laramie Energy, LLC and the Company. Incorporated by reference to Exhibit 10.1 to the Companys Current Report on Form 8-K filed on June 8, 2012. \n2.3 \nMembership Interest Purchase Agreement dated as of June 17, 2013, by and among Tesoro Corporation, Tesoro Hawaii, LLC, and Hawaii Pacific Energy, LLC.Incorporated by reference to Exhibit 2.4 to the Companys Quarterly Report on Form 10-Q for the quarterly period ended June30, 2013, filed on August14, 2013. \n2.4 \nAgreement and Plan of Merger dated as of June 2, 2014, by and among the Company, Bogey, Inc., Kokooha Investments, Inc., and Bill D. Incorporated by reference to Exhibit 2.5 to the Companys Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2014, filed on August 11, 2014. \n2.5 \nAmendment of Agreement and Plan of Merger dated as of September9, 2014, by and among the Company, Bogey, Inc., Kokooha Investments, Inc., and Bill D. Incorporated by reference to Exhibit 10.2 to the Companys Current Report on Form 8-K filed on September 10, 2014. \n2.6 \nSecond Amendment of Agreement and Plan of Merger dated as of December 31, 2014, by and among Par Petroleum Corporation, Bogey, Inc., Kokooha Investments, Inc., and Bill D. Incorporated by reference to Exhibit 10.1 to the Companys Current Report on Form 8-K filed on January 7, 2015. \n2.7 \nThird Amendment to Agreement and Plan of Merger dated as of March31, 2015, by and among the Company, Bogey, Inc., Kokooha Investments, Inc., and Bill D. Incorporated by reference to Exhibit 2.4 to the Companys Current Report on Form 8-K filed on April 2, 2015. \n2.8 \nUnit Purchase Agreement, dated as of June 13, 2016, between Par Wyoming, LLC and Black Elk Refining, LLC. Incorporated by reference to Exhibit 2.1 to the Companys Current Report on Form 8-K filed on June 15, 2016. \n2.9 \nFirst Amendment to Unit Purchase Agreement dated as of July14, 2016, between Par Wyoming, LLC and Black Elk Refining, LLC. Incorporated by reference to Exhibit 2.2 to the Companys Current Report on Form 8-K filed on July 15, 2016. \n2.10 \nPurchase and Sale Agreement dated as of November 26, 2018, among Par Petroleum, LLC, TrailStone NA Oil & Refining Holdings, LLC, and solely for certain purposes specified therein, the Company. Incorporated by reference to Exhibit 2.1 to the Companys Current Report on Form 8-K/A filed on November 30, 2018.# \n2.11 \nAmendment No. 1 to Purchase and Sale Agreement dated as of January 11, 2019, among Par Petroleum, LLC, TrailStone NA Oil & Refining Holdings, LLC, and Par Pacific Holdings, Inc. Incorporated by reference to Exhibit 2.2 to the Companys Current Report on Form 8-K filed on January 14, 2019. \n3.1 \nRestated Certificate of Incorporation of the Company dated October 20, 2015. Incorporated by reference to Exhibit 3.2 to the Companys Current Report on Form 8-K filed on October 20, 2015. \n3.2 \nSecond Amended and Restated Bylaws of the Company dated October 20, 2015. Incorporated by reference to Exhibit 3.3 to the Companys Current Report on Form 8-K filed on October 20, 2015. \n4.1 \nForm of the Companys Common Stock Certificate. Incorporated by reference to Exhibit 4.1 to the Companys Annual Report on Form 10-K filed on March 31, 2014. \n4.2 \nRegistration Rights Agreement effective as of August 31, 2012, by and among the Company, Zell Credit Opportunities Master Fund, L.P., Waterstone Capital Management, L.P., Pandora Select Partners, LP, Iam Mini-Fund 14 Limited, Whitebox Multi-Strategy Partners, LP, Whitebox Credit Arbitrage Partners, LP, HFR RVA Combined Master Trust, Whitebox Concentrated Convertible Arbitrage Partners, LP, and Whitebox Asymmetric Partners, LP. Incorporated by reference to Exhibit 4.3 to the Companys Current Report on Form 8-K filed on September 7, 2012. \n4.3 \nFirst Amendment to Registration Rights Agreement dated as of December 19, 2018, by and among the Company and the holders party thereto. Incorporated by reference to Exhibit 4.3 to the Companys registration statement on Form S-3 filed on December 21, 2018. \n4.4 \nPar Pacific Holdings, Inc. Amended and Restated 2012 Long Term Incentive Plan. Incorporated by reference to Appendix A to the Companys Proxy Statement on Schedule 14A filed on April 21, 2016.**** \n4.5 \nPar Pacific Holdings, Inc. Second Amended and Restated 2012 Long Term Incentive Plan. Incorporated by reference to Exhibit 4.1 to the Companys registration statement on Form S-8 filed on May 18, 2018.**** \n4.6 \nPar Pacific Holdings, Inc. 2018 Employee Stock Purchase Plan. Incorporated by reference to Exhibit 4.2 to the Companys Registration Statement on Form S-8 filed on May 18, 2018.**** \n4.7 \nRegistration Rights Agreement dated as of September 25, 2013, by and among the Company and the Purchasers party thereto. Incorporated by reference to Exhibit 4.1 to the Companys Current Report on Form 8-K filed on September 27, 2013. \n4.8 \nStockholders Agreement dated April10, 2015. Incorporated by reference to Exhibit 4.1 to the Companys Current Report on Form 8-K filed on April 13, 2015. \n4.9 \nRegistration Rights Agreement, dated June 21, 2016, between Par Pacific Holdings, Inc. and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as representative of the Initial Purchasers. Incorporated by reference to Exhibit 10.1 to the Companys Current Report on Form 8-K filed on June 22, 2016. \n4.10 \nRegistration Rights Agreement dated as of July14, 2016, by and among Par Pacific Holdings, Inc. and the purchasers party thereto. Incorporated by Reference to Exhibit 4.1 to the Companys Current Report on Form 8-K filed on July 15, 2016. \n4.11 \nFirst Amendment to Registration Rights Agreement dated as of September 27, 2016, by and among the Company and the purchasers party thereof. Incorporated by reference to Exhibit 4.14 to the Companys Quarterly Report on Form 10-Q filed on November 4, 2016. \n4.12 \nSecond Amendment to Registration Rights Agreement dated as of September 30, 2016, by and among the Company and the holders party thereto. Incorporated by reference to Exhibit 4.15 to the Companys Quarterly Report on Form 10-Q filed on November 4, 2016. \n4.13 \nThird Amendment to Registration Rights Agreement dated as of October 7, 2016, by and among the Company and the holders party thereto. Incorporated by reference to Exhibit 4.16 to the Companys Quarterly Report on Form 10-Q filed on November 4, 2016. \n4.14 \nFourth Amendment to Registration Rights Agreement dated as of October 14, 2016, by and among the Company and the holders party thereto. Incorporated by reference to Exhibit 4.17 to the Companys Quarterly Report on Form 10-Q filed on November 4, 2016. \n4.15 \nFifth Amendment to Registration Rights Agreement dated as of October 21, 2016, by and among the Company and the holders party thereto. Incorporated by reference to Exhibit 4.18 to the Companys Quarterly Report on Form 10-Q filed on November 4, 2016. \n4.16 \nSixth Amendment to Registration Rights Agreement dated as of October 28, 2016 by and among the Company and the holders party thereto. Incorporated by reference to Exhibit 4.19 to the Companys Quarterly Report on Form 10-Q filed on November 4, 2016. \n4.17 \nIndenture, dated June 21, 2016, between Par Pacific Holdings, Inc. and Wilmington Trust, National Association, as Trustee. Incorporated by reference to Exhibit 4.1 to the Companys Current Report on Form 8-K filed on June 22, 2016. \n4.18 \nIndenture, dated December 21, 2017, among Par Petroleum, LLC, Par Petroleum Finance Corp., the Guarantors (as defined therein), and Wilmington Trust, National Association, as Trustee and Collateral Trustee. Incorporated by reference to Exhibit 4.1 to the Companys Current Report on Form 8-K filed on December 22, 2017. \n4.19 \nFirst Supplemental Indenture, dated November 20, 2018, among Par Petroleum, LLC, Par Petroleum Finance Corp., the Guarantors (as defined therein), and Wilmington Trust, National Association, as Trustee. Incorporated by reference to Exhibit 4.21 to the Companys registration statement on FormS-3filed on December21, 2018. \n4.20 \nSecond Supplemental Indenture, dated January11, 2019, among Par Tacoma, LLC (f/k/a TrailStone NA Asset Finance I, LLC), U.S. Oil & Refining Co., McChord Pipeline Co., Par Petroleum, LLC, Par Petroleum Finance Corp., Par Pacific Holdings, Inc., the other guarantors party thereto, and Wilmington Trust, National Association. Incorporated by reference to Exhibit 4.2 to the Companys Current Report on Form8-Kfiled on January14, 2019. \n4.21 \nThird Supplemental Indenture, dated August 15, 2019, among Par Hawaii, LLC (successor by conversion to Par Hawaii, Inc.), Par Petroleum, LLC, Par Petroleum Finance Corp., Par Pacific Holdings, Inc., the other guarantors party thereto, and Wilmington Trust, National Association. Incorporated by reference to Exhibit 4.23 to the Companys Quarterly Report on Form 10-Q filed on August 10, 2020. \n4.22 \nRegistration Rights Agreement dated as of December19, 2018, by and between the Company and IES Downstream, LLC. Incorporated by reference to Exhibit 4.1 to the Companys Current Report on Form8-Kfiled on December20, 2018. \n4.23 \nRegistration Rights Agreement dated as of January11, 2019, by and between the Company and TrailStone NA Oil & Refining Holdings, LLC. Incorporated by reference to Exhibit 4.1 to the Companys Current Report on Form8-Kfiled on January14, 2019. \n4.24 \nIndenture, dated as of June 5, 2020, among Par Petroleum, LLC, Par Petroleum Finance Corp., the Guarantors (as defined therein) and Wilmington Trust, National Association, as Trustee and Collateral Trustee. Incorporated by reference to Exhibit 4.1 to the Companys current report on Form 8-K filed on June 8, 2020. \n4.25 \n\n+ \n10.1 \nLoan and Security Agreement dated as of December 21, 2017, among Par Petroleum, LLC, Par Hawaii, Inc, Mid Pac Petroleum, LLC, HIE Retail, LLC, Hermes Consolidated, LLC, Wyoming Pipeline Company, LLC, and the other members party thereto, the financial institutions party thereto, and Bank of America, N.A., as administrative agent. Incorporated by reference to Exhibit 10.1 to the Companys Current Report on Form 8-K filed on December 22, 2017. \n10.2 \nFourth Amended and Restated Limited Liability Company Agreement of Laramie Energy, LLC, dated as of October 18, 2018, by and among Par Piceance Energy Equity LLC and the other members party thereto.Incorporated by reference to Exhibit 10.4 to the Companys Quarterly Report on Form 10-Q filed on November 7, 2018. \n10.3 \nCredit Agreement dated as of June 4, 2012 among Piceance Energy, LLC, the financial institutions party thereto, JPMorgan Chase Bank, N.A., as administrative agent and Wells Fargo Bank, National Association, as syndication agent. Incorporated by reference to Exhibit10.3 to<|endoftext|>Resources of the Company, we do not currently have a Code of Ethics applicable to our principal executive, financial and accounting officers. We do not have a financial expert on the Board of Directors or an audit committee or nominating committee. \n\nThus, there is a potential conflict of interest in that our directors and officers have the authority to determine issues concerning management compensation and audit issues that may affect management decisions. We are not aware of any other conflicts of interest with any of our executives or directors. \n\nSection 16(a) of the Securities Exchange Act of 1934, as amended, requires executive officers and directors of the Company and persons who own more than 10% of a registered class of the Companys equity securities to file reports of ownership and changes in their ownership with the SEC, and forward copies of such filings to the Company. All of our executive officers and directors have complied with the Section 16(a) filing requirements. \n\nThere are no legal proceedings that have occurred within the past ten years concerning our directors, or control persons which involved a criminal conviction, a criminal proceeding, an administrative or civil proceeding limiting ones participation in the securities or banking industries, or a finding of securities or commodities law violations. \nITEM 11. \n### Executive Compensation \nOur sole named executive officer, consisting of our principal executive officer as of the fiscal years ended December 31, 2019 and December 31, 2018 (the Named Executive Officer) was: \nMatthew Feinstein, former Chief Executive Officer, Chief Financial Officer, Chairman, Secretary and Director. \n\nThe following table sets forth, for the fiscal years ended December 31, 2019 and 2018, compensation awarded or paid to our Named Executive Officers. \nNamed Executive Officer and Other Officer Employment Agreements and Arrangements \nFor the fiscal years ended December 31, 2019 and 2018, Matthew Feinstein received compensation of $15,000 per month through January 31, 2019, reducing to $10,000 per month through August 31, 2019. From September 1, 2019 through December 31, 2019 he received $8,000 per month as part of a company-wide restructuring plan. From January 2020 until now he receives $9,000 per month. \nDr. Randy Hurwitz did not join the Company until after the fiscal year ended December 31, 2018. As of June 1, 2019, Randy Hurwitz received $1,500 per month. \nEric Kennedy signed a Directors Agreement in 2016 and received 50,000 shares. According to his agreement, he received $1,500 per month and 1,500 shares per quarter during the year ended December 31, 2017. During the year ended December 31, 2018, Eric Kennedy received 17,500 shares plus $2,500 per month, which continued through June 30, 2019. Eric Kennedy also received a bonus of 500,000 shares in July 2018. From July 2019 until December of 2019, he was to receive $2,000 per month and 10,000 shares per quarter. In April 2020, the Company agreed to settle with Eric Kennedy for 150,000 shares to cover stock issuances and cash owed up until his resignation. \nAs of April 1, 2019 until March 31, 2021, Shawn Credle receives $48,000 per year as Chief Executive Officer. He was awarded 500,000 shares of the Company at signing. \nAs of January 1, 2019 until March 31, 2019, Joshua Eisenberg received $90,000 per year as Chief Operations Officer. As of April 1, 2019 until March 31, 2021, Joshua Eisenberg receives $48,000 per year as Chief Operations Officer. \nAs of June 1, 2020 until May 31, 2022, Marco Rullo receives $500 per year as Chief Strategy Officer. He was awarded 240,000 shares of the Company at signing. \n\nAs of the fiscal year ended 2019, none of our directors or executive officers has held unexercised options, stock that had not vested, or equity incentive plan awards. \nDirector Compensation for Fiscal Year Ended December 31, 2019 \n(1) \n(2) \nEmployee directors do not receive any additional compensation for their services on our Board of Directors. \nRepresents the grant date fair value computed in accordance with FASB ASC Topic 718. The assumptions used in calculating the amounts are discussed in Note 2 Summary of Significant Accounting Policies Stock-based Compensation. This represents the grant of 40,000 shares of the Companys common stock as stock-based compensation. \n### ITEM 12. \n\nThe following table lists, as of February 12, 2021, the number of shares of common stock of our Company that are beneficially owned by (i) each person or entity known to our Company to be the beneficial owner of more than 5% of the outstanding common stock; Information relating to beneficial ownership of common stock by our principal shareholders and management is based upon information furnished by each person using beneficial ownership concepts under the rules of the SEC. Under the SEC rules, more than one person may be deemed to be a beneficial owner of the same securities, and a person may be deemed to be a beneficial owner of securities as to which he or she may not have any pecuniary beneficial interest. \nThe percentages below are calculated on the basis of 88,461,200 shares of Common Stock of the Company, issued and outstanding as of February 12, 2021, together with such number of shares of Series A Convertible Preferred Stock which may be converted into Common Stock as of the date hereof or within 60 days thereafter, representing an aggregate of 88,461,200 shares of Common Stock. The Company does not have any outstanding options, warrants or other securities exercisable for or convertible into shares of its Common Stock. \n* represents beneficial ownership of less than one percent. \n(1) 30,790,000 shares of the Companys Common Stock owned by Mr. Ortega are subject to an irrevocable proxy granted by Mr. Ortega to Matthew Feinstein, the Companys Chief Financial Officer and Director. \n\nAs of the fiscal year ended December 31, 2019, the Company did not have any equity compensation plans. \n### ITEM 13. \n\n\n### Related Party \nRelationship \nNote \n### Date \nDescription \nSky Island, Inc. \nCommon ownership; \n### See Note 7 \nSince 2015 through 2019 \n$1,757,124 and $1,203,271 outstanding as of December 31, 2019 and 2018, respectively. \n### Neu-Ventures, Inc. \nCommon ownership; \nSee Note 7 \nOrtega. $325,380 and $0 outstanding as of December 31, 2019 and 2018, respectively. \nPineapple Ventures Inc. \n### Common ownership \nSee Note 2 and Note 5 \n2018 and 2019 \nConsulting Income for Marketing, Website Development, etc. ($15,000 in 2019; $10,000 in 2018). \nIn November 2018, the Company entered into a Consulting Services Agreement with Pineapple Ventures Inc. (PVI) to create a marketing campaign, create influencer relationships, and consult on website and app design and 3rd party vendors in exchange for $5,000 per month beginning in November 2018. The agreement term is for 1 year, reverting to a month-to-month term thereafter. A total of $10,000 was billed and recognized as revenue in 2018 for November and December consulting income. PEC billed and recognized an additional $15,000 for consulting in January March 2019. In April 2019, the Company entered into an agreement to invest in PVI, at which point the Consulting Services Agreement with PEC was terminated. No further revenue from this agreement was recognized in 2019. \n### Licensing Agreement \nIn September 2018, the Company entered into a Website Licensing Agreement with PVI to license its www.pineappleexpress.com website, including the proprietary Uniform Resource Locator, to be developed and actively utilized in distributing content, selling products/services, and hosting social media predominantly in the cannabis space. The agreement includes an initial licensing fee upon execution of the agreement of $150,000 payable from the licensee to the licensor. The agreement also includes a revenue share equal to the greater of 10% of net income or 5% of gross revenue. Monthly statements shall be tendered to licensor along with checks for revenue share at 5% of gross revenue. An additional payment shall be tendered to Licensor within 45 days of year end should 10% of net income calculations result in an additional amount owed. The agreement also includes annual minimum revenue share payments of $300,000 during the first 2 years, $350,000 during the third year, and $400,000 for all years thereafter. The $150,000 initial payment under the agreement was not paid in cash; however, the Company credited the amount against the principal of the outstanding Sky Island note. As of December 31, 2018, the Company has not appropriately fulfilled its obligation to provide access and administration for the website. Thus, the Company has determined it is appropriate to still not recognize this revenue during 2018. No other payments have been received since the initial licensee fee. \n50% Equity Investment Loss ($61,285 in 2019; $0 in 2018) \nIn April 2019, the Company acquired a 50% investment in PVI in exchange for 20,000,000 shares of common stock. \nThe investment was recorded at cost, which was determined to be $11,000,000 based on a value of $0.55 per share. \n\nAdvances for Monthly Rent Payments ($42,856 in 2019; $0 in 2018). \n\n### Matthew Feinstein \nOwner; \nSee Note 5 and Note 8 \n### Since 2016 through 2019 \nCash compensation for services provided ($117,000 in 2019; $180,000 in 2018) \nIn September 2016, the Company received a $50,000 loan from Matthew Feinstein, Director. During 2019, Mr. $2,249 and $13,704 outstanding as of December 31, 2019 and 2018, respectively. \nMatthew Feinstein is also a guarantor of the Companys note payable with Kabbage, Inc. \n### Eric Kennedy \nOwner; Director \nSee Note 7 and Note 11 \n2018 and 2019 \nCash compensation for services provided ($30,000 in 2019; $0 in 2018). \nStock-based compensation for services provided ($18,900 in 2019; $270,625 in 2018). \nIn May 2019, the Company agreed to a settlement with Eric Kennedy, a Director, related to deferred cash compensation that had been accrued for in the Companys accounts payable and accrued liabilities to reduce the amount to $35,000, resulting in a gain on settlement of related party payables of $36,000, which has been recorded in the consolidated statements of stockholders equity (deficit). \n### Employment Arrangements \nThe relationships and related party transactions described herein are in addition to any employment and consulting arrangements with our executive officers and directors, which are described above under Executive Compensation Named Executive Officer and Other Officer Employment Agreements and Arrangements. \nIndemnification Agreements \nOur Bylaws provide that none of our officers or directors shall be personally liable for any obligations of our Company or for any duties or obligations arising out of any acts or conduct of said officer or director performed for or on behalf of our Company, including without limitation, acts of negligence or contributory negligence. In addition, our Bylaws provide that we shall indemnify and hold harmless each person and their heirs and administrators who shall serve at any time hereafter as a director or officer of our Company from and against any and all claims, judgments and liabilities to which such persons shall become subject by reason of their having heretofore or hereafter been a director or officer of our Company, or by reason of any action alleged to have heretofore or hereafter taken or omitted to have been taken by him or her as such director or officer, and that we shall reimburse each such person for all legal and other expenses reasonably incurred by him or her in connection with any such claim, judgment or liability, including our power to defend such persons from all suits or claims as provided for under the provisions of the Delaware General Corporation Law; provided, however, that no such persons shall be indemnified against, or be reimbursed for, any expense incurred in connection with any claim or liability arising out of his (or her) own willful misconduct. In addition, we intend to enter into indemnification agreements with our directors and officers and some of our executives may have certain indemnification rights arising under their employment agreements with us. \nThe limitation of liability and indemnification provisions in our Bylaws may discourage stockholders from bringing a lawsuit against our directors for breach of their fiduciary duties. They may also reduce the likelihood of derivative litigation against our directors and officers, even though an action, if successful, might benefit us and our stockholders. A stockholders investment may<|endoftext|>Respectively. The tax years ended December 31, 2015 through December 31, 2020 are considered to be open under statute and therefore may be subject to examination by the Internal Revenue Service and various state jurisdictions. \nThe Company is a partnership for federal income taxes; however, its subsidiaries are C corporations. The Company will file consolidated returns whenever possible. Following is a summary of prepaid and deferred tax assets and liabilities for December 31, 2020 and 2019. \n1847 HOLDINGS LLC \n\nDECEMBER 31, 2020 AND 2019 \nNOTE 20SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION \nSupplemental disclosures of cash flow information for the years ended December 31, 2020 and 2019 were as follows: \n1847 HOLDINGS LLC \n\nDECEMBER 31, 2020 AND 2019 \n### NOTE 21DISTRIBUTION \nOn October 23, 2020, the Company completed the distribution of Goedekers stock then held by it. The common shareholders of the Company received an aggregate of 2,660,007 shares of the common stock of Goedeker, which were distributed on a pro rata basis at a ratio of 0.710467618568632 shares of Goedekers common stock for each common share of the Company held on the record date, and the Manager, as the sole holder of the allocation shares, received 664,993 shares of the common stock of Goedeker, which it then distributed to its members. \nAs discussed in Note 15, the Manager owns 100% of the allocation shares of the Company which represent the original equity interest in the Company. As a holder of the allocation shares, the Manager is entitled to receive a 20% profit allocation as a form of preferred distribution, pursuant to profit allocation formula upon the occurrence of certain events. The distribution of the profit allocation is paid upon the occurrence of a Sale Event or a Holding Event. The Company records distributions of the profit allocation to the holders upon occurrence of a Sale Event or a Holding Event as dividends declared on allocation interests to stockholders equity when they are approved by the Companys board of directors. \nUpon the sale of a subsidiary of the Company, the Manager will be paid a profit allocation based on the gain of the sale and net income (loss) since acquisition, subject to various hurdle thresholds. Upon a Holding Event, the Manager will be paid a profit allocation based on the subsidiarys net income since its acquisition, subject to various hurdle thresholds. The calculation of the profit allocation and the rights of the Manager, as the holder of the allocation shares, are governed by the operating agreement. \nThe following is a summary of the profit allocation payments made during the year ended December 31, 2020. There were no allocation payments made to the allocation interest holders in 2019. \nDuring the fourth quarter of 2020, the Company distributed to its shareholders all of the common stock of Goedeker held by it, which resulted in the declaration and payment of a profit allocation interest to the Manager. Payment was in the form of a distribution allocation of 664,993 Goedeker shares with a fair value of $5,985,000 which was calculated by the Company in accordance with the profit allocation formula outlined in the operating agreement.In calculating the distribution,the board reached its preliminary determination based on the fact thatno capital was contributed by the Company in connection with the acquisition of Goedeker,and as suchall profit from the Sale Event constituted Total Profit Allocation,as outlined in the operating agreement,without regard to losses incurred by Goedeker fromthe date of acquisitionthrough the date of the spin off.Post allocation, the Company determined that the calculation required a revision to the shares distributed to the Manager to 443,331 shares, with a fair value of approximately $3,990,000. As a result, $5,985,000 was recognized as a distribution to the allocation shares, and a $1.995 million distribution receivable was established within shareholders equity. \n### NOTE 22 SUBSEQUENT EVENTS \nIn accordance with ASC 855-10, the Company has analyzed its operations subsequent to December 31, 2020 to the date these financial statements were issued, and has determined that, except as set forth below, it does not have any material subsequent events to disclose in these financial statements. \nWolo Closing and Related Transactions \nAmendment to the Stock Purchase Agreement and Closing \nOn December 22, 2020, the Company and its wholly-owned subsidiary 1847 Wolo Inc. (1847 Wolo) entered into a stock purchase agreement with Wolo Mfg. Corp., a New York corporation, and Wolo Industrial Horn & Signal, Inc., a New York corporation (together, Wolo), and the sellers named therein (together, the Wolo Sellers), pursuant to which 1847 Wolo agreed to acquire all of the issued and outstanding capital stock of Wolo (the Wolo Acquisition). \nOn March 30, 2021, the Company, 1847 Wolo, Wolo and the Wolo Sellers entered into amendment No. 1 to the stock purchase agreement to amend certain terms of the stock purchase agreement. Following entry into such amendment, closing of the Wolo Acquisition was completed on the same day. \nPursuant to the terms of the stock purchase agreement, as amended, 1847 Wolo agreed to acquire all of the issued and outstanding capital stock of Wolo for an aggregate purchase price of $7,400,000, subject to adjustment as described below. The purchase price consists of (i) $6,550,000 in cash and (ii) a 6% secured promissory note in the aggregate principal amount of $850,000. \nThe purchase price is subject to a post-closing working capital adjustment provision.Under this provision, the Wolo Sellers delivered to 1847 Wolo at the closing an unaudited balance sheet of Wolo as of that date. \n1847 HOLDINGS LLC \n\n\nPurchase to the stock purchase agreement, 1847 Wolo agreed to indemnify and hold harmless the Wolo Sellers for any amounts in respect of taxes payable by the Wolo Sellers in connection with the Wolo Acquisition that are in excess of the amounts of taxes that would have been payable by the Wolo Sellers in connection with the Wolo Acquisition if the closing had occurred on or prior to December 31, 2020. \nThe stock purchase agreement contains customary representations, warranties and covenants, including a covenant that the Wolo Sellers will not compete with the business of Wolo for a period of three (3) years following closing. \nThe stock purchase agreement also contains mutual indemnification for breaches of representations or warranties and failure to perform covenants or obligations contained in the stock purchase agreement. In the case of the indemnification provided by the Wolo Sellers with respect to breaches of certain non-fundamental representations and warranties, the Wolo Sellers will only become liable for indemnified losses if the amount exceeds an aggregate of $10,000, whereupon the Wolo Sellers will be liable for all losses that exceed the $100,000 threshold, provided that the liability of the Wolo Sellers for breaches of certain non-fundamental representations and warranties shall not exceed $1,825,000. \n6% Secured Promissory Note \n\n\nOn March 30, 2021, 1847 Wolo entered into an offsetting management services agreement with the Manager on the same terms as the other offsetting management services agreements described in Note 16; provided that, the quarterly management fee is equal to the greater of $75,000 or 2% of adjusted net assets (as defined in the management services agreement). \nThe rights of the Manager to receive payments under this offsetting management services agreement are subordinate to the rights of Sterling (as defined below) under separate a subordination agreement that the Manager entered into with Sterling on March 30, 2021. \n\nOn March 30, 2021, 1847 Wolo and Wolo entered into a credit Agreement with Sterling National Bank (Sterling) for (i) revolving loans in an aggregate principal amount that will not exceed the lesser of the borrowing base (as defined below) or $1,000,000 and (ii) a term loan in the principal amount of $3,550,000. \n\n\n\n1847 HOLDINGS LLC \n\n\nUnit Offering \nOn March 26, 2021, the Company entered into several securities purchase agreements with certain purchasers, pursuant to which the Company sold an aggregate of 1,818,182 units, at a price of $1.65 per unit, to the purchasers for an aggregate purchase price of $3,000,000. Each unit consists of (i) one (1) series A senior convertible preferred share of the Company with a stated value of $2.00 per share and (ii) a three-year warrant to purchase one (1) common share of the Company at an exercise price of $2.50 per share (subject to adjustment), which may be exercised on a cashless basis under certain circumstances. The proceeds of offering were used to fund, in part, an acquisition of Wolo. \nPursuant to the securities purchase agreements, the Company is required file a registration statement with the Securities and Exchange Commission (the SEC) under the Securities Act of 1933, as amended, covering the resale of all shares issuable upon conversion of the series A senior convertible preferred shares and exercise of the warrants with thirty (days) after the closing and use its commercially reasonable efforts to have the registration statement declared effective by the SEC as soon as practicable, but in no event later than (i)ninety (90) days after the closing in the event that the SEC does not review the registration statement, or (ii)one hundred fifty (150) days after the closing in the event that the SEC reviews the registration statement (but in any event, no later than two (2) business days from the SEC indicating that it has no further comments on the registration statement). \nThe lead investors in the offering received participation rights that permit them, for a period of 12 months after the closing, to participate in an offering of securities by the Company or any of its subsidiaries in an amount up to the aggregate amount that the lead investor invested in the offering with customary exclusions. \nIn addition to the participation right, and registration rights described above, the securities purchase agreements provided several other covenants in favor of the purchasers and/or the lead investor, including information rights, observer rights, certain restrictive covenants, and other covenants customary for similar transactions. The securities purchase agreements also contain customary representations, warranties closing conditions and indemnities. \nThe warrants issued in this offering have the same terms as the warrants issued on September 30, 2020 and October 26, 2020 in connection with the prior unit offering (see Note 17). In connection with the unit offering, the Company amended and restated the certificate of designation for the series A senior convertible preferred shares (See Note 17). The amendments include the following: \nThe number of shares designated as series A senior convertible preferred shares was increased to 4,450,460. \nThe dividend provision has been amended to provide that if the Companys common shares are not registered, and rulemaking referred to below is effective, any dividends payable in common shares shall be calculated based upon the fixed price of $1.57; provided that the Company may only elect to pay dividends in common shares based upon such fixed price if the VWAP for the common shares on the Companys principal trading market during the five (5) trading days immediately prior to the applicable dividend payment date is $1.57 or higher. \nThe conversion price (as defined in the certificate of designation) was changed to $1.75 per share. \nThe voting provision was amended to provide that so long as any series A senior convertible preferred shares are outstanding, the affirmative vote of the Requisite Holders shall be required prior to the Companys, Kyles or Wolos creation or issuance of (i) any parity securities; (ii) any senior securities; and (iii) any new indebtedness other than (A) intercompany indebtedness by Kyles or Wolo in favor of the Company, (B) indebtedness incurred in favor of the sellers of Kyles or Wolo in connection with the acquisition of Kyles or Wolo, or (C) indebtedness (or the refinancing of such indebtedness) the proceeds of which are used to complete the acquisition of Kyles or Wolo related expenses or working capital to operate the business of Kyles or Wolo. \n1847 HOLDINGS LLC \n\n\nThe adjustments provision was revised to add an additional adjustment which provides that if any legislation or rules are adopted whereby the holding period of securities for purposes of Rule 144 of the Securities Act of<|endoftext|>The Registration Statement)) in excess of the Switchback Transaction Costs Cap (as defined in the Registration Statement), and all other Switchback Transaction Costs will be borne by us. Our transaction expenses as a result of the Business Combination are currently estimated at approximately $29.5million, including approximately $10.9million in deferred underwriting discounts and commissions to the underwriters of our Public Offering. \nWe may be subject to business uncertainties while the Business Combination is pending. \nUncertainty about the effect of the Business Combination on employees and third parties may have an adverse effect on ChargePoint and consequently, on Switchback. These uncertainties may impair ChargePoints ability to attract, retain and motivate key personnel and could cause third parties that deal with ChargePoint to defer entering into contracts or making other decisions or seek to change existing business relationships. If key employees depart because of issues relating to such uncertainty or a desire not to remain with the business, ChargePoints business following the Business Combination could be negatively impacted. In addition, the Business Combination Agreement restricts ChargePoint from making certain expenditures and taking other specified actions without the consent of Switchback until the Business Combination occurs. These restrictions may prevent ChargePoint from pursuing attractive business opportunities that may arise prior to the Closing. \nOur Warrants are being accounted for as a warrant liability and are being recorded at fair value upon issuance with changes in fair value each period reported in earnings, which may have an adverse effect on the market price of our Class A common stock. \nUnder U.S. GAAP, we are required to evaluate the Warrants to determine whether they should be accounted for as a warrant liability or as equity. We have concluded that the Warrants contain provisions requiring liability classification. Therefore, as described in our financial statements included in Part II, Item 8, of this Form 10-K/A, we are accounting for the Warrants as a warrant liability and are recording that liability at fair value upon issuance. We will record any subsequent changes in fair value as of the end of each period for which earnings are reported. The impact of changes in fair value on earnings may have an adverse effect on the market price of our Class A common stock and may cause fluctuations in our results of operations based on factors that are outside of our control. \nIf we do not adequately address this material weakness or if other material weaknesses or significant deficiencies in our internal control over financial reporting are discovered, this could adversely affect our business and the market price of our Class A common stock. \nas of December 31, 2020, the disclosure of which may have an adverse impact on the price of our common stock (please refer to Part II, Item 9A of this Form 10-K/A for further discussion). A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our financial statements will not be prevented or detected on a timely basis. As a result of this material weakness, our management concluded that our internal control over financial reporting was not effective as of December 31, 2020, and our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective at the reasonable assurance level as of December 31, 2020. The material weakness resulted in a reclassification of our Warrants from equity to liabilities and the recognition of the related gain or loss as a result of the change in the fair value of the warrant liabilities, and related restatement of (i) the audited consolidated financial statements of Switchback as of December 31, 2020 and 2019, for the year ended December 31, 2020 and for the period from May 10, 2019 (inception) through December 31, 2019 included in the Original Filing, (ii) certain items on the Companys previously issued audited balance sheet dated as of July 30, 2019, which was included in the IPO Closing 8-K, and (iii) the condensed consolidated unaudited financial statements of Switchback included in Switchbacks Quarterly Reports on Form 10-Q for (a) the three months ended September 30, 2019 and for the period from May 10, 2019 (inception) through September 30, 2019 (b) the three months ended March 31, 2020, (c) the three and six months ended June 30, 2020, and (d) the three and nine months ended September 30, 2020. \nWe are required to restate the consolidated financial statements of the Company. We have taken, and intend to continue to take, certain remedial actions intended to address the identified material weakness in our internal control over financial reporting. However, we can give no assurance that such measures will remediate the material weakness identified or that any additional material weaknesses or restatements of financial results will not arise in the future. Additionally, significant costs and resources may be needed to remediate any material weakness (including the material weakness identified) or any internal control deficiencies that may arise in the future. \nIf we cannot produce reliable and timely financial reports, investors may lose confidence in our financial reporting and we could be subject to sanctions or investigations by the SEC or other regulatory authorities. Moreover, if we are unable to remediate, evaluate, and test our internal controls on a timely basis in the future, management will be unable to conclude that our internal controls are effective and our independent registered public accounting firm will be unable to express an unqualified opinion on the effectiveness of our internal control over financial reporting. Any actual or perceived weaknesses or deficiencies that need to be addressed in our internal control over financial reporting, or disclosure of managements assessment of our internal control over financial reporting, could have an adverse impact on our business and the market price of our Class A Common Stock. \nThe consummation of the Business Combination is subject to a number of conditions and if those conditions are not satisfied or waived, the Business Combination Agreement may be terminated in accordance with its terms and the Business Combination may not be completed. \nThe Business Combination Agreement is subject to a number of conditions which must be fulfilled in order to complete the Business Combination. Those conditions include: (a)approval by our stockholders and ChargePoints stockholders, (b)Switchback having at least $5,000,001 of net tangible assets as of the effective time of the consummation of the Business Combination, (c)the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, (d) the listing of the shares of ClassA common stock to be issued in connection with the Closing and the PIPE Financing on the NYSE (or another national securities exchange mutually agreed by the parties to the Business Combination Agreement) and the effectiveness of the Registration Statement and (e)the amount of Switchback Cash (as defined in the Registration Statement) minus (x)the aggregate amount of cash proceeds that will be required to satisfy redemptions of public shares by our public stockholders in accordance with our organizational documents, if any, minus (y)the amount of Switchback Transaction Costs that remain unpaid immediately prior to the Closing (excluding, for the avoidance of doubt, any Switchback Transaction Costs payable by our Sponsor in accordance with the Business Combination Agreement), equaling at least $300,000,000. In addition, the parties can mutually decide to terminate the Business Combination Agreement at any time, before or after stockholder approval, or Switchback or ChargePoint may elect to terminate the Business Combination Agreement in certain other circumstances. \nWe may waive one or more of the conditions to the Business Combination. \nWe may agree to waive, in whole or in part, one or more of the conditions to our obligations to complete the Business Combination, to the extent permitted by our Charter, bylaws and applicable laws. For example, it is a condition to our obligation to close the Business Combination that certain of ChargePoints representations and warranties be true and correct in all material respects as of the date of the Business Combination Agreement and the Effective Time. However, if our board of directors determines that it is in the best interests of Switchback to proceed with the Business Combination, then our board of directors may elect to waive that condition and close the Business Combination. \nIf we are unable to complete an initial business combination on or prior to July30, 2021, our public stockholders may receive only approximately $10.00 per share on the liquidation of our Trust Account (or less than $10.00 per share in certain circumstances where a third party brings a claim against us that our Sponsor is unable to indemnify), and our Warrants will expire worthless. \nIf we are unable to complete an initial business combination on or prior to July30, 2021, our public stockholders may receive only approximately $10.00 per share on the liquidation of our Trust Account (or less than $10.00 per share in certain circumstances where a third party brings a claim against us that our Sponsor is unable to indemnify (as described below)), and our Warrants will expire worthless. \nIf third parties bring claims against us, the proceeds held in our Trust Account could be reduced and the per share redemption amount received by stockholders may be less than $10.00 per share. \nAlthough we will seek to have all vendors, service providers (other than our independent registered public accounting firm), prospective target businesses and other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the Trust Account for the benefit of our public stockholders, such parties may not execute such agreements, or even if they execute such agreements, they may not be prevented from bringing claims against the Trust Account, including, but not limited to, fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain advantage with respect to a claim against our assets, including the funds held in the Trust Account. Although no third parties have refused to execute an agreement waiving such claims to the monies held in the Trust Account to date, if any third party refuses to execute such an agreement in the future, our management will perform an analysis of the alternatives available to it and will only enter into an agreement with a third party that has not executed a waiver if management believes that such third partys engagement would be significantly more beneficial to us than any alternative. \nUpon redemption of our public shares, if we are unable to complete our Business Combination within the prescribed timeframe, or upon the exercise of a redemption right in connection with our Business Combination, we will be required to provide for payment of claims of creditors that were not waived that may be brought against us within the ten years following redemption. Accordingly, the per-shareredemption amount received by public stockholders could be less than the $10.00 per public share initially held in the Trust Account, due to claims of such creditors. Our Sponsor has agreed that it will be liable to us if and to the extent any claims by a third party (other than our independent registered public accounting firm) for services rendered or products sold to us, or a prospective target business with which we have entered into a letter of intent, confidentiality or other similar agreement or Business Combination agreement, reduce the amount of funds in the Trust Account to below the lesser of (a)$10.00 per public share and (b)the actual amount per public share held in the Trust Account, if less than $10.00 per share due to reductions in the value of the trust assets as of the date of the liquidation of the Trust Account, in each case including interest earned on the funds held in the Trust Account and not previously released to us to pay our franchise and income taxes, less franchise<|endoftext|>Terms that would produce value for our shareholders. \nAny potential target business with which we enter into negotiations concerning a business combination will be aware that we must complete our initial business combination by July 17, 2022. \n\nOn January31, 2020, U.S. This outbreak of COVID-19has resulted in a widespread health crisis that has and may continue to adversely affect the economies and financial markets worldwide, and the business of any potential target business with which we may consummate a business combination could be materially and adversely affected. The extent to which COVID-19impacts our search for and ability to consummate a business combination will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of COVID-19and the actions to contain COVID-19or treat its impact, among others. If the disruptions posed by COVID-19or other matters of global concern continue for an extensive period of time, and result in protectionist sentiments and legislation in our target markets, our ability to consummate a business combination, or the operations of a target business with which we ultimately consummate a business combination, may be materially adversely affected. In addition, our ability to consummate a transaction may be dependent on the ability to raise equity and debt financing which may be impacted by COVID-19and other events. \nWe may not be able to complete our initial business combination by July 17, 2022, in which case we would cease all operations except for the purpose of winding up and we would redeem our public shares and liquidate. \nWe may not be able to find a suitable target business and complete our initial business combination by July 17, 2022. If we have not completed our initial business combination by July 17, 2022, we will: (i)cease all operations except for the purpose of winding up, (ii)as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account (less taxes payable and up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public shareholders rights as shareholders (including the right to receive further liquidation distributions, if any) and (iii)as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders and our board of directors, liquidate and dissolve, subject in the case of clauses (ii)and (iii), to our obligations under Cayman Islands law to provide for claims of creditors and in all cases subject to the other requirements of applicable law. \n\n\n\n\n\n\n\nSince the net proceeds of the offering and the sale of the private placement warrants are intended to be used to complete an initial business combination with a target business that has not been selected, we may be deemed to be a blank check company under the UnitedStates securities laws. However, because we have net tangible assets in excess of $5,000,000 upon the completion of the offering and the sale of the private placement warrants and have filed a Current Report on Form8-K, including an audited balance sheet demonstrating this fact, we are exempt from rules promulgated by the SEC to protect investors in blank check companies, such as Rule419. Among other things, this means our units are immediately tradable and we will have a longer period of time to complete our initial business combination than do companies subject to Rule419. Moreover, if the offering were subject to Rule419, that rule would prohibit the release of any interest earned on funds held in the trust account to us unless and until the funds in the trust account were released to us in connection with our completion of an initial business combination. \n\n\n\n\nIf the net proceeds of the offering and the sale of the private placement warrants not being held in the trust account are insufficient to allow us to operate at least until July 17, 2022, it could limit the amount available to fund our search for a target business or businesses and complete our initial business combination, and we will depend on loans from our sponsor or management team to fund our search and to complete our initial business combination. \nOf the net proceeds of the offering, approximately $1.1 million was available to us outside the trust account as of December 31, 2020 to fund our working capital requirements. We believe that the funds available to us outside of the trust account are sufficient to allow us to operate at least until July 17, 2022; If we enter into a letter of intent or merger agreement where we paid for the right to receive exclusivity from a target business and were subsequently required to forfeit such funds (whether as a result of our breach or otherwise), we might not have sufficient funds to continue searching for, or conduct due diligence with respect to, a target business. \n\n\n\nPursuant to the letter agreement the form of which is filed as an exhibit to the registration statement of which the prospectus forms a part, our sponsor has agreed that it will be liable to us if and to the extent any claims by a third party for services rendered or products sold to us, or a prospective target business with which we have entered into a written letter of intent, confidentiality or other similar agreement or business combination agreement, reduce the amount of funds in the trust account to below the lesser of (i) $10.00 per public share and (ii)the actual amount per public share held in the trust account as of the date of the liquidation of the trust account, if less than $10.00 per share due to reductions in the value of the trust assets, less taxes payable, provided that such liability will not apply to any claims by a third party or prospective target business who executed a waiver of any and all rights to the monies held in the trust account (whether or not such waiver is enforceable) nor will it apply to any claims under our indemnity of the underwriters of the offering against certain liabilities, including liabilities under the Securities Act. \n\n\n\nIf, after we distribute the proceeds in the trust account to our public shareholders, we file a bankruptcy or insolvency petition or an involuntary bankruptcy or insolvency petition is filed against us that is not dismissed, any distributions received by shareholders could be viewed under applicable debtor/creditor and/or bankruptcy laws as either a preferential transfer or a fraudulent conveyance. \n\nIf, before distributing the proceeds in the trust account to our public shareholders, we file a bankruptcy or insolvency petition or an involuntary bankruptcy or insolvency petition is filed against us that is not dismissed, the proceeds held in the trust account could be subject to applicable bankruptcy law, and may be included in our bankruptcy estate and subject to the claims of third parties with priority over the claims of our shareholders. \n\n\n\nThe offering was not intended for persons who are seeking a return on investments in government securities or investment securities. (ii)the redemption of any public shares properly submitted in connection with a shareholder vote to amend our amended and restated memorandum and articles of association (A)to modify the substance or timing of our obligation to allow redemption in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination by July 17, 2022 or (B)with respect to any other material provisions relating to shareholders rights or pre-initial business combination activity; or (iii)absent an initial business combination by July 17, 2022, our return of the funds held in the trust account to our public shareholders as part of our redemption of the public shares. \n\n\nIf we are unable to consummate our initial business combination by July 17, 2022, our public shareholders may be forced to wait beyond such to 24 months before redemption from our trust account. \nIf we are unable to consummate our initial business combination by July 17, 2022, the proceeds then on deposit in the trust account, including interest earned on the funds held in the trust account (less taxes payable and up to $100,000 of interest to pay dissolution expenses), will be used to fund the redemption of our public shares, as further described herein. \n\n\nWe may not hold an annual general meeting until after the consummation of our initial business combination, which could delay the opportunity for our shareholders to appoint directors. \nIn accordance with NYSE corporate governance requirements, we are not required to hold an annual general meeting until no later than one year after our first fiscal year end following our listing on NYSE. In addition, as holders of our ClassA ordinary shares, our public shareholders will not have the right to vote on the appointment of directors until after the consummation of our initial business combination. \n\nOur management team has extensive experience in identifying and executing strategic investments globally and has done so successfully in a number of sectors, including consumer brands sectors. \n\n\n\n\n\n\n\nImmediately after the offering, there were 165,500,000 and 11,375,000 authorized but unissued ClassA ordinary shares and ClassB ordinary shares, respectively, available for issuance which amount does not take into account shares reserved for issuance upon exercise of outstanding warrants or shares issuable upon conversion of the ClassB ordinary shares. \n\n\nThe founder shares will automatically convert into ClassA ordinary shares concurrently with or immediately following the consummation of our initial business combination on a one-for-one basis, subject to adjustment for share sub-divisions, share capitalizations, reorganizations, recapitalizations and the like, and subject to further adjustment as provided herein. \n\n\nWe may be a passive foreign investment company, or PFIC, which could result in adverse UnitedStates federal income tax consequences to U.S. investors. \nHolder (as defined in the section of the prospectus captioned TaxationUnitedStates Federal Income Tax ConsiderationsGeneral) of our ClassA ordinary shares or warrants, the U.S. Our PFIC status for our current and subsequent taxable years may depend on whether we qualify for the PFIC start-up exception (see the section of the prospectus captionedTaxationUnitedStates Federal Income Tax ConsiderationsU.S. HoldersPassive Foreign Investment Company Rules). We urge U.S. \n\nAlthough we will not be specifically focusing on, or targeting, any transaction with any affiliated entities, we would pursue such a transaction if we determined that such affiliated entity met our criteria for a business and such transaction was approved by a majority of our independent and disinterested directors. \n\nOn May14, 2020, our sponsor paid $25,000, or approximately $0.003 per share, to cover certain of our offering costs in exchange for 7,187,500 founder shares. On June25, 2020, our sponsor transferred 15,000 founder shares to Robert Kirby and 25,000 founder shares to each of Michael Kives, Fred Langhammer and Terry Lundgren, resulting in our sponsor holding 7,097,500 founder shares. On July14, 2020, we effected a share capitalization of 1,437,500shares and as a result our sponsor now holds 8,535,000 founder shares. The number of founder shares outstanding was determined based on the expectation that the total size of the Public Offering would be a maximum of 34,500,000 units, and therefore that such founder shares would represent 20% of the outstanding shares after the Public Offering. In addition, our sponsor purchased an aggregate of 8,900,000 private placement warrants for an aggregate purchase price of $8,900,000, or $1.00 per warrant. This risk may become more acute as July 17, 2022 nears, which is the deadline for our completion of an initial business combination. \n\n\n\n\n\n\n\n\n\n\n\n\nAmending our amended and restated memorandum and articles of association will require a special resolution under Cayman Islands law, being the affirmative vote of a majority of at least two-thirds of the shareholders who attend and vote at a general meeting of the company, and amending our warrant agreement will require a vote of holders of at least 50% of the public warrants and, solely with respect<|endoftext|>They have a PRC identity or not. Although he leaves the PRC from time to time and maintains his Hong Kong identity card, Mr. Xinrong Zhuo has been residing in mainland China for most of the time since the SAFE Circular No. 75 became effective. Accordingly, it is possible that PRC authorities may consider Mr. Zhuo to be a PRC resident. As of the date of this 10-K submission, Mr. Zhuo has not made registrations or filings according to SAFE Circular No. 75. Due to uncertainty over how SAFE Circular No. 75 will be interpreted and implemented, we cannot predict how SAFE Circular No. 75 will affect our business operations or future strategies following the business combination. If SAFE Circular No. 75 is determined to apply to us or any of our PRC resident shareholders, none of whom to our knowledge has made registrations or filings according to SAFE Circular No. 75, a failure by any such shareholders or beneficial owners to comply with SAFE Circular No. 75 may subject the relevant shareholders or beneficial owners to penalties under PRC foreign exchange administrative regulations, and may subject us to fines or legal sanctions, restrict our overseas or cross-border investment activities, limit our subsidiaries ability to make distributions or pay dividends or affect our ownership structure and capital inflow from the offshore entity, which would have a material adverse effect on our business, financial condition, results of operations and liquidity. In addition, we may not be informed of the identities of our beneficial owners and our Chinese resident beneficial owners, if any, may not comply with SAFE Circular No. 75. The failure or inability of our beneficial owners who are PRC citizens, residents or entities to make or amend any required registrations may subject these PRC residents or our PRC subsidiary to fines and legal sanctions, and may also limit our ability to contribute additional capital into our PRC subsidiary and limit our PRC subsidiarys ability to make distributions or pay dividends to us, as a result of which our business operations and our ability to distribute profits to our shareholders may be materially and adversely affected. \nIn December 2009, the PRC State Administration for Taxation issued a notice, known as Circular 698, addressing PRC income tax issues in connection with transfers of equity by a non-PRC resident enterprise that directly or indirectly holds an interest in a PRC resident enterprise. Circular 698 requires certain tax filings with, and the submission of comprehensive information to, the applicable tax authorities regarding transfers of equity by a non-PRC resident enterprise that directly or indirectly holds an interest in a PRC resident enterprise. The filings and submissions are designed to assist the taxing authorities in evaluating whether the transfer has a reasonable business purpose. If the transfer does not have a reasonable business purpose, Circular 698 provides that the seller is subject to PRC income tax on the gains received from the transfer of the PRC resident enterprise. Although the tax obligations generally apply to the seller, the PRC resident enterprise that is transferred is also subject to certain requirements to assist the PRC tax authorities in collecting the taxes, potentially including withholding agent obligations. Circular 698 is relatively new with limited implementation guidance, and it is uncertain how it will be interpreted, implemented or enforced. For example, there is no clear guidance regarding what constitutes a reasonable business purpose or the assistance obligation applicable to the transferred PRC resident enterprise. We cannot predict how Circular 698 will apply to current or future acquisition strategies and business operations. For example, if our affiliated PRC entities are deemed to have been sold through an offshore holding company, we may face comprehensive filing obligations that could result in significant taxes, potential sanctions or other enforcement action, or other adverse considerations, which could have an adverse impact on our ability to consummate such a transaction or expand our business and market share. \n\nUnder the Enterprise Income Tax Law of the PRC, or the EIT Law, dividends, interest, rents, royalties and gains on transfers of property payable by a foreign-invested enterprise in China to its foreign investor who is a non-resident enterprise will be subject to a 10% withholding tax, unless such non-resident enterprises jurisdiction of incorporation has a tax treaty with China that provides for a reduced rate of withholding tax. Under the arrangement for avoidance of double taxation between mainland China and Hong Kong, the effective withholding tax applicable to a Hong Kong non-resident company is 5% if it directly owns no less than a 25% stake in the Chinese foreign-invested enterprise. \nUnder the EIT Law, an enterprise established outside China with its de facto management body within China is considered a resident enterprise in China and is subject to the Chinese enterprise income tax at the rate of 25% on its worldwide income. We may be deemed to be a PRC resident enterprise under the EIT Law and be subject to the PRC enterprise income tax at the rate of 25% on its worldwide income. If the Chinese tax authorities determine that we should be classified as a resident enterprise, foreign securities holders will be subject to a 10% withholding tax on dividends payable by us and subject to income tax upon gains on the sale of securities under the EIT Law. \n\nThe Wholly-Foreign Owned Enterprise Law (1986), as amended, The Wholly-Foreign Owned Enterprise Law Implementing Rules (1990), as amended, and the Company Law of the PRC (2006) contain the principal regulations governing dividend distributions by Wholly-Foreign Owned Enterprises, or WFOEs. Under these regulations, WFOEs may pay dividends only out of their accumulated profits, if any, determined in accordance with PRC accounting standards and regulations. Additionally, they are required to set aside each year 10% of its net profits, if any, based on PRC accounting standards, to fund a statutory surplus reserve until the accumulated amount of such reserve reaches 50% of their respective registered capital. These reserves are not distributable as cash dividends except in the event of liquidation and cannot be used for working capital purposes. The PRC government also imposes controls on the conversion of RMB into foreign currencies and the remittance of currencies out of the PRC. We may experience difficulties in completing the administrative procedures necessary to obtain and remit foreign currency for the payment of dividends from the profits of our WFOE. \nFurthermore, if our subsidiaries in the PRC incur debt on their own in the future, the instruments governing the debt may restrict their ability to pay dividends or make other payments. If we or our subsidiaries are unable to receive all of the economic value from the operations of our PRC subsidiaries through contractual or dividend arrangements, we may be unable to pay dividends on our ordinary shares. \nBecause our principal assets are located outside of the United States and our directors and officers reside outside of the United States, it may be difficult for you to enforce your rights based on the United States federal securities laws against us and our officers and directors in the United States or to enforce foreign judgments or bring original actions in the PRC against us or our management. \nMost of our officers and directors reside outside of the United States. In addition, our operating subsidiaries are located in the PRC and all of their assets are located outside of the United States. The PRC does not have a treaty with United States providing for the reciprocal recognition and enforcement of judgments of courts. Therefore, it may be difficult for investors in the United States to enforce their legal rights based on the civil liability provisions of the United States federal securities laws against us in the courts of either the United States or the PRC and, even if civil judgments are obtained in courts of the United States, to enforce such judgments in PRC courts. \nIn addition, since we are incorporated under the laws of the Cayman Islands and our corporate affairs are governed by the laws of the Cayman Islands, it may not be possible for investors to originate actions against us or our directors or officers based upon PRC laws, and it may be difficult, if possible at all, to bring actions based upon Cayman Islands laws in the PRC in the event that you believe that your rights as a shareholder have been infringed. \n\nThe PRC National Peoples Congress promulgated the Labor Contract Law, which became effective on January 1, 2008. Compared to previous labor laws, the Labor Contract Law provides stronger protection for employees and imposes more obligations on employers. According to the Labor Contract Law, employers have the obligation to enter into written labor contracts with employees to specify the key terms of the employment relationship. The law also stipulates, among other things, (i) that all written labor contracts shall contain certain requisite terms; (ii) that the length of trial employment periods must be in proportion to the terms of the relevant labor contracts, which in any event may not be longer than six months; (iii) that in certain circumstances, a labor contract is deemed to be without a fixed term and thus an employee can only be terminated with cause; and (iv) that there are certain restrictions on the circumstances under which employers may terminate labor contracts as well as the economic compensation to employees upon termination of the employees employment. \nPingtan Fishing has not entered into employment agreements with some of its employees, basically the root-level employees, none of whom has endowment insurance, basic medical insurance, insurance against injury at work, maternity insurance and unemployment insurance. Due to the lack of these employment arrangements, we may be subject to overdue payment and fines and in turn our financial condition and results of operations may be adversely affected. \nIn addition, if we decide to significantly change or downsize our workforce, the Labor Contract Law could restrict our ability to terminate employee contracts and adversely affect our ability to make such changes to our work force in a manner that is most favorable to our business or in a timely and cost-effective manner, which in turn may materially and adversely affect our financial condition and results of operations. If we are subject to severe penalties or incur significant legal fees in connection with labor law disputes or investigations, our business, financial condition and results of operations may be adversely affected. \nInvestors will have limited access to corporate records filed with the relevant PRC government authorities by the PRC operating entities. \nAll of our PRC subsidiaries are companies registered in Fujian Province. The PRC State Administration for Industry and Commerce and its local counterparts, or collectively SAIC, is the PRC government authority governing the market supervision and administrative enforcement of various business licensing laws. According to the relevant SAIC regulations, certain corporate records of a company should be filed with SAIC, for example, the annual financial report, shareholder changes, amendments of articles of association, registered capital changes, capital verification reports and equity interest pledge registration. In Fujian Province, an individual can gain access to information filed with SAIC only with the authorization of the company for which such information is filed. Alternatively, access to information can be granted by an order of a PRC peoples court, provided that the individual requesting the information is a party to litigation involving the company in question. Due to such restrictions, investors will have limited access to corporate records filed with the SAIC by our PRC subsidiaries. \ndollar terms. \ndollar and our operations in the PRC use their local currency as their functional currencies. Substantially all of our revenue and expenses are in Renminbi. Accordingly, we are subject to the effects of exchange rate fluctuations with respect to the Renminbi. For example, the value of the Renminbi depends to a large extent on PRC government policies and the PRCs domestic and international economic and political developments, as well as supply and demand in the local market. Since 1994, the<|endoftext|>To the present, George Bolton has been the Chair and Charles Sills and Anthony Santelli the remaining other members. \n\nDuring the past five years no director, person nominated to become a director, executive officer, promoter or control person of the Company has: (i) had any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time; (ii) been convicted in a criminal proceeding or been subject to a pending criminal proceeding (excluding traffic violations and other minor offenses); (iii) been subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; or (iv) been found by a court of competent jurisdiction (in a civil action), the Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated except for the following: \nFour of the directors of the Company (Messrs. Slager, Santelli, Sills and Bolton) were directors or executive officers of the Company at the time of the Companys filing of a Voluntary Petition for Non-Individuals Filing for Bankruptcy pursuant to Chapter 11 of the United States Bankruptcy Act in the United States Bankruptcy Court for the Southern District of Florida (Case No. 18-23071-EPK) on October 22, 2018. This Bankruptcy Proceeding was closed on October 25, 2019. \n\nThe Company filed a Form 15 in 2018 ceasing to be a reporting Company. On January 5, 2021, the Company filed a Form 10, which became effective 60 days later, on March 8, 2021. As of the date of this filing, all officers and directors and greater than 10% shareholders have filed reports in accord with these regulations. \n### Code of Ethics \nThe Companys board of directors has adopted a code of ethics that its officers, directors and any person who may perform similar functions is subject to. \nITEM 11. EXECUTIVE COMPENSATION \nThe Companys board of directors has a compensation committee consisting entirely of independent directors, with Peter Zimeri as chair and George Bolton and Charles Sills as the other members. The Companys compensation philosophy is based on its belief that its compensation programs should be aligned with stockholders interests and business objectives; reward performance; and be externally competitive and internally equitable. The Company seeks to achieve three objectives, which serve as guidelines in making compensation decisions: \n1. \nProviding a total compensation package which is competitive and therefore enables it to attract and retain, high-caliber executive personnel; \n2. \nIntegrating compensation programs with its short-term and long-term strategic plan and business objectives; and \n3. \nEncouraging achievement of business objectives and enhancement of stockholder value by providing executive management log-term incentive through equity ownership. \nThe Company may compensate its officers with cash compensation, common stock and common stock options. The Company has not established any quantifiable criteria with respect to the level of compensation, stock grants or options. Rather, the Board of Directors and its compensation committee will evaluate cash, stock grants and stock options paid to executives in similarly situated companies. \nWith respect to stock grants and options which may be issued to the Companys officers and directors, the Board and its compensation committee will consider an overall compensation package that includes both cash and stock-based compensation which would be in line with the Companys overall operations and compensation levels paid to similarly situated companies. Under the Companys 2012 Employee, Director Stock Plan, the administrator can provide for the grant of non-qualified stock options (Non-Qualified Stock Options), incentive stock options (ISOs, together with Non-Qualified Stock Options referred to herein as Stock Options), stock appreciation rights (SARs), restricted stock (Restricted Stock) and registered stock (Registered Stock), (collectively, the Awards) to eligible Participants. \nAs of the date of this filing, the Company has two executives. \nCommencing on January 1, 2021, Ben Slager, CEO, has an employment contract to receive a salary of $360,000 per annum until at least June 30, 2022, and until all his back pay due is paid. He will receive a $40,000 bonus plus health insurance. In addition, he must be given 6-months notice of termination, and shall receive a severance package of one-months pay in addition to the 6-months notice, or 3 months salary if he dies. His prior employment contracts from when he was Chief Technology Officer and CEO, dating back to 2017, all had his salary at $220,000 per annum. \nCommencing January 1, 2021, Anthony Santelli, CFO, has an employment contract to receive a salary of $250,000 per annum, and may not be terminated until all his back pay due is paid. In addition, the CFO must be given 6-months notice of termination and shall receive a severance package of one-months pay in addition to the 6-months notice, or 3 months salary if he dies. His prior contracts as CFO and COO dating from October 20, 2018, had his salary at $200,000 per annum. \nAs of December 31, 2020, Ben Slager is owed $440,682 in back pay dating as far back as 2017, along with interest of $56,151. As of September 30, 2020, Anthony Santelli is owed $148,218 in back pay plus $16,033 in unpaid directors fees, along with interest of $10,558. \nAs of December 31, 2020, AES Financial Advisors, LLC, an entity owned by Anthony Santelli II and his wife Marjorie Santelli, Esq., is owed $76,670, primarily dating from 2018, prior to when Dr. Santelli became COO, plus interest of $17,418. \nThe following table sets forth the compensation paid by the Company to its officers and directors for the fiscal years ended December 31, 2020, and December 31, 2019. This information includes the dollar value of base salaries, bonus awards and number of stock options granted, and certain other compensation, if any. The compensation discussed addresses all compensation awarded to, earned by, or paid to its named executive officers and directors. \n### OUTSTANDING EQUITY AWARDS \nGrants of Plan-Based Awards \nWarrants Issued to Management \n### Grants of Plan-Based Awards \n\nIn the year ended December 31, 2020, the Companys Chief Executive Officer received options to purchase up to 10,000,000 shares of the companys common stock under the Companys 2012 Employee Director Stock Plan at an exercise price of 10 cents per share, half that vested immediately, and half that vest upon the commercialization of the CTS 2.0 process. In the year ended December 31, 2019, the Companys Chief Executive Officer received options to purchase up to 4,000,000 shares of the companys common stock under the Companys 2012 Employee Director Stock Plan at an exercise price of $0.025 per share. Using a Black-Scholes asset pricing model, these agreement were valued at $103,132. In 2019, all these options issued in 2019 and all prior options were returned and the CEO purchased 30,000,000 shares of common stock at $0.005 per share upon the approval of the Bankruptcy Court. \nIn the year ended December 31, 2020, the Companys Chief Financial Officer received options to purchase up to 10,000,000 shares of the companys common stock under the Companys 2012 Employee Director Stock Plan at an exercise price of 10 cents per share, half that vested immediately, and half that vest upon the commercialization of the CTS 2.0 process. In the year ended December 31, 2019, the Companys Chief Financial Officer received options to purchase up to 2,000,000 shares of the companys common stock under the Companys 2012 Employee Director Stock Plan at an exercise price of $0.25 per share. Using a Black-Scholes asset pricing model, these agreement were valued at $51,566. In 2019, all these options and all prior options were returned and the CFO purchased 20,000,000 shares of common stock at $0.005 per share upon the approval of the Bankruptcy Court. \nIn the year ended December 31, 2019, director George Bolton returned all his options and purchased 4,700,000 shares of common stock at $0.005 per share upon the approval of the Bankruptcy Court. \nIn the year ended December 31, 2020, director Charles Sills converted $30,000 in back pay into 600,000 shares of common stock at a price of $0.05 per share. In the year ended December 31, 2019, he converted $2,500 of back pay into 500,000 shares of common stock upon approval of the Bankruptcy Court. In the year ended December 31, 2018, he received options to purchase 402,471 shares of the companys common stock under the Companys 2012 Employee Director Stock Plan. Using a Black-Scholes asset pricing model, these agreement were valued at $14,418. In 2018, those options and others from prior years totaling 781,098 were rescinded, having been improperly issued, and back pay of $40,000 was rebooked as accounts payable. As of September 30, 2020, Mr. Sills is owed $31,543 in back pay. \nIn the year ended December 31, 2020, Peter Zimeri received options to purchase 100,000 shares of the Companys common stock under the Companys 2012 Employee Director Stock Plan, at an exercise price of $0.05/share. Using a Black-Scholes asset pricing model, these options were valued at $6,431. \nIn the year ended December 31, 2019, prior to being a director, Ned Burke received 1,000,000 warrants to purchase common stock at an exercise price of $0.05 per share in exchange for services. These warrants were valued at $49,521. \n### Additional Narrative Disclosures \nA majority of the Companys employees, including its executive officers, have entered into employment contracts with the company. The company does not offer any benefits package, deferred compensation, or retirement plan at this time, other than an employee stock option plan. \nDirector Compensation \nIn March 2015, the Board of Directors approved a resolution to award compensation packages to the Companys independent directors for their service as directors or as members of any committee of directors. Each independent member of the board was to receive $10,000 in value of common stock, cash or five-year options per quarter. In addition, the Chairman of the Board was to receive a $3,000 monthly payment. In May 2018, the Board of Directors approved a resolution to cut the compensation package to $5,000 each quarter, and for it to be payable only in cash or to be accrued on the books. There was no additional compensation for the Chairman. Directors who are also officers are not to receive additional compensation for being Directors. Due to the necessity to restructure the Company, and the unusual amount of work that had been put onto Board members, the Board of Directors enabled stock to be purchased with accrued unpaid Board compensation with the approval of the Bankruptcy Court. After the Company exited Chapter 11, Board compensation reverted to $5,000 per quarter. In a resolution dated September 2020, the board voted to have the $5000 per quarter paid in restricted stock at the market price. \nITEM 12. \nThe following table sets forth certain information regarding beneficial ownership of the Companys Common Stock as of March 31, 2021, by: (I) each current director; \n(1) \nThe percentages in this table are based upon 241,721,947 shares of common stock issued and outstanding as of December 31, 2020, and assumes the persons vested options and warrants are exercised but none other. \n(2) \nBeneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission and includes voting and investment power with respect to the shares. Shares of Common Stock subject to options or warrants currently exercisable or exercisable within 60 days are deemed outstanding for computing the percentage of the person holding such options or warrants, but are not deemed outstanding for computing the percentage of any other person. \n(3) \nIncludes 5,000,000 fully vested and exercisable employee options owned by Benjamin Slager. Benjamin Slager also has 11,000,000 additional employee options awarded, with 6,000,000 vesting January 1, 2022, and 5,000,000 vesting with the commercialization of the CTS 2.0 system, unless the company enters into a merger or purchase agreement, at which time all options shall vest<|endoftext|>Market and privately negotiated transactions) in favor of our initial business combination. \n\n\nNotwithstanding the foregoing, if we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our amended and restated certificate of incorporation provides that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a group (as defined under Section13 of the Exchange Act), will be restricted from seeking redemption rights with respect to more than an aggregate of 15% of the shares sold in the Initial Public Offering, which we refer to as the Excess Shares. \n\n\n\n\n\n\nIf our initial proposed initial business combination is not completed, we may continue to try to complete an initial business combination with a different target until November19, 2022 or during any Extension Period. \n\nIf we do not complete our initial business combination within such 24-month period or any Extension Period, we will: (i)cease all operations except for the purpose of winding up, (ii)as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account including interest earned on the funds held in the trust account and not previously released to us to pay our franchise and income taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii)as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. \nOur initial stockholders, officers and directors have entered into a letter agreement with us, pursuant to which they have waived their rights to liquidating distributions from the trust account with respect to any founder shares held by them if we fail to complete our initial business combination prior to November19, 2022 or during any Extension Period. However, if our initial stockholders, officers or directors acquire public shares in or after the Initial Public Offering, they will be entitled to liquidating distributions from the trust account with respect to such public shares if we fail to complete our initial business combination within the allotted 24-month time period. \nOur initial stockholders, officers and directors have agreed, pursuant to a written agreement with us, that they will not propose any amendment to our amended and restated certificate of incorporation (i)to modify the substance or timing of our obligation to allow redemption in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination prior to November19, 2022 or (ii)with respect to any other provision relating to stockholders rights or pre-initial business combination activity, unless we provide our public stockholders with the opportunity to redeem their shares of ClassA common stock upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account including interest earned on the funds held in the trust account and not previously released to us to pay our franchise and income taxes divided by the number of then outstanding public shares. However, we may not redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 upon consummation of our initial business combination and after payment of deferred underwriting commissions (so that we are not subject to the SECs penny stock rules). \n\nIf we were to expend all of the net proceeds of the Initial Public Offering and the Private Placement, other than the proceeds deposited in the trust account, and without taking into account interest, if any, earned on the trust account, the per-share redemption amount received by stockholders upon our dissolution would be approximately $10.00. \nMarcum LLP, our independent registered public accounting firm, and the underwriters of the Initial Public Offering will not execute agreements with us waiving such claims to the monies held in the trust account. \nOur sponsor has agreed that it will be liable to us if and to the extent any claims by a third party for services rendered or products sold to us, or a prospective target business with which we have entered into a written letter of intent, confidentiality or similar agreement or business combination agreement, reduce the amount of funds in the trust account to below the lesser of (i)$10.00 per public share and (ii)the actual amount per public share held in the trust account as of the date of the liquidation of the trust account, if less than $10.00 per share due to reductions in the value of the trust assets, less taxes payable, provided that such liability will not apply to any claims by a third party or prospective target business who executed a waiver of any and all rights to the monies held in the trust account (whether or not such waiver is enforceable) nor will it apply to any claims under our indemnity of the underwriters of the Initial Public Offering against certain liabilities, including liabilities under the Securities Act. \n\nWe will have access to up to approximately $1,000,000 from the proceeds of the Initial Public Offering and the Private Placement with which to pay any such potential claims (including costs and expenses incurred in connection with our liquidation, currently estimated to be no more than approximately $100,000). In the event that we liquidate and it is subsequently determined that the reserve for claims and liabilities is insufficient, stockholders who received funds from our trust account could be liable for claims made by creditors; however, such liability will not be greater than the amount of funds from our trust account received by any such stockholder. \n\nFurthermore, if the pro rata portion of our trust account distributed to our public stockholders upon the redemption of our public shares in the event we do not complete our initial business combination prior to November19, 2022 or during any Extension Period, is not considered a liquidating distribution under Delaware law and such redemption distribution is deemed to be unlawful (potentially due to the imposition of legal proceedings that a party may bring or due to other circumstances that are currently unknown), then pursuant to Section174 of the DGCL, the statute of limitations for claims of creditors could then be six years after the unlawful redemption distribution, instead of three years, as in the case of a liquidating distribution. If we do not complete our initial business combination prior to November19, 2022 or during any Extension Period, we will: (i)cease all operations except for the purpose of winding up, (ii)as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account including interest earned on the funds held in the trust account and not previously released to us to pay our franchise and income taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii)as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. \nBecause we will not be complying with Section280, Section281(b)of the DGCL requires us to adopt a plan, based on facts known to us at such time that will provide for our payment of all existing and pending claims or claims that may be potentially brought against us within the subsequent ten years. Further, our sponsor may be liable only to the extent necessary to ensure that the amounts in the trust account are not reduced below (i)$10.00 per public share or (ii)such lesser amount per public share held in the trust account as of the date of the liquidation of the trust account, due to reductions in value of the trust assets, in each case net of the amount of interest withdrawn to pay taxes and will not be liable as to any claims under our indemnity of the underwriters of the Initial Public Offering against certain liabilities, including liabilities under the Securities Act. \n\nOur public stockholders will be entitled to receive funds from the trust account only upon the earlier to occur of: (i)the completion of our initial business combination, (ii)the redemption of any public shares properly tendered in connection with a stockholder vote to amend any provisions of our amended and restated certificate of incorporation (A)to modify the substance or timing of our obligation to allow redemption in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination prior to November19, 2022 or (B)with respect to any other provision relating to stockholders rights or pre-initial business combination activity, and (iii)the redemption of all of our public shares if we do not complete our business combination prior to November19, 2022 or during any Extension Period, subject to applicable law. \n### Competition \n\nFacilities \nSunrise Blvd. \n### Employees \n\nYou should consider carefully all of the risks described below, together with the other information contained in this annual report on Form10-K, before making a decision to invest in our securities. The risks include the following: \n\n\n\n\nIf we seek shareholder approval of our initial business combination, our sponsor and members of our management team have agreed to vote in favor of such initial business combination, regardless of how our public stockholders vote. \nIf we seek shareholder approval of our initial business combination, our sponsor, directors, executive officers, advisors and their affiliates may elect to purchase public shares or warrants, which may influence a vote on a proposed business combination and reduce the public float of our ClassA common stock or public warrants. \n\n\nIf the net proceeds of the Initial Public Offering and the Private Placement not being held in the trust account are insufficient to allow us to operate until November19, 2022, it could limit the amount available to fund our search for a target business or businesses and our ability to complete our initial business combination, and we will depend on loans from our sponsor, its affiliates or members of our management team to fund our search and to complete our initial business combination. \n\n\n\nWe may not be able to consummate an initial business combination prior to November19, 2022, in which case we would cease all operations except for the purpose of winding up and we would redeem our public shares and liquidate. \n\n\n\n\n\n\n\n\nThis material weakness resulted in a material misstatement of our derivative warrant liabilities, change in fair value of derivative warrant liabilities, ClassA common stock subject to possible redemption, accumulated deficit and related financial disclosures for the Affected Period. \nLikewise, if our financial statements are not filed on a timely basis, we could be subject to sanctions or investigations by the stock exchange on which our ClassA common stock are listed, the SEC or other regulatory authorities. Controls and Procedures. \n\nRisks Related to Our Business and the Initial Business Combination \n\n\n\nPursuant to the letter agreement, our initial stockholders, officers and directors have agreed to vote their founder shares, as well as any public shares purchased during or after the Initial Public Offering (including in open market and privately negotiated transactions), in favor<|endoftext|>$251,564, $37,509, and $58,601, respectively. \nThe weighted average grant date fair value of options granted to employees and directors during the years ended December 31, 2020, 2019, and 2018, was $62.11, $19.83 and $20.83, respectively. \nA summary of the activity in the RSUs granted to employees and directors for the year ended December 31, 2020, is as follows: \nThe weighted-average grant-date fair value of RSUs granted during the years ended December 31, 2020, 2019 and 2018, was $202.10, $71.46 and $41.45, respectively. \nc. \n### Employee Stock Purchase Plan: \nThe Company adopted an ESPP effective upon the consummation of the IPO. As of December 31, 2020, total of 2,687,451 shares were reserved for issuance under this plan. The number of shares of common stock reserved for issuance under the ESPP will increase automatically on January 1st of each year, for ten years, by the lesser of 1% of the total number of shares of the Companys common stock outstanding on December 31st of the preceding calendar year or 487,643 shares. \nHowever, the Companys board of directors may reduce the amount of the increase in any particular year at their discretion, including a reduction to zero. \nThe ESPP is implemented through an offering every six months. According to the ESPP, eligible employees may use up to 10% of their salaries to purchase common stock up to an aggregate limit of $10 per participant for every six months plan. The price of an ordinary share purchased under the ESPP is equal to 85% of the lower of the fair market value of the ordinary share on the subscription date of each offering period or on the purchase date. \nAs of December 31, 2020, 612,229 shares of common stock had been purchased under the ESPP. \nAs of December 31, 2020, 2,075,222 shares of common stock were available for future issuance under the ESPP. \nIn accordance with ASC No. 718, the ESPP is compensatory and, as such, results in recognition of compensation cost. \nF-43 \nSOLAREDGE TECHNOLOGIES, INC. \nAND ITS SUBSIDIARIES \n### NOTES TO \nU.S. \nNOTE 19:- \n### STOCK CAPITAL (Cont.) d. \nStock-based compensation expenses for employees and non-employees: \nThe Company recognized stock-based compensation expenses related to stock options and RSUs granted to employees and nonemployees and ESPP in the consolidated statement of income for the years ended December 31, 2020, 2019 and 2018, as follows: \nAs of December 31, 2020, there were total unrecognized compensation expenses in the amount of $230,503 related to non-vested equity-based compensation arrangements granted under the Companys Plans. These expenses are expected to be recognized during the period from January 1, 2021 through November 30, 2025. \nNOTE 20:- \n### EARNINGS PER SHARE \nBasic net EPS is computed by dividing the net earnings attributable to SolarEdge Technologies, Inc. by the weighted-average number of shares of common stock outstanding during the period. \nDiluted net EPS is computed by giving effect to all potential shares of common stock, to the extent dilutive, including stock options, RSUs, PSUs, shares to be purchased under the Companys ESPP, and the Notes due 2025, all in accordance with ASC No. 260, \"Earnings Per Share.\" \n2,276,818 and 312,128 shares of common stock were excluded from the calculation of diluted net EPS due to their anti-dilutive effect for the year ended December 31, 2020 and 2019, respectively. \nNo shares were excluded from the calculation for the year ended December 31, 2018. \nF-44 \nSOLAREDGE TECHNOLOGIES, INC. \nAND ITS SUBSIDIARIES \n### NOTES TO \nU.S. \nNOTE 20:- \n### EARNINGS PER SHARE (Cont.) \nThe following table presents the computation of basic and diluted EPS attributable to SolarEdge Technologies, Inc.: \nF-45 \nSOLAREDGE TECHNOLOGIES, INC. \nAND ITS SUBSIDIARIES \n### NOTES TO \nU.S. \nNOTE 21:- \nOTHER OPERATING EXPENSES (INCOME) \n(1) \nAt the time of the acquisition of Kokam, Kokam had an outstanding claim against it for damages. The claim was settled for an amount of $4,900, which was recognized as an expense in the year ended December 31, 2019. In March 2020, the Company was indemnified for the full amount by a major selling shareholder of Kokam, which was recognized as an income in the year ended December 31, 2020. \n(2) \nThe Company ceased to use intangible assets of one of SolarEdge Automation Machiness subsidiaries. \n(3) \nOn August 25, 2019, the Company announced the untimely death of Mr. Guy Sella, Founder, who had served as \nCEO and Chairman of the Board of Directors until shortly before his passing. The amount is related to payroll, bonus and acceleration of stock-based compensation award. \n(4) \nAs part of SolarEdge Automation Machines acquisition, the Company issued to a shareholder who had served as an executive of SolarEdge Automation Machines 334,095 PSUs, which were subject to certain performance goals and a vesting period. In December 2019, in connection with a separation agreement between the parties, the Company and the shareholder amended the original agreement, which resulted in a modification to the terms of 150,000 of the original PSUs, such as, the fair value of the PSU, the service period and the performance goals. The Company exercised a call option with respect to the remaining 183,395 PSUs, for a price per share equal to 0.01. \n(5) \nOn December 31, 2019, the Company completed the sale of a SolarEdge Automation Machines subsidiary. \nF-46 \nSOLAREDGE TECHNOLOGIES, INC. \nAND ITS SUBSIDIARIES \n### NOTES TO \nU.S. \nNOTE 22:- \nINCOME TAXES a. \n### Tax rates in U.S: \nThe Company is subject to U.S. federal tax at the rate of 21%. \nOn December 22, 2017, the Tax Cuts and Jobs Act (the \"Tax Act\") was signed into law making significant changes to U.S. income tax law. These changes include, but are not limited to, a corporate tax rate decrease from 35% to 21% effective for tax years 2018 onwards and created new taxes on certain foreign-sourced earnings and certain related-party payments. \nThe Tax Act required the Company to pay U.S. income taxes on accumulated foreign subsidiaries earnings not previously subject to U.S. The total tax liability was calculated to approximately $8,500. The Company has elected to pay its transition tax over the eight-year period provided in the Tax Act. \nb. \nKokam is subject to Korean tax on progressive tax rates of up to \n22%. \nc. \nSolarEdge Automation Machines is subject to Italian corporate tax rate of \n24%. \nd. \n### Corporate tax in Israel: \nTaxable income of Israeli companies is subject to corporate tax at the rate of 23%. \nIn December 2016, the Israeli Parliament approved the Economic Efficiency Law 2016 (Legislative Amendments for Applying the Economic Policy for the 2017 and 2018 Budget Years), which reduces the corporate income tax rate to 23% effective from January 1, 2018 onwards. \nThe Israeli subsidiary is also eligible for tax benefits as further described in note 22l. \ne. \n### Carryforward tax losses: \nAs of December 31, 2020, Kokam has carryforward tax losses of $28,520. \nAs of December 31, 2020, SolarEdge Automation Machines has carryforward tax losses of approximately $59,140. \nf. \n### Deferred taxes: \nDeferred taxes reflect the net tax effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. \nF-47 \nSOLAREDGE TECHNOLOGIES, INC. \nAND ITS SUBSIDIARIES \n### NOTES TO \nU.S. \nNOTE 22:- \n### INCOME TAXES (Cont.) \nThe Companys Israeli subsidiarys tax-exempt profit from Benefited Enterprises (as defined in note 22l) is permanently reinvested, as the Companys management and the Board of Directors has determined that the Company does not currently intend to distribute dividends. Therefore, deferred taxes have not been provided for such tax-exempt income. The Company intends to continue to reinvest these profits and does not currently foresee a need to distribute dividends out of such tax-exempt income. Therefore, no deferred taxes have been provided in respect of such tax-exempt income as the undistributed tax-exempt income is essentially permanent in duration. \nThe Company may incur additional tax liability in the event of intercompany dividend distributions by some of its subsidiaries. Such additional tax liability in respect of these subsidiaries has not been provided for in the Financial Statements as the Companys management and the Board of Directors has determined that the Company intends to reinvest earnings of its subsidiaries indefinitely. \nTaxes that would apply in the event of disposal of investments in subsidiaries have not been taken into account in computing deferred income taxes, as the Companys management and the Board of Directors has determined that the Companys intention to hold, and not to realize, these investments. \nSignificant components of the Companys deferred tax liabilities and assets are as follows: \n(1) \nRelated to deferred tax assets that would only be realizable upon the generation of net income in certain foreign jurisdictions. \nF-48 \nSOLAREDGE TECHNOLOGIES, INC. \nAND ITS SUBSIDIARIES \n### NOTES TO \nU.S. \nNOTE 22:- \nINCOME TAXES (Cont.) g. \n### Uncertain tax positions: \nThe total amount of gross unrecognized tax benefits was $10,564, $9,532 and $8,499 as of December 31, 2020, 2019 and 2018, respectively, and if recognized, would affect our effective tax rate. \nThe Company accrues interest and penalties related to unrecognized tax benefits in its provision for income taxes. The total amount of penalties and interest were $127 as of December 31, 2020 and not material as of December 31, 2019 and 2018. \nh. \nIncome before income taxes are comprised as follows: i. \nIncome taxes (tax benefit) are comprised as follows: \nF-49 \nSOLAREDGE TECHNOLOGIES, INC. \nAND ITS SUBSIDIARIES \n### NOTES TO \nU.S. \nNOTE 22:- \n### INCOME TAXES (Cont.) j. \nReconciliation of theoretical tax expense to actual tax expense: \nThe differences between the statutory tax rate of the Company and the effective tax rate are result of a variety of factors, including different effective tax rates applicable to non-US subsidiaries that have tax rates different than the Company tax rate, tax benefits relating to stock-based compensation and adjustments to valuation allowances on deferred tax assets on such subsidiaries. \nA reconciliation between the theoretical tax expense, assuming all income is taxed at the statutory tax rate applicable to income of the Company, and the actual tax expense (benefit) as reported in the consolidated statements of income is as follows: k. \n### Tax assessments: \nAs of December 31, 2020, the Company and certain of its subsidiaries filed U.S. federal and various state and foreign income tax returns. The statute of limitations relating to the consolidated U.S. federal income tax return is closed for all tax years up to and including 2016. Net operating losses generated in years prior to 2016 and carried forward are available to adjustment and subject to the statute of limitation provisions of such year when the net operating losses were utilized. \nThe statute of limitations related to tax returns of the Companys Israeli subsidiary for all tax years up to and including 2014 has lapsed. \nThe statute of limitations related to tax returns of the Companys other subsidiaries has lapsed for part of the tax years, which differs between the different subsidiaries. \nThe Company believes that it has adequately provided for reasonably foreseeable outcomes related to tax audits and settlements. The final tax outcome of any company tax audits could be different from that which is reflected in the Companys income tax provisions and accruals. Such differences could have a material effect on the Companys income tax provision and net income in the period in which such determination is made. \nThe Israeli tax authorities issued a tax assessment for 2018 against the Companys Israeli subsidiary in the total amount of $11.5 million. The Israeli subsidiary has challenged the tax assessment. \nThe Company believes it has adequately provided for this tax assessment such that any adverse results would have an immaterial impact on the Companys financial statements. \nF-50 \nSOLAREDGE TECHNOLOGIES, INC. \nAND ITS SUBSIDIARIES \n### NOTES TO \nU.S. \nNOTE 22:- \n### INCOME TAXES (Cont.) l. \nTax benefits for Israeli companies under the Law for the Encouragement of Capital Investments, 1959 (the \nInvestments Law): \nThe Israeli subsidiary elected tax year 2012 as a \"Year of Election\" for Benefited Enterprise status under the Investments Law. According to the Investments Law, the Israeli subsidiary elected to participate in the<|endoftext|>"},"task":{"kind":"string","value":"{\"file\": \"/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz\"}"}}},{"rowIdx":95,"cells":{"text":{"kind":"string","value":"<|endoftext|>Initial business combination by December 28, 2022 is not considered a liquidating distribution under Delaware law and such redemption distribution is deemed to be unlawful (potentially due to the imposition of legal proceedings that a party may bring or due to other circumstances that are currently unknown), then pursuant to Section174 of the DGCL,the statute of limitations for claims of creditors could then be six years after the unlawful redemption distribution, instead of three years, as in the case of a liquidating distribution. Accordingly, it is our intention to redeem our public shares as soon as reasonably possible following December 28, 2022 and, therefore, we do not intend to comply with those procedures. As such, our stockholders could potentially be liable for any claims to the extent of distributions received by them (but no more) and any liability of our stockholders may extend well beyond the third anniversary of such date. \nBecause we will not be complying with Section280, Section281(b) of the DGCL requires us to adopt a plan, based on facts known to us at such time that will provide for our payment of all existing and pending claims or claims that may be potentially brought against us within the subsequent 10years. As described above, pursuant to the obligation contained in our underwriting agreement, we will seek to have all vendors, service providers (other than our independent registered accounting firm), prospective target businesses or other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account. As a result of this obligation, the claims that could be made against us are significantly limited and the likelihood that any claim that would result in any liability extending to the trust account is remote. Further, our sponsor may be liable only to the extent necessary to ensure that the amounts in the trust account are not reduced below (i) $10.00 per public share or (ii)such lesser amount per public share held in the trust account as of the date of the liquidation of the trust account, due to reductions in value of the trust assets, in each case net of the amount of interest withdrawn to pay taxes and will not be liable as to any claims under our indemnity of the underwriters of our initial public offering against certain liabilities, including liabilities under the Securities Act. In the event that an executed waiver is deemed to be unenforceable against a third party, our sponsor will not be responsible to the extent of any liability for such third-partyclaims. \nIf we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, the proceeds held in the trust account could be subject to applicable bankruptcy law, and may be included in our bankruptcy estate and subject to the claims of third parties with priority over the claims of our stockholders. To the extent any bankruptcy claims deplete the trust account, we cannot assure you we will be able to return $10.00 per share to our public stockholders. Additionally, if we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, any distributions received by stockholders could be viewed under applicable debtor/creditor and/or bankruptcy laws as either a preferential transfer or a fraudulent conveyance. Furthermore, our board of directors may be viewed as having breached its fiduciary duty to our creditors and/or may have acted in bad faith, thereby exposing itself and our company to claims of punitive damages, by paying public stockholders from the trust account prior to addressing the claims of creditors. We cannot assure you that claims will not be brought against us for these reasons. \nOur public stockholders will be entitled to receive funds from the trust account only upon the earlier to occur of: (i)the completion of our initial business combination, (ii)the redemption of any public shares properly tendered in connection with a stockholder vote to amend any provisions of our amended and restated certificate of incorporation (A)to modify the substance or timing of our obligation to offer redemption rights in connection with any proposed initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination by December 28, 2022 or (B)with respect to any other provision relating to stockholders rights or pre-initialbusiness combination activity, and (iii)the redemption of all of our public shares if we are unable to complete our business combination by December 28, 2022, subject to applicable law. Stockholders who do not exercise their redemption rights in connection with anamendment to our certificate of incorporation would still be able to exercise their redemption rights in connection with a subsequent business combination. In no other circumstances will a stockholder have any right or interest of any kind to or in the trust account. In the event we seek stockholder approval in connection with our initial business combination, a stockholders voting in connection with the initial business combination alone will not result in a stockholders redeeming its shares to us for an applicable pro rata share of the trust account. Such stockholder must have also exercised its redemption rights as described above. \n### Competition \nIn identifying, evaluating and selecting a target business for our initial business combination, we have encountered and may continue to encounter competition from other entities having a business objective similar to ours, including other blank check companies, private equity groups and leveraged buyout funds, and operating businesses seeking strategic business combinations. Moreover, many of these competitors possess greater financial, technical, human and other resources than we do. Our ability to acquire larger target businesses is limited by our available financial resources. This inherent limitation gives others an advantage in pursuing the initial business combination of a target business. \nFacilities \n\n### Employees \nWe currently have two officers. The amount of time they devote in any time period varies based on the stage of the initial business combination process we are in. We do not intend to have any full-timeemployees prior to the completion of our initial business combination. \nPeriodic Reporting and Financial Information \nOur units, ClassA common stock and warrants are registered under the Exchange Act, and we have reporting obligations, including the requirement that we file annual, quarterly and current reports with the SEC. In accordance with the requirements of the Exchange Act, this report contains financial statements audited and reported on by our independent registered public accountants. \nWe will provide stockholders with audited financial statements of the prospective target business as part of the tender offer materials or proxy solicitation materials sent to stockholders to assist them in assessing the target business. In all likelihood, these financial statements will need to be prepared in accordance with, or reconciled to, GAAP, or IFRS, depending on the circumstances, and the historical financial statements may be required to be audited in accordance with the standards of the PCAOB. These financial statement requirements may limit the pool of potential targets we may conduct an initial business combination with because some targets may be unable to provide such statements in time for us to disclose such statements in accordance with federal proxy rules and complete our initial business combination within the prescribed time frame. We cannot assure you that any particular target business identified by us as a potential business combination candidate will have financial statements prepared in accordance with GAAP or that the potential target business will be able to prepare its financial statements in accordance with the requirements outlined above. To the extent that these requirements cannot be met, we may not be able to acquire the proposed target business. While this may limit the pool of potential business combination candidates, we do not believe that this limitation will be material. \nWe will be required to evaluate our internal control procedures for the fiscal year ending December31, 2021 as required by the Sarbanes-OxleyAct. Only in the event we are deemed to be a large accelerated filer or an accelerated filer, and no longer qualify as an emerging growth company, will we be required to have our internal control procedures audited. A target company may not be in compliance with the provisions of the Sarbanes-OxleyAct regarding adequacy of their internal controls. The development of the internal controls of any such entity to achieve compliance with the Sarbanes-OxleyAct may increase the time and costs necessary to complete any such business combination. We have filed a Registration Statement on Form8-Awith the SEC to voluntarily register our securities under Section12 of the Exchange Act. As a result, we are subject to the rules and regulations promulgated under the Exchange Act. We have no current intention of filing a Form15 to suspend our reporting or other obligations under the Exchange Act prior or subsequent to the consummation of our initial business combination. \nWe will remain an emerging growth company until the earlier of (1)the last day of the fiscal year (a)following the fifth anniversary of the completion of our initial public offering, (b)in which we have total annual gross revenue of at least $1.07billion, or (c)in which we are deemed to be a large accelerated filer, which means the market value of our shares of ClassA common stock that are held by non-affiliatesexceeds $700million as of the prior June 30 th \n, and (2)the date on which we have issued more than $1.0billion in non-convertibledebt during the prior three-yearperiod. \n\nItem 1A. \n### Risk Factors \nAs a smaller reporting company, we are not required to include risk factors in this annual report. However, below is a partial list of material risks, uncertainties and other factors that could have a material effect on the Company and its operations: we are an early stage Company with no revenue or basis to evaluate our ability to select a suitable business target; we may not be able to obtain additional financing to complete our initial business combination or reduce number of shareholders requesting redemption; an active market for our public securities' may not develop and you will have limited liquidity and trading; and our financial performance following a business combination with an entity may be negatively affected by their lack an established record of revenue, cash flows and experienced management. \nFor the complete list of risks relating to our operations, see the section titled Risk Factors contained in our prospectus dated December 28, 2020. \nItem 1B. \n\nNot applicable. \nItem 2. \n### Properties \n\nItem 3. \n### Legal Proceedings \nTo the knowledge of our management team, there is no litigation currently pending or contemplated against us, any of our officers or directors in their capacity as such or against any of our property. \nItem 4. \n### Mine Safety Disclosures \nNot applicable. \nPART II \n### Item 5. \nMarket for Registrants Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities \n(a) \n### Market Information \nOur units, Class A common stock and warrants are each traded on the NASDAQ Capital Market under the symbols VIIAU, VII and VIIAW, respectively. Our units commenced public trading on December 23, 2020, and our Class A common stock and warrants commenced public trading separately on February 12, 2021. \n(b) \n### Holders \nOn March 26, 2021, there was 1 holder of record of our units, 1 holder of record of our shares of Class A common stock and 2 holders of record of our warrants. \n(c) \n### Dividends \n\n(d) \n\nNone. \n(e) \n\nOn December 28, 2020, simultaneously with the closing of our initial public offering, pursuant to the Private Placement Warrants Purchase Agreement, the Company completed the private sale of an aggregate of 7,350,000 warrants (the Private Placement Warrants) to the Sponsor at a purchase price of $1.00 per Private Placement Warrant, generating gross proceeds to the Company of $7,350,000. The Private Placement Warrants are identical to the Warrants included in the Units sold as part of the Units in the IPO, except as otherwise disclosed in the Registration Statement. No underwriting discounts<|endoftext|>Sold during the year ended December 31, 2019 compared to $67.14 per Bbl of oil and $3.10 per Mcf of gas sold during the year ended December 31, 2018 \n\nProduction and ad valorem taxes decreased $0.9 million, or 17%, to $4.3 million for the year ended December 31, 2019, from $5.1 million for the year ended December 31, 2018. The decrease in production and ad valorem taxes was attributable to the decrease in production.As a percentage of oil and gas revenue, production and ad valorem taxes was 6% for the year ended December 31, 2019 compared to 5% for the year ended December 31, 2018.The increase during the year ended December 31, 2019 was partially related to approximately $0.7 million increase in ad valorem taxes assessed on our properties compared to the prior year. \n\nMarketing and transportation expense decreased by less than $0.1 million or 1%, to $2.4 million for the year ended December 31, 2019, from $2.4 million for the year ended December 31, 2018. \nAs a percentage of revenue, marketing and transportation expense was 3% during the year ended December 31, 2019 as compared to 2% for same period in the prior year.Marketing and transportation expense as a percentage of revenue was lower during the year ended December 31, 2018 due to certain oil and gas interests that the Company owns in the Eagle Ford that contributed a significant amount of production but contractually are not charged for any marketing and transportation expenses. \n\nAmortization of royalty interests in oil and natural gas properties expense decreased $4.2 million, or 25%, to $12.7 million for the year ended December 31, 2019, from $17.0 million for the year ended December 31, 2018. \nThe decrease in amortization of royalty interests in oil and gas properties expense was attributable to a portion of our interests in certain oil and natural gas properties sold during Q1 2018 having had a higher amortization rate in addition to a decrease in production during the year ended December 31, 2019. \n### General, Administrative and Other Expense \nGeneral, administrative, and other expense increased by $ \n2.4 million, or \n%, to $ \n11.9 million for the year ended \n### December 31 \n, from $ \n9.5 million for the year ended \n### December 31, 2018 \nThe increase in general, administrative, and other expense was attributable to the change in management related to the Transactions and the additional costs incurred related to being a publicly traded company.In addition, the Company incurred $2.5 million in non-cash stock-based compensation expense during 2019 in connection with the implementation of our long-term incentive plan. \n\nThe change in the fair value of warrant liability decreased by $21.7 million, or 78% to $6.1 million for the year ended December 31, 2019, from $27.8 million for the year ended December 31, 2018.The decrease in the fair value of the warrant liability is attributable to the decrease in the Companys stock price that was used in calculating the fair value of the warrant liability. \nInterest Expense \nInterest expense increased by $0.1 million, or 6%, to $2.5 million for the year ended December 31, 2019, from $2.4 million for the year ended December 31, 2018. \nThe increase in interest expense was attributable to greater average outstanding borrowings partially offset by lower interest rates under our Credit Facility. \n### Income Taxes \nIncome tax expense increased to $3.9 million for the year ended December 31, 2019, compared to $3.3 million for the year ended December 31, 2018. \nThe increase in income taxes was attributable to the Company only incurring income taxes for a portion of the prior year because the Transactions did not take place until August 23, 2018. Prior to the Transactions, Royal was treated as a partnership and was not subject to income taxes. \n### Adjusted EBITDA \nAdjusted EBITDA is a supplemental non-GAAP financial measure used by management and external users of our financial statements, such as industry analysts, investors, lenders, and rating agencies. We believe Adjusted EBITDA is useful because it allows us to evaluate our performance and compare the results of our operations period to period without regard to our financing methods or capital structure. In addition, management uses Adjusted EBITDA to evaluate cash flow available to pay dividends to our common stockholders. \nWe define Adjusted EBITDA as net income before interest expense, net, depletion expense, provision for income taxes, depreciation, unrealized gains and losses on commodity derivative instruments, non-cash gains and losses on revaluation of warrant liability, and non-cash equity-based compensation. Adjusted EBITDA is not a measure of net income as determined by GAAP. We exclude the items listed above from net income in arriving at Adjusted EBITDA because these amounts can vary substantially from company to company within our industry depending upon accounting methods and book values of assets, capital structures and the method by which the assets were acquired. Certain items excluded from Adjusted EBITDA are significant components in understanding and assessing a companys financial performance, such as a companys cost of capital and tax structure, as well as historic costs of depreciable assets, none of which are components of Adjusted EBITDA. \nAdjusted EBITDA should not be considered an alternative to, or more meaningful than, net income, royalty income, cash flow from operating activities or any other measure of financial performance presented in accordance with GAAP. Our computations of Adjusted EBITDA may not be comparable to other similarly titled measures of other companies. \nThe following table presents a reconciliation of net income to Adjusted EBITDA, our most directly comparable GAAP financial measure for the periods indicated (in thousands). \n\nOverview \nOur primary sources of liquidity have historically been cash flows from operations and equity and debt financings, and our primary uses of cash are for dividends and for the acquisition of additional Royalties. We intend to finance potential future acquisitions through a combination of cash on hand, borrowings under our Credit Facility and, subject to market conditions and other factors, proceeds from one or more capital market transactions, which may include debt or equity offerings. Our ability to generate cash is subject to a number of factors, some of which are beyond our control, including commodity prices and general economic, financial, competitive, legislative, regulatory, and other factors, including weather. \nOur shareholders agreement does not require us to distribute any of the cash we generate from operations.Cash dividends are made to the common stockholders of record on the applicable record date, generally within60days after the end of each quarter. Available cash for each quarters dividend is determined by the Board of Directors following the end of such quarter. Available cash for each quarter generally equals Adjusted EBITDA reduced for cash needed for debt service, income tax requirements and other contractual obligations and fixed charges that the Board of Directors deems necessary or appropriate, if any. \nThe effects of the COVID-19 outbreak and the recent oil price decline could have significant adverse consequences for general economic, financial and business conditions, as well as for our business and financial position and the business and financial position of the operators of our mineral interests and may, among other things, impact our ability to generate cash flows from operations, access the capital markets on acceptable terms or at all, and affect our future need or ability to borrow under our Credit Facility. In addition to our potential sources of funding, the effects of such global events may impact our liquidity or need to alter our allocation or sources of capital, implement further cost reduction measures, and change our financial strategy. Although the COVID-19 outbreak and the recent oil price decline could have a broad range of effects on our sources and uses of liquidity, the ultimate effect thereon, if any, will depend on future developments, which cannot be predicted at this time. \nThe following table presents cash distributions approved by the Board of Directors of our general partner for the periods presented. \n(1) \nRepresents the initial pro rata distribution of our quarterly dividend for the period from August 23, 2018 through September 30, 2018. \n### Indebtedness \nFalcon Credit Facility \nOn the Closing Date, we entered into a credit facility with Citibank, N.A., as administrative agent and collateral agent for the lenders from time-to-time party thereto (the Credit Facility). The Credit Facility provides for a maximum credit amount of $500.0 million and a borrowing base based on our oil and natural gas reserves and other factors of $70.0 million, subject to scheduled semi-annual and other borrowing base redeterminations and expires on the fifth anniversary of the Closing Date. As of December 31, 2020, the Company had borrowings of $39.8 million under the Credit Facility at an interest rate of 2.65% and $30.2 million available for future borrowings under the Credit Facility. \nPrincipal amounts borrowed are payable on the maturity date. We have a choice of borrowing at the base rate or LIBOR, with such borrowings bearing interest, payable quarterly in arrears for base rate loans and one month, two-month, three month or six-month periods for LIBOR loans. LIBOR loans bear interest at a rate per annum equal to the rate appearing on the Reuters Reference LIBOR01 or LIBOR02 page as the LIBOR, for deposits in dollars at 12:00 noon (London, England time) for one, two, three, or six months plus an applicable margin ranging from 200 to 300 basis points. Base rate loans bear interest at a rate per annum equal to the greatest of (i) the agent banks reference rate, (ii) the federal funds effective rate plus 50 basis points and (iii) the rate for one-month \nLIBOR loans plus 1%, plus an applicable margin ranging from 100 to 200 basis points. \nThe scheduled redetermination s of our borrowing base take place on April 1 st and October 1 st of each year \nObligations under the Credit Facility are guaranteed by us and each of our existing and future, direct and indirect domestic subsidiaries (the Credit Parties) and are secured by all of the present and future assets of the Credit Parties, subject to customary carve-outs. \nThe Credit Facility contains certain customary representations and warranties, affirmative covenants, negative covenants, and events of default. As of December 31, 2020, the Company was in compliance with such covenants. The negative covenants include restrictions on the Companys ability to incur additional indebtedness, acquire and sell assets, create liens, enter into certain lease agreements, make investments, and make distributions. \nOn July 27, 2017, the U.K. Financial Conduct Authority announced that it intends to stop persuading or compelling banks to submit LIBOR rates after 2021. Our Credit Facility includes provisions to determine a replacement rate for LIBOR if necessary during its term, which require that we and our lenders agree upon a replacement rate based on the then-prevailing market convention for similar agreements. We currently do not expect the transition from LIBOR to have a material impact on us. However, if clear market standards and replacement methodologies have not developed as of the time LIBOR becomes unavailable, we may have difficulty reaching agreement on acceptable replacement rates under our Credit Facility. In the event that we do not reach agreement on an acceptable replacement rate for LIBOR, outstanding borrowings under the Credit Facility would revert to a floating rate equal to the alternative base rate (which, as of the time that LIBOR becomes unavailable, is equal to the greater of the agent banks reference rate and the federal funds effective rate plus 0.50%) plus the applicable margin for the alternative base rate which ranges between 1.00% and 2.00%. If we are unable to negotiate replacement rates on favorable terms, it could have a material adverse effect on our financial condition, results of operations, and cash distributions to unitholders. \n### Cash Flows \n\nA summary of the changes in cash flow data for the years ended December31, 2020 and 2019 are set forth in the following table (in thousands, except percentages): \n\n\nThe decrease in cash flow provided by operating activities for the year ended December 31, 2020 as compared to the year ended December 31, 2019 was primarily related<|endoftext|>Capabilities. \n\nWe intend to acquire one or more businesses that will benefit from being publicly traded and can effectively utilize the broader access to capital and the public profile that are associated with being a publicly traded company. We will focus on companies that have proven technology or products, with strong supporting data, near and long term milestones and strong fundamentals. We do not intend to acquire start-up companies or companies without a path to long-term profitability. \nIn the event that we decide to enter into a business combination with a target business that does not meet the above criteria and guidelines, we will disclose that the target business does not meet the above criteria in our stockholder communications related to our initial business combination, which, as discussed in the Companys Form S-4, would be in the form of proxy solicitation or tender offer materials, as applicable, that we would file with the SEC. \n\nNasdaq rules require that we must complete one or more business combinations having an aggregate fair market value of at least 80% of the value of the assets held in the trust account (excluding the deferred underwriting commissions and taxes payable on the interest earned on the trust account). If our board of directors is not able to independently determine the fair market value of the target business or businesses, we will obtain an opinion from an independent investment banking firm that is a member of FINRA or from an independent accounting firm, with respect to the satisfaction of such criteria. \nIf less than 100% of the equity interests or assets of a target business or businesses are owned or acquired by the post-transaction company, the portion of such business or businesses that is owned or acquired is what will be valued for purposes of the 80% of netassetstest. \n\nIn a business combination transaction with us, the owners of the target business may, for example, exchange their shares of stock in the target business for our ClassA common stock (or shares of a new holding company) or for a combination of our ClassA common stock and cash, allowing us to tailor the consideration to the specific needs of the sellers. The typical initial public offering process takes a significantly longer period of time than the typical business combination transaction process, and there are significant expenses and market and other uncertainties in the initial public offering process, including underwriting discounts and commissions, marketing and road show efforts that may not be present to the same extent in connection with a business combination with us. \nFollowing an initial business combination, we believe the target business would then have greater access to capital, an additional means of providing management incentives consistent with stockholders interests and the ability to use its shares as currency for acquisitions. \n\nWe will remain an emerging growth company until the earlier of (1)the last day of the fiscal year (a)following the fifth anniversary of the completion of the IPO, (b)in which we have total annual gross revenue of at least $1.07billion, or (c)in which we are deemed to be a large accelerated filer, which means the market value of our ClassA common stock that is held by non-affiliates exceeds $700million as of the prior June30th, and (2)the date on which we have issued more than $1.0billion in non-convertible debt securities during the prior three-year period. \nWe will remain a smaller reporting company until the last day of the fiscal year in which (1)the market value of our common stock held by non-affiliates exceeds $250million as of the prior June30th, or (2)our annual revenues exceeded $100million during such completed fiscal year and the market value of our common stock held by non-affiliates exceeds $700million as of the prior June30th. \n### Financial Position \nWith funds available for a business combination initially in the amount of $110,975,000 (assuming no redemptions) after payment of $4,025,000 of deferred underwriting fees), we offer a target business a variety of options such as creating a liquidity event for its owners, providing capital for the potential growth and expansion of its operations or strengthening its balance sheet by reducing its debt ratio. \n\nWe are not presently engaged in, and we will not engage in, any operations until the time at which our initial business combination is consummated. We intend to effectuate our initial business combination using cash from the proceeds of the IPO and the private placement of the private placementunits, the proceeds of the sale of our shares in connection with our initial business combination (including pursuant to forward purchase agreements or backstop agreements we may enter into following the consummation of the IPO or otherwise), shares issued to the owners of the target, debt issued to bank or other lenders or the owners of the target, or a combination of the foregoing. \n\nWe have selected a specific business combination target and have entered into a business combination agreement with such target. Although our management has assessed certain risks inherent in our potential target business with which we may combine, we cannot assure you that our assessment will result in our identifying all risks that the target business may encounter. Furthermore, some of those risks may be outside of our control, meaning that we can do nothing to control or reduce the chances that those risks will adversely affect the target business. \nWe may need to obtain additional financing to complete our initial business combination, either because the transaction requires more cash than is available from the proceeds held in our trust account or because we become obligated to redeem a significant number of our public shares upon completion of the business combination, in which case we may issue additional securities or incur debt in connection with such business combination. We have entered into certain PIPE subscription agreements in connection with our initial business combination as further discussed herein. We are not currently a party to any arrangement or understanding with any third party with respect to raising any additional funds through incurrence of debt or otherwise. \n\nOver the course of their careers, the members of our management team have developed a broad network of contacts and corporate relationships around the world, which includes private equity firms, venture capitalists and entrepreneurs. In addition, members of our management team have developed contacts from serving on the boards of directors of public companies. \n\nIn addition, as of the date of this Form 10-K we are paying our sponsor $10,000 per month for office space, secretarial and administrative services provided to members of our management team. \n\nMembers of our management team and our independent directors are eligible to receive our founder shares and/or private placementunits following the IPO and, accordingly, may have a conflict of interest in determining whether a particular target business is an appropriate business with which to effectuate our initial business combination. \n\n\n\n\n\n\n\n\n\n\n\n### Type of Transaction \nWhether \nStockholder \n### Approval Is \nRequired \nPurchase of assets \nNo \n\nNo \n\nNo \n\nYes \nUnder Nasdaqs listing rules, stockholder approval would be required for our initial business combination if, for example: we issue shares of common stock that will be equal to or in excess of 20% of the number of our shares of common stock then outstanding (other than in a public offering); any of our directors, officers or substantial stockholders (as defined by Nasdaq rules) has a 5% or greater interest earned on the trust account (or such persons collectively have a 10% or greater interest), directly or indirectly, in the target business or assets to be acquired or otherwise and the present or potential issuance of common stock could result in an increase in outstanding common stock or voting power of 5% or more; \n\n\n\nThe purpose of any such purchases of shares could be to (i)vote such shares in favor of the business combination and thereby increase the likelihood of obtaining stockholder approval of the business combination or (ii)to satisfy a closing condition in an agreement with a target that requires us to have a minimum net worth or a certain amount of cash at the closing of our initial business combination, where it appears that such requirement would otherwise not be met. \nIn addition, if such purchases are made, the public float of our ClassA common stock or public warrants may be reduced and the number of beneficial holders of our securities may be reduced, which may make it difficult to maintain or obtain the quotation, listing or trading of our securities on a national securities exchange. \nOur sponsor, initial stockholders, officers, directors and/or their affiliates anticipate that they may identify the stockholders with whom our initial stockholders, officers, directors or their affiliates may pursue privately negotiated purchases by either the stockholders contacting us directly or by our receipt of redemption requests submitted by stockholders (in the case of ClassA common stock) following our mailing of proxy materials in connection with our initial business combination. To the extent that our sponsor, officers, directors, advisors or their affiliates enter into a private purchase, they would identify and contact only potential selling stockholders who have expressed their election to redeem their shares for a prorata share of the trust account or vote against our initial business combination, whether or not such stockholder has already submitted a proxy with respect to our initial business combination but only if such shares have not already been voted at the stockholder meeting related to our initial business combination. Our sponsor, executive officers, directors, advisors or any of their affiliates will select which stockholders to purchase shares from based on a negotiated price and number of shares and any other factors that they may deem relevant, and will only purchase shares if such purchases comply with RegulationM under the Exchange Act and the other federal securities laws. \n\nWe will provide our public stockholders with the opportunity to redeem all or a portion of their shares of ClassA common stock upon the completion of our initial business combination at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account calculated as of two business days prior to the consummation of the initial business combination, including interest earned on the funds held in the trust account (net of permitted withdrawals), divided by the number of then outstanding public shares, subject to the limitations described herein. \n\nIn the event the aggregate cash consideration we would be required to pay for all shares of ClassA common stock that are validly submitted for redemption plus any amount required to satisfy cash conditions pursuant to the terms of the proposed business combination exceed the aggregate amount of cash available to us, we will not complete the business combination or redeem any shares in connection with such initial business combination, and all shares of ClassA common stock submitted for redemption will be returned to the holders thereof. \n\n\n\nIf we provide our public stockholders with the opportunity to redeem their public shares in connection with a stockholder meeting, we will: conduct the redemptions in conjunction with a proxy solicitation pursuant to Regulation14A of the Exchange Act, which regulates the solicitation of proxies, and not pursuant to the tender offer rules, and file proxy materials with the SEC. \nOur initial stockholders will count towards this quorum and, pursuant to the letter agreement, our sponsor, officers and directors have agreed to vote any founder shares they hold and any public shares purchased during or after the IPO (including in open market and privately-negotiated transactions) in favor of our initial business combination. As a result, in addition to our initial stockholders founder shares and private placement shares, we would need only 3,562,501, or 35.6%, of the 10,000,000 public shares sold in the IPO to be voted in favor of an initial business combination (assuming all outstanding shares are voted) in order to have our initial business combination approved (assuming the over-allotment option is not exercised). \nIf a stockholder vote is not required and we do not decide to hold a stockholder vote for<|endoftext|>Pursuant to such agreement will be reduced to the extent necessary to avoid the application of any golden parachute excise tax pursuant to Section4999 of the Internal Revenue Code of 1986, as amended, if such reduction would result in Mr.Britti receiving greater compensation and benefits on an after-tax basis. Mr.Brittis employment agreement provides that, to the fullest extent permitted by law, we will indemnify Mr.Britti (and advance certain legal and other expenses) in connection with the defense of any lawsuit or other claim to which Mr.Britti is made a party by reason of performing his responsibility as an officer or executive officer of RealPage or any if its subsidiaries, other than claims brought against Mr.Britti by any of his former employers. \n### David G. Monk \nOn May1, 2015, we entered into an Employment Agreement with David G. Monk (the Monk Employment Agreement). The Monk Employment Agreement sets a minimum base salary for Mr.Monk at $320,000 with a target annual bonus of 50% of his annual base salary as determined under the management incentive plan with performance criteria to be established by our Compensation Committee. Mr.Monk is eligible to receive equity grants under the Companys Equity Incentive Plan or any successor plan. Mr.Monk is entitled to four weeks paid vacation per year, is eligible to participate in all employee welfare benefits plans and other benefit programs made available generally to our employees or senior executives and is reimbursed for all reasonable business expenses. Additionally, we make available to Mr.Monk all fringe benefits and perquisites that are made available to other senior executives. The Monk Employment Agreement also provides for $3,500 per year in medical benefits to be used toward preventative medical expenses, including annual physical examinations, and certain benefits upon termination of employment as a result of death, Disability, or without Cause or for Good Reason (each as defined in the Monk Employment Agreement) or in connection with a Change in Control of RealPage each of which is disclosed below under Executive Compensation Potential Payments Upon \nTermination or Change in Control. For a period of two years following the termination of Mr.Monks employment for any reason, Mr.Monk will be restricted from competing with RealPage and its affiliates and soliciting RealPage and its affiliates respective customers, licensees or employees. The Monk Employment Agreement also includes confidentiality provisions, non-interference and non-disparagement obligations during his employment and following termination. \nMr.Monks employment agreement also provides that payments and benefits payable pursuant to such agreement will be reduced to the extent necessary to avoid the application of any golden parachute excise tax pursuant to Section4999 of the Internal Revenue Code of 1986, as amended, if such reduction would restrict Mr.Monk from receiving greater compensation and benefits on an after-tax basis. Mr.Monks employment agreement also provides that, to the fullest extent permitted by law, we will indemnify Mr.Monk (and advance certain legal and other expense) in connection with the defense of any lawsuit or other claim to which Mr.Monk is made a party by reason of performing his responsibilities as an officer or executive officer of RealPage or any of its subsidiaries, other than claims brought against Mr.Monk by any of his former employers. \n### Thomas C. Ernst, Jr. \nOn January7, 2019, we entered into an employment agreement with Mr.Ernst (the Ernst Employment Agreement). The Ernst Employment Agreement sets a minimum salary for Mr.Ernst at $450,000 with a target annual bonus of 70% of his annual base salary as determined under the management incentive plan with performance criteria to be established by the Compensation Committee, and Mr.Ernst is entitled to equity grants pursuant to the Companys Equity Incentive Plan or any successor plan. Mr.Ernst is entitled to four weeks paid vacation per year, is eligible to participate in all employee welfare benefits plans and other benefit programs made available generally to our employees or senior executives and is reimbursed for all reasonable business expenses. Additionally, we make available to Mr.Ernst all fringe benefits and perquisites that are made available to other senior executives. The Ernst Employment Agreement also provides for $3,500 per year in medical benefits to be used toward preventative medical expenses, including annual physical examinations, and certain benefits upon termination of employment as a result of death, Disability, or without Cause or for Good Reason (each defined in the Ernst Employment Agreement) or in connection with a Change in Control of RealPage each of which is disclosed below under Executive Compensation Potential Payments Upon Termination of Change in Control. For a period of two years following the termination of Mr.Ernsts employment for any reason, Mr.Ernst will be restricted from competing with RealPage and its affiliates and soliciting RealPage and its affiliates respective customers, licensees or employees. The Ernst Employment Agreement also includes confidentiality provisions, non-interference and non-disparagement obligations during his employment and following termination. \nThe Ernst Employment Agreement provides that payments and benefits payable pursuant to such agreement will be reduced to the extent necessary to avoid the application of any golden parachute excise tax pursuant to Section4999 of the Internal Revenue Code of 1986, as amended, if such reduction would result in Mr.Ernst receiving greater compensation and benefits on an after-tax basis. Mr.Ernsts employment agreement provides that, to the fullest extent permitted by law, we will indemnify Mr.Ernst (and advance certain legal and other expenses) in connection with the defense of any lawsuit or other claim to which Mr.Ernst is made a party by reason of performing his responsibility as an officer or executive officer of RealPage or any if its subsidiaries, other than claims brought against Mr.Ernst by any of his former employers. \nWe entered into a Transition Agreement with Mr.Ernst on July13, 2020 in order to assist with the transition of Mr.Ernsts duties to the Company, and pursuant to which Mr.Ernst remained an employee of the Company until August15, 2020 and provided consulting services thereafter through December31, 2020. The Transition Agreement provided that Mr.Ernst remain as a service provider (as defined in the 2010 Equity Incentive Plan) until termination of the Transition Agreement, and his existing restricted stock and stock option agreements continued to vest through December31, 2020. \n\nThe following table sets forth information regarding equity awards held by our NEOs as of December31, 2020: \n\n(1) \nStock option awards with an expiration date during the years 2020 through 2023 vested as to 5% of the shares subject to such award on the first day of each calendar quarter, beginning on the first day of the calendar quarter following the date of grant, for 15 consecutive calendar quarters and as to the remaining 25% of the shares subject to such option on the first day of the calendar quarter following such fifteenth consecutive calendar quarter. Stock option awards with an expiration date during the year 2024 or later vested as to one-twelfth \n(1/12) of the shares subject to such award on the first day of each calendar quarter, beginning on the first day of the calendar quarter following the date of grant, for 12 consecutive quarters. All such stock options awarded to each of our NEOs were fully vested as of December31, 2020. \n(2) \nValue based on $87.24, which was the closing market price of our common stock on December31, 2020. See notes (3)through (5) below for market price thresholds required to be achieved for eligibility and vesting. \n(3) \n### One-fourth \nJuly1, 2021, the average closing price per share of the Companys common stock for 20 consecutive trading days equals or exceeds the threshold price of $60.89 per share, an additional one-fourth \nJuly1, 2021, the average closing price per share of the Companys common stock for 20 consecutive trading days equals or exceeds the target price of $66.98 per share, an additional one-fourth \nJuly1, 2021, the average closing price per share of the Companys common stock for 20 consecutive trading days equals or exceeds the exceed price of $73.07 per share, and an additional one-fourth \nJuly1, 2021, the average closing price per share of the Companys common stock for 20 consecutive trading days equals or exceeds the maximum price of $85.24 per share (Shares that become eligible to vest, if any, are referred to as Eligible Shares). Once any shares become Eligible Shares, they will vest 25% per quarter over the year following the date they become Eligible Shares beginning on the first day of the next calendar quarter, subject to continued status as a service provider (as defined in the 2010 Equity Incentive Plan) through each vesting date, provided that those Shares that have become Eligible Shares will be fully vested on July1, 2021, or upon a Change in Control, Death or Disability (as defined in the 2010 Equity Incentive Plan). The restricted stock shall accelerate and shall be fully vested immediately prior to a Change in Control of the Company (as defined in the 2010 Equity Incentive Plan) that results in consideration per share of the Companys common stock equal to or in excess of $60.89 per share with respect to the first tranche of shares, $66.98 per share with respect to the second tranche of shares, $73.07 per share with respect to the third tranche of shares, and $85.24 per share with respect to the fourth tranche of shares, respectively. \n(4) \n### One-fourth \nJuly1, 2022, the average closing price per share of the Companys common stock for 20 consecutive trading days equals or exceeds the threshold price of $69.50 per share, an additional one-fourth \nJuly1, 2022, the average closing price per share of the Companys common stock for 20 consecutive trading days equals or exceeds the target price of $77.84 per share, an additional one-fourth \nJuly1, 2022, the average closing price per share of the Companys common stock for 20 consecutive trading days equals or exceeds the exceed price of $88.96 per share, and an additional one-fourth \nJuly1, 2022, the average closing price per share of the Companys common stock for 20 consecutive trading days equals or exceeds the maximum price of $100.08 per share (Shares that become eligible to vest, if any, are referred to as Eligible Shares). Once any shares become Eligible Shares, they will vest 25% per quarter over the year following the date they become Eligible Shares beginning on the first day of the next calendar quarter, subject to continued status as a service provider (as defined in the 2010 Equity Incentive Plan) through each vesting date, provided that those Shares that have become Eligible Shares will be fully vested on July1, 2022, or upon a Change in Control, Death or Disability (as defined in the 2010 Equity Incentive Plan). The restricted stock shall accelerate and shall be fully vested immediately prior to a Change in Control of the Company (as defined in the 2010 Equity Incentive Plan) that results in consideration per share of the Companys common stock equal to or in excess of $69.50 per share with respect to the first tranche of shares, $77.84 per share with respect to the second tranche of shares, $88.96 per share with respect to the third tranche of shares, and $100.08 per share with respect to the fourth tranche of shares, respectively. \n(5) \n### One-fourth \n\n\n\n\n(6) \n### One-fourth \n\n\n\n\n(7) \n### One-fourth \n\n\n\n\n\n(8) \n### Restricted stock award vests as to one-twelfth \n(1/12) of the shares subject to such restricted stock award on the first day of each calendar quarter, beginning on the first day of the second calendar quarter following the date of grant, for 12 consecutive quarters. \n\nThe following table sets forth information regarding stock option exercises and the value realized upon exercise, as well as all stock awards vested and the value realized upon vesting by our NEOs during the year ended December31, 2020. \nIN 2020 \n(1) \nThe value realized upon exercise of stock options is calculated based on the difference between the market price of our common stock upon exercise and the exercise price of the options. \n(2) \nThe value realized upon vesting is equal to the number of shares vesting multiplied by the closing market price of our common stock on the vesting date.<|endoftext|>Into which the Class B Units of Opco will convert may be adjusted so that, after all founder shares have been exchanged for shares of our Class A common stock, the aggregate number of shares of our Class A common stock received by holders in exchange for founder shares would equal 20% of our total outstanding common stock upon completion of our initial public offering plus the number of shares of our Class A common stock and equity-linked securities issued or deemed issued in connection with our initial business combination, excluding any shares of our Class A common stock or equity-linked securities issued, or to be issued, to any seller in our initial business combination, and excluding the sponsor shares. \n\n\n\n\n\n\n\n\nOur key personnel may be able to remain with our company after the completion of our business combination only if they are able to negotiate employment or consulting agreements in connection with the business combination. \n\n\n\n\n\n\n\nUntil we consummate our initial business combination, we are in the process of identifying and combining with one or more businesses. Our sponsor and officers and directors are, and may in the future become, affiliated with entities that are engaged in a similar business, including Rice Investment Group and its portfolio companies and Rice II. \n\n\nIn fact, we may enter into a business combination with a target business that is affiliated with our sponsor, our directors or officers, although we do not intend to do so, or we may acquire a target business through an Affiliated Joint Acquisition with one or more affiliates of our sponsor, including Rice Investment Group and/or one or more of its portfolio companies. \nIn particular, members of our sponsor and its affiliates, including Rice Investment Group and its portfolio companies and Rice II, are focused on investments in the energy industry. As a result, there may be substantial overlap between companies that would be a suitable business combination for us and companies that would make an attractive target for such affiliates. \n\nIn light of the involvement of our sponsor, officers and directors with other entities, we may decide to acquire one or more businesses affiliated with our sponsor, officers, directors or existing holders, including one or more portfolio companies of Rice Investment Group. They may also have investments in target businesses. Despite our obligation to obtain an opinion from an independent investment banking firm that is a member of FINRA or from an independent accounting firm regarding the fairness to our company from a financial point of view of a business combination with one or more domestic or international businesses affiliated with our sponsor, officers or directors, potential conflicts of interest still may exist and, as a result, the terms of the business combination may not be as advantageous to our public stockholders as they would be absent any conflicts of interest. \nMoreover, we may pursue an Affiliated Joint Acquisition opportunity with one or more affiliates of our sponsor, including Rice Investment Group and/or one or more of its portfolio companies. \nSince our sponsor, officers and directors will lose their entire investment in us if our business combination is not completed (other than with respect to sponsor shares and public shares they have acquired during or may acquire after our initial public offering), a conflict of interest may arise in determining whether a particular business combination target is appropriate for our initial business combination. \nOf the 23,725,000 units sold, affiliates of our Sponsor and Atlas Point Fund had purchased 1,980,000 units and 2,128,500 units at the initial public offering price. Each unit consists of one share of Class A common stock and one-half of one redeemable warrant. The personal and financial interests of our officers and directors may influence their motivation in identifying and selecting a target business combination, completing an initial business combination and influencing the operation of the business following our initial business combination. \n\n\n\nOf the net proceeds from our initial public offering and the sale of the private placement warrants, up to approximately $237.3 million is available to complete our business combination and pay related fees and expenses. Of the up to approximately $237.3 million, approximately $1.0 million will be held outside the trust account for business, legal and accounting due diligence on prospective acquisitions and continuing general and administrative expenses. \n\n\n\n\n\n\n\n\nWe may structure a business combination so that we will control less than 100% of the equity interests or assets of a target business, but we will only complete such business combination if we control 50% or more of the outstanding voting securities of the target or otherwise are not required to register as an investment company under the Investment Company Act. Even if we control 50% or more of the voting securities of the target, our stockholders prior to the business combination may collectively own a minority interest in the post business combination company, depending on valuations ascribed to the target and us in the business combination transaction. \n\nOur amended and restated certificate of incorporation will not provide a specified maximum redemption threshold, except that in no event will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 upon consummation of our initial business combination and after payment of underwriters fees and commissions (such that we are not subject to the SECs penny stock rules). As a result, we may be able to complete our business combination even though a substantial majority of our public stockholders do not agree with the transaction and have redeemed their shares or, if we seek stockholder approval of our initial business combination and do not conduct redemptions in connection with our business combination pursuant to the tender offer rules, have entered into privately negotiated agreements to sell their shares to our sponsor, Atlas Point Fund, officers, directors, advisors or any of their affiliates. In the event the aggregate cash consideration we would be required to pay for all shares of our Class A common stock that are validly submitted for redemption plus any amount required to satisfy cash conditions pursuant to the terms of the proposed business combination exceed the aggregate amount of cash available to us, we will not complete the business combination or redeem any shares, all shares of our Class A common stock submitted for redemption will be returned to the holders thereof, and we instead may search for an alternate business combination. \nThe exercise price for the public warrants is higher than in some other blank check company offerings, and accordingly, the warrants are more likely to expire worthless. \n\nIn order to effectuate our initial business combination, we may seek to amend our amended and restated certificate of incorporation or other governing instruments in a manner that will make it easier for us to complete our initial business combination but that our stockholders or warrantholders may not support. \nIn order to effectuate a business combination, we may amend various provisions of our charter and governing instruments, including the warrant agreement, the underwriting agreement relating to our initial public offering, the letter agreement among us and our sponsor, Atlas Point Fund, officers and directors, and the registration rights agreement among us and our initial stockholders. Except in relation to the charter, any such amendments would not require approval from our stockholders and may have an adverse effect on the value of an investment in our securities. \n\nOur amended and restated certificate of incorporation provides that any of its provisions (other than amendments relating to the election of directors, which require the approval of a majority of at least 90% of our common stock voting at a stockholder meeting) related to pre-business combination activity (including the requirement to deposit proceeds of our initial public offering and the private placement warrants into the trust account and not release such amounts except in specified circumstances, and to provide redemption rights to public stockholders as described herein) may be amended if approved by holders of 65% of our common stock entitled to vote thereon, and corresponding provisions of the trust agreement governing the release of funds from our trust account may be amended if approved by holders of 65% of our common stock entitled to vote thereon. Our initial stockholders, who will collectively beneficially own 20% of the total outstanding common stock, will participate in any vote to amend our amended and restated certificate of incorporation and/or trust agreement and will have the discretion to vote in any manner they choose. \nThese agreements are contained in a letter agreement that we have entered into with our sponsor, Atlas Point Fund, officers, and directors. Our stockholders are not parties to, or third-party beneficiaries of, these agreements and, as a result, will not have the ability to pursue remedies against our sponsor, Atlas Point Fund, officers, and directors for any breach of these agreements. \n\nAlthough we believe that the net proceeds of our initial public offering and the sale of the private placement warrants and the forward purchase securities are sufficient to allow us to complete our initial business combination, we cannot ascertain the capital requirements for any particular transaction. If the net proceeds of our initial public offering and the sale of the private placement warrants and the forward purchase securities prove to be insufficient, either because of the size of our initial business combination, the depletion of the available net proceeds in search of a target business, the obligation to redeem for cash a significant number of shares from stockholders who elect redemption in connection with our initial business combination or the terms of negotiated transactions to purchase shares in connection with our initial business combination, or if Atlas Point Fund decides not to exercise its right to purchase all of the forward purchase securities, we may be required to seek additional financing or to abandon the proposed business combination. \nAs a result, they elect all of our directors prior to our initial business combination and may exert a substantial influence on actions requiring a stockholder vote, potentially in a manner that you do not support. \nAfter the closing of our initial public offering, our initial stockholders own shares representing 20% of our shares of common stock. These provisions of our amended and restated certificate of incorporation may only be amended by a special resolution passed by a majority of at least 90% of our common stock voting at a stockholder meeting. Neither our initial stockholders nor, to our knowledge, any of our officers or directors have any current intention to purchase additional securities, other than as disclosed in our initial public offering. In addition, our board of directors, whose members were elected by our initial stockholders, is divided into three classes, each of which will generally serve for a term of three years with only one class of directors being elected in each year. We may not hold an annual meeting to elect new directors prior to the completion of our business combination, in which case all of the current directors will continue in office until at least the completion of the business combination. The forward purchase securities will not be issued until completion of our initial business combination, and, accordingly, will not be included in any stockholder vote until such time. \nAs a result, the exercise price of your warrants could be increased, the warrant could be converted into cash or stock (at a ratio different than initially provided), the exercise period could be shortened and the number of shares of our Class A common stock purchasable upon exercise of a warrant could be decreased, all without your approval. \nThe warrant agreement provides that the terms of the warrants may be amended without the consent of any holder to cure any ambiguity or correct any defective provision or mistake (including to conform the terms of the warrants to those described herein), but requires the approval by the holders of at least 50% of the then outstanding public warrants to make any change that adversely affects the interests<|endoftext|>To written agreements with us, that they will not propose any amendment to our second amended and restated certificate of incorporation to modify the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial business combination by March 13, 2022 or with respect to any other material provisions relating to stockholders rights or pre-initial business combination activity, unless we provide our public stockholders with the opportunity to redeem their Class A common stock upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account and not previously released to us to fund our working capital requirements (subject to an annual limit of $500,000) and/or to pay our taxes, divided by the number of then outstanding public shares. \n\n\n\nAccordingly, they may exert a substantial influence on actions requiring a stockholder vote, potentially in a manner that you do not support,including amendments to our second amended and restated certificate of incorporation. \n\n\n\n\n\nShould the targets management not possess the skills, qualifications or abilities necessary to manage a public company, the operations and profitability ofthe post-combination business may be negatively impacted. \n\n\n\ntariffs and trade barriers; longer payment cycles; rates of inflation; employment regulations; corruption; terrorist attacks and wars; \n\n\n\n\n\nApproximately $230.0 million of the net proceeds of the initial public offering and certain of the proceeds of the private placement of warrants was placed in the Trust Account (including the $6.3 million deferred underwriting commissions). \n\n\n\nWith multiple business combinations, we could also face additional risks, including additionalburdens and costs with respect to possible multiple negotiations and due diligence investigations (if there are multiple sellers) and the additional risks associated with the subsequent assimilation of the operations and services or products of the acquired companies in a single operating business. \n\n\n\n\n\n\nThe profitability of healthcare-related companies may also be affected, among other factors, by restrictions on government reimbursement for medical expenses, rising or falling costs of medical products and services, pricing pressure, an increased emphasis on outpatient services, a limited product offering, industry innovation, changes intechnologies and other market developments. \n\n\nAs of December 31, 2020, we had approximately $0.9 million in cash and a working capital deficit of approximately $0.8 million. \n### Risks Relating to the Sponsor and Management Team \n\n\n\n\n\nThe initial stockholders beneficially own approximately 20% of the Companys 5,750,000 issued and outstanding shares, including 5,360,000 founder shares held by our sponsor, 100,000 founder shares held by each of our executive officers and 30,000 founder shares held by each of our directors. The founder shares will be worthless if we do not complete an initial business combination by March 13, 2022. In addition, the sponsor owns an aggregate of 3,733,334 private placement warrants that will also be worthless if we do not complete a business combination by March 13, 2022. \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nsecurities fraud; A further appeal is pending. \n\n\n\n\n\nIf (x) we issue additional shares of Class A common stock or equity-linked securities for capital raising purposes in connection with the closing of our initial business combination at a Newly Issued Price of less than $9.20 per share of Class A common stock, (y) the aggregate gross proceeds from such issuances represent more than 50% of the total equity proceeds, and interest thereon, available for the funding of our initial business combination on the date of the consummation of our initial business combination (net of redemptions), and (z) the Market Value is below $9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value and the Newly Issued Price, and the $18.00 per share redemption trigger prices described below under Description of Securities - Redeemable Warrants - Redemption of warrants when the price per share of Class A common stock equals or exceeds $18.00 and Redemption of warrants when the price per share of Class A common stock equals or exceeds \n$10.00 will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price, and the $10.00 per share redemption trigger price described below under Description of Securities - Redeemable Warrants - Redemption of warrants when the price per share of Class A common stock equals or exceeds $10.00 will be adjusted (to the nearest cent) to be equal to the higher of the Market Value and the Newly Issued Price. \n\n\n\n\n(ii) the redemption of any public shares properly tendered in connection with a stockholder vote to amend our second amended and restated certificate of incorporation to modify the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial business combination by March 13, 2022; and (iii) absent an initial business combination by March 13, 2022 or with respect to any other material provisions relating to stockholders rights or pre-initial business combination activity, our return of the funds held in the Trust Account to our public stockholders as part of our redemption of the public shares. \n\nOur units, Class A common stock and warrants are listed on The Nasdaq Stock Market LLC (Nasdaq). \n\n\nWe may also issue shares of Class A common stock upon the conversion of the founder shares at a ratio greater than one-to-one at the time of our initial business combination as a result of the anti-dilution provisions contained in our second amended and restated certificate of incorporation. \nOur second amended and restated certificate of incorporation authorizes the issuance of up to 100,000,000 shares of Class A common stock, par value $0.0001 per share, 10,000,000 shares of Class B common stock, par value $0.0001 per share, and 1,000,000 shares of preferred stock, par value $0.0001 per share. There are 77,000,000 and 4,250,000 authorized but unissued shares of Class A common stock and Class B common stock, respectively, available for issuance which amount does not take into account shares reserved for issuance upon exercise of outstanding warrants or shares issuable upon conversion of the Class B common stock. The Class B common stock is automatically convertible into Class A common stock at the time of our initial business combination, initially at a one-for-one ratio but subject to adjustment as set forth herein and in our second amended and restated certificate of incorporation. \nHowever, our second amended and restated certificate of incorporation provides, among other things, that prior to our initial business combination, we may not issue additional shares that would entitle the holders thereof to (i) receive funds from the Trust Account or (ii) vote as a class with our public shares (a) on any initial business combination or (b) to approve an amendment to our second amended and restated certificate of incorporation to (x) extend the time we have to consummate a business combination beyond 24 months from the closing of the initial public offering or \n(y) amend the foregoing provisions. These provisions of our second amended and restated certificate of incorporation, like all provisions of our second amended and restated certificate of incorporation, may be amended with a stockholder vote. \n\n\n\n\n\n\n\n\nThe warrant agreement provides that in the following circumstances holders of warrants who seek to exercise their warrants will not be permitted to do for cash and will, instead, be required to do so on a cashless basis in accordance with Section 3(a)(9) of the Securities Act: (i) if the shares of Class A common stock issuable upon exercise of the warrants are not registered under the Securities Act in accordance with the terms of the warrant agreement; \n\n\n\n\n\n\n\n\n\n\n\nWe issued warrants to purchase 4,312,500 shares of our Class A common stock as part of our initial public offering and, simultaneously with the closing of the initial public offering, we issued 3,733,334 private placement warrants, each exercisable to purchase one share of Class A common stock at \n$11.50 per share. In addition, if our sponsor or an affiliate of our sponsor or certain of our officers and directors makes any working capital loans, such lender may convert those loans into up to an additional 1,000,000 private placement warrants, at the price of $1.50 per warrant. \nProvisions in our second amended and restated certificate of incorporation and Delaware law may inhibit a takeover of us, which could limit the price investors might be willing to pay in the future for our shares of Class A common stock and could entrench management. \n\n\n\nOur second amended and restated certificate of incorporation will require, unless we consent in writing to the selection of an alternative forum, that \n(i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee to us or our stockholders, (iii) any action asserting a claim against us, our directors, officers or employees arising pursuant to any provision of the DGCL or our second amended and restated certificate of incorporation or bylaws, or (iv) any action asserting a claim against us, our directors, officers or employees governed by the internal affairs doctrine may be brought only in the Court of Chancery in the State of Delaware, except any claim (A) as to which the Court of Chancery of the State of Delaware determines that there is an indispensable party not subject to the jurisdiction of the Court of Chancery (and the indispensable party does not consent to the personal jurisdiction of the Court of Chancery within ten days following such determination), (B) which is vested in the exclusive jurisdiction of a court or forum other than the Court of Chancery, (C) for which the Court of Chancery does not have subject matter jurisdiction, or (D) any action arising under the Securities Act, as to which the Court of Chancery and the federal district court for the District of Delaware shall have concurrent jurisdiction. \n\n### General Risk Factors \n\nFollowing the issuance of the SEC Staff Statement on April 12, 2021, after consultation with our management and our audit committee concluded that, in light of the SEC Statement, it was appropriate to restate (i) previously issued audited balance sheet dated as of March 13, 2020 which was related to its initial public offering, (ii) unaudited interim financial statements as of and for the quarterly periods ended March 31, 2020, June 30, 2020 and September 30, 2020, as reported in the Companys Quarterly Reports on Form 10-Q filed with the SEC on May 8, 2020, August 13, 2020 and November 13, 2020, respectively, and (iii) audited financial statements as of December 31, 2020 and for the period from November 1, 2019 (inception) through December 31, 2020 as reported in the Companys Annual Report on Form 10-K filed with the SEC on March 30, 2021 (collectively, the Affected Periods). \n\n1, we have identified a material weakness in our internal control over financial reporting related to the accounting for a significant and unusual transaction related to the warrants we issued in connection with our initial public offering in March 2020. \nIn addition, we will incur additional costs to remediate material weaknesses in our internal control over financial reporting, as described in Part II, Item 9A. Controls and Procedures. \n\n\n\n\nPast performance by such individuals and entities is not a guarantee either \n(i) of success with respect to any business combination we may consummate or (ii) that we will be able to locate a suitable candidate for our initial business combination. \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nITEM 1B. UNRESOLVED STAFF COMMENTS. \nNone. \n### ITEM 2: PROPERTIES. \n\nITEM 3: LEGAL PROCEEDINGS. \n\nITEM 4: MINE SAFETY DISCLOSURES. \nNot applicable. \nPART II \nITEM 5: MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. \n### Market Information \nOur units, Class A common stock and warrants listed on Nasdaq under the symbols DFPHU, DFPH, and DFPHW, respectively. \nHolders \nAs of December 31, 2020, there was one holder of record of our units, one holder of<|endoftext|>Date of termination and (B) if Mr. Bracken elects, the Company shall directly pay for certain healthcare payments pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, for the 18-month period following such termination, or such shorter period as provided in Mr. Brackens employment agreement. \nIf Mr. Bracken is terminated by the Company without cause or due to Mr. Brackens resignation for good reason, in either case, on or within twenty-four months following the date of a change in control, then, subject to certain conditions, including the Mr. Bracken signing a release, the Mr. Bracken shall receive (A) an amount in cash equal to 2.0 times the sum of his (x) annual salary and (y) target annual bonus, payable in lump sum, and (B) certain healthcare payments pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, for the 24-month period following such termination. \nMr. Brackens employment agreement contains non-competition and non-solicitation covenants for a period of one year post-termination, as well as standard confidentiality and assignment of invention provisions. \n### Jana Payne Employment Agreement \nThe Company entered into an executive employment agreement with Jana Payne, the Companys Vice President of Geosciences, effective November 30, 2020. Ms. Paynes employment agreement has a two year term (unless earlier terminated per the terms of Ms. Paynes employment agreement) and may be renewed for additional periods upon mutual written agreement of Ms. Payne and the Board. Notwithstanding the foregoing, in the case of a change in control (as defined in Ms. Paynes employment agreement), the term of the agreement shall automatically renew until the second anniversary of the effective date of such change in control, subject to earlier termination. \nMs. Paynes employment agreement provides for a base salary of $291,500 and eligibility to participant in the companys annual bonus program. Ms. Paynes annual incentive compensation under such incentive program for calendar years 2021 and thereafter will be targeted at 55% of her base salary and which will not exceed 200% of such target. Ms. Payne will also be eligible to participate in employee benefit plans, programs and arrangements of the Company and a management incentive plan to be implemented by the Company. \nUnder the terms of Ms. Paynes employment agreement, Ms. Payne is entitled to certain severance payments and other benefits upon a qualifying termination of employment. Upon termination of Ms. Paynes employment due to death or disability, the Ms. Payne (or her estate) shall receive an amount of cash equal to a pro-rata portion of her annual bonus for the year in which termination occurs determined by multiplying (A) the annual bonus based on actual performance and (B) a fraction with the number of full months of the year elapsed prior to the date of termination in the numerator and 12 as the denominator, payable when bonuses for such year are paid to actively employed senior executive of the Company. Upon termination without cause or due to Ms. Paynes resignation for good reason, in either case, which termination does not occur within twenty-four months following date of a Change in Control, then, subject to certain conditions, Ms. Payne shall receive (A) cash equal to 1.0 times the sum of her (x) annual salary and (y) target annual bonus, payable in equal monthly installments over the 12-month period following the date of termination and (B) if Ms. Payne elects, the Company shall directly pay for certain healthcare payments pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, for the 12-month period following such termination, or such shorter period as provided in Ms. Paynes employment agreement. \nIf Ms. Payne is terminated by the Company without cause or due to Ms. Paynes resignation for good reason, in either case, on or within twenty-four months following the date of a change in control, then, subject to certain conditions, including the Ms. Payne signing a release, the Ms. Payne shall receive (A) an amount in cash equal to 1.5 times the sum of her (x) annual salary and (y) target annual bonus, payable in lump sum, and (B) certain healthcare payments pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, for the 18-month period following such termination. \nMs. Paynes employment agreement contains non-competition and non-solicitation covenants for a period of one year post-termination, as well as standard confidentiality and assignment of invention provisions. \n\nAll outstanding equity incentive awards held by our named executive officers and other employees were cancelled for no consideration in connection with our chapter 11 plan of reorganization. None of our named executive officers had any equity incentive awards outstanding as of December 31, 2020. \n\nThe Company did not have any equity compensation plans in effect as of December 31, 2020. \n### DIRECTOR COMPENSATION \nFor their service on our Board, each current non-employee member of the Board received in 2020 a prorated annual cash board fee of $60,000. Members of the Audit Committee received a prorated annual cash fee of $25,000 each; members of the Compensation and Nomination Committee received a prorated annual cash fee of $15,000 each; members of the Reserves Committee received a prorated annual cash fee of $10,000 each and Mr. Burnett received a prorated annual cash board chairman fee of $35,000. \nFor their service on our Board for the Company prior to November 30, 2020 (the \"Predecessor\"), each non-employee member of the Predecessor's Audit Committee received in 2020 a prorated annual cash board fee of $50,000. Mr. Ellis also received a prorated annual cash Audit Committee chairman fee of $10,000. \nThe total compensation earned by our non-employee directors during 2020 (regardless of when paid) is set forth in the following table, which amounts represent, except with respect to Mr. Pinkerton, annual board fees, committee fees and chair fees. For Mr. Pinkerton, the amount shown represents cash board chairman fees and retention payments made during the Company's restructuring. \n(1)Mr. Long's director compensation is paid directly to the FS Energy and Power Fund, for which Mr. Long serves as President. \n(2)The Company emerged from bankruptcy and went effective with its plan of reorganization on November 30, 2020 (the \"Effective Date\"). These Predecessor Board members resigned from the Board on the Effective Date. \nItem 12. \nThe following table sets forth certain information with respect to holdings of our Common Stock by (i)stockholders who beneficially owned more than 5% of the outstanding shares of our Common Stock, and (ii)each of our directors (which includes all nominees), each of our named executive officers and all directors and executive officers as a group as of April 12, 2021, unless otherwise indicated. Applicable percentage ownership is based on 10,000,149 shares of Common Stock outstanding as of April 12, 2021. Except as described in the footnotes to the table below, in computing the number of shares beneficially owned by a person and the percentage ownership of that person, shares subject to warrants, restricted stock units or other rights or conversion privileges held by such person, that may be exercisable or settled for or converted into shares of Common Stock within 60 days of April 12, 2021 are considered outstanding, although these shares are not considered outstanding for purposes of computing the percentage ownership of any other person. \nUnless otherwise indicated, the address of each beneficial owner listed below is c/o Lonestar Resources US Inc., 111 Boland Street, Suite 301, FortWorth, Texas, 76107. We believe, based on information provided to us, that each of the stockholders listed below has sole voting and investment power with respect to the shares beneficially owned by the stockholder unless noted otherwise, subject to community property laws where applicable. \n*Less than one percent. \nBased on a Schedule 13G filed by David J. Matlin on December 3, 2020, (i) David J. Matlin reported that he had sole voting and dispositive power with respect to 1,909,786 shares of Common Stock. The address of David J. Matlin is 70 East 55th Street, 9th Floor, New York, New York, 10022. \nBased on a Schedule 13G filed by Loomis, Sayles & Co., L.P. (\"Loomis\") on February 16, 2021, Loomis reported that it had sole voting power with respect to 1,680,000 shares of Common Stock, shared voting power with respect to 52,608 shares of Common Stock and dispositive power with respect to 1,758,528 shares of Common Stock. The address of Loomis is One Financial Center, Boston, MA, 02111. \nBased on a Schedule 13G/A filed by William R. Kruse and William T. Kruse on April 9, 2021, (i) William R. Kruse reported that he had shared voting and dispositive power with respect to 1,404,699 shares of Common Stock, and (ii) William T. Kruse reported that he had shared voting and dispositive power with respect to 1,404,699 shares of Common Stock. The address of William R. Kruse and William T. Kruse is 1340 S. Main Street, Suite 300, Grapevine, TX 76051. \nBased on a Schedule 13G filed by Hotchkis and Wiley Capital Management, LLC (\"HWCM\") on February 11, 2021, HWCM reported that it had sole voting power with respect to 810,809 shares of Common Stock and dispositive power with respect to 815,809 shares of Common Stock. The Hotchkis and Wiley High Yield Fund, an investment company registered under the Investment Company Act of 1940, has an interest of 631,604 shares. The address of HWCM is 601 S. Figueroa Street, 39th Floor, Los Angeles, CA, 90017. \nBased on a Schedule 13G filed by B-29 Holdings, LP on April 12, 2021, (i) B-29 Holdings, LP reported that it had shared voting and dispositive power with respect to 592,747 shares. The address of B-29 Holdings, LP is 1700 Pacific Avenue, Suite 3840, Dallas, TX, 75201. \nBased on a Schedule 13G filed by Lisa Matlin on December 2, 2020, Inc., (i) Lisa Matlin reported that he had sole voting and dispositive power with respect to 576,000 shares of Common Stock. The address of Lisa Matlin is P.O. Box 63, New York, New York, 10014. \nItem 13. \nRelated Person Transactions Policies and Procedures \nOur Board has adopted a written Related Person Transaction Policy and Procedures, setting forth the policies and procedures for the review and approval or ratification of related person transactions. This policy covers, with certain exceptions set forth in Item 404 of Regulation S-K, any transaction, arrangement or relationship, or any series of similar transactions, arrangements or relationships, in which we (including any of our subsidiaries) are, were or will be a participant, where the amount involved exceeds $120,000 in any fiscal year and a related person has, had or will have a direct or indirect material interest, which may include, without limitation, purchases of goods or services by or from the related person or entities in which the related person has a material interest, indebtedness, guarantees of indebtedness and employment by us of a related person. \nUnder the policy, management is responsible for implementing procedures to obtain information with respect to potential related person transactions, and then determining whether such transactions constitute related person transactions subject to the policy. Management then is required to present to the Audit Committee each proposed related person transaction. If advance Audit Committee approval of a related person transaction is not feasible, then the transaction may be preliminarily entered into by management upon prior approval by the Chairperson of the Audit Committee, subject to ratification of the transaction by the Audit Committee at the Audit Committees next scheduled meeting. Any related person transaction must be approved or ratified by the Audit Committee in order to be consummated or continue, as applicable. Management is responsible for updating the Audit Committee as to any material changes to any approved or ratified related person transaction and for providing a status report at least annually of all current related person transactions at a regularly scheduled meeting of the Audit Committee. All of the transactions, agreements or relationships described in this section occurred prior to the adoption of this policy. \nThe following are certain transactions, arrangements and relationships with our directors, executive officers and stockholders owning 5% or more of our outstanding Common<|endoftext|>All shares issued in the specified future issuance, unless the holders of a majority of the then-outstanding shares of ClassB common stock agreed to waive such adjustment with respect to the specified future issuance at the time thereof. We cannot determine at this time whether a majority of the holders of our ClassB common stock at the time of any such specified future issuance would agree to waive such adjustment to the conversion ratio. They may waive such adjustment due to (but not limited to) the following: (i)closing conditions which are part of the agreement for our initial business combination; (ii)negotiation with ClassA stockholders on structuring an initial business combination; (iii)negotiation with parties providing financing which would trigger the anti-dilution provisions of the ClassB common stock; or (iv)as part of the Affiliated Joint Acquisition. If such adjustment is not waived, the specified future issuance would not reduce the percentage ownership of holders of our ClassB common stock, but would reduce the percentage ownership of holders of our ClassA common stock. The issuance of the forward purchase securities will not result in such an adjustment to the conversion ratio of our ClassB common stock. \nWe anticipate structuring our initial business combination either (i)in such a way so that the post-transaction company in which our public stockholders own shares will own or acquire 100% of the equity interests or assets of the target business or businesses, or (ii)in such a way so that the post-transaction company owns or acquires less than 100% of such interests or assets of the target business in order to meet certain objectives of the target management team or stockholders, or for other reasons, including an Affiliated Joint Acquisition as described above. So long as we obtain and maintain a listing for our securities on Nasdaq, we would be required to comply with such 80% rule. \nHowever, if our estimates of the costs of identifying a target business, undertaking in-depth due diligence and negotiating an initial business combination are less than the actual amount necessary to do so, we may have insufficient funds available to operate our business prior to our initial business combination. Moreover, we may need to obtain additional financing either to complete our initial business combination or because we become obligated to redeem a significant number of our public shares upon completion of our initial business combination, in which case we may issue additional securities or incur debt in connection with such business combination. In addition, we are targeting businesses with enterprise values that are greater than we could acquire with the net proceeds of our initial public offering and the sale of the private placement units, and, as a result, if any cash portion of the purchase price exceeds the amount available from the trust account, net of amounts needed to satisfy redemptions by public stockholders, we may be required to seek additional financing to complete such proposed initial business combination. We may also obtain financing prior to the closing of our initial business combination to fund our working capital needs and transaction costs in connection with our search for and completion of our initial business combination. There is no limitation on our ability to raise funds through the issuance of equity or equity-linked securities or through loans, advances or other indebtedness in connection with our initial business combination, including pursuant to forward purchase agreements or backstop arrangements into which we may enter. \n\nIn evaluating prospective business combinations, we conduct, and expect to continue to conduct, a thorough due diligence review that encompasses, among other things, a review of historical and projected financial and operating data, meetings with management and their advisors (if applicable), on-site inspection of facilities and assets to the extent possible, discussion with customers and suppliers, document reviews, as well as a review of financial, operational, legal and other information which will be made available to us and which we deem appropriate. We will also utilize our expertise and the sponsors expertise in analyzing companies and evaluating operating projections, financial projections and determining the appropriate return expectations. \nIn the event we seek to complete our initial business combination with a business that is affiliated with Cantor or its affiliates or the sponsor, or our officers or directors, we, or a committee of independent directors, will obtain an opinion from an independent investment banking firm or another independent firm that commonly renders valuation opinions that our initial business combination is fair to our stockholders from a financial point of view. The sponsor has committed, pursuant to the FPA, to purchase, in a private placement for gross proceeds of $15,000,000 to occur concurrently with the consummation of our initial business combination, 1,500,000 of our units on substantially the same terms as the sale of units in the initial public offering at $10.00 per unit, and 375,000 shares of Class A common stock. The funds from the sale of units will be used as part of the consideration to the sellers in the initial business combination; \nCantor is the beneficial owner of founder shares and/or private placement units by virtue of its ownership of the sponsor and members of our management team may indirectly own such securities. Either the sponsor will transfer up to 15,000 founder shares to each of our independent directors or we will pay cash fees to such directors, at our discretion. Because of such ownership and interests, Cantor and our officers and directors may have a conflict of interest in determining whether a particular target business is an appropriate business with which to effectuate our initial business combination. \nAll of our officers are employed by Cantor or its affiliates. Cantor is continuously made aware of potential business opportunities, one or more of which we may desire to pursue for an initial business combination. While Cantor does not have any duty to offer acquisition opportunities to us, Cantor may become aware of a potential transaction that is an attractive opportunity for us, which Cantor may decide to share with us. \nThe sponsor, officers, directors, Cantor and their affiliates may participate in the formation of, or become an officer or director of, any other blank check company prior to completion of our initial business combination. In particular, certain of our executive officers and directors also serve as executive officers or directors of other special purpose acquisition companies sponsored by Cantor as set forth below, each of which is focused on searching for businesses that may provide significant opportunities for attractive investor returns in industries similar to the industries in which our search is focused. As a result, the sponsor, officers or directors could have conflicts of interest in determining whether to present business combination opportunities to us or to any other blank check company with which they may become involved. \nEach of our officers and directors presently has, and any of them in the future may have additional, fiduciary, contractual or other obligations or duties to one or more other entities pursuant to which such officer or director is or will be required to present a business combination opportunity. The Charter provides that we renounce our interest in any corporate opportunity offered to any director or officer unless such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of our company, such opportunity is one we are legally and contractually permitted to undertake and would otherwise be reasonable for us to pursue, and to the extent the director or officer is permitted to refer that opportunity to us without violating another legal obligation. \n### Our Management Team \n\nOver the course of their careers, the members of our management team have developed a broad network of contacts and corporate relationships in various industries. \n\n\n\n\n\nAs such, we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestatio n requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. \n\nWe will remain an emerging growth company until the earlier of (1)the last day of the fiscal year (a)following December 28, 2025, (b)in which we have total annual gross revenue of at least $1.07billion, or (c)in which we are deemed to be a large accelerated filer, which means the market value of our ClassA common stock that is held by non-affiliates exceeds $700million as of the prior June30, and (2)the date on which we have issued more than $1.0billion in non-convertible debt securities during the prior three-year period. \nWe will remain a smaller reporting company until the last day of the fiscal year in which (1) the market value of our common stock held by non-affiliates exceeds $250million as of the prior June30, or (2) our annual revenues exceed $100million during such completed fiscal year and the market value of our common stock held by non-affiliates exceeds $700million as of the prior June 30. \nIn addition, only holders of our founder shares have the right to vote on the election of directors prior to the consummation of our initial business combination. As a result, Nasdaq considers us to be a controlled company within the meaning of Nasdaq corporate governance standards. Under Nasdaq corporate governance standards, a company of which more than 50% of the voting power for the election of directors is held by an individual, group or another company is a controlled company and may elect not to comply with certain corporate governance requirements. We have utilized, and will continue to utilize, these exemptions. \n### Financial Position \nWith funds available for an initial business combination in the amount of $500,000,000, based on the balance of our trust account as of December 31, 2020, we offer a target business a variety of options such as creating a liquidity event for its owners, providing capital for the potential growth and expansion of its operations or strengthening its balance sheet by reducing its debt or leverage ratio. However, we have not taken any steps to secure any third party financing and there can be no assurance it will be available to us. \n\nWe are not presently engaged in, and we will not engage in, any operations other than the pursuit of our business combination, at which point we will engage in the business of the target we acquire in our initial business combination. We intend to effectuate our initial business combination using cash from the proceeds of the (i) initial public offering, (ii) private placement of the private placement units, (iii) $15,000,000 FPA to purchase 1,500,000 units and 375,000 shares of Class A common stock by the sponsor, (iv) sale of our securities in connection with our initial business combination (pursuant to forward purchase contracts or any backstop agreements we may enter into following the consummation of the initial public offering or otherwise), (v) shares issued to the owners of the target, (vi) debt issued to bank or other lenders or the owners of the target, or (vii) a combination of the foregoing. \nIf our initial business combination is paid for using equity or debt securities, or not all of the funds released from the trust account are used for payment of the consideration in connection with our initial business combination or used for redemptions of our ClassA common stock, we may apply the balance of the cash released to us from the trust account, as well as the $15,000,000 from the FPA, for general corporate purposes, including for maintenance or expansion of operations of the post-transaction company, the payment of principal or interest due on indebtedness incurred in completing our initial business combination, to fund the purchase of other companies or for working capital. \nIn addition to the transactions contemplated by the FPA,<|endoftext|>### EXPLANATORY NOTE \nThis Amendment No. 1 on Form 10-K/A (this Amendment) amends the Annual Report on Form 10-K for Nocopi Technologies, Inc. for the fiscal year ended December 31, 2020, which was filed with the Securities and Exchange Commission (the SEC) on March 30, 2021 (the Original Form10-K).Unless the context otherwise requires, all references to the Company, we, our or us and other similar terms means Nocopi Technologies, Inc. \nWe are filing this Amendment to include the information required by Part III and not included in the Original Form10-K, because we will not file our definitive proxy statement within 120 days of the end of our fiscal year ended December 31, 2020.This information was previously omitted from theOriginal Form10-Kin reliance on General Instruction G(3) to Form 10-K, which permits the information in the above referenced items to be incorporated in our Form 10-K by reference from our definitive proxy statement if such statement is filed no later than 120 days after our fiscal year-end.The reference on the cover page of the Original Form10-K to our incorporation by reference of certain sections of our definitive proxy statement into Part III of the Original Form10-K is hereby deleted. \nExcept as set forth in Part III below, the updates to exhibit list in the Index to Exhibits (incorporated into Part IV Item 15(a)(3) by reference) and the above-mentioned changes to the cover page of the Original Form 10-K, no other changes are made to the Original Form10-K. Accordingly, this Amendment should be read in conjunction with the Original Form10-K and our other filings with the SEC. \ni \n### PART III \nItem 10. \n\n\n* \nThe term of office of each of the Directors is one (1)year, which continues until his successor has been elected and qualified. \nBusiness experience of directors, executive officers, and significant employees \n### Michael A. Feinstein, M.D \n, 74, has served as our Chairman of the Board of Directors since December 1999 and our Chief Executive Officer since February 2000, has been a practicing physician in Philadelphia for more than thirty years, serving for more than twenty-five years as the President of a group medical practice which includes two physicians. He is a Fellow of the American College of Obstetrics and Gynecology and of the American Board of Obstetrics and Gynecology. He received his B.A. from LaSalle University and his M.D. from Jefferson Medical College. He has represented our Company in numerous licensing negotiations, governmental meetings and capital raises. Feinsteins considerable personal experience as a business owner and investor in publicly traded businesses makes him well suited to serve as a member of our Board of Directors. \nTerry W. Stovold \n, 58, has served as our Chief Operating Officer since July 2014, and has been employed by our Company for more than thirty years. Mr. Stovold previously served as our Companys Director of Operations and Sales. Mr. Stovold received a Forestry Technician College degree from Algonquin College in Pembroke, Ontario, Canada and studied business at McGill University in Montreal, Canada. He holds numerous U.S. and foreign patents in the fields of printing technology and printing inks. \n### Rudolph A. Lutterschmidt \n, 74, has served as our Vice President and Chief Financial Officer since 1992, serving in this capacity on a part-time basis since January 2000. Mr. Lutterschmidt has been a consultant to several southeast Pennsylvania businesses. He is a graduate of Syracuse University. \nMarc Rash \n, 72, has served as our director since September 2017, and is the Executive Vice President of Keystone Property Group, a Real Estate Development Company with over 10 million square feet of commercial real estate and a $2 billion Real Estate Fund. Mr. Rash, who joined Keystone in 1994, has extensive dealings with numerous lenders and investors as well as significant real estate experience, including the redevelopment of apartments, shopping centers and industrial/office space. Previously, Mr. Rash was an agent with the IRS specializing in auditing large corporations and high-net-worth individuals. Mr. Rash graduated from the University of North Carolina with a Bachelor of Science in Accounting and received his Juris Doctor degree from Delaware Law School. He is a member of the Pennsylvania Bar Association and the American Institute of Certified Public Accountants. Rashs financial and legal background along with his banking and investor experience make him well suited to serve as a member of our Board of Directors. \n### Philip B. White \n, 82, has served as our director since August 2006. Mr. White is currently an international consultant in the private sector providing regulatory and industry standards advice to international companies regulated by the Food and Drug Administration, the Consumer Product Safety Commission, and the Environmental Protection Agency. He also served as a Technical Advisor and Regulatory Liaison to Nocopi from 2002 to 2005. Before establishing his own global consulting practice in 2000, Mr. White was, from 1994 to 2000, Director of Medical Device Consulting at the international firm of AAC Consulting Group (now Kendle), Rockville, MD. In 1994, Mr. White retired from a 33-year career with the U.S. Food and Drug Administration. His last FDA position was Director of the Office of Standards and Regulations in the Center for Devices and Radiological Health. Previous FDA positions included Regional Director of FDAs enforcement activities in the Southwestern Region, Deputy FDA Assistant Commissioner for Program Coordination, and Supervisory Food and Drug Inspector. He has served on the Board of Directors of the American National Standards Institute, the Association for Advancement of Medical Instrumentation, and the Regulatory Affairs Professionals Society. He is a 1961 graduate of Wilkes University, Wilkes-Barre, PA with a B.A. Degree in Biology. He also did graduate studies in 1967 and 1968 specializing in the Federal Food Drug and Cosmetic Act at the New York University Graduate Law School in New York City. Whites considerable experience with consumer product safety and regulatory matters gained from his many years at the Food and Drug Administration makes him well suited to serve as a member of our Board of Directors. \nThe terms of all current directors expire at the 2021 annual meeting of stockholders of our Company. \n### Changes to Director Nomination Procedures \nOn March 8, 2019 our Board of Directors amended and restated our Companys bylaws in their entirety. Our amended and restated bylaws contain new procedures by which security holders may recommend nominees to our Board of Directors. These new procedures are contained in Sections 2.13 and 2.14 of our amended and restated bylaws. Our amended and restated bylaws are incorporated herein by reference as Exhibit 3.2. The foregoing discussion does not purport to be complete and is qualified in its entirety by reference to the attached amended and restated bylaws. \n\nOur Company has established a standing audit committee in accordance with Section 3(a) (58) (A) of the Securities Exchange Act of 1934 that makes recommendations to our Companys Board of Directors regarding the selection of an independent registered public accounting firm, reviews the results and scope of the Companys audits and other accounting-related services and reviews and evaluates the Companys internal control functions. The audit committee does not presently have a written charter. During our last fiscal year, our audit committee was comprised of MichaelA.Feinstein,M.D., our Chairman of the Board, and Herman M. Gerwitz, CPA. Mr. The Board of Directors has not yet appointed a replacement for Mr. Gerwitz, so it presently does not have an audit committee financial expert. Presently, our audit committee is comprised solely of Michael A. Feinstein, M.D., who is not an independent director or an audit committee financial expert. The Board of Directors had determined that Mr. Gerwitz was an audit committee financial expert as currently defined under the SEC rules implementing Section 407 of the Sarbanes Oxley Act of 2002 and that Mr. Gerwitz met the criteria for independence as defined by the SEC. Please see \nItem 13. \n### Code of Ethics \nOur Company has adopted a Code of Ethics that applies to its Principal Executive Officer, Principal Financial Officer, Principal Accounting Officer and persons performing similar functions. A copy of our Companys Code of Ethics is incorporated by reference to Exhibit 14.1 of this report on Form 10-K/A. \n\n\nTo the best of our knowledge, based solely upon a review of Forms 3 and 4 and amendments thereto furnished to our Company during its most recent fiscal year and Forms 5 and amendments thereto furnished to our Company with respect to its most recent fiscal year, and any written representation referred to in paragraph (b)(1) of Item 405 of Regulation S-K, all of our executive officers, directors and greater-than-ten percent stockholders complied with all Section 16(a) filing requirements. \nItem 11. \n### Executive Compensation \nThe table below summarizes all compensation awarded to, earned by, or paid to our Named Executives for the fiscal years ended December 31, 2020 and 2019. \nSummary Compensation Table \n1. \nDr. Feinstein entered into a written employment agreement effective June 1, 2008 under which he serves as President and Chief Executive Officer of our Company for an initial term of three years with successive one year renewal terms. In accordance with the terms of the employment agreement, the employment agreement renewed on December1,2020 for a period of one year effective June 1, 2021. The employment agreement provided for an annual base salary of $85,000 which may be increased annually at the discretion of the Board of Directors and an annual performance bonus determined by the Board of Directors. On December 13, 2019, our Company entered into an amended employment agreement with Dr. Feinstein that amends his employment agreement to increase his base salary from $85,000 to $120,000 effective January 1, 2020.In certain situations, including a change in control, Dr.Feinstein may be eligible to receive his base salary for a period of up to twelve months following the termination of employment. The employment agreement prohibits him from competing with our Company during the term of this agreement and for two years after the termination of his employment with our Company. \n2. \nMr. Stovold entered into a written employment agreement effective April 1, 2011 under which he served as our Companys Director of Operations and Sales for an initial term of three years with successive one-year renewal terms. The employment agreement provides for a base salary set by the Companys Board of Directors, which is currently set at $75,000 per year beginning on January 1, 2012, along with a commission of seven percent on sales generated by his efforts. The amount in column (g) reflects Mr.Stovolds commissions on sales. In certain situations, including but not limited to a change in control, Mr.Stovold may be eligible to receive his base salary for a period of up to six months following the termination of employment. The employment agreement prohibits him from competing with our Company during the term of the agreement and for one year after the termination of his employment with our Company. At December 31, 2020, Mr.Stovold was owed approximately $147,500 of commissions payable through 2023 related to sales realized through 2020 as a result his efforts of which approximately $108,300 is currently payable. In July 2014, our Companys Board of Directors appointed Mr.Stovold Chief Operating Officer of our Company. There were no changes to the employment agreement with Mr.Stovold resulting from this appointment. \n\nNone. \nDirector Compensation \nThe following table summarizes compensation earned by our Companys directors for the year ended December 31, 2020. All directors have been and will be reimbursed for reasonable expenses incurred in connection with attendance at meetings of the Board of Directors or other activities undertaken by them on behalf of our Company. \n1. \nServes as an executive officer and a director, but receives no additional compensation for serving as a director. \n2. \n### Mr. Gerwitz passed away on January 13, 2021. \n\n\n### Item 12. \n\nThe following table sets forth, as of March 31, 2021, the stock ownership of (1) each person or group known to our Company to beneficially own 5% or more of our common stock and (2) each director and Named Executive (as set forth<|endoftext|>Our management team in evaluating operating projections, financial projections and determining the appropriate return expectations given the risk profile of the target business. \nIn the event we seek to complete our initial business combination with a company that is affiliated with the Sponsor or our officers or directors, we, or a committee of independent directors, will obtain an opinion from an independent investment banking firm or another independent entity that commonly renders valuation opinions that our initial business combination is fair to our company from a financial point of view. \n\n\n### Sources of Target Business \nOur officers and directors, as well as the Sponsor and their respective affiliates, may also bring to our attention target business candidates that they become aware of through their business contacts as a result of formal or informal inquiries or discussions they may have, as well as attending trade shows or conventions. In no event, however, will the Sponsor or any of our existing officers or directors, or any entity with which the Sponsor or our officers or directors are affiliated, be paid any finders fee, reimbursement, consulting fee, monies in respect of any payment of a loan or other compensation by the company prior to, or in connection with any services rendered for any services they render in order to effectuate, the completion of our initial business combination (regardless of the type of transaction that it is). None of the Sponsor, executive officers or directors, or any of their respective affiliates, will be allowed to receive any compensation, finders fees or consulting fees from a prospective business combination target in connection with a contemplated initial business combination. We have agreed to pay an affiliate of the Sponsor a total of $10,000 per month for office space, utilities and secretarial and administrative support and to reimburse the Sponsor for any out-of-pocket expenses related to identifying, investigating and completing an initial business combination. \nWe are not prohibited from pursuing an initial business combination with an initial business combination target that is affiliated with the Sponsor or our officers or directors or making the initial business combination through a joint venture or other form of shared ownership with the Sponsor or our officers or directors. \nIn the event we seek to complete our initial business combination with an initial business combination target that is affiliated with the Sponsor or our officers or directors, we, or a committee of independent directors, would obtain an opinion from an independent investment banking firm which is a member of FINRA or an independent accounting firm that such an initial business combination is fair to our company from a financial point of view. \n### Competition \n\nHuman Capital Resources \n\n### Our Website \nOur corporate website address is www.otracquisition.com \n\n\nWe have registered our units, ClassA common stock and Public Warrants under the Securities Exchange Act of 1934, as amended (the Exchange Act), and have reporting obligations, including the requirement that we file annual, quarterly and current reports with the SEC. \n\n\nOn November16, 2020 we filed a Registration Statement on Form8-A with the SEC to voluntarily register our securities under Section12 of the Exchange Act. \nWe will remain an emerging growth company until the earlier of (1)the last day of the fiscal year (a)following the fifth anniversary of the completion of the Initial Public Offering, (b)in which we have total annual gross revenue of at least $1.07 billion, or (c)in which we are deemed to be a large accelerated filer, which means the market value of our shares of ClassA common stock that are held by non-affiliates exceeds $700 million as of the prior June30th, and (2)the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period. \n### Item 1A. Risk Factors \nYou should consider carefully all of the risks described below, together with the other information contained in this prospectus, before making a decision to invest in our units. \nSummary of Risk Factors \n\n\n\n\n\n\n\n\n\n\n\nWe will likely only be able to complete one business combination with the proceeds of the Initial Public Offering, which will cause us to be solely dependent on a single business which may have a limited number of products or services. \n\n\n\n\n\nThe significant outbreak of COVID-19 has resulted in a widespread health crisis that could adversely affect the economies and financial markets worldwide, and the business of any potential target business with which we consummate a business combination could be materially and adversely affected. We may be unable to complete a business combination if continued concerns relating to COVID-19 restrict travel, limit the ability to have meetings with potential investors or the target companys personnel, vendors and services providers who become unavailable to negotiate and consummate a transaction in a timely manner. \n\n\n\n\n\nFurthermore, in no event will we redeem our Public Shares in an amount that would cause our net tangible assets to be less than $5,000,001 both immediately prior to and upon consummation of our initial business combination and after payment of underwriters fees and commissions (so that we are not subject to the SECs penny stock rules) or any greater net tangible asset or cash requirement which may be contained in the agreement relating to our initial business combination. Consequently, if accepting all properly submitted redemption requests would cause our net tangible assets to be less than $5,000,001 both immediately prior to and upon consummation of our initial business combination and after payment of underwriters fees and commissions or such greater amount necessary to satisfy a closing condition as described above, we would not proceed with such redemption and the related business combination and may instead search for an alternate business combination. \n\nFurthermore, this dilution would increase to the extent that the anti-dilution provision of the ClassB common stock result in the issuance of ClassA shares on a greater than one-to-one basis upon conversion of the ClassB common stock at the time of our business combination. The amount of the deferred underwriting commissions payable to the underwriters in connection with the Initial Public Offering will not be adjusted for any shares that are redeemed in connection with an initial business combination. The per-share amount we will distribute to stockholders who properly exercise their redemption rights will not be reduced by the deferred underwriting commission and after such redemptions, the per-share value of shares held by non-redeeming stockholders will reflect our obligation to pay such deferred underwriting commissions. \n\nIf our initial business combination agreement requires us to use a portion of the cash in the Trust Account to pay the purchase price or requires us to have a minimum amount of cash at closing, the probability that our initial business combination would be unsuccessful is increased. \n\nAny potential target business with which we enter into negotiations concerning an initial business combination will be aware that we must complete our initial business combination within 18 months from the closing of the Initial Public Offering. \n, in which case our public stockholders may only receive $10.25 per share, or less than such amount in certain circumstances, and our warrants will expire worthless. \nOur amended and restated certificate of incorporation provides that we must complete our initial business combination within 18 months from the closing of the Initial Public Offering. In such case, our public stockholders may only receive $10.25 per share, and our warrants will expire worthless. \n\n\nIf we are unable to complete our initial business combination, our public stockholders may receive only approximately $10.25 per share on our redemption of our Public Shares, or less than such amount in certain circumstances, and our warrants will expire worthless. \nWhile we believe there are numerous target businesses we could potentially acquire with the net proceeds of the Initial Public Offering and the Private Placement, our ability to compete with respect to the acquisition of certain target businesses that are sizable will be limited by our available financial resources. \nIf the net proceeds of the Initial Public Offering and the Private Placement not being held in the Trust Account are insufficient to allow us to operate for at least the next 18 months, we may be unable to complete our initial business combination, in which case our public stockholders may only receive $10.25 per share, or less than such amount in certain circumstances, and our warrants will expire worthless. \nThe funds available to us outside of the Trust Account may not be sufficient to allow us to operate for at least the next 18 months, assuming that our initial business combination is not completed during that time. If we are unable to complete our initial business combination, our public stockholders may receive only approximately $10.25 per share on the liquidation of the Trust Account and our warrants will expire worthless. \n\nOf the net proceeds of Initial Public Offering and the Private Placement, only approximately $1,000,000 will be available to us initially outside the Trust Account to fund our working capital requirements. As of December31, 2020, cash of $991,720 was held outside of the Trust Account and is available for working capital purposes. If we are required to seek additional capital, we will need to borrow funds from our Sponsor, management team or other third parties to operate or may be forced to liquidate. Consequently, our public stockholders may only receive approximately $10.25 per share on our redemption of our Public Shares, and our warrants will expire worthless. \n\n\n\n\n(ii)the redemption of any Public Shares properly submitted in connection with a stockholder vote to amend our amended and restated certificate of incorporation (A)to modify the substance or timing of our obligation to redeem 100% of our Public Shares if we do not complete our initial business combination within 18 months from the closing of the Initial Public Offering or (B)with respect to any other provision relating to stockholders rights or pre-initial business combination activity; or (iii)absent an initial business combination within 18 months from the closing of the Initial Public Offering, our return of the funds held in the Trust Account to our public stockholders as part of our redemption of the Public Shares. \n\n\n\nIf you exercise your Public Warrants on a cashless basis, you will receive fewer shares of ClassA common stock from such exercise than if you were to exercise such warrants for cash. \nFirst, if a registration statement covering the shares of ClassA common stock issuable upon exercise of the warrants is not effective by the 52nd day after the closing of our initial business combination, warrant holders may, until such time as there is an effective registration statement, exercise warrants on a cashless basis in accordance with Section3(a)(9)of the Securities Act of 1933, as amended (the Securities Act), or another exemption. Second, if our ClassA common stock is at any time of any exercise of a warrant not listed on a national securities exchange such that it satisfies the definition of a covered security under Section18(b)(1)of the Securities Act, we may, at our option, require holders of Public Warrants who exercise their warrants to do so on a cashless basis in accordance with Section3(a)(9)of the Securities Act and, in the event we so elect, we will not be required to file or maintain in effect a registration statement, and in the event we do not so elect, we will use our best efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available. The fair market value is the average reported last sale price of the ClassA common stock for the 10 trading days ending on the third trading day prior to the date on which the notice of exercise is received by the warrant agent or on which the notice of redemption is sent to the holders of warrants, as applicable. \n\nWe are not limited to evaluating a target business in a particular industry sector, except that we will not, under our amended and restated certificate of incorporation, be permitted to effectuate our initial business combination with another blank check company or similar company<|endoftext|>(5) \nConsists of options to purchase 4,603,168 shares of common stock that are exercisable within 60 days of April 12, 2021. \n(6) \nIncludes 181,441 shares underlying private warrants, and 24,665 RSUs that vest within 60 days of April 12, 2021. \n(7) \nDoes not include shares held by Green Nikola Holdings LLC. Ms. Jin is affiliated with Green Nikola Holdings LLC but has no voting or dispositive power over the shares held by Green Nikola Holdings LLC. \n(8) \nDoes not include shares held by Nimbus Holdings LLC. Mr. Mansuetti is affiliated with Nimbus Holdings LLC but has no voting or dispositive power over the shares held by Nimbus Holdings LLC. \n(9) \nConsists of 21,000 RSUs that vest within 60 days of April 12, 2021. Does not include shares held by Iveco. Mr. Marx is affiliated with Iveco but has no voting or dispositive power over the shares held by Iveco. \n(10) \nConsists of 4,307 RSUs that vest within 60 days of April 12, 2021. \n(11) \nConsists of 370,857 shares, 31,441 shares underlying private warrants and 6,301 RSUs that vest within 60 days of April 12, 2021. \n(12) \nConsists of 5,324 RSUs that vest within 60 days of April 12, 2021. \n(13) \nConsists of 13,144,216 shares held by Legend Capital Partners and 20,000 RSUs that vest within 60 days of April 12, 2021. As the Managing Partner of Legend Capital Partners, Mr. Thompson may be deemed to indirectly beneficially own shares held by Legend and disclaims beneficial ownership of such shares except to the extent of his pecuniary interest therein. The business address of this stockholder is 1245 Bridgestone Blvd., LaVergne, TN 37086. \n(14) \nConsists of 3,552,006 shares held by Spring NM, 10,275,437 shares held by Spring Master Fund, and 21,000 RSUs that vest within 60 days of April 12, 2021. As the managing member of Spring NM, Mr. Ubben may be deemed to indirectly beneficially own shares held by Spring NM. Shares held by Spring Master Fund may be deemed to be indirectly beneficially owned by Inclusive Capital Partners, L.P. as investment manager to Spring Master Fund. Mr. Ubben disclaims beneficial ownership of securities held by Spring NM and Spring Master Fund except to the extent of his pecuniary interest therein. Mr. Ubben may be deemed to have an indirect pecuniary interest in shares held by Spring NM and Spring Master Fund. The business address of this stockholder is 572 Ruger Street, Suite B, San Francisco, CA 94129. \n(15) \nConsists of (i) 74,981,188 shares beneficially owned by our current executive officers and directors, (ii) options to purchase 24,131,593 shares of common stock that exercisable within 60 days of April 12, 2021, (iii) 1,838,597 RSUs that vest within 60 days of April 12, 2021 and (iv) 212,882 shares underlying exercisable private warrants. \n(16) \nBased on Form 4 filed jointly on April 19, 2021, by Trevor R. Milton and M&M Residual, M&M Residual is wholly-owned by Trevor R. Milton and Mr. Milton has sole voting and dispositive power over shares held by M&M Residual. Includes 2,181,642 shares subject to option held by certain employees pursuant to the Founder Stock Option Plan, including 930,797 options held by Mr. Pike and Mr. Worthen. The business address of this stockholder is P.O. Box 50608, Phoenix, AZ 85076. \n(17) \nIveco is a wholly-owned subsidiary of CNHI. The business address of this stockholder is 25 St. James Street, London, SW1A 1HA, United Kingdom. \n(18) \nBased on Amendment No. 1 to Schedule 13D filed jointly on March 17, 2021, by Green Nikola Holdings LLC, Hanwha General Chemical USA Corp and Hanwha Energy USA Holdings Corp., Green Nikola Holdings LLC has two members, Hanwha General Chemical USA Corp. and Hanwha Energy USA Holdings Corp., which also share voting and investment power over the shares. The business address of this stockholder is 300 Frank W. Burr. Blvd., Suite 52, Teaneck, NJ 07666. \nItem 13. \nThe following includes a summary of transactions since January 1, 2020 to which we have been a party, in which the amount involved in the transaction exceeded $120,000, and in which any of our directors, executive officers or, to our knowledge, beneficial owners of more than 5% of our capital stock or any member of the immediate family of any of the foregoing persons had or will have a direct or indirect material interest, other than equity and other compensation, termination, change of control, and other arrangements, which are described under the section entitled Executive Compensation. \n### Private Placement \nOn June 3, 2020, a number of purchasers (each, a Subscriber) purchased from us an aggregate of 52,500,000 shares of common stock (PIPE Shares), for a purchase price of $10.00 per share and an aggregate purchase price of $525.0 million, pursuant to separate subscription agreements (each, a Subscription Agreement) entered into effective as of March 2, 2020. Pursuant to the Subscription Agreements, we gave certain registration rights to the Subscribers with respect to the PIPE Shares. The sale of PIPE Shares was consummated concurrently with the closing of the Business Combination. Inclusive Capital Partners Spring Master Fund, L.P. (f/k/a ValueAct Spring Master Fund, L.P.) (Spring Master Fund) which is affiliated with Jeffrey W. Ubben, a member of our board of directors, purchased 5,000,000 shares of common stock in the PIPE for an aggregate purchase price of $50.0 million. \nStockholder Support Agreement \nOn March 2, 2020, Legacy Nikola, VectoIQ and certain Legacy Nikola stockholders entered into a Stockholder Support Agreement with us (the Stockholder Support Agreement) whereby certain Legacy Nikola stockholders agreed to vote all of their shares of Legacy Nikolas capital stock in favor of the approval and adoption of the Business Combination and related transactions. Additionally, such stockholders agreed not to transfer any of their shares of Legacy Nikola common stock and Legacy Nikola preferred stock (or enter into any arrangement with respect thereto) or enter into any voting arrangement that is inconsistent with the Stockholder Support Agreement. \n\nWe entered into indemnification agreements with our directors and executive officers, in addition to the indemnification provided for in our Certificate of Incorporation and our Bylaws. These agreements, among other things, require us to indemnify our directors and executive officers for certain expenses, including attorneys fees, judgments, fines and settlement amounts incurred by a director or executive officer in any action or proceeding arising out of their services as one of our directors or executive officers or as a director or executive officer of any other company or enterprise to which the person provides services at our request. \nThe limitation of liability and indemnification provisions in our Certificate of Incorporation and our Bylaws may discourage stockholders from bringing a lawsuit against directors for breach of their fiduciary duties. They may also reduce the likelihood of derivative litigation against directors and officers, even though an action, if successful, might benefit our company and our stockholders. \n### Equity Financings \nSeries D Preferred Stock Financing \nFrom September 30, 2019 through the closing of the Business Combination, Legacy Nikola sold an aggregate of 25,661,448 shares of Series D preferred stock for an aggregate purchase price of $250.0 million, pursuant to Legacy Nikolas Series D preferred stock financing. In connection with the Series D preferred stock financing, Legacy Nikola entered into a Series D preferred stock purchase agreement and the CNHI Services Agreement with CNHI and Iveco. Under these agreements, Legacy Nikola issued to Iveco 25,661,448 shares of Series D preferred stock in exchange for a license valued at $50.0 million, $100.0 million in-kind services and $100.0 million in cash. \nIn 2019, Legacy Nikola issued 5,132,291 shares of Series D preferred stock to Iveco in exchange for $50.0 million. Legacy Nikola also issued 5,953,515 shares of Series D preferred stock to Iveco in exchange for licensed Iveco technology and for $8.0 million in in-kind services. \nIn 2020, Legacy Nikola issued an additional 5,132,289 shares of Series D preferred stock to CNHI and Iveco in exchange for approximately $50.0 million pursuant to the Series D preferred stock purchase agreement and 9,443,353 shares pursuant to a Technical Assistance Service Agreement as a payment for in-kind services provided in the first and second quarter of 2020 as well as prepayment for additional services to be provided to us during the remainder of 2020 and 2021. \nThe following table summarizes purchases of Legacy Nikolas Series D preferred stock by related persons and their affiliated entities. None of Legacy Nikolas executive officers purchased shares of Series D preferred stock. \n(1) \nGerrit A Marx is a member of our board of directors and if affiliated with Iveco. \n(2) \nJeffrey W. Ubben is a member of our board of directors and is affiliated with Spring Master Fund. \n(3) \nIncludes shares committed for issuance to Iveco on or prior to the closing of the Business Combination. \n(4) \nIncludes a cash investment and value of services rendered and licenses granted pursuant to the CNHI Services Agreement. \n### Repurchase Agreements \nOn March 2, 2020, in accordance with the redemption rights granted pursuant to that certain letter agreement by and between Legacy Nikola and Nimbus, dated August 3, 2018, (as amended, the Nimbus Redemption Letter Agreement), which gave Nimbus the right to sell back to Legacy Nikola a portion of its shares of Series B preferred stock and Series C preferred stock from time to time upon the consummation of future equity capital raises by Legacy Nikola, Legacy Nikola entered into a \nSeries B preferred stock repurchase agreement with Nimbus, whereby Legacy Nikola agreed to repurchase 2,850,930 shares of Legacy Nikolas Series B preferred stock from Nimbus at a price of $8.77 per share for an aggregate repurchase price of $25.0 million and was completed prior to the closing of the Business Combination. The parties agreed that the aggregate repurchase price constituted a credit towards the number of shares that Nimbus would otherwise be entitled to redeem under any letter agreement between Legacy Nikola and Nimbus. \n### Commercial Agreements \nAgreements with Nimbus \nOn March 2, 2020, Legacy Nikola entered into a Commercial Letter Agreement with Nimbus, whereby Legacy Nikola agreed to use Nimbus affiliates autonomous driving components on Legacy Nikolas autonomy equipped trucks, subject to certain conditions, negotiate inverter development, fuel cell power module development and part supply with Nimbus, and obligate Legacy Nikola to receive services resulting in a minimum payment to Nimbus and its affiliates. We believe the terms of this agreement are generally no less favorable to Legacy Nikola than those that could be obtained in similar transactions with unaffiliated third parties. The Nimbus Redemption Letter Agreement was terminated at the closing of the Business Combination. \n### Agreements with Bosch Entities \nWe maintain commercial relationships with Robert Bosch, LLC, Robert Bosch Battery Systems, LLC, and Robert Bosch Automotive Steering, LLC (collectively, the Bosch Entities). Robert Bosch GmbH is the parent company of the Bosch Entities, and Nimbus is an affiliate of Robert Bosch GmbH. During the year ended December 31, 2020, we recorded research and development expenses of $15.1 million to these entities. As of December 31, 2020, we recorded $2.8 million of accounts payable and $0.8 million in accrued expenses to these entities. As of December 31, 2020, we have remaining purchase obligations of $1.5 million through 2022 to these entities. \nAgreements with CNHI/Iveco \nOn September 30, 2019, Legacy Nikola entered into a European alliance agreement with CNHI and Iveco (the European Alliance Agreement) whereby Legacy Nikola and CNHI/Iveco agreed to establish an entity for the purposes of designing, developing, engineering and manufacturing pure electric and hydrogen heavy trucks in Europe. Iveco is a beneficial owner of more than 5% of our common stock and Gerrit A. Marx, a member of our board of directors, serves as president of commercial and specialty vehicles of CNHI. Pursuant to the European Alliance Agreement, Legacy Nikola and Iveco will contribute equal amounts of cash and in kind contributions necessary for each of party to subscribe to 50% of the capital stock of the entity contemplated by the agreement. The initial term of the European Alliance Agreement expires on December 31, 2030, with automatic renewals<|endoftext|>Crimson Wine Group, 5901 Silverado Trail, Napa, CA 94558 and (ii) each person and entity listed has sole voting power and sole dispositive power with respect to the shares indicated as beneficially owned. \n* Less than 0.1%. \n(a) \nIncludes 308,207 (1.3%) shares owned directly by Mr. John D. Cumming and 2,410,828 (10.4%) shares owned by the Ian M. Cumming Charitable Lead Annuity Trust (the \"CLAT\"). \n(b) \nIncludes 538,543 (2.3%) shares owned directly owned by Mr. Joseph S. Steinberg and 13,920 (less than 0.1%) shares of common stock beneficially owned by Mr. Steinbergs wife and daughter, 1,786,627 (7.7%) shares of common stock held by corporations that are wholly owned by Mr. Steinberg, or held by corporations that are wholly owned by family trusts as to which Mr. Steinberg has sole voting and dispositive control, or held by such trusts, and 323,582 (1.4%) shares of common stock held in a trust for the benefit of Mr. Steinbergs children as to which Mr. Steinberg may be deemed to be the beneficial owner. \n(c) \nBased on Form 4 filed by Mr. DeLong on May 23, 2019. As of March 6, 2020, Mr. DeLong is not an employee of the Company. \n(d) \nIncludes 30 shares of common stock owned of record by Mr. Neikrugs minor son. \n(e) \nBased on Form 4 filed by Mr. Cekay on November 28, 2018. As of March 6, 2020, Mr. Cekay is not an employee of the Company. \n(f) \nPatrick M. DeLong and Mike Cekay are not employed by the Company as of March 6, 2020 and are excluded from the total. \n(g) \nMr. John D. Cumming is a trustee of the Cumming Foundation, a private charitable foundation, and disclaims beneficial ownership of the shares of common stock held by the foundation. \n(h) \nMr. Steinberg and his wife are the trustees of the charitable trust.Mr. Steinberg and his wife disclaim beneficial ownership of the shares of common stock held by the charitable trust. \n(i) \nMr. John D. Cumming is the trustee of the CLAT and has sole voting and dispositive control over the shares owned by the CLAT. \n(j) \nBased on Schedule 13G filed by Beck, Mack & Oliver LLC with the SEC on February 7, 2020. \n(k) \nBased on Schedule 13D filed by Mr. Gabelli with the SEC on March 3, 2016. All shares are held directly or indirectly in entities that Mr. Gabelli either controls or for which he acts as chief investment officer, including 345,000 shares (1.5%) owned by GAMCO Asset Management Inc., 370,503 shares (1.6%) owned by Gabelli Funds, LLC and 510,000 shares (2.2%) owned by Teton Advisors, Inc. \nAs of March 6, 2020, Cede & Co. held of record 19,078,933 shares of our common stock (approximately 82.0% of our total common stock outstanding). Cede & Co. held such shares as a nominee for broker-dealer members of The Depository Trust Company, which conducts clearing and settlement operations for securities transactions involving its members. \nAs described herein, our common stock is subject to transfer restrictions that are designed to reduce the possibility that certain changes in ownership could result in limitations on the use of our tax attributes. Our certificate of incorporation contains provisions that generally restrict the ability of a person or entity from acquiring ownership (including through attribution under the tax law) of 5% or more of our common shares and the ability of persons or entities now owning 5% or more of our common shares from acquiring additional common shares. Stockholders (and prospective stockholders) are advised that, under the tax law rules incorporated in these provisions, the acquisition of even a single share of common stock may be proscribed under our certificate of incorporation, given (among other things) the tax law ownership attribution rules as well as the tax law rules applicable to acquisitions made in coordination with or in concert with others. The restriction will remain until the earliest of (a) December 31, 2022, (b) the repeal of Section 382 of the Internal Revenue Code (or any comparable successor provision) and (c) the beginning of our taxable year to which these tax attributes may no longer be carried forward. The restriction may be waived by our Board of Directors. \nStockholders are advised to carefully monitor their ownership of our common stock and consult their own legal advisers and/or us to determine whether their ownership of our common shares approaches the proscribed level. \nItem 13.Certain Relationships and Related Transactions, and Directors Independence. \nPolicies and Procedures with Respect to Transactions with Related Persons \nThe Board has adopted a written policy for the review, approval and ratification of transactions that involve related persons and potential conflicts of interest (the Related Person Transaction Policy). \nThe Related Person Transaction Policy applies to each director and executive officer of the Company, any nominee for election as a director of the Company, any security holder who is known to own of record or beneficially more than five percent of any class of the Companys voting securities, any immediate family member of any of the foregoing persons, and any corporation, firm, association or other entity in which one or more directors of the Company are directors or officers, or have a substantial financial interest (each a Related Person). \nUnder the Related Person Transaction Policy, a Related Person Transaction is defined as a transaction or arrangement involving a Related Person in which the Company is a participant or that would require disclosure in the Companys filings in accordance with SEC rules. \nUnder the Related Person Transaction Policy, Related Persons must disclose to the Audit Committee any potential Related Person Transactions and must disclose all material facts with respect to such transaction. All Related Person Transactions will be reviewed by the Audit Committee and, in its discretion, approved or ratified. In determining whether to approve or ratify a Related Person Transaction, the Audit Committee will consider the relevant facts and circumstances of the Related Person Transaction, which may include factors such as the relationship of the Related Person with the Company, the materiality or significance of the transaction to the Company and the Related Person, the business purpose and reasonableness of the transaction, whether the transaction is comparable to a transaction that could be available to the Company on an arms-length basis, and the impact of the transaction on the Companys business and operations. \nFrom time to time, our directors and officers may engage in purchases of our products at substantial discounts (but not below cost) as determined to be reasonable under the circumstances. Generally, we do not believe any such transactions to be material to the Company or the related person and do not believe that any such transactions would impair the independence of any director. The Board has considered these possible purchases under the Related Person Transaction Policy and has determined that no such purchase will require prior approval by the Audit Committee. \n### Director Independence \nThe Board of Directors has determined that Messers. Cumming, Steinberg, Neikrug, Carlson, Rollins and Ms. Tierney are independent applying the NASDAQ Stock Markets listing standards for independence. \nItem 14. \nPrior to formation of the Audit Committee, the Board of Directors adopted a policy for pre-approval by the Audit Committee of all audit and non-audit work performed by the Companys independent registered public accounting firm and has pre-approved (i) certain general categories of work where no specific case-by-case approval is necessary (general pre-approvals) and (ii) categories of work which require the specific pre-approval of the Audit Committee (specific pre-approvals). For additional services or services in an amount above the annual amount that has been pre-approved, additional authorization from the Audit Committee is required. The Audit Committee has delegated to the Chairman of the Audit Committee the ability to pre-approve all of these services in the absence of the full committee. Any pre-approval decisions made by the Chairman of the Audit Committee under this delegated authority will be reported to the full Audit Committee. All requests for services to be provided by our independent registered public accounting firm that do not require specific approval by the Audit Committee must be submitted to the Chief Financial Officer of the Company, who determines whether such services are in fact within the scope of those services that have received the general pre-approval of the Audit Committee. The Chief Financial Officer reports to the Audit Committee periodically, at a minimum quarterly. \n### Audit Fees \nIn accordance with the SECs definitions and rules, Audit Fees are fees paid to our independent registered public accounting firm for professional services for the audit of the Companys consolidated financial statements included in the Companys Form 10-K, the review of financial statements included in the Companys Form 10-Qs, services that are normally provided in connection with statutory and regulatory filings or engagements, assurance and related services that are reasonably related to the performance of the audit or review of our financial statements. Audit Related Fees include professional services for the audit of the Companys 401K plan, including compliance with regulatory matters, consulting with respect to technical accounting and disclosure rules. For the years ended December 31, 2019 and 2018, BPM LLP, our independent registered public accounting firm did not perform any tax related services for the Company. \nDuring the fiscal years ended December 31, 2019 and 2018, fees paid to the Companys independent public accountant, consisted of the following: \n### PART IV \n\n(a)(2) \n\nSchedules are omitted because they are not required or are not applicable or the required information is shown in the financial statements or notes thereto. \n(a)(3) \nSee item 15(b) below for a complete list of Exhibits to this Report including Executive Compensation Plans and Arrangements. \n(b) \n### Exhibits. \nWe will furnish any exhibit upon request made to our Corporate Secretary, 5901 Silverado Trail, Napa, CA 94558.We charge $0.50 per page to cover expenses of copying and mailing. \nAll documents referenced below were filed pursuant to the Securities Exchange Act of 1934 by the Company, file number 000-54866, unless otherwise indicated. \nExhibit No. \nDescription \n2.1 \nSeparation Agreement, dated February 1, 2013, between Crimson Wine Group, Ltd. (formerly known as Leucadia National Corporation) (filed as Exhibit 2.1 to the Companys Form 8-K, filed on February 25, 2013 (the February 25, 2013 Form 8-K)).* \n3.1 \nAmended and Restated Certificate of Incorporation (filed as Exhibit 3.1 to the February 25, 2013 Form 8-K).* \n3.2 \nAmended and Restated Bylaws (filed as Exhibit 3.2 to the February 25, 2013 Form 8-K).* \n4.1 \nDescription of Securities.** \n4.2 \nForm of Specimen Stock Certificate (filed as Exhibit 4.1 to Amendment No. 2 to the Companys Registration Statement on Form 10-12G).* \n10.1 \nOffer Letter between Crimson Wine Group, Ltd. and Jennifer Locke, dated November 4, 2019 (filed as Exhibit 10.1 to the Company's Form 8-K filed on November 7, 2019).* \n10.2 \nEmployment Agreement between Crimson Wine Group, Ltd. and Mike S. Cekay, dated March 26, 2012 (filed as Exhibit 10.2 to Amendment No. 1 to the Companys Registration Statement on Form 10-12G).* + \n10.3 \nTax Matters Agreement dated February 1, 2013, between Crimson Wine Group, Ltd. and Leucadia National Corporation (filed as Exhibit 10.1 to the Companys Form 8-K filed on February 25, 2013).* \n10.4 \nAdministrative Services Agreement, dated February 1, 2013, between Crimson Wine Group, Ltd. (formerly known as Leucadia National Corporation) (filed as Exhibit 10.2 to the Companys Form 8-K filed on February 25, 2013).* \n10.5 \nFirst Amendment to Administrative Services Agreement, dated August 1, 2013, between Crimson Wine Group, Ltd. (formerly known as Leucadia National Corporation) (filed as Exhibit 10.1 to the Companys Form 8-K filed on August 2, 2013).* \n10.6 \nCrimson Wine Group, Ltd. 2013 Omnibus Incentive Plan (filed as Exhibit 10.3 to the Companys Form 8-K filed on February 25, 2013).* + \n10.7 \nCredit Agreement dated as of March 22, 2013 among Crimson Wine Group, Ltd., Pine Ridge Winery, LLC, Chamisal Vineyards, LLC and Double Canyon Vineyards, LLC, and American AgCredit, FLCA, as Agent for the Lenders and for itself as a Lender(filed as Exhibit 10.6 to the Companys Form 10-K filed on March 28, 2013).* \n10.8 \nLoan<|endoftext|>"},"task":{"kind":"string","value":"{\"file\": \"/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz\"}"}}},{"rowIdx":96,"cells":{"text":{"kind":"string","value":"<|endoftext|>Period should be restated because of a misapplication in the guidance around accounting for certain of our outstanding warrants to purchase common stock (the Warrants) and should no longer be relied upon. \nWe reassessed our accounting for Warrants issued in our initial public offering, in light of the SEC Staffs published views. \n\nAs a result of that reassessment, we determined that our disclosure controls and procedures for such periods were not effective with respect to the classification of the Companys warrants as components of equity instead of as derivative liabilities.For more information, see Item 9A included in this Annual Report on Form 10-K/A. \nWe have not amended our previously filed Quarterly Report on Form 10-Q. \n\n### Overview \nWe are a blank check company incorporated on June 24, 2020 as a Delaware corporation and formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses (a Business Combination). We consummated our Public Offering (as defined below) on October 22, 2020 and are currently in the process of locating suitable targets for our business combination. \n\nWe completed the sale of 15,000,000 units (the Units and, with respect to the shares of common stock included in the Units being offered, the Public Shares) at $10.00 per Unit on October 22, 2020. Simultaneous with the closing of the Public Offering, we completed the sale of 228,000 Private Units (the Private Units) at a price of $10.00 per Private Unit in a private placement to certain funds and accounts managed by Magnetar Financial LLC, Mint Tower Capital Management B.V., Periscope Capital Inc., and Polar Asset Management Partners Inc. (collectively, the Anchor Investors). \nAs of December 31, 2020, a total of $170,000,000 of the net proceeds from the IPO (including the partial exercise of the over-allotment option) and the Private Placements were in a trust account established for the benefit of the Companys public shareholders. \nOur management has broad discretion with respect to the specific application of the net proceeds of IPO and the Private Placement, although substantially all of the net proceeds are intended to be applied generally towards consummating a business combination. \n### Results of Operations \nAs of December 31, 2020, we have not commenced any operations. All activity for the period from June 24, 2020 (inception) through December 31, 2020, relates to our formation and initial public offering (Public Offering of IPO), and, since the completion of the IPO, searching for a target to consummate a Business Combination. \nFor the period from June 24, 2020 (Inception) through December 31, 2020, we had net income of approximately $1.1 million. We incurred $126,315 of formation and operating costs (not charged against stockholders equity), consisting mostly of general and administrative expenses and a $1.2 million change in the fair value of warrant liabilities. \n\nAs of December 31, 2020, we had cash outside our trust account of $1,276,364, available for working capital needs. \nOn October 22, 2020, the Company completed the sale of 15,000,000 units (the Units and, with respect to the shares of common stock included in the Units being offered, the Public Shares) at $10.00 per Unit,generating gross proceeds of $150,000,000. \nSimultaneous with the closing of the IPO, the Company completed the sale of 228,000 Private Units (the Private Units) at a price of $10.00 per Private Unit in a private placement to certain funds and accounts managed by Magnetar Financial LLC, Mint Tower Capital Management B.V., Periscope Capital Inc., and Polar Asset Management Partners Inc. (collectively, the Anchor Investors), generating gross proceeds of $2,228,000. \nIn connection with the IPO, the underwriters were granted a 45-day option from the date of the prospectus (the Over-Allotment Option) to purchase up to 2,250,000 additional units to cover over-allotments (the Over-Allotment Units), if any. On October 26, 2020, the underwriters purchased an additional 1,500,000 Over-Allotment Units pursuant to the partial exercise of the Over-Allotment Option. On November 17, 2020, the underwriters purchased an additional 500,000 Over-Allotment Units pursuant to the partial exercise of the Over-Allotment Option. The Over-Allotment Units were sold at an offering price of $10.00 per Over-Allotment Unit, generating aggregate additional gross proceeds of $20,000,000 to the Company. On November 17, 2020, the underwriters canceled the remainder of the Over-Allotment Option. \nWe intend to use substantially all of the funds held in the trust account, including any amounts representing interest earned on the trust account (excluding the business combination marketing fees payable to I-Bankers) to complete our initial Business Combination. Our 2020 franchise tax was calculated using a partial year proration and amounted to $44,523. \nThe notes would either be repaid upon consummation of a Business Combination, without interest, or, at the lenders discretion, or converted upon consummation of a Business Combination into additional Private Placement Units at a price of $10.00 per Unit (the Working Capital Units). As of December 31, 2020, no Working Capital Loans have been issued. \n\n\nWe did not have any off-balance sheet arrangement as of December 31, 2020. \nContractual Obligations \nAs of December 31, 2020, we did not have any long-term debt, capital or operating lease obligations. \n\nWe have engaged I-Bankers as an advisor in connection with our acquiring, engaging in a share exchange, share reconstruction and amalgamation with, purchasing all or substantially all of the assets of, entering into contractual arrangements with, or engaging in any other similar Business Combination with one or more businesses or entities. We will pay I-Bankers for such services a fee equal to 4.5% of the gross proceeds of the Public Offering. \n\n\n\nWe account for our common stock subject to possible redemption in accordance with the guidance in the Financial Accounting Standards Boards (FASB) Accounting Standards Codification (ASC) Topic 480 \n\nConditionally redeemable common stock (including common stock that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within our control) are classified as temporary equity. Our common stock feature certain redemption rights that are considered to be outside of our control and subject to the occurrence of uncertain future events. Accordingly, at December31, 2020, 15,730,400 shares of common stock subject to possible redemption are presented as temporary equity, outside of the stockholders equity section of our balance sheet. \nNet Income Per Common Share \nNet income per share is computed by dividing income by the weighted-average number of shares of common stock outstanding during the period, excluding shares of common stock subject to forfeiture. The Company has not considered the effect of the warrants sold in the Initial Public Offering and private placement to purchase shares in the calculation of diluted income per share, since the exercise of the warrants are contingent upon the occurrence of future events and the inclusion of such warrants would be anti-dilutive. \nThe Companys statements of operations include a presentation of net income per share for common shares subject to possible redemption in a manner similar to the two-class method of net income per share. \nNet income per share, basic and diluted, for non-redeemable common stock is calculated by dividing the net income, adjusted for income or loss on marketable securities attributable to Common stock subject to possible redemption, by the weighted average number of non-redeemable common stock outstanding for the period. \n\n\n\nWe issued warrants to investors in our initial public offering and we issued private placement warrants in the private placement we completed at the time of our initial public offering. The fair value of warrants issued in connection with our initial public offering and private placement were initially measured at fair value using the Black Sholes method for Private Warrants and a Monte Carlo simulation model for Public Warrants. Subsequent to being publicly traded, we use the publicly traded warrant price for Public Warrants and the Black Sholes method for Private Warrants to estimate fair value at each measurement date. \n\n\nJOBS Act \n\nSubject to certain conditions set forth in theJOBS Act, if, as an emerging growth company, we choose to rely on such exemptions we may not be required to, among other things, (i) provide an independent registered public accounting firms attestation report on our system of internal controls over financial reporting pursuant to Section 404, (ii) provide all of the compensation disclosure that may be required of non-emerginggrowth public companies under the Dodd-FrankWall Street Reform and Consumer Protection Act, (iii) comply with any requirement that may be adopted by the PCAOB regarding mandatory audit firm rotation or a supplement to the independent registered public accounting firms report providing additional information about the audit and the financial statements (auditor discussion and analysis), and (iv) disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the CEOs compensation to median employee compensation. \nITEM 7A. \nAs of December 31, 2020, we were not subject to any material market or interest rate risk. Following the consummation of our Public Offering, the net proceeds of the Public Offering and the Private Placement, including amounts in the Trust Account, were invested in U.S. \nWe have not engaged in any hedging activities since our inception. \nITEM 8. \nThe financial statements required by this item are set forth following Item 16 of this Report and are incorporated herein by reference. \nITEM 9. \nThere have been no disagreements with our independent registered public accountants on accounting or financial disclosure matters during our two most recent fiscal years. \n### ITEM 9A. CONTROLS AND PROCEDURES \n\n1, our management re-evaluated, with the participation of our principal executive officer and principal financial and accounting officer (our Certifying Officers), the effectiveness of our disclosure controls and procedures as of December 31, 2020, pursuant to Rule13a-15(b) under the Exchange Act. Based upon that evaluation and in light of the SEC Staff Statement, our Certifying Officers concluded that, solely due to the Companys restatement of its financial statements to reclassify the Companys warrants as described in the Explanatory Note to this Amendment, a material weakness existing and our disclosure controls and procedures were not effective as of December 31, 2020. \n\n\nOur Original Filing did not, and this Amendment No. 1 does not, include a report of managements assessment regarding internal control over financial reporting or an attestation report of our independent registered public accounting firm due to a transition period established by rules of the SEC for newly public companies. \n\nOn May 7, 2021, we revised our prior position on accounting for warrants and restated our financial statements to reclassify the Companys warrants as described in the Explanatory Note to this Amendment No. 1. \n\nOther than as noted, there were no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. 1, we plan to enhance our processes to identify and appropriately apply applicable accounting requirements to better evaluate and understand the nuances of the complex accounting standards that apply to our financial statements. \nITEM 9B. OTHER INFORMATION. \nNone. \nPART III \nPART IV \nITEM 15. EXHIBITS AND FINANCIAL STATEMENTS a. \n\n1. \n### Financial Statements \nThe financial statements and notes thereto which are attached hereto have been included by reference into Item 8 of this part of the annual report on Form 10-K. See the Index to Financial Statements. \n2. \n\nAll schedules are omitted because they are inapplicable or not required or the required information is shown in the financial statements or notes thereto. \n3. \nExhibits \n* \nFiled herewith. \n### ITEM 16. FORM 10-K SUMMARY \nNone.<|endoftext|>If we fail to complete our initial business combination by December 7, 2022. However, if our sponsor or management team acquire public shares, they will be entitled to liquidating distributions from the trust account with respect to such public shares if we fail to complete our initial business combination within the allotted time period. \nOur sponsor, officers and directors have agreed, pursuant to a written agreement with us, that they will not propose any amendment to our amended and restated memorandum and articles of association (A) to modify the substance or timing of our obligation to allow redemption in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination by December 7, 2022 or (B) with respect to any other material provisions relating to shareholders rights or pre-initial business combination activity, unless we provide our public shareholders with the opportunity to redeem their public shares upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account and not previously released to us to pay our taxes, divided by the number of then outstanding public shares. \n\nThe funds deposited in the trust account could, however, become subject to the claims of our creditors which would have higher priority than the claims of our public shareholders. We cannot assure you that the actual per-share redemption amount received by shareholders will not be substantially less than \n$10.00. \nIn order to protect the amounts held in the trust account, our sponsor has agreed that it will be liable to us if and to the extent any claims by a third party (other than WithumSmith+Brown, PC, our independent registered public accounting firm) for services rendered or products sold to us, or a prospective target business with which we have entered into a written letter of intent, confidentiality or other similar agreement or business combination agreement, reduce the amount of funds in the trust account to below the lesser of (i) $10.00 per public share and (ii) the actual amount per public share held in the trust account as of the date of the liquidation of the trust account, if less than $10.00 per share due to reductions in the value of the trust assets, less taxes payable, provided that such liability will not apply to any claims by a third party or prospective target business who executed a waiver of any and all rights to the monies held in the trust account (whether or not such waiver is enforceable) nor will it apply to any claims under our indemnity of the underwriters of our initial public offering against certain liabilities, including liabilities under the Securities Act. \n\nIn the event that the funds in the trust account are reduced below the lesser of (i) $10.00 per public share and (ii) the actual amount per public share held in the trust account as of the date of the liquidation of the trust account if less than $10.00 per share due to reductions in the value of the trust assets, in each case less taxes payable, and our sponsor asserts that it is unable to satisfy its indemnification obligations or that it has no indemnification obligations related to a particular claim, our independent directors would determine whether to take legal action against our sponsor to enforce its indemnification obligations. \nWe will have access to up to approximately $1,000,000 from the proceeds of our initial public offering with which to pay any such potential claims (including costs and expenses incurred in connection with our liquidation, currently estimated to be no more than approximately $100,000). \nIf we file a bankruptcy or winding-up petition or an involuntary bankruptcy or winding-up petition is filed against us that is not dismissed, the funds held in the trust account could be subject to applicable bankruptcy or insolvency law, and may be included in our bankruptcy estate and subject to the claims of third parties with priority over the claims of our shareholders. \nOur public shareholders will be entitled to receive funds from the trust account only (i) in the event of the redemption of our public shares if we do not complete our initial business combination by December 7, 2022, (ii) in connection with a shareholder vote to amend our amended and restated memorandum and articles of association (A) to modify the substance or timing of our obligation to allow redemption in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination by December 7, 2022 or (B) with respect to any other material provisions relating to shareholders rights or pre-initial business combination activity or (iii) if they redeem their respective shares for cash upon the completion of our initial business combination. \n### Conflicts of Interest \nAccordingly, if any of our officers or directors becomes aware of a business combination opportunity which is suitable for an entity to which he or she has then- current fiduciary or contractual obligations, he or she will honor his or her fiduciary or contractual obligations to present such business combination opportunity to such entity, subject to their fiduciary duties under Cayman Islands law. \nFacilities \nWe currently utilize office space at 777 Arthur Godfrey Road, #202, Miami Beach, FL 33140 from our sponsor and the members of our management team as our executive offices. \n### Employees \nWe currently have three officers: Ian Friedman, Paul Maeder and Dan Nova. \n\n### General Risk Factors \n\nWe are a blank check company incorporated under the laws of the Cayman Islands and all of our activities to date have been related to our formation, our initial public offering and our search for a business combination target. \n\nWe are an emerging growth company within the meaning of the Securities Act, as modified by the JOBS Act, and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including, but not limited to, not being required to comply with the auditor internal controls attestation requirements of Section 404 of the Sarbanes-Oxley Act, 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 and shareholder approval of any golden parachute payments not previously approved. \n\n\n\n\n\n\n\n\n\n\nOur initial shareholders and management team also may from time to time purchase Class A ordinary shares prior to our initial business combination. Our amended and restated memorandum and articles of association provide that, if we seek shareholder approval of an initial business combination, such initial business combination will be approved if we receive an ordinary resolution under Cayman Islands law, which requires the affirmative vote of a majority of the shareholders who attend and vote at a general meeting of the company, including the founder shares. \n\nThe amount of the deferred underwriting commissions payable to the underwriter will not be adjusted for any shares that are redeemed in connection with a business combination and such amount of deferred underwriting discount is not available for us to use as consideration in an initial business combination. Furthermore, in no event will we redeem our public shares in an amount that would cause our net tangible assets, after payment of the deferred underwriting commissions, to be less than $5,000,001 upon completion of our initial business combination, or any greater net tangible asset or cash requirement that may be contained in the agreement relating to our initial business combination. Consequently, if accepting all properly submitted redemption requests would cause our net tangible assets, after payment of the deferred underwriting commissions, to be less than $5,000,001 upon completion of our initial business combination or less than such greater amount necessary to satisfy a closing condition as described above, we would not proceed with such redemption of our public shares and the related business combination, and we may instead search for an alternate business combination. If we are able to consummate an initial business combination, the per-share value of shares held by non-redeeming shareholders will reflect our obligation to pay the deferred underwriting commissions. \n\nFurthermore, this dilution would increase to the extent that the anti-dilution provision of the Class B ordinary shares results in the issuance of Class A ordinary shares on a greater than one-to-one basis upon conversion of the Class B ordinary shares at the time of our initial business combination. In addition, the amount of the deferred underwriting commissions payable to the underwriter will not be adjusted for any shares that are redeemed in connection with an initial business combination. \n\n\nThe requirement that we complete our initial business combination by December 7, 2022 may give potential target businesses leverage over us in negotiating a business combination and may limit the time we have in which to conduct due diligence on potential business combination targets, in particular as we approach our dissolution deadline, which could undermine our ability to complete our initial business combination on terms that would produce value for our shareholders. \nAny potential target business with which we enter into negotiations concerning a business combination will be aware that we must complete our initial business combination by December 7, 2022. \nOur search for a business combination, and any partner business with which we ultimately complete a business combination, may be materially adversely affected by the recent coronavirus (COVID-19) pandemic and the status of debt and equity markets. \nOn January 31, 2020, U.S. \nFurthermore, we may be unable to complete a business combination if concerns relating to COVID-19 continue to restrict travel, limit the ability to have meetings with potential investors or the partner businesss personnel, vendors and services providers are unavailable to negotiate and complete a transaction in a timely manner. If the disruptions posed by COVID-19 or other matters of global concern continue for an extensive period of time, our ability to complete a business combination, or the operations of a partner business with which we ultimately complete a business combination, may be materially adversely affected. In addition, our ability to complete a transaction may be dependent on the ability to raise equity and debt financing which may be impacted by COVID-19 and other events, including as a result of increased market volatility, decreased market liquidity and third-party financing being unavailable on terms acceptable to us or at all. \n\n\n\nWe may not be able to complete our initial business combination by December 7, 2022, in which case we would cease all operations except for the purpose of winding up and we would redeem our public shares and liquidate. \nWe may not be able to find a suitable target business and complete our initial business combination by December 7, 2022. If we have not completed our initial business combination within such time period, we will: (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account (less taxes payable and up to $100,000 of interest income to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public shareholders rights as shareholders (including the right to receive further liquidation distributions, if any) and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders and our board of directors, liquidate and dissolve, subject in the case of clauses (ii) and (iii), to our obligations under Cayman Islands law to provide for claims of creditors and in all cases subject to the other requirements of applicable law. \nIf we seek shareholder approval of our initial business combination, our sponsor, initial shareholders, directors,<|endoftext|>Leased) U.S. company-operated convenience and fuel retail stores having an aggregate fair value of approximately $50.2 million, and the Partnership transferred to Circle K the real property for 19 of the master lease properties having an aggregate fair value of approximately $51.4 million. \nIn connection with the closing of the First Asset Exchange and Second Asset Exchange (collectively, the Closed Asset Exchange Transactions), the stores transferred by Circle K were dealerized as contemplated by the Asset Exchange Agreement and Circle Ks rights under the dealer agreements and agent agreements that were entered into in connection therewith were assigned to the Partnership. Additionally, at the closing of the First Asset Exchange, LGW and Circle K entered into a Sub-Jobber Agreement, dated as of May 21, 2019 (the Sub-Jobber Agreement), pursuant to which Circle K will supply fuel to LGW for resale to the dealers at the stores that Circle K transferred to the Partnership in the Closed Asset Exchange Transactions. While there is no minimum or maximum quantity of products that LGW is required to purchase from Circle K, for each store location covered by the Sub-Jobber Agreement, LGW must purchase from Circle K all of the requirements for motor fuel at the stores covered by the Sub-Jobber Agreement, except in certain limited circumstances described in the Sub-Jobber Agreement. The term of the Sub-Jobber Agreement will expire on May 21, 2024, unless earlier terminated by either party in accordance with the terms of the Sub-Jobber Agreement. Circle K also has the right to grant temporary extensions of the Sub-Jobber Agreement of up to 180 days per extension. \nAfter each subsequent separate tranche closing under the Asset Exchange Agreement, the Sub-Jobber Agreement will be amended by agreement of LGW and Circle K to add the store locations acquired by the Partnership at such closing to the Sub-Jobber Agreement. \nCROSSAMERICA PARTNERS LP \n\nThe purchases and sales were accounted for as transactions between entities under common control. As such, the sites divested were recorded as a charge against equity. The sites acquired were recorded at carryover book basis from Circle Ks balance sheet as a contribution to equity. \nWe recorded the following to reflect the divestiture of the CAPL Properties in the Closed Asset Exchange Transactions with the net assets divested recorded through equity (in thousands). \nWe recorded the following to reflect the acquisition of the CK Properties in the Closed Asset Exchange Transactions with the net assets acquired recorded through equity (in thousands). \n(a) \nBecause the fair value of the properties divested to Circle K was $0.2 million greater than the fair value of the properties acquired from Circle K in the First Asset Exchange and $1.2 million greater than the fair value of the properties acquired from Circle K in the Second Asset Exchange, we recognized a receivable for $1.4 million. \nIn connection with the closing of the First Asset Exchange, we received $2.8 million in cash from Circle K during the second quarter of 2019 as consideration primarily for 1) inventory transferred by us to Circle K at the 17 company operated sites; and 2) security deposits from dealers assigned by Circle K to us. In connection with the closing of the Second Asset Exchange, we received $0.3 million in cash from Circle K during the third quarter of 2019 as consideration primarily for security deposits from dealers assigned by Circle K to us. \nOn February 25, 2020, the closing of the third separate tranche of asset exchanges under the Asset Exchange Agreement occurred. In this tranche, Circle K transferred to the Partnership ten (all fee) U.S. company-operated convenience and fuel retail stores having an aggregate fair value of approximately $11.0 million, and the Partnership transferred to Circle K the real property for five of the master lease properties having an aggregate fair value of approximately $10.3 million. \nCROSSAMERICA PARTNERS LP \n\nThe remaining tranches are anticipated to close in the first half of 2020. \n### Note 4. ASSETS HELD FOR SALE \nWe have classified \n24 and two sites as held for sale at December31, 2019 and 2018, respectively. \nThe sites classified as held for sale at December 31, 2019 are expected to be sold within one year of such classification. Assets held for sale were as follows (in thousands): \nThe Partnership has reprioritized divesting lower performing assets, which has resulted in an increase in the number of sites classified as held-for-sale at December 31, 2019. See Note 7 for information regarding impairment charges recorded upon such classification. \n### Note 5. RECEIVABLES \nChanges in the allowance for doubtful accounts consisted of the following \n(in thousands): \nNotes receivable from lessee dealers totaled $2.1 million and $2.8 million at December 31, 2019 and 2018, respectively, and are included in other current assets and other noncurrent assets on the consolidated balance sheets. \n### Note 6. INVENTORIES \nInventories consisted of the following (in thousands): \nSee Note 3 for information related to the May 2019 closing of the first tranche of the asset exchange with Circle K and Note 21 for additional information related to the dealerization of our company operated sites. Subsequent to these transactions, we no longer operate company operated retail sites and thus no longer have retail site merchandise inventory. \nCROSSAMERICA PARTNERS LP \n\nNote 7. PROPERTY AND EQUIPMENT \n\nAs a result of the adoption of ASC 842, on January 1, 2019, we recorded a transition adjustment removing the $42.0 million of property and equipment, net recorded on the December 31, 2018 balance sheet related to leases previously accounted for as failed sale-leaseback transitions. \nSee Note 3 for additional information on the closings of the first two tranches of the asset exchange with Circle K, which resulted in a $6.4 million reduction of property and equipment, net. \nAs discussed in Note 11, we lease sites under our Getty Lease, for which the building and equipment components are classified as a finance lease. The right-of-use asset associated with this finance lease is included in the table above and totaled $14.0 million at December 31, 2019, net of accumulated amortization. Amortization of this right-of-use asset is included in depreciation, amortization and accretion expense on the statement of income and amounted to $2.3 million in 2019. \nApproximately $556.3 million of property and equipment, net was used for leasing purposes at December 31, 2019. \nDepreciation expense, including amortization of assets recorded under finance lease obligations, was approximately $42.8 million, $49.3 million and $42.5 million for 2019, 2018 and 2017, respectively. Included in these amounts are impairment charges primarily related to sites classified within assets held for sale totaling $4.5 million, $8.1 million and $1.3 million during 2019, 2018 and 2017, respectively. \nOf the impairment charges recorded in 2018, $8.1 million related to the 11 FTC-required divestitures. The impairment charges include $1.2 million of wholesale fuel distribution rights and $0.3 million of goodwill, most of which relates to the Retail segment. \nAs part of Circle Ks acquisition of Holiday, the FTC issued a decree in which nine sites were required to be divested to FTC approved third-party buyers (Upper Midwest Sites). Since this was a forced divestiture of assets for us, Circle K compensated us with an amount representing the difference between the value of the nine Upper Midwest Sties and the proceeds of the sale to FTC approved third-party buyers, which amounted to $6.3 million. This payment was accounted for as a transaction between entities under common control and thus recorded as a contribution to partners capital, net of income taxes. \nIn October 2018, Hurricane Michael damaged most of our 45 sites in Florida. As a result, we wrote off property and equipment with a net book value of $2.3 million. We recorded $3.1 million in insurance proceeds and as such, recognized a net gain of $0.8 million in 2018. \nDuring 2017, as approved by the conflicts committee of our Board, we sold 29 properties to Dunne Manning Realty LP, an entity affiliated with Joseph V. Topper, Jr., a member of the Board (DMR), for $18.9 million, resulting in a $0.8 million gain. These sites were generally sites at which we did not supply fuel or represented vacant land. \nDuring 2017, we sold two properties as a result of the FTCs requirements associated with the CST Merger for $6.7 million, resulting in a gain of $2.2 million. In addition, Circle K agreed to reimburse us for the tax liability incurred on the required sale, resulting in additional proceeds of $0.3 million, which was accounted for as a contribution to partners capital. \nCROSSAMERICA PARTNERS LP \n\nDuring 2017, DMS renewed its contract with one of its customers, triggering a $ \n0.8 million earn-out payment by DMS to us under a contract entered into with DMS at the time of CST acquiring our General Partner in October 2014, which was recorded as a gain. \nNote 8. \n### INTANGIBLE ASSETS \nIntangible assets consisted of the following (in thousands): \nAs a result of the adoption of ASC 842, on January 1, 2019, we recorded a transition adjustment reclassifying below market lease intangible assets (and above market lease liabilities) to the right-of-use asset. \nSee Note 3 for additional information on the May 2019 and September 2019 closing of the first and second tranche of the asset exchange with Circle K, which resulted in the disposal of $2.1 million of wholesale fuel distribution rights. \nAmortization expense, including amortization of above and below market lease intangible assets, which is classified as rent expense, was $10.9 million, $15.4 million (including $2.0 million of impairments primarily related to FTC-required divestitures discussed in Note 7) and $13.6 million for 2019, 2018 and 2017, respectively. Aggregate amortization expense is expected to be $10.6 million, $9.9 million, $9.2 million, $6.5 million and $4.2 million for 2020, 2021, 2022, 2023 and 2024, respectively. \n### Note 9. GOODWILL \nChanges in goodwill during 2019 and 2018 consisted of the following (in thousands): \nAs a result of converting our remaining company-operated sites to dealer-operated sites in the third quarter of 2019 and the resulting reduction in future cash flows in the Retail segment and the expected increase in future cash flows that will be received by the Wholesale segment subsequent to the date of conversion, $4.5 million of the goodwill originally assigned to the Retail segment was reassigned to the Wholesale segment. See Note 21 for additional information on the dealerization of our company operated sites. \nCROSSAMERICA PARTNERS LP \n\nNote 10. ACCRUED EXPENSES AND OTHER LONG-TERM LIABILITIES \nAccrued expenses and other current liabilities consisted of the following (in thousands): \nOther long-term liabilities consisted of the following (in thousands): \n(a) \nSee Note 2 for information regarding the transition adjustment recorded related to the adoption of ASC 842. \n(b) \nSee Note 21 for information regarding the dealerization of our remaining company operated sites. \n(c) \nSee Note 13 for information regarding the noncurrent portion of our accounts payable with Circle K. \n\nEnvironmental laws in the U.S. require the permanent closure of USTs within one to two years after the USTs are no longer in service, depending on the jurisdiction in which the USTs are located. We have estimated that USTs at our owned retail sites will remain in service approximately 30 years and that we will have an obligation to remove those USTs at that time. For our leased retail sites, our lease agreements generally require that we remove certain improvements, primarily USTs and signage, upon termination of the lease, and so an asset retirement obligation is incurred upon entering the lease. There are no assets that are legally restricted for purposes of settling our asset retirement obligations. \nA rollforward of our asset retirement obligation is below (in thousands): \nCROSSAMERICA PARTNERS LP \n\nNote 11. DEBT \nOur balances for long-term debt and finance lease obligations are as follows (in thousands): \nAs of December 31, 2019, future principal payments on debt and future minimum rental payments on finance lease obligations were as follows (in thousands): \nOur borrowings under the revolving credit facility had a weighted-average interest rate of 3.73% as of December 31, 2019 (LIBOR plus an applicable margin, which was<|endoftext|>During the same period in which the related revenues are earned. The Company has determined that the population of contracts with the Companys customers and Brand Partners tends to be homogenous, so that review of the contracts and estimate of various revenue related adjustments can be applied to the entire population. The Company had customer returns of $63,272 for the year ended December 31, 2020 and $79,090 for the year ended December 31, 2019. The Company has not recorded a reserve for returns at December 31, 2020, or 2019 since it does not believe such returns will be material. \nAs of December 31, 2020, the Company did not have any in-process or prepaid sales orders or transactions that would require the recognition of a contract liability. \n### Cost of Revenue \nAmounts recorded as cost of revenue relate to direct product costs. Such costs are recorded when the associated revenue is recognized. Our cost of revenue consists primarily of the cost of product, and the cost of product samples. \nCommission Expense and Contract Acquisition Costs \nThe Company markets and sells its products through a multi-level marketing sales platform. Commissions are earned on product sales to Brand Partners and customers at a rate of 10% for every transaction plus a specified spread on recurring sales. Brand Partners earn a 5% commission on sales by other team members at lower levels up to nine levels below the Brand Partner. The team bonus is $400 for each time their team bonus volume reaches a certain amount in a 30-day period. Brand Partners can also earn an initial bonus for qualifying customer purchases in the Brand Partners first 30 days of 20% of the transaction value. \nThe Company treats commission payments as costs to obtain a contract in accordance with ASC 340, Other Assets and Deferred Costs. Commissions are accrued upon shipment of the product to either the Brand Partner or the customer. \n### Advertising Expenses \nThe Company expenses advertising costs as incurred in accordance with ASC 720-35, Other Expenses Advertising Cost. Advertising expenses totaled $12,385 for the year ended December 31, 2020 and $12,626 for the year ended December 31, 2019. \nIncome Taxes \nThe effect on deferred tax assets and liabilities of a change in the tax rates is recognized in the statements of operations as an adjustment to income tax expense in the period that includes the enactment date. Utilization of the net operating loss carry forwards and credits may be subject to a substantial annual limitation due to ownership change limitations provided by Section 382 of the Internal Revenue Code of 1986, as amended, and similar state provisions. \nASC Topic 740-10, Income Taxes, clarifies the accounting for uncertainty in income taxes recognized in the Companys financial statements in accordance with GAAP. \nThe Companys policy is to recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense. \n\nASC 718, Compensation Stock Compensation, prescribes accounting and reporting standards for all share-based payment transactions. Share-based payments to employees and non-employees, including grants of employee stock options, are recognized as compensation expense in the financial statements based on their fair values at the grant date. \nThe Company accounts for stock-based compensation issued to non-employees and consultants in accordance with the provisions of ASC 505-50, Equity Based Payments to Non-Employees. Measurement of share-based payment transactions with non-employees is based on the fair grant date FV of equity instruments. Share-based compensation expense for the year ended December 31, 2020 and 2019 was $2,787,568 and $677,604, respectively. \n\nFASB ASU No. 2019-12 Income Taxes - \n2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, as part of its initiative to reduce complexity in the accounting standards. The standard eliminates certain exceptions related to the approach for intra-period tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. The standard also clarifies and simplifies other aspects of the accounting for income taxes. The standard is effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the impact that this guidance will have upon its financial position and results of operations, if any. \n### ASU 2020-06 \n: In August 2020, the FASB issued ASU 2020-06, DebtDebt with Conversion and Other Options (Subtopic 470-20) and Derivatives and HedgingContracts in Entitys Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entitys Own Equity, which simplifies accounting for convertible instruments by removing major separation models required under current GAAP. The ASU also removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception and simplifies the diluted earnings per share calculation in certain areas. The amendments in this ASU are effective for annual and interim periods beginning after December 15, 2023, although early adoption is permitted. The Company is in the process of evaluating the impact of this new guidance on its financial statements. \nNote 2 Going Concern \nWe incurred a net loss of $5,046,711 for the year ended \nDecember 31, 2020, of which $2,787,568 was related to non-cash stock based compensation, and had an accumulated deficit of $7,167,015 . At \n### December 31, 2020 \n, we had a cash balance of approximately $45,102, compared to a cash balance of $1,125 at December 31, 2019. At D ecember 31, 2020 \n, we had a working capital deficit of $2,460,718, compared to a working capital deficit of $1,047,273 at December 31, 2019. \nThere is no guarantee that we will be able to generate enough revenue and/or raise capital to support operations. \n\n### Note 3 Concentrations of Business and Credit Risk \nThe Company at times maintains balances in various operating accounts in excess of federally insured limits. \nSince the Company sells its products to a large number of customers, there is no receivable or revenue concentration from customers. However, as of December 31, 2020 and 2019, one credit card processor accounted for 100% of credit card receivables. \n### Note 4 Equity \nOn January 9, 2019, the Company purchased one hundred percent (100%) of the outstanding units of New You LLC. Pursuant to the terms and conditions of the Share Exchange Agreement, the Company issued 15,974,558 common shares in exchange for one hundred percent (100%) of New You LLC outstanding units. As a result of the Share Exchange Agreement, New You LLC became a wholly owned subsidiary of the Company. New You LLC began operations in August 2018. \nto New You, Inc. Unless otherwise indicated, the information in these unaudited condensed consolidated financial statements gives effect to the 1-for-50 reverse stock split of the Companys common stock, par value $0.00001 per share and name change from \nThe Radiant Creations Group, Inc. \n### Stock Sales \nDuring the year ended December 31, 2020, the Company issued 90,000 common shares which resulted in raising $45,000 in additional capital that was received in 2019. \nDuring the year ended December 31, 2019, the Company issued 652,450 common shares which resulted in raising $316,300 in additional capital and two investors paid a total of $45,000 for 90,000 common shares that were not issued as of December 31, 2019. \n2020 Restricted Stock Grants \nDuring the year ended December 31, 2020, the Company granted 6,111,130 common shares (of which 770,000 were cancelled in the same period) valued at $3,055,565 for employees and several consultants for services that will be provided in the future and will vest over the course of twenty-four months or twelve months based on the specific contract. The Company estimates the fair value of the shares at $0.50 per share based on the price at which the Company issued common shares for cash in 2019 and not based on the amount that shares were trading for on the OTC Pink market since shares were thinly traded on the market when the equity instruments were granted. \nThe table below summarizes the activity of the restricted stock during 2020: \nFor the year ended December 31, 2020, the compensation cost that has been charged to Stock Compensation Expense is $2,787,568. No portion of the total compensation cost was capitalized. The unrecognized compensation costs as of December 31, 2020 and 2019 is $1,766,619 and $1,902,896, respectively, which will be recognized over 0.8 years and one year respectively. The company recognizes the cost of these stocks using a straight-line method and forfeitures are recognized as they occur. \n\nOperating Lease Commitments \nA lease provides the lessee the right to control the use of an identified asset for a period of time in exchange for consideration. Right of use (ROU) assets represent the Companys right to use an underlying asset for the lease term and operating lease liabilities represent the Companys obligation to make lease payments arising from the lease. ROU assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. Most operating leases contain renewal options that provide for rent increases based on prevailing market conditions. The lease term used to calculate the ROU asset includes renewal periods or periods subject to termination when it is reasonably certain that the Company will lease the assets in such periods. \nThe discount rate used to determine the commencement date present value of lease payments is the interest rate implicit in the lease, or when that is not readily determinable, the estimated incremental secured borrowing rate. ROU assets include any lease payments required to be made prior to commencement and exclude lease incentives. Both ROU assets and lease liabilities exclude variable payments not based on an index or rate, which are treated as period costs. The Companys lease agreements do not contain significant residual value guarantees, restrictions or covenants. \nThe Company leases a warehouse facility under a lease agreement that expires July 31, 2021. The Company does not have any significant capital leases. \nThe components of total lease costs are as follows: \nCash paid for amounts included in operating lease liabilities was $39,746 for the year ended December 31, 2020. The table below presents total operating lease ROU assets and lease liabilities as of December 31, 2020: \nThe table below presents the maturities of operating lease liabilities as of December 31, \n### Note 6 - Litigation and Claims \nThe Company may be involved in lawsuits and claims arising in the ordinary course of business from time to time. The Company reviews any such legal proceedings and claims on an ongoing basis and follows appropriate accounting guidance when making accrual and disclosure decisions. The Company establishes accruals for those contingencies where the incurrence of a loss is probable and can be reasonably estimated, and it discloses the amount accrued and the amount of a reasonably possible loss in excess of the amount accrued, if such disclosure is necessary for the Companys financial statements not to be misleading. To estimate whether a loss contingency should be accrued by a charge to income, the Company evaluates, among other factors, the degree of probability of an unfavorable outcome and the ability to make a reasonable estimate of the amount of the loss. The Company does not record liabilities when the likelihood that the liability has been incurred is probable, but the amount cannot be reasonably estimated. Based upon present information, the Company determined that there were no matters that neither required an accrual as of December 31, 2020 or 2019, nor were there any asserted or unasserted material claims for which material losses are reasonably possible. \n\nDuring the year December 31, 2020 and 2019, directors and members of management provided loans to the Company or paid for various expenses of the Company. These loans contained no interest, term or due date. As of December 31, 2020, these loans had a combined balance of $523,658 for the CEO, the President, and two other board members. Total additions to these loans during the year ended December 31, 2020 were cash loan proceeds of $61,100 and deferred compensation of $270,000 transferred<|endoftext|>In Hong Kong may adversely impact our results of operations. \nOur operational activities are primarily conducted in Hong Kong. Accordingly, political and economic conditions in Hong Kong and the surrounding region may directly affect our business. The economy of Hong Kong has been negatively impacted, including our retail market, property market, stock market, and tourism, from such protests. \nUnder the Basic Law, Hong Kong is exclusively in charge of its internal affairs and external relations, while the government of the PRC is responsible for its foreign affairs and defense. \n\n\nThe future development of national security laws and regulations in Hong Kong could materially impact our business by possibly triggering sanctions and other measures which can cause economic harm to our business. \nOn May 28, 2020, the National Peoples Congress of the Peoples Republic of China approved a proposal to impose a new national security law for Hong Kong and authorized the Standing Committee of the National Peoples Congress to proceed to work out details of the legislation to be implemented in Hong Kong (the Decision). The Decision states that the new law will target secession, subversion of state power, terrorism activities and foreign interference. The stated objective of the Decision is to protect the national security of China as a whole (including Hong Kong and Macau) and is not intended to have a direct commercial bearing on commercial and economic activities. The government believes the new law may bring about more stability to Hong Kong, which in turn may lay the foundation for commercial and economic activities to flourish. On June 30, 2020, Chinas National Peoples Congress Standing Committee passed the national security law for the Hong Kong Special Administrative Region (HKSAR). We cannot rule out the possibility that the Decision and the implementation of the national security law may trigger sanctions or other forms of penalties by foreign governments, which may cause economic and other hardship for Hong Kong, including companies like us that do business in Hong Kong. It is difficult for us to predict the impact, in any, the implementation of the national security law will have on our business, as such impact will depend on future developments, which are highly uncertain and cannot be predicted. \nThe market price for our securities could be adversely affected by increased tensions between the United States and China. \nRecently there have been heightened tensions in the economic and political relations between the United States and China. On June 30, 2020, the Standing Committee of the PRC National Peoples Congress issued the Law of the Peoples Republic of China on Safeguarding National Security in the Hong Kong Special Administrative Region. This law defines the duties and government bodies of Hong Kong for safeguarding national security and four categories of offencessecession, subversion, terrorist activities and collusion with a foreign country or external elements to endanger national securityand their corresponding penalties. On July 14, 2020, U.S. President Donald Trump signed the Hong Kong Autonomy Act, or HKAA, into law, authorizing the U.S. administration to impose blocking sanctions against individuals and entities who are determined to have materially contributed to the erosion of Hong Kongs autonomy. On August 7, 2020, the U.S. government imposed HKAA-authorized sanctions on eleven individuals, including Hong Kong chief executive Carrie Lam. The HKAA further authorizes secondary sanctions, including the imposition of blocking sanctions, against foreign financial institutions that knowingly conduct a significant transaction with foreign persons sanctioned under this authority. The imposition of sanctions such as those provided in the HKAA is in practice discretionary and highly political, especially in a relationship as extensive and complex as that between the United States and China. It is difficult to predict the full impact of the HKAA on Hong Kong and companies like us. Furthermore, legislative or administrative actions in respect of Sino-U.S. relations could cause investor uncertainty for affected issuers, including us, and the market price of our securities could be adversely affected. \nOur business, financial condition and results of operations, and/or the value of our common stock or our ability to offer or continue to offer securities to investors may be materially and adversely affected to the extent the laws and regulations of the PRC become applicable to a company such as us. \nWe currently have only immaterial, non-substantive operations mainland China. YeeTah does not sell any insurance products in mainland China or solicit customers or collect, store or process any personal data of any customer in China, and is not regulated by any insurance regulator in mainland China. As a result, the laws and regulations of the PRC do not currently have any material impact on YeeTahs business, financial condition and results of operations. However, as we operate in Hong Kong, a special administrative region of China, there is no guarantee that if certain existing or future laws of the PRC become applicable to a company such as us, it will not have a material adverse impact on our business, financial condition and results of operations and/or our ability to offer or continue to offer securities to investors, any of which may cause the value of such securities to significantly decline or be worthless. \n\nThe laws and regulations in the PRC are evolving, and their enactment timetable, interpretation and implementation involve significant uncertainties. \nWe may also become subject to the laws and regulations of the PRC to the extent we commence business and customer facing operations in mainland China as a result of any future acquisition, expansion or organic growth. \nThe PRC government exerts substantial influence and discretion over the manner in which companies incorporated under the laws of PRC must conduct their business activities. We are a Hong Kong-based company with no substantive operations in mainland China. However, if we were to become subject to such direct influence or discretion, it may result in a material change in our operations and/or the value of our common stock, which would materially affect the interest of the investors. \nWe have only immaterial, non-substantive operations in mainland China. We primarily operate in Hong Kong, a special administrative region of China. In addition, YeeTah does not sell any insurance products in mainland China or solicit any customer in China, and is not regulated by any insurance regulator in mainland China. The PRC government currently does not exert direct influence and discretion over the manner in which we conduct our business activities outside of mainland China, however, there is no guarantee that we will not be subject to such direct influence or discretion in the future due to changes in laws or other unforeseeable reasons or as a result of our expansion or acquisition of operations in mainland China. See \nOur business, financial condition and results of operations, and/or the value of our common stock or our ability to offer or continue to offer securities to investors may be materially and adversely affected by existing or future laws and regulations of the PRC which may become applicable to a company such as us \nThe PRC legal system is evolving rapidly and the PRC laws, regulations, and rules may change quickly with little advance notice. In particular, because these laws, rules and regulations are relatively new, and because of the limited number of published decisions and the non-precedential nature of these decisions, the interpretation of these laws, rules and regulations may contain inconsistences, the enforcement of which involves uncertainties. The PRC government has exercised and continues to exercise substantial control over many sectors of the PRC economy through regulation and/or state ownership. Government actions have had, and may continue to have, a significant effect on economic conditions in the PRC and businesses which are subject to such government actions. \nIf we were to become subject to the direct intervention or influence of the PRC government at any time due to changes in laws or other unforeseeable reasons or as a result of our development, expansion or acquisition of operations in the PRC, it may require a material change in our operations and/or result in increased costs necessary to comply with existing and newly adopted laws and regulations or penalties for any failure to comply. In addition, the market prices of our common stock could be adversely affected as a result of anticipated negative impacts of any such government actions, as well as negative investor sentiment towards Hong Kong-based companies subject to direct PRC government oversight and regulation, regardless of our actual operating performance. There can be no assurance that the Chinese government would not intervene in or influence our operations at any time. \nWe are not currently required to obtain permission from the PRC government for the trading of our common stock on the OTCQB, however there is no guarantee that this will continue to be the case in the future, or even when such permission is obtained, it will not be subsequently denied or rescinded. Any actions by the PRC government to exert more oversight and control over offerings (including businesses whose primary operations are in Hong Kong) that are conducted overseas and/or foreign investments in Hong Kong-based issuers could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of our securities to significantly decline or be worthless. \n\nThe limited public trading market may cause volatility in our stock price. \nThe quotation of our common stock on the OTCQB does not assure that a meaningful, consistent and liquid trading market currently exists, and in recent years such market has experienced extreme price and volume fluctuations that have particularly affected the market prices of many smaller companies like us. Our common stock is thus and will be subject to significant volatility. Sales of substantial amounts of our common stock, or the perception that such sales might occur, could adversely affect prevailing market prices of our common stock. \nAn active and visible trading market for our common stock may not develop. \nAlthough our common stock is quoted on the OTCQB marketplace operated by OTC Markets Group, Inc., trading has been very limited and we cannot predict whether an active market for our common stock will develop in the future. We are not applying for the listing of our common stock on a national exchange. In the absence of an active trading market: investors may have difficulty buying and selling or obtaining market quotations; market visibility for shares of our common stock may be limited; and a lack of visibility for shares of our common stock may have a depressive effect on the market price for shares of our common stock. \nThe OTCQB is an unorganized, inter-dealer, over-the-counter market that provides significantly less liquidity than Nasdaq Stock Market or the New York Stock Exchange. The trading price of the common stock is expected to be subject to significant fluctuations in response to variations in quarterly operating results, changes in analysts earnings estimates, announcements of innovations by us or our competitors, general conditions in the industry in which we operate and other factors. These fluctuations, as well as general economic and market conditions, may have a material or adverse effect on the market price of our common stock. \nWe may not maintain qualification for OTCQB inclusion, and therefore you may be unable to sell your shares. \nOur common stock is eligible for quotation on the OTCQB. However, trading of our common stock could be suspended. If for any reason our common stock does not become eligible or maintain eligibility for quotation on the OTCQB or a public trading market does not develop, purchasers of shares of our common stock may have difficulty selling their shares should they desire to do so. If we are unable to satisfy the requirements for quotation on the OTCQB, any quotation in our common stock could be conducted in the pink sheets market. As a result, a purchaser of our common stock may find it more difficult to dispose of, or to obtain accurate quotations as to the price of their shares. This would materially and adversely affect the liquidity<|endoftext|>Of a new retail building located at 1106 W. Northwest Highway in Grapevine, Texas for $620,000. The purchase was partly financed through a $496,000, 5 year loan, bearing an annual interest rate of 3.75%, amortized over 20 years, payable to Texas Bank & Trust. The note has monthly interest and principal payments of $2,941. \n(4) On November 4, 2020, 1901 Gateway Holdings, LLC, a wholly owned subsidiary of Envela Corporation, closed on the purchase of a new office building located at 1901 Gateway Drive, Irving, Texas for $3.521 million. The building was partially financed through a $2.96 million, 5 year loan, bearing an interest rate of 3.25%, amortized over 20 years, payable to Texas Bank & Trust. The note has monthly interest and principal payments of $16,792. \n(5) The Company applied for and received, on April 20, 2020, approximately $1.67 million, 1% interest, federally backed loan intended to pay employees and cover certain rent and utility-related costs during the COVID-19 pandemic (the Federal Loan), with Truist Bank (f/k/a BB&T Bank) as lender. We have applied for the forgiveness of the Federal Loan during the fourth quarter ending December 31, 2020; therefore, we are classifying the loan as short-term. \nFuture scheduled principal payments of our note payables and note payables, related party, as of December 31, 2020 are as follows: \n### PART II \nItem 8 \nPART II \nItem 8 \n### NOTE 11 SEGMENT INFORMATION \nWe determine our business segments based upon an internal reporting structure. Our financial performance is based on the following segments: DGSE and ECHG. \nThe DGSE segment includes Dallas Gold & Silver Exchange, which has five retail stores in the Dallas/Fort Worth Metroplex, and Charleston Gold & Diamond Exchange, which has one retail store in Charleston, \n### South Carolina. \nThe ECHG segment includes Echo, ITAD USA and Teladvance. These three companies were added during 2019 and are involved in recycling and the reuse of electronic waste. \nWe allocate our corporate costs and expenses, including rental income and expenses relating to our new corporate headquarters, to our business segments. These income and expenses are included in selling, general and administrative expenses, depreciation and amortization, other income, interest expense and income tax expense. Our management team evaluates the operating performance of each segment and makes decisions about the allocation of resources according to each segment profit. The allocations are generally amounts agreed upon by management, which may differ from an arms-length amount. \nThe following table segments the financial results of DGSE and ECHG for Fiscal 2020: \n### PART II \nItem 8 \nNOTE 12BASIC AND DILUTED AVERAGE SHARES \nA reconciliation of basic and diluted average common shares is as follows: \nFor the years ended December 31, 2020 and 2019, there were 15,000 and 15,250 Common Stock options, warrants, and Restricted Stock Units (RSUs) unexercised respectively. For the years ended December 31, 2020 and 2019, there were no anti-dilutive shares. \n### NOTE 13COMMON STOCK \nIn January 2014, the Companys Board granted 112,000 RSUs to its officers and certain key employees. As of December 31, 2020, no RSUs remain unexercised and dilutive. \nNOTE 14STOCK OPTIONS AND RESTRICTED STOCK UNITS \nOn June 21, 2004, our shareholders approved the adoption of the 2004 Employee Stock Option Plan (the 2004 Employee Stock Option Plan) t hat provided for incentive stock options and nonqualified stock options to be granted to key employee and certain directors. \nEach option vested on either January 1, 2004 or immediately upon issuance thereafter. The exercise price of each option issued pursuant to the 2004 Plan is equal to the market value of our Common Stock on the date of grant, as determined by the closing bid price for our Common Stock on the Exchange on the date of grant or, if no trading occurred on the date of grant, on the last day prior to the date of grant on which our securities were listed and traded on the Exchange. Of the options issued under the 2004 Employee Stock Option Plan, 15,000 remain outstanding. Options issued pursuant to the 2004 Employee Stock Option Plan have no expiration date. The Company previously determined there will be no additional grants under the 2004 Employee Stock Option Plan. \nOn December 7, 2016, our shareholders approved the adoption of the 2016 Equity Incentive Plan (the 2016 Plan), which reserved 1,100,000 shares for issuance pursuant to awards issued thereunder. \nThe following table summarizes the activity in common shares subject to options and warrants: \nThe 15,000 options exercisable at the end of the year are potential dilutive shares. \n### PART II \nItem 8 \nInformation about stock options outstanding at December 31, 2020 is summarized as follows: \nThe aggregate intrinsic values in the above table were based on the closing price of our Common Stock of $5.37 as of December 31, 2020. \nA summary of the status of our non-vested RSU grants issued under our 2006 Plan is presented below: \nAs a result of the expiration of the 2006 Plan, as of December 31, 2019, no further shares could be issued under the 2006 Plan. As of January 1, 2020, the remaining 250 RSU grants have vested and were exercised during Fiscal 2020. A total of 1,100,000 shares remain available for future grants pursuant to the 2016 Plan. \nDuring Fiscal 2020 we recognized $325 of stock-based compensation expense compared to $0 in Fiscal 2019. \n### NOTE 15 INCOME TAXES \nThe income tax provision reconciled to the tax computed at the statutory from continuing operations Federal rate follows: \nPART II \n### Item 8 \nDeferred income taxes are comprised of the following at December 31, 2020 and 2019: \nAs of December 31, 2020, the Company had $2,729,636 of net operating loss carry-forwards, related to the Superior Galleries acquisition which may be available to reduce taxable income in future years, subject to the applicable Internal Revenue Code Section 382 limitations. As of December 31, 2020, the Company had approximately $28,353,926 of net operating loss carry-forwards related to Superior Galleries post acquisition operating losses and other operating losses incurred by the Companys other operations. These carry-forwards will expire, starting in 2026 if not utilized. \nThe Company is uncertain of our ability to accurately project income into the future due to the economic conditions caused by the pandemic, therefore, the Company is waiving any adjustment to the current valuation allowance. \nAs of December 31, 2020, the Company determined based on consideration of all available evidence, including but not limited to historical, current and future anticipated financial results as well as applicable IRS limitations and expiration dates related to the Companys net operating losses, a full valuation allowance should be recorded for its net deferred tax assets. \n### NOTE 16LEASES \nOn February 25, 2016, the FASB issued ASU No. 2016-02, Leases (ASC 842). We adopted ASC 842 on January 1, 2019, by applying its provisions prospectively. The financial results reported in periods prior to January 1, 2019 are unchanged. Upon adoption, we recognized all of our leases on the balance sheet as right-of-use assets and lease liabilities. For income statement purposes, the FASB retained a dual model, requiring leases to be classified as either operating of finance. Classification is based on certain criteria and we have determined that all of our retail building leases fall into the operating lease category. Our leases are included in our consolidated balance sheet as right-of-use assets along with the current operating lease liabilities and long-term operating lease liabilities. \nWhen the provision was first adopted by the Company on January 1, 2019, we recognized $1,994,840 of operating lease right-of-use assets, $446,462 in short-term operating lease liabilities and $1,609,891 in long-term operating lease liabilities on the consolidated balance sheet. The operating lease liabilities were determined based on the present value of the remaining minimum rental payments and the operating lease right-of-use asset was determined based on the value of the lease liabilities, adjusted for deferred rent balances of $61,500, which were previously included in other liabilities. \nDue to the acquisition, referred in Note 6, we recognized an additional $2,350,781 of operating lease right-of-use assets, $703,523 in short-term operating lease liabilities and $1,647,258 in long-term operating lease liabilities on the consolidated balance sheet. The operating lease liabilities were determined based on the present value of the remaining minimum rental payments and the operating lease right-of-use asset was determined based on the value of the lease liabilities. \n### PART II \nItem 8 \nIn determining our right-of-use assets and lease liabilities, we apply a discount rate to the minimum lease payments within each lease agreement. ASC 842 requires us to use the rate of interest that a lessee would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. If we cannot readily determine the discount rate implicit in the lease agreement, we utilize our incremental borrowing rate. \nThe Company has six operating leases, five in the Dallas/Fort Worth Metroplex and one in Charleston South Carolina. We have two leases expiring during Fiscal year 2021. Our Southlake, Texas location expired July 31, 2020 with no current options. We evaluated the lease in the present location and decided to vacate the property as of July 31, 2020. Our lease on the main flagship store located at 13022 Preston Road, Dallas, Texas will be expiring October 31, 2021, with no current lease options. The Grand Prairie, Texas lease expires June 30, 2022, and has no current lease options. The Charleston, \nSouth Carolina lease expires April 30, 2025, and has no current lease options. The Euless, Texas lease expires June 30, 2025 with an option for an additional five (5) year term. On September 9, 2020, we entered into a new lease agreement with the landlord of the Echo Belt Line building starting January 1, 2021, expiring January 31, 2026, with one option period of an additional 60 months. A portion of the Echo Belt Line building was sublet and the rent received was applied against the rental expense for the building. The new Echo Belt Line lease, starting January 1, 2021, will not contain a subletter. The McKenzie ITAD lease expires July 31, 2021 with no current lease options. All six leases are triple net leases that we pay our proportionate amount of common area maintenance, property taxes and property insurance. Leasing costs for Fiscal 2020 and Fiscal 2019 was $1,452,689 and $1,151,619, respectively. These lease costs consist of a combination of minimum lease payments and variable lease costs. \nAs of December 31, 2019, the weighted average remaining lease term and weighted average discount rate for operating leases was 2.81 years and 5.5%, respectively. The Companys future operating lease obligations that have not yet commenced are immaterial. The cash paid for operating lease liabilities for Fiscal 2020 and Fiscal 2019 was $1,314,285 and $1,809,514, respectively. \nFuture annual minimum lease payments as of December 31, 2020: \n### PART II \nItem 8 \nNOTE 17 RELATED-PARTY TRANSACTIONS \nThe Company has a corporate policy governing the identification, review, consideration and approval or ratification of transactions with related persons, as that term is defined in the Instructions to Item 404(a) of Regulation S-K, promulgated under the Securities Act (Related Party). Under this policy, all Related Party transactions are identified and approved prior to consummation of the transaction to ensure they are consistent with the Companys best interests and the best interests of its stockholders. Among other factors, the Companys Board considers the size and duration of the transaction, the nature and interest of the of the Related Party in the transaction, whether the transaction may involve a conflict of interest and if the transaction is on terms that are at least as favorable to the Company as would be available in a comparable transaction with an unaffiliated third party. Envelas Board reviews all Related Party transactions at least annually to determine if it is in the Boards best interests and the best interests of the Companys stockholders to continue, modify, or terminate any of the Related Party transactions. Envelas Related Person Transaction Policy is available for<|endoftext|>This Amendment No. 1 on Form 10-K/A (this Form 10-K Amendment) amends Novavax,Inc.s (the Company, Novavax, we, our or us) Annual Report on Form 10-K for the fiscal year ended December 31, 2020, originally filed with the U.S. Securities and Exchange Commission (SEC) on March 1, 2021 (the Original Report). The purpose of this Form 10-K Amendment is to include the information required by Items 10 through 14 of Part III of Form 10-K. This information was previously omitted from the Original Report in reliance on General Instruction G(3) to Form 10-K. We are filing this Form 10-K Amendment to present the information required by Part III of Form 10-K as we will not file our definitive proxy statement within 120 days of the end of our fiscal year ended December 31, 2020. \nIn accordance with Rule 12b-15 under the Securities Exchange Act of 1934, as amended (the Exchange Act), Part III, including Items 10 through 14 of the Original Report, is hereby amended and restated in its entirety. This Form 10-K Amendment consists solely of the preceding cover page, this explanatory note, the information required by Part III, Items 10 through 14 of Form 10-K, a signature pageand certifications required to be filed as exhibits. We are amending Part IV to add those certifications, which are attached hereto, and to correct certain hyperlinks that were incorrect in the Original Report. \nThis Form 10-K Amendment does not amend, modify, or otherwise update any other information in the Original Report. Accordingly, this Form 10-K Amendment should be read in conjunction with the Original Report. In addition, this Form 10-K Amendment does not reflect events that may have occurred subsequent to the Original Report date. \nNOVAVAX, INC. \n### PART III \nItem 10. \n\n### BOARD OF DIRECTORS \nIn accordance with the Companys charter, the Board of Directors (the Board) may consist of no fewer than three directors, with the specific number to be authorized by the Board from time to time at its discretion. The Board is presently authorized to consist of ten members, and currently includes the following ten individuals. \n* Mr. Evans will not be standing for election at the Companys 2021 Annual Meeting of Stockholders (the Annual Meeting). \nMembers of the Board are divided into three classes, designated as Class I, Class II, and Class III, each serving staggered three-year terms. The term of the Class II directors expires at the 2021 Annual Meeting. The terms of the Class III and Class I directors will expire at the 2022 and 2023 Annual Meetings of Stockholders, respectively. The following information outlines our directors and their ages and positions as of April 19, 2021, as well as biographical information of each such director. \n### Class II Directors \nClass III Directors \nClass I Directors \nINFORMATION REGARDING THE BOARD AND CORPORATE GOVERNANCE MATTERS \nOn March 18, 2021, the Board determined, upon the recommendation by the Nominating and Corporate Governance Committee, that all of the members of the Board are independent directors as defined in the Nasdaq Global Select Market (Nasdaq) listing standards, except Dr. Modi and Mr. Erck. \nMr. Dr. \nDuring 2020, the Board met 14 times and acted by written consent in lieu of a meeting five times and the non-employee directors met four times in executive session during the same period. As the year progressed and the severity of the coronavirus global pandemic (COVID-19) became more clear, the directors convened an additional 17 times during 2020 during which management provided operational updates. Each of our incumbent directors attended at least 75% of the aggregate of the total number of meetings of the Board they were eligible to attend, as well as the total number of meetings held by all committees on which they served. \nRecognizing that director attendance at the Companys Annual Meetings of Stockholders provides stockholders with an opportunity to communicate with members of the Board, the Company strongly encourages (but does not require) members of the Board to attend such meetings. All of the then-current Board members attended the 2020 Annual Meeting of Stockholders, held on June 25, 2020 (the 2020 Annual Meeting). \n### Leadership Structure and Risk Oversight \nOne of the most critical roles of our Chief Executive Officer and board members is managing risk. Todays environment consists of ongoing disruption, innovation, and technological change. Increasing disruption leads to greater risks, which may become greater still because they are often interconnected. The Board separates the positions of Chairman of the Board and Chief Executive Officer thereby allowing our Chief Executive Officer to focus on our day-to-day business, while allowing the Chairman of the Board to lead the Board in its fundamental role of providing advice to and independent oversight of management. The Board recognizes the commitment that our Chief Executive Officer is required to devote to his position, as well as the commitment required to serve as our Chairman of the Board, particularly as the Boards oversight responsibilities continue to grow. Mr. Erck and Dr. Young each are responsible for: \nOur Chief Executive Officer and Chairman work closely together to execute our strategic plan. Our Chairman leads our Board, serves as a liaison between the Board and senior management team, mentors and advises the senior scientific team, provides an extensive network of contacts, and reports regularly to the Board. We believe the combination of Mr. Erck as the and Dr. Young as the Chairman of the Board is an effective leadership structure. The additional avenues of communication between the Board and management associated with having Dr. Young serve as Chairman provides the basis for the proper functioning of the Board and its oversight of management. \nOur Chief Executive Officer and senior management team are primarily responsible for managing the risks Novavax faces in the ordinary course of operating the business. The Board actively oversees potential risks and risk management activities by receiving operational and strategic presentations from management, which include discussions of key risks to the business. In addition, the Board delegates risk oversight to each of its key committees within their areas of responsibility. \n### For example: \nBoard committees are chaired by independent directors and at each Board meeting the committee chairs deliver reports to the full Board on the activities and decisions made by the committees at recent meetings. In addition, there is significant cross-over of members of the various committees allowing information to flow freely outside of a full board meeting. \nBoard Committees \nOur Board currently maintains four standing committees: Audit Committee, Compensation Committee, Nominating and Corporate Governance Committee and Research and Development Committee. In addition to the descriptions below, please refer to the Compensation Committee Report included in this Form 10-K Amendment. The members of the committees are shown below. \n### Committee Memberships \nDirector \nIndependent \n### Audit \nCompensation \nNominating and \n### Corporate \nGovernance \nResearch and \n### Development \nGregg H. Alton \nRichard H. Douglas, Ph.D. \n### Stanley C. Erck \nGary C. Evans \nRachel K. King \nMargaret G. McGlynn, R. Ph. \nMichael A. McManus, Jr., J.D. \nRajiv I. Modi, Ph.D. \n### David M. Mott \nJames F. Young, Ph.D. \nCommittee Chair \n### Committee Member \nChairman of the Board \n\n### Nomination Procedures \nStockholders who wish to nominate qualified candidates to serve as directors may do so in accordance with the procedures set forth in the Companys Amended and Restated By-Laws (By-Laws), which procedures did not change during the last fiscal year. As stated in the By-Laws, a stockholder must notify the Company in writing, by notice delivered to the attention of the Secretary of the Company at the address of the Companys principal executive offices, of a proposed nominee. \nIn order to ensure meaningful consideration of such candidates, notice must be received not less than 60 days nor more than 90 days prior to the anniversary date of the applicable years Annual Meeting of Stockholders. However, in the event the date of the applicable years Annual Meeting of Stockholders is more than 30 days before or after the anniversary date of the prior years Annual Meeting of Stockholders, notice by the stockholder to be timely it must be received not later than the close of business on the 10th day following the day on which such notice of the date of the meeting was mailed or public disclosure of the date of such meeting was made, whichever occurs first. \nThe notice must include the following information for each proposed nominee: name, age, business and residence address; his or her principal occupation or employment; the class and number of shares of capital stock and other securities of the Company, if any, which are beneficially owned by such nominee and whether and the extent to which any hedging or other transaction or series of transactions has been entered into by or on behalf of, or any other agreement, arrangement or understanding has been made, the effect or intent of which is to increase or decrease the voting power or economic interest of, such person with respect to the Companys securities; and any other information concerning the nominee that must be disclosed as to nominees in proxy solicitations, or is otherwise required, in each case pursuant to applicable law. \nThe notice must also include with respect to the stockholder giving the notice and each Stockholder Associated Person: the name and address, as they appear on the Companys books, of such stockholder; a description of all direct and indirect compensation and other material monetary arrangements, agreements or understandings during the past three years, and any other material relationship, if any, between or concerning such stockholder and each Stockholder Associated Person, on the one hand, and each proposed nominee, and his or her respective affiliates and associates, on the other hand; the class and number of shares of capital stock and other securities of the Company that are owned by such person; and any derivative positions held of record or beneficially by such person and whether and the extent to which any hedging or other transaction or series of transactions has been entered into by or on behalf of, or any other agreement, arrangement or understanding has been made, the effect or intent of which is to increase or decrease the voting power or economic interest of, such person, with respect to the Companys securities. \nFor purposes of this Form 10-K Amendment, a Stockholder Associated Person of any stockholder means: \n(i) any affiliate or associate (as those terms are defined in Rule 12b-2 under the Exchange Act) of the stockholder who owns beneficially or of record any capital stock or other securities of the Company or, through one or more derivative positions, has an economic interest (whether positive or negative) in the price of securities of the Company, and \n(ii) any person acting in concert with such stockholder or any affiliate or associate of such stockholder with respect to the capital stock or other securities of the Company. \nIn addition, any nominee proposed by a stockholder shall complete a questionnaire, in a form provided by the Company. The completed questionnaire shall be submitted within ten days after the Company provides the questionnaire. The Company may require any proposed nominee to furnish other information as may reasonably be required to determine the eligibility of the nominee to serve as a director. Nominations received through this process will be forwarded to the Nominating and Corporate Governance Committee for review. \nThe Nominating and Corporate Governance Committee strives to maintain a board of directors with a diverse set of skills and qualifications to ensure the board of directors is adequately serving the needs of the Companys stockholders. Before evaluating director candidates, the Nominating and Corporate Governance Committee reviews the skills and qualifications of the directors currently serving on the Board and identifies any areas of weakness or skills of particular importance. On the basis of that review, the Nominating and Corporate Governance Committee will evaluate director candidates with those identified skills. While the Nominating and Corporate Governance Committee does not have a formal policy on Board diversity, the committee takes into account a broad range of diversity considerations<|endoftext|>Are hired by TCF or any of its subsidiaries after the closing of the Merger. The Legacy TCF Omnibus Plan authorizes the grant of awards, including stock options, stock appreciation rights, restricted stock, restricted stock units, other stock-based awards, performance-based restricted stock, and performance-based restricted stock units. \nIn addition, at December 31, 2020, we also had 27,731 shares issuable upon exercise of outstanding options, warrants and rights under plans assumed by us in various other merger transactions, with a weighted average exercise price of outstanding options, warrants and rights of $14.63 per share. No further grants will be made under these assumed plans. These assumed plans consisted of the Talmer Bancorp, Inc. 2009 Equity Incentive Plan (TLMR Equity Incentive Plan), the Lake Michigan Financial Corporation Stock Incentive Plan of 2003 and the Lake Michigan Financial Corporation Stock Incentive Plan of 2012 (collectively referred to as the LMFC Stock Incentive Plans). The TLMR Equity Incentive Plan granted non-statutory stock options that were awarded at the fair value of Talmer Bancorp, Inc. common stock on the date of grant. Effective as of our merger with Talmer Bancorp, Inc. on August 31, 2016, each option outstanding under the TLMR Equity Incentive Plan ceased to represent a stock option for TLMR common stock and was converted into a stock option for common stock of TCF. The LMFC Stock Incentive Plans granted non-statutory stock options that were awarded at the fair value of Lake Michigan Financial Corporation common stock on the date of grant. Effective as of our acquisition of Lake Michigan Financial Corporation on May 31, 2015, each option outstanding under the LMFC Stock Incentive Plans ceased to represent a stock option for LMFC common stock and was converted into a stock option for common stock of TCF. Payment for the exercise of an option at the time of exercise may be made in the form of shares of TCFs common stock having a market value equal to the exercise price of the option at the time of exercise, or in cash. There are no further stock options or other awards available for grant under the TLMR Equity Incentive Plan or the LMFC Stock Incentive Plans. As of December 31, 2020, there were 17,102 options to purchase TCFs common stock under the TLMR Equity Incentive Plan with a weighted average exercise price of $14.32 per share and 10,629 options to purchase TCFs common stock outstanding under the LMFC Stock Incentive Plans with a weighted average exercise price of $15.13 per share. \n### Ownership of TCF Stock \nTCF Stock Ownership of Directors and Executive Officers \nCOMMON STOCK \nThe following table shows ownership as of March 31, 2021, of TCF common stock by those indicated. \n* Represents 1.0% or less of the outstanding TCF common stock. \n(1) \nAll shares are directly owned and the person indicated has sole voting and dispositive power, except as indicated in this footnote and footnote (2) below. Includes shares beneficially owned by affiliated trusts or family members who share the persons household, with respect to which shares the indicated person disclaims any beneficial ownership, as follows: Mr. Bell, 16,925 shares; Mr. Klein, 18,976 shares; Mr. Sit, 45,505 shares; Mr. Wheatlake, 3,799 shares; Mr. Provost, 283 shares; Mr. Torgow, 1,339 shares; Mr. Jones, 65,754 shares; and all Directors and Executive Officers combined, 153,469 shares. Includes the following shares indirectly owned through related entities: Mr. Sit, 50,810 shares; Mr. Wheatlake, 79,495 shares; and all Directors and Executive Officers, 130,305 shares. Mr. Sit and Mr. Wheatlake disclaim any beneficial ownership in the shares owned by a related entity. Includes stock options exercisable within 60 days, as follows: Mr. Shafer, 10,540 shares; and all Directors and Executive Officers combined, 13,223 shares. \n(2) \nIncludes whole shares of TCF common stock allocated to accounts in the 401(k) Plan for which certain NEOs have shared voting power as follows: Mr. Dahl (as of October 30, 2020), 18,205 shares; Mr. Jones, 14,291 shares; Mr. Maass, 5,529 shares; and all Executive Officers combined, 101,850 shares. Also includes whole shares of TCF common stock in the trust for the Supplemental Plan for which certain NEOs do not have voting power, as follows: Mr. Dahl (as of October 30, 2020), 66,204 shares; Mr. Jones, 13,081 shares; Mr. Maass, 9,119 shares; and all Legacy TCF Executive Officers combined, 172,645 shares. Also includes whole shares of TCF common stock (all of which have vested) in the trust for the TCF Employees Omnibus Deferred Stock Compensation Plan for which the NEOs do not have voting power, as follows: Mr. Dahl, 25,405 shares; and all Legacy TCF Executive Officers combined, 30,486 shares. Also includes whole shares of TCF common stock (vested and unvested) in the trust for the Directors Deferred Compensation Plan for which the holder does not have voting power, as follows: Mr. Bell, 6,338 shares; Ms. Grandstrand, 50,864 shares; Mr. King, 22,791 shares; Mr. Klein, 5,969 shares; Ms. Mahone, 8,974 shares; Ms. McQuade, 10,296 shares; Mr. Opperman, 64,978 shares; Mr. Sit, 32,447 shares; Dr. Sullivan, 11,615 shares; Mr. Tate, 10,296 shares; Mr. Weiss, 10,296 shares; Mr. Wheatlake, 5,969 shares; Dr. Wise, 13,989 shares; and all TCF Directors combined, 254,822 shares. \n(3) \nAs of March 31, 2021, there were 152,696,133 shares of TCF common stock outstanding. The percentage for each Director and Executive Officer has been calculated by treating as outstanding the shares which could be purchased upon the exercise of outstanding options by such Director or Executive Officer within 60 days after March 31, 2021. \n(4) \nAmounts for Messrs. Dahl and Klaeser are as of October 27, 2020 and October 1, 2020 when each of their employment with TCF terminated, respectively. \n### PREFERRED STOCK \nNone of our directors or executive officers own any of our depositary shares, each representing a 1/1000 th interest in a share of our 5.70% Series C Non-Cumulative Perpetual Preferred Stock. \nTCF Common Stock Ownership of Certain Beneficial Owners \nThe following table shows ownership as of December 31, 2020 of each person known by us to beneficially own more than five percent of our common stock. \n(1) \nThe information that follows is based upon the Schedule 13G/A filed with the SEC on behalf of BlackRock, Inc. on February 5, 2021. Beneficial ownership of shares by BlackRock, Inc. is in the following manner: sole voting power, 14,815,548 shares; shared voting power, 0 shares; sole dispositive power, 15,359,069 shares; and shared dispositive power, 0 shares. The address of BlackRock, Inc. \n(2) \nThe information that follows is based upon the Schedule 13G/A filed with the SEC on behalf of The Vanguard Group on February 10, 2021. Beneficial ownership of shares by The Vanguard Group is in the following manner: sole voting power, 0 shares; shared voting power, 98,438 shares; sole dispositive power, 13,705,904 shares; and shared dispositive power, 220,100 shares. The address of The Vanguard Group is 100 Vanguard Blvd, Malvern, PA 19355. \n(3) \nAs of December 31, 2020, there were 152,565,504 shares of TCF common stock outstanding. \n### Item 13 \n\nDirector Independence and Related Person Transactions \nHow Does the Board Determine Which Directors are Independent? \nNasdaq listing rules require a majority of our Directors and each member of our Audit, Compensation, and Nominating Committees to be independent. Our Board has adopted Categorical Director Independence Standards to help fulfill its obligations under Nasdaq rules to determine whether any Director has a relationship that would interfere with the exercise of the Directors independent judgment in carrying out the responsibilities of a director, which we refer to as a material relationship. The categorical standards provide that a Director shall be deemed not to have a material relationship with the Company if the Director satisfies each of the Director Independence Standards listed below (the term Family Member means a persons spouse, parents, children and siblings, whether by blood, marriage or adoption, or anyone residing in such persons home): \n### No Material Employment with the Company. \nThe Director is not, and has not within the past three years been, a team member of TCF, and no Family Member of the Director is, or within the past three years has been, an executive officer of TCF. \nNo Material Direct Compensation from the Company. \nNeither the Director nor a Family Member of the Director has received more than $120,000 of compensation during any twelve-month period within the three years preceding the determination of independence. In calculating such compensation, the following is excluded: (a) compensation for Board or Board Committee service; (b) compensation paid to a Family Member who is an employee of TCF (other than an Executive Officer); and (c) benefits under a tax-qualified retirement plan or non-discretionary compensation. \nNo Material Relationship Involving TCF in Business Dealings with TCF. \nNeither the director nor a Family Member is a partner in, or a controlling equity holder (as defined below), or an executive officer of, any organization to which the Company has made, or from which the Company has received, payments for property or services in the current or any of the past three fiscal years that exceeds the lesser of $120,000 or 1% of the other companys consolidated gross revenues for that year, other than the following: (a) payments arising solely from investments in the companys securities; or (b) payments under non-discretionary charitable contribution matching programs. \nNo Material Relationship Involving Tax-Exempt or Other Charitable Organizations to which TCF Contributes. \nNeither the Director nor a Family Member of the Director is currently an executive officer or director of a tax-exempt or other charitable entity to which TCF has made contributions in the current fiscal year or any of the past three fiscal years representing more than the lesser of $200,000 or 5% of such organizations annual consolidated gross revenues. \n### No Material Affiliation with Our Auditor. \n(a) The Director is not a current partner of a firm that is TCFs outside auditor; (b) the Director has no Family Member who is a current partner of a firm that is TCFs outside auditor; and (c) neither the Director nor a Family Member of the Director was, within the last three years, a partner or employee of a firm that is TCFs outside auditor and personally worked on TCFs audit within that time. \n### What Transactions Were Considered Non-Material? \nDuring 2018 through 2020, TCF was a party to relationships with certain Directors, their related companies, or immediate family members, each of which was determined by the Board not to be material for purposes of Director independence for each Director who served during 2020 and for each Nominee. \nCommercial Loans, Consumer Loans, and Retail Banking Accounts \nEach of the following transactions and relationships was reviewed by the Board and was determined to not constitute a material relationship for purposes of Director independence: \nThe following independent Directors have, or had during 2018 through 2020, retail deposit accounts or consumer or commercial loans with TCF, all of which are on ordinary terms and conditions: King, Klein, Mahone, McQuade, Sit, Tate, Weiss, Wheatlake and Wise. \nAll commercial loans and leases, and all home mortgages and consumer loans, were made in the ordinary course of business on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with persons not related to TCF and do not involve more than the normal risk of collectability, nor do they present other unfavorable features. All such loans and leases have been approved by the Board when required by Regulation O. \nRelated Person Transactions Involving Independent Directors \nMr. King was an executive officer of Thomson Reuters until his retirement in 2021. During 2020, TCF made payments to Thomson Reuters and its related entities in the ordinary course of business totaling $1,568,329 under standard terms and conditions. Many of these payments are related to products and services first acquired before Mr. King joined the Board. Thomson Reuters total revenue for the year ended December 31, 2020 was $6 billion. Mr. Kings only interest in these transactions was as an officer of Thomson Reuters. Kings status as an officer of Thomson Reuters, and affirmatively determined (with<|endoftext|>Conducting ordinary course business activities for indefinite periods of time, either at specific branches or on a broader scale, including due to shutdowns necessitated for the health and well-being of our employees, the employees of our business partners, or shutdowns that may be requested or mandated by governmental authorities. Directives to de-densify worksites, Shelter in Place, Safe at Home, quarantine, or similar orders or mandates that restrict workforce and/or require closures of non-essential businesses have been implemented by government authorities to one degree or another starting with China in January 2020 and quickly spreading in the following months through Europe, North America and most locations throughout the world. Such orders or mandates have been lifted in many geographies, but there is a continuing threat that such measures may again be required as the original COVID-19 virus, or variants thereof, have continued to spread in certain geographies. While vaccines are now available and being administered in certain geographies, the quantities are limited and are generally reserved at this time for healthcare workers, first responders, long-term care facility staff and residents, people 65 years or older, other individuals with significant health concerns, and essential workers. Although the Company has already been adversely impacted by the COVID-19 pandemic, the situation is very fluid and subject to rapid change; the full extent of the impact that the COVID-19 pandemic may yet have on the Company's business, operations and financial condition is currently unknown. Future pandemics could have similar, or more severe, impacts to our business and operations. \nWhile our branches have as a whole generally remained operational at varying levels of volume throughout the pandemic, there can be no assurances that from time to time we will not have to close any branch or multiple branches for indefinite periods of time due to concerns over the health and well-being of our employees, due to further developments in government directives or due to continued drop in demand from our customers or disruptions from our suppliers. While we have implemented policies and practices to protect our employees at each of our locations, including sanitizing and cleaning protocols, requiring face coverings and other personal protective equipment, social distancing and other behavioral best practices, remote work arrangements, staggered and spaced work shifts, separating workspaces by distance and/or physical barriers, and suspending non-essential employee travel and visitors to our locations throughout the world, there can be no assurances that these efforts will be successful to prevent a contamination from impacting or potentially closing any of our branches or corporate offices for a time. While each of our operations has prepared and regularly updates customized business continuity and return to work plans to address COVID-19 concerns, in an effort to ensure that we are protecting our employees, continuing to operate our business and service our customers needs, and mitigating the potential impacts of COVID-19 or other similar epidemics, there is no guarantee that such plans will anticipate or fully mitigate the various impacts the pandemic, much of which is still entirely uncertain. While vaccines are expected to be more widely available in the coming months, there can be no assurances as to how quickly the vaccines will be made available in sufficient quantities to mitigate the continuing economic effects of the pandemic and there can be no assurances that the vaccines will eradicate COVID-19 and any variants. \nWhile it is not possible at this time to estimate the scope and severity of the impact that COVID-19 could yet have on our branches, the continued spread of COVID-19 (including any variants), the measures taken by the governments of countries affected, the availability and efficacy of the COVID-19 vaccinations, actions taken to protect employees, actions taken to continue operations, and the impact of the pandemic on various business activities in affected countries could adversely affect our financial condition, results of operations and cash flows. \nIn April 2020, we applied for and received a $10.0 million PPP Loan (see Item 8 - - Impact of Coronavirus (COVID-19) Pandemic). At that time, after taking into account, among other things, the disruptions to our business activities caused by the COVID-19 pandemic, our completed exchange offer to issue our and shares of our common stock in exchange for our 5.00%/7.00% Convertible Notes \n, our available, committed primary sources of liquidity, and our lack of access to alternative sources of liquidity, we believed and certified that economic conditions at that time made this loan request necessary and appropriate to support our ongoing U.S. operations and mitigate potentially significant detriment to our business. Recipients of loans in excess of $2.0 million will be audited and, despite our good-faith belief that given our circumstances we then satisfied and continue to satisfy all eligible requirements for the PPP Loan as well as all conditions for loan forgiveness. The federal government may disagree and determine that we were ineligible to have applied for and received the PPP Loan and/or ineligible for loan forgiveness either in full and/or in part. In such event, we may be required to repay the PPP Loan in its entirety and could be subject to additional penalties, which could have a material adverse effect on our liquidity and financial condition. \nWhile we have and continue to pursue government relief programs in addition to the PPP loan and the France Term Loan (including tax deferrals, subsidies, loans, etc.) and have and continue to implement a number of temporary and long-term cost-cutting initiatives to align our operations to current customer demand as well as be prepared for any market recovery once this pandemic has passed, including staff reductions, reduction in employee hours and/or salaries, furloughs, temporary layoffs, or a combination of these actions. At each of our locations, there can be no assurances that such actions will be sufficient to stave off the economic impacts of the pandemic or that further such actions will not be warranted. Although we have seen recent improvements, we saw a significant reduction in customer forecasts and orders in 2020 as a result of the pandemic and there can be no assurances that we will not see further degradation in customer business in the short- or long-term and it is uncertain how quickly customer forecasts and business will improve following this pandemic. \nOur principal sources of liquidity are cash provided by operations and proceeds from borrowings under the Credit Facilities. Starting in the second quarter of 2020, and continuing into the second half of 2020, the average receivable days outstanding increased from levels in previous quarters, which we believe reflects some slowing in payments from customers due to the financial uncertainties resulting from the COVID-19 pandemic. We also have a lower accounts receivable balance as of December 31, 2020 (as compared to previous years) as a result of the decrease in demand resulting from the COVID-19 pandemic, which has decreased our borrowing base collateral attributable to accounts receivable under our Credit Facilities and, in the near term, could result in less cash provided by operations. Further decreases in our accounts receivable could result in further reductions in our borrowing base collateral and therefore, the maximum amount we could borrow under our Credit Facilities could decrease accordingly. The decrease in demand has also resulted in an increase in inventory and average days sales in inventory in 2021 compared to previous years. We are focused on maintaining liquidity by purchasing a sufficient level of inventory to meet customer demand while not carrying excess inventory and lowering overall stock levels throughout the business. However, if we are unable to sufficiently manage our inventory levels and we begin to carry excess inventory, our liquidity could be unfavorably impacted. \nConversely, a decrease in our inventory could result in a reduction in our borrowing base collateral attributable to inventory and therefore, the maximum amount we could borrow under our revolving credit facility could decrease accordingly. \nThe full extent to which COVID-19 impacts our business both in the short-term and long-term will depend on the continuing severity, location and duration of the spread of COVID-19 (and any variants) as well as resurgent outbreaks of COVID-19 which could result as communities reopen, the short- and long-term efficacy of the vaccines, and the speed at which vaccinations are available and administered. The extent of the impact will further depend on, among other things, the rate, pace, and effectiveness of the actions undertaken by local and world governments and health officials to contain the virus or treat its effects, the nature of government public health guidelines and the publics adherence to those guidelines, the impact of government economic relief on the US economy, unemployment levels, the success of businesses reopening, the timing for proven treatments and vaccines for COVID-19, consumer confidence and the rate, pace and effectiveness of the actions undertaken by the leadership and employees of our Company, as well as those of our suppliers, customers and other business partners, to return businesses to pre-pandemic levels. \n### Capitalization \nOur public reporting obligations have been suspended, which could have an adverse impact on the market price and liquidity of our common stock and we filed documents with the SEC to terminate registration of our common stock with the SEC. \nEffective as of December 29, 2020, we effected a 1-for-10 reverse stock split (the Reverse Split), combining each 10 shares of our common stock into one whole share of common stock and paying cash in lieu of any fractional shares that otherwise would have resulted from the Reverse Split. As the Reverse Split resulted in a reduction in the number of stockholders of record to fewer than 300, on January 6, 2021 we filed with the SEC a Certification and Notice of Termination of Registration Under Section 12(g) of the Securities Exchange Act of 1934 on Form 15, deregistering our common stock under the Securities Exchange Act of 1934. As a result of this going private transaction, our obligation to file periodic reports and other information with the SEC, including our quarterly and annual reports, has been suspended. \nPrior to the Reverse Split and the going private transaction, our common stock was traded on the OTCQX Best Market (the OTCQX) under the ticker CTAM. It is anticipated that the trading of our common stock will shift to the OTC Pink Open Market, a centralized electronic quotation service for over-the-counter securities. OTC Pink is the baseline tier of the OTC Markets and has no financial standards or reporting requirements, and companies in this tier choose the level of information they provide to investors and may have current, limited, or no public disclosure. However, OTC Pink is not a stock exchange, and we do not have the ability to control whether our shares are quoted on OTC Pink. Trading opportunities in OTC Pink will be dependent upon whether any broker-dealers commit to continue making a market for our common stock. Accordingly, we cannot guarantee that our common stock will continue to be quoted on OTC Pink. In addition, any prices at which our shares are quoted on the OTC Pink, if at all, may be more or less than the price of our common stock prior to deregistration. In addition, the spread between the bid and asked prices of our common stock on the OTC Pink may be wider than before deregistration and the liquidity of our shares may be lower. There can be no assurances that there will be any OTC Pink quotations for our common stock or that, if such quotations continue, they will continue for any length of time. There can be no assurances that any trading market for our common stock, at the OTC or otherwise, will continue. \nEven if trading on the OTC Pink continues, the trading of our common stock in the OTC market rather than a national securities exchange may negatively impact the trading price of our common stock and the levels of liquidity available to our stockholders. Securities traded in the OTC market generally have less liquidity due to factors such as the reduced number of investors that will<|endoftext|>Incentive, 2020 Long-Term PBRSU and 2020 PSU awards and the associated grant dates are shown in the table above. \n(2) \nRepresents the target maximum STI amount payable to each NEO according to each NEOs 2020 Resilience Scorecard. As discussed in the Compensation Discussion and Analysis, short-term incentives are payable in cash, and may increase or decrease from the target value with actual payouts ranging from 0% to 150%. Actual amounts paid in cash for 2020 performance are included in the Bonus column of the and further described in the CD&A. \n(3) \nRepresents PSUs granted in 2020 for the 2020-2022 performance period. PSU payouts may increase or decrease from the target grant, with actual payouts ranging from 0% to 150% of the target grant based on performance against pre-established adjusted ROTCE with a TSR adjustment factor, subject to 3-year cliff vesting. \n(4) \nStock awards are valued in accordance with ASC 718, based on the fair market value of CIT common stock on each respective date of grant, and awards subject to performance conditions are determined based on the probable outcome of such conditions. Fair market values for RSU and PBRSU awards granted during 2020 are based on the closing price of CIT common stock on each respective date of grant. Grant date fair market values for PSU awards granted during 2020 reflect the impact of the TSR adjustment factor described in the Compensation Discussion and Analysis, calculated using a Monte Carlo simulation model. \n(5) \nRepresents a one-time grant of supplemental PBRSUs to Ms. Alemany, Mr. Fawcett, Ms. Menelly and Mr. Solk, as discussed above on page 28. These PBRSUs vested on December 31, 2020. \n(6) \nRepresents incremental PBSRUS and incremental PSUs to Mr. Harnisch in connection with an increase to his LTI upon his promotion in 2020. The PBRSUs will vest in three equal installments on July 1, 2021, March 1, 2022 and March 1, 2023. The PSUs granted are for the 2020-2022 performance period. PSU payouts may increase or decrease from the target grant, with actual payouts ranging from 0% to 150% of the target grant based on performance against pre-established ROTCE subject to 3-year cliff vesting. \n(7) \nRepresents the portion of 2020 long-term incentives in the form of PBRSUs, granted during 2020. These PBRSUs are scheduled to vest one-third per year over three years subject to an additional performance vesting hurdle (if the Company does not meet or exceed the applicable minimum Common Equity Tier 1 capital ratio required for well-capitalized banks as established by the Federal Reserve for the prior year, the Compensation Committee will determine whether a portion, if any, of the PBRSUs will vest). \n-37- \nNarrative Disclosure to and 2020 Grants of Plan-Based Equity Awards Table \n### Total Compensation \nTotal Compensation values shown in the are presented in accordance with SEC rules. The Total Direct Compensation amounts approved by the Compensation Committee, and/or Board of Directors, and awarded to our NEOs for 2020 performance, regardless of when paid or granted, are presented in and further described in the Compensation Discussion and Analysis. \nPerformance-Based Restricted Stock Units \nEach of the NEOs received a grant of PBRSUs (with a performance-vesting hurdle based on minimum Common Equity Tier 1 Capital for well-capitalized banks) during 2020 as part of his or her 2020 LTI. Unvested awards are forfeited on termination of employment, except in certain circumstances, such as death, disability, or following a qualifying termination within two years of a Change of Control, in which case awards will immediately vest in full. For employees who resign and meet retirement criteria, or who are terminated involuntarily without cause, awards continue to vest over time on their original schedules. \nEach PBRSU includes a dividend equivalent right, pursuant to which the holder of the award is entitled to receive a cumulative amount upon vesting/settlement equal to any dividends declared on CIT common stock during the vesting period. PBRSU awards are also subject to forfeiture during the vesting period and to recoupment for a period of 12 months following vesting. \n### Performance Share Units \nEach of the NEOs also received a target grant of PSUs during 2020 for the 2020-2022 performance period. PSUs are earned based on three-year average adjusted ROTCE between 0%- 150% of target following the 2020-2022 performance period, subject to a relative TSR adjustment factor. Unvested awards are forfeited on termination of employment, except in certain circumstances, such as death, disability, or following a qualifying termination within two years of a change of control, in which case the target number of awards will immediately vest in full. For employees who meet retirement criteria upon their resignation or involuntary termination without cause, the awards continue to vest over time on their original schedules. For employees who are terminated involuntarily without cause and do not meet retirement criteria, a prorated portion of the awards continue to vest over time on their original schedules. \nPSUs for 2020-2022 are subject to forfeiture during the performance period, and are also subject to clawback for a period of two years following the end of the performance period. \n### One-Time \nSupplemental Equity Awards \nAs discussed above, during 2020, the Compensation Committee granted supplemental equity awards to our four continuing NEOs in light of the fact that the 2018 PSUs such NEOs had received would not pay out, given the minimum threshold level average adjusted ROTCE would not be met. \n-38- \n2020 Outstanding Equity Awards at Fiscal Year End \nThe following table summarizes information on equity-based awards that were unvested and outstanding for each NEO at December31, 2020. \n(1) \nThis column shows the aggregate number of PBRSUs outstanding as of December31, 2020 that remain outstanding as of that date. The remaining vesting dates are shown in the following table. All awards described below vest in three equal annual installments on the first day of the calendar month following the first anniversary of the award, unless otherwise noted. \n(2) \nShares are valued based on a $35.90 share price, the closing price of CIT common stock on December31, 2020, and assume achievement of performance conditions at 100% of target. \n(3) \nThe amounts shown in this column represent the aggregate number of PSU awards outstanding as of December31, 2020, assuming a payout at 100% of target. Actual payouts will be determined at such time that the Compensation Committee certifies, following the end of each respective performance period, that the relevant performance measures were achieved. PSU awards are generally expected to be certified by the Committee no later than March15 of the year immediately following the end of the respective performance period. The corresponding performance periods and remaining vesting dates are shown in the following table. \n-39- \n\n(1) \nThe following table provides information about restricted stock units and/or awards that vested during 2020. \n(1) \nNone of the NEOs has outstanding stock options, and no stock options were exercised by any of the NEOs during 2020. \n(2) \nThe value shown was determined by multiplying the aggregate number of PSUs and PBRSUs on each specific vesting date by the closing price of CIT common stock on that date, or the last trading date immediately preceding the vesting date in the event the vesting date occurred on a non-trading date. \n2020 Pension Benefits \nNone of the NEOs benefited from any pension benefit plans in 2020. For this reason, the table disclosing pension benefits is omitted. \n-40- \n\nNone of the NEOs benefited from any nonqualified defined contribution or other deferred compensation plans in 2020. For this reason, the table disclosing contributions to such plans, each NEOs withdrawals, earnings and fiscal year-end balances in those plans is omitted. \nNarrative Information Relating to \n\n\n### CIT Employee Severance Plan \nNone of the NEOs (nor other executive officers) is party to an employment agreement with CIT, and as such, their employment with the Company is at will. Ms.Alemany has an individual agreement, described below, that provides for cash severance payments upon termination of employment or in connection with a Change of Control. None of the remaining NEOs have such agreements. Under the CIT Employee Severance Plan as amended effective as of February21, 2018, which covers all of our U.S. employees, each of the NEOs, other than Ms.Alemany whose benefits are described below, is eligible to receive a cash severance amount equal to 52 weeks of base salary, a severance bonus (prorated based on prior short-term incentives), a payment equal to the employer portion of the cost of health insurance premiums for 52 weeks, which amount will be increased to cover applicable taxes, and certain outplacement services. In the event of a qualifying Change of Control Termination, each of the NEOs is eligible to receive a cash severance amount equal to three times for Ms.Alemany and two times for the other NEOs the sum of base salary plus the average two of the three highest short-term incentives for the three preceding calendar years, a prorated severance bonus for the year of termination, a payment equal to the employer portion of the cost of health insurance premiums for a maximum of 36 months for Ms.Alemany and 24 months for the other NEOs, which amount will be increased to cover applicable taxes, and certain outplacement services, and at the Companys discretion, up to 12 weeks of base salary in lieu of written notice of termination from CIT. Under the severance plan, the definition of STI excludes any prior year STI for any period shorter than a year, with any participant being treated as ineligible for STI for such period and replacing it with a target STI, as applicable. Effective February21, 2018, the severance plan was amended and restated to change the cash severance amount payable in the event of a qualifying Change of Control Termination to the CEO from two times to three times the sum of base salary plus the average two of the three highest short-term incentives for the three preceding calendar years. On October19, 2020, we entered into severance amendment letter agreements with Ms.Alemany, Mr.Fawcett and Mr.Harnisch, clarifying certain provisions of the CIT Employee Severance Plan, please see \nElection of Directors; \nThe severance amounts shown below in reflect the benefits that would have been payable under the severance plan as amended. \n### Ms.Alemany \nCompensation and Benefits \nMs.Alemanys offer letter provides for a total target compensation opportunity that will be allocated among cash and equity awards in the manner determined by the Board, provided that her annualized base salary will not be less than $800,000. For performance years 2017 and beyond, Ms.Alemany will have a total target compensation opportunity of no less than $5,850,000, consisting of an annualized base salary, a target short-term incentive opportunity and a target long-term incentive opportunity. Ms.Alemany is also entitled to benefits consistent with senior executives of CIT and reimbursement of reasonable business expenses, as well as a company-provided car and driver. \n-41- \n### Termination and Change of Control Arrangements \nIn the event Ms.Alemanys employment is terminated by her for Good Reason or by CIT Without Cause (in each case, as defined in her offer letter), Ms.Alemany generally is entitled to receive benefits under the CIT Employee Severance Plan, described above, except that her severance bonus will be calculated as a pro rata portion of her short-term and long-term incentive targets, rather than only her short-term incentive targets. The foregoing notwithstanding, if the amount that would be payable to Ms.Alemany under the CIT Employee Severance Plan is greater than the severance amount described above, she will instead be paid the amount payable under the severance plan but in accordance with the terms and conditions of her offer letter. \nChange of Control \nMs.Alemany is entitled to receive severance benefits equivalent to those provided under the CIT Employee Severance Plan following a Change of Control for similarly situated executives. Effective as of February21, 2018, the severance plan was amended and restated to change the cash severance amount payable in the event of a qualifying Change of Control Termination to the CEO from a multiple of two times to three times the sum of annual base salary plus severance bonus,<|endoftext|>Technology Ventures Fund, a $1.4 billion venture capital fund focused on upstream oil and gas technology companies. While at STV he served on the board of several portfolio companies including Prometheus Energy Group, Inc., ThruBit BV (acquired by Schlumberger), and Smartpipe Technologies. During 2009-2010 Mr. Mulgrew was Chief Operating Officer of Pacific Western Brewing Ltd., Canada's largest independent brewery and beverage company. Previously he led the IPO via reverse merger of Acro Energy Technologies Corp as Chief Financial Officer. Mr. Mulgrew earned an MBA from the top-ranked Jones Graduate School of Business at Rice University and holds a BBA in Accounting from Simon Fraser University in Canada. Christopher is also qualified as a Chartered Public Accountant in Canada and a Certified Public Accountant in the US and has completed executive programs at the London School of Business. \nM. Richard Cutler, Director \nMr. Cutler founded Cutler Law Group in 1996. Mr. Cutler has practiced in the general corporate and securities area and international business transactions since his graduation from law school. Mr. Cutler is a graduate of Brigham Young University (B.A., magna cum laude, 1981); and Columbia University School of Law (J.D. 1984). While at Columbia, Mr. Cutler was honored as a Harlan Fiske Stone Scholar, was Managing Editor of the Columbia Journal of Law and Social Problems, received a Recognition of Achievement with Honors in Foreign and International Law, Parker School of Foreign and Comparative Law and was honored for best senior writing for \"United States v. Ross: A Solution to the Automobile Container Dilemma?\" published in the Columbia Journal of Law & Social Problems in 1983. Mr. Cutler was admitted to the State Bar of Texas in 1984 and the State Bar of California in 1990. After law school, Mr. Cutler joined Jones, Day, Reavis & Pogue where he practiced in the corporate, securities and mergers and acquisitions departments. Mr. Cutler subsequently spent five years in the corporate and securities department in the Dallas office of Akin, Gump, Strauss, Hauer & Feld. After moving to the west coast, Mr. Cutler was with the Los Angeles office of Kaye, Scholer, Fierman, Hayes & Handler, a New York based law firm, where he continued his corporate securities practice. I n 1991, Mr. Cutler founded the law firm of Horwitz, Cutler & Beam in Anaheim California, a general practice firm, where he managed the corporate and securities practice for five years. In 1996, Mr. Cutler formed Cutler Law Group in Newport Beach, California, a firm which specializes only in general business, corporate and securities law, as well as international business transactions. Cutler Law Group moved to Augusta, Georgia in September 2002, where he continued to practice law and operated The Club at Raes Creek, a first class swim, tennis and fitness club while continuing his legal practice in Augusta. From 2008 until 2010, Mr. Cutler was President and Chief Executive Officer of Sustainable Power Corp., a company in Baytown, Texas specializing in green energy technologies. Cutler Law Group moved to Houston, Texas in June 2009. Mr. Cutler has been admitted to the U.S. Federal District Courts, Central and Northern Districts of California, U.S. Federal District Court, Southern District of Texas, as well as the U.S. Mr. Cutler is the author of \"Comparative Conflicts of Law: Effectiveness of Contractual Choice of Forum,\" published in the Texas International Law Journal. Mr. Cutler is a Director of Nymox Pharmaceutical, Inc. \n### Committees of the Board \nDecisions of the Board of Directors are generally taken by written unanimous resolutions. The current Board comprises two members and is intending to hold regularly scheduled meetings. The entire board provides the functions of Audit, Compensation and Governance committees until such time as charters for these committees can be adopted and they can be populated by independent directors. \nCode of Ethics \nThe Company has adopted a Code of Ethics that applies to our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. Until recently we have had a sole officer and director conducting all operations. We have recently expanded operations, the Board of Directors and the executive team. We anticipate adopting a formal Code of Ethics soon. \n### Family Relationships \nNo family relationships exist between any of our present directors and officers. \n\nSection 16(a) of the Securities Exchange Act of 1934, as amended, requires that our directors and executive officers and persons who beneficially own more than 10% of our common stock (referred to herein as the reporting persons) file with the SEC various reports as to their ownership of and activities relating to our common stock. Such reporting persons are required by the SEC regulations to furnish us with copies of all Section 16(a) reports they file. Based solely upon a review of copies of Section 16(a) reports and representations received by us from reporting persons, and without conducting any independent investigation of our own during the fiscal year ended June 30, 2020, all forms required, if any, were filed with the SEC by such reporting persons. \n### Changes in Nominating Procedures \nNone \nItem 11. Executive Compensation \nThe following table sets forth information concerning the total compensation paid or accrued by us during the fiscal year ended June 30, 2019 and the fiscal year ended June 30, 2020 to: all individuals who served as our chief executive officer, chief financial officer or acted in a similar capacity for us at any time during such periods and all individuals who served as executive officers of ours at any time during such periods and received annual compensation in excess of $100,000. \n\n*Mr. Marshalls salary was accrued but unpaid for both years, and subsequent to the 2020 fiscal year end the compensation for 2019 was converted to 515,000 shares of common stock \nEmployment Agreements and Benefits \nWe currently do not currently provide any employee benefit or retirement programs. Our officers salaries are determined by the Board of Directors. Officers and employees may receive bonuses from time to time in the form of cash or equity at the sole discretion of the Board of Directors. \nOn June 11, 2020, the Company entered into an employment agreement with its Chief Executive Officer, Corby Marshall (the Marshall Employment Agreement). The Marshall Employment Agreement provides that Mr. Marshall will serve as the Companys chairman of the board, president and chief executive officer for a period of three years. Mr. Marshall will receive an annual base salary of $180,000 a bonus of up to 50% of his base salary and other employee benefits available generally to all employees or specifically to executives of the Company. Mr. Marshall is also entitled to receive an expense allowance, health insurance and an automobile allowance. Under the terms of the Marshall Employment Agreement, Mr. Marshalls employment may be terminated at any time for cause or change of Control of the company through ownership votes. Under the terms of the Marshall Employment Agreement, if Mr. Marshalls employment terminates other than for cause, disability or death, he is entitled to continued payment of his then base salary for one year in one lump sum commencing on the date of severance with reimbursement of reimbursable accrued expenses and any employee accrued amounts. \nEffective January 15, 2021, the Company entered into a consulting agreement with its Chief Financial Officer, Christopher Mulgrew (the Mulgrew Consulting Agreement). The Mulgrew Consulting Agreement provides that Mr. Mulgrew will serve as the Companys Chief Financial Officer. Mr. Mulgrew will receive an annual base salary of $120,000 as well as a bonus of up to 50% of his base salary upon achieving certain objectives or a bonus of up to 90% of his base salary upon achieving alternative objectives. Mr. Mulgrew is also entitled to receive reimbursement of expenses and health insurance. Under the terms of the Mulgrew Consulting Agreement, Mr. Mulgrews engagement may be terminated at any time for cause or change of Control of the company through ownership votes. \nWe may also pay bonuses to our named executive officers and other employees at the discretion of the board of directors. \n\n\n(1) \nOption awards under our 2019 Directors, Officers, Employees and Consultants Stock Option Plan. \n(2) \nVesting schedule: 20% immediately on issuance and 20% every three months thereafter. \n\nThe fair value of these shares was $467,455 of which $182,982 was recognized in the year ended June 30, 2020. At June 30, 2020, compensation cost for non-vested options of $280,473 will be recognized over the next year. \n\n\n\n\nIn connection with his engagement with Hawkeye Systems Mr. Mulgrew was granted an option to acquire 500,000 shares of the Companys Common Stock at $0.45 per share pursuant to the terms of the Option Agreement as well as the terms of the Companys 2019 Directors, Officers, Employees and Consultants Stock Option Plan. Mr. Mulgrews right to acquire the Shares pursuant to the Option vests 20% immediately upon issuance of this option, and an additional 20% every three months thereafter. In the event Mr. \n### Long-Term Incentive Plans \nThere are no arrangements or plans in which we provide pension, retirement or similar benefits for directors or executive officers, except that our directors and executive officers may receive stock options at the discretion of our board of directors pursuant to our 2019 Officers, Directors, Employees and Consultants Stock Option Plan. We do not have any material bonus or profit sharing plans pursuant to which cash or non-cash compensation is or may be paid to our directors or executive officers, except that stock options may be granted at the discretion of our board of directors. \nCompensation of Directors \nWe may reimburse our directors for expenses incurred in connection with attending board meetings. \nWe did not pay director's fees or other cash compensation for services rendered as a director in the fiscal year ended June 30, 2020. \nWe have no formal plan for compensating our directors for their service in their capacity as directors, although such directors are expected in the future to receive stock options to purchase common shares as awarded by our board of directors or (as to future stock options) a compensation committee which may be established. Directors are entitled to reimbursement for reasonable travel and other out-of-pocket expenses incurred in connection with attendance at meetings of our board of directors. No director received and/or accrued any compensation for their services as a director, including committee participation and/or special assignments. \nItem 12. \nThe following table sets forth, as of January 21, 2021, the beneficial ownership of Hawkeye Systems, Inc. common stock by each of our directors and named executive officers, each person known to us to beneficially own more than 5% of our common stock, and by the officers and directors of the Company as a group. Unless otherwise indicated in the footnotes to the following table, each person named in the table has sole voting and investment power (subject to applicable community property laws) and that persons address is care of the Company. Shares of Common Stock subject to options, warrants, or convertible notes currently exercisable or convertible or exercisable or convertible within 60 days after October 18, 2019 are deemed outstanding for computing the share ownership and percentage of the person holding such options, warrants, or convertible notes but are not deemed outstanding for computing the percentage of any other person. \n_____________ \n(1) c/o Hawkeye Systems, Inc. Consists of 3,000,000 shares held by Mr. Marshall and 1,500,000 pursuant to options. \n(2)c/o Cutler Law Group, P.C., 6575 West Loop South, Suite 500, Bellaire, TX 77401. Consists of 241,000 shares held by Mr. Cutler and 500,000 pursuant to options. \n(3) \nConsists of options to purchase 500,000 shares of common stock. \n(4)Mr. Hall also holds warrants exercisable for up to 2,075,330 shares of common stock but which are limited to exercise to no more than 4.99% of the Companys common stock. \nNote: Beneficial Ownership of Securities: Pursuant to Rule 13d-3 under the Securities Exchange Act of 1934, involving the determination of beneficial owners of securities, a beneficial owner of securities is a person who directly or indirectly, through any<|endoftext|>Share due to reductions in the value of the trust assets, in each case net of the interest that may be withdrawn to pay our taxes, if any, provided that such liability will not apply to any claims by a third party or prospective target business that executed a waiver of any and all rights to seek access to the Trust Account nor will it apply to any claims under our indemnity of the underwriters of our Initial Public Offering against certain liabilities, including liabilities under the Securities Act. \n\n\n\n\n\nIf, after we distribute the proceeds in the Trust Account to our Public Stockholders, we filea bankruptcy or winding-up petition or an involuntary bankruptcy or winding-up petition is filed against us that is not dismissed, a bankruptcy or insolvency court may seek to recover such proceeds, and the members of our board of directors may be viewed as having breached their fiduciary duties to our creditors, thereby exposing the members of our board of directors and us to claims of punitive damages. \nIf, after we distribute the proceeds in the Trust Account to our Public Stockholders, we filea bankruptcy or winding-up petition or an involuntary bankruptcy or winding-up petition is filed against us that is not dismissed, any distributions received by stockholders could be viewed under applicable debtor/creditor and/or bankruptcy or insolvency laws as either a preferential transfer or a fraudulent conveyance. \nIf, before distributing the proceeds in the Trust Account to our Public Stockholders, we filea bankruptcy or winding-up petition or an involuntary bankruptcy or winding-up petition is filed against us that is not dismissed, the claims of creditors in such proceeding may have priority over the claims of our stockholders and the per-share amount that would otherwise be received by our stockholders in connection with our liquidation may be reduced. \nIf, before distributing the proceeds in the Trust Account to our Public Stockholders, we filea bankruptcy or winding-up petition or an involuntary bankruptcy or winding-up petition is filed against us that is not dismissed, the proceeds held in the Trust Account could be subject to applicable bankruptcy or insolvency law, and may be included in our bankruptcy estate and subject to the claims of third parties with priority over the claims of our stockholders. \n\n\n\n\n\n\n\n\n\nBecause we do not comply with Section280, Section281(b)of the DGCL requires us to adopt a plan, based on facts known to us at such time that will provide for our payment of all existing and pending claims or claims that may be potentially brought against us within the 10years following our dissolution. However, because we are a blank check company, rather than an operating company, and our operations are limited to searching for prospective target businesses to acquire, the only likely claims to arise would be from our vendors (such as lawyers, investment bankers,etc.) or prospective target businesses. \n\nIn accordance with the Nasdaq corporate governance requirements, we are not required to hold an annual meeting until no later than one year after our first fiscal year end following our listing on Nasdaq. Under Section211(b)of the DGCL, we are, however, required to hold an annual meeting of stockholders for the purposes of electing directors in accordance with our amended and restated bylaws unless such election is made by written consent in lieu of such a meeting. \nHolders of our ClassA common stock are not entitled to vote on any appointment of directors we hold prior to our initial Business Combination. \nPrior to our initial Business Combination, only holders of our Founder Shares have the right to vote on the appointment of directors. Holders of our Public Shares are not entitled to vote on the appointment of directors during such time. \n\nHowever, under the terms of the warrant agreement, we have agreed to use our commercially reasonable efforts to filea registration statement under the Securities Act covering such shares and maintain a current prospectus relating to the ClassA common stock issuable upon exercise of the warrants until the expiration of the warrants in accordance with the provisions of the warrant agreement. \n\n\nNotwithstanding the above, if the shares of our ClassA common stock are at the time of any exercise of a warrant not listed on a national securities exchange such that it satisfies the definition of a covered security under Section18(b)(1)of the Securities Act, we may, at our option, require holders of Public Warrants who exercise their warrants to do so on a cashless basis in accordance with Section3(a)(9)of the Securities Act and, in the event we so elect, we will not be required to file or maintain in effect a registration statement, but we will be required to use our commercially reasonable efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available. \n\n\nIf we call the warrants for redemption, we will have the option, in our sole discretion, to require all holders that wish to exercise warrants to do so on a cashless basis in certain circumstances. \n\n\n\nPursuant to an agreement entered into concurrently with the issuance and sale of the securities in the Initial Public Offering \n, our Sponsor and its permitted transferees can demand that we register the shares of our ClassA common stock into which Founder Shares are convertible, the Private Placement warrants and the ClassA common stock issuable upon exercise of the Private Placement warrants, and warrants that may be issued upon conversion of working capital loans and the ClassA common stock issuable upon conversion of such warrants. \n\nWe may pursue Business Combination opportunities in any sector, except that we are not, under our amended and restated Certificate of Incorporation, permitted to effectuate our initial Business Combination with another blank check company or similar company with nominal operations. \n\n\nAlthough we have identified general criteria and guidelines that we believe are important in evaluating prospective target businesses and our strategy is to identify, acquire and build a company in our target investment area, we may enter into our initial Business Combination with a target that does not meet such criteria and guidelines, and as a result, the target business with which we enter into our initial Business Combination may not have attributes entirely consistent with our general criteria and guidelines. \nAlthough we have identified general criteria and guidelines for evaluating prospective target businesses and our strategy is to identify, acquire and build a company in our target investment area, it is possible that a target business with which we enter into our initial Business Combination will not have attributes consistent with our general criteria and guidelines. \n\nUnless we complete our initial Business Combination with an affiliated entity, we are not required to obtain an opinion from an independent accounting firm or independent investment banking firm that the price we are paying is fair to our stockholders from a financial point of view. \n\nOur amended and restated Certificate of Incorporation authorizes the issuance of up to 400,000,000 shares of our ClassA common stock, par value $0.0001 per share, 40,000,000 shares of our ClassB common stock, par value $0.0001 per share, and 1,000,000 shares of preferred stock, par value $0.0001 per share. As of December31, 2020, there were 358,928,177 and 29,732,044 authorized but unissued shares of our ClassA common stock and ClassB common stock, respectively, available for issuance, which amount does not take into account shares reserved for issuance upon exercise of outstanding warrants or shares issuable upon conversion of the ClassB common stock, if any. \nThe issuance of additional shares of common stock or shares of preferred stock: may significantly dilute the equity interest of investors in our Initial Public Offering; \n\nThe Founder Shares will automatically convert into shares of our ClassA common stock on the first business day following the completion of our initial Business Combination at a ratio such that the number of shares of our ClassA common stock issuable upon conversion of all Founder Shares will equal, in the aggregate, on an as-converted basis, 20% of the sum of (i)the total number of shares of our ClassA common stock issued and outstanding upon completion of our Initial Public Offering, plus (ii)the total number of shares of our ClassA common stock issued or deemed issued or issuable upon conversion or exercise of any equity-linked securities or rights issued or deemed issued, by the company in connection with or in relation to the completion of the initial Business Combination, excluding any shares of our ClassA common stock or equity-linked securities exercisable for or convertible into shares of our ClassA common stock issued, or to be issued, to any seller in the initial Business Combination and any Private Placement warrants issued to our Sponsor upon conversion of working capital loans. \n\n\n\n\n\nOf the net proceeds from our Initial Public Offering the sale of the Private Placement warrants, and the exercise in part of the underwriters overallotment, $396,428,273 is available to complete our Business Combination and pay related fees and expenses after taking into account the $14,375,138 of deferred underwriting commissions being held in the Trust Account \n\n\n\n\n\n\n\n\n\n\n\n\n\n\nAmending our amended and restated Certificate of Incorporation will require the approval of holders of 60% of our common stock, and amending our warrant agreement will require a vote of holders of at least 50% of the Public Warrants. In addition, our amended and restated Certificate of Incorporation will require us to provide our Public Stockholders with the opportunity to redeem their Public Shares for cash if we propose an amendment to our amended and restated Certificate of Incorporation that would affect the substance or timing of our obligation to allow redemption in connection with our initial Business Combination or to redeem 100% of our Public Shares if we do not complete an initial Business Combination within 24months from the closing of our Initial Public Offering or with respect to any other provisions relating to stockholders rights or pre-initial Business Combination activity. To the extent any of such amendments would be deemed to fundamentally change the nature of any of the securities, we would register, or seek an exemption from registration for, the affected securities. \nThe provisions of our amended and restated Certificate of Incorporation that relate to our pre-Business Combination activity (and corresponding provisions of the agreement governing the release of funds from our Trust Account) may be amended with the approval of holders of at least 60% of our common stock, which is a lower amendment threshold than that of some other blank check companies. \nOur amended and restated Certificate of Incorporation provides that any of its provisions related to pre-Business Combination activity (including the requirement to deposit proceeds of our Initial Public Offering and the Private Placement of warrants into the Trust Account and not release such amounts except in specified circumstances, and to provide redemption rights to Public Stockholders as described herein) may be amended if approved by holders of 60% of our common stock entitled to vote thereon and corresponding provisions of the trust agreement governing the release of funds from our Trust Account may be amended if approved by holders of at least 60% of our common stock entitled to vote thereon. Our Sponsor and its permitted transferees, if any, who collectively beneficially own, on an as converted basis, 20% of our ClassA common stock upon the closing of our Initial Public Offering (assuming they do not purchase any units in our Initial Public Offering), will participate in any vote to amend our amended and restated Certificate of Incorporation and/or trust agreement and have the discretion to vote in any manner they choose. \nOur stockholders are not parties to, or third-party beneficiaries of, these agreements and, as a result, do not have the ability to pursue remedies against our Sponsor, executive officers or directors for any breach of these agreements. \n\nThe current economic environment m ay make it difficult for companies to obtain acquisition financing. \n\n\nThe warrant agreement provides that the terms of the warrants may be amended without the consent of any holder for the purpose of (i)curing any ambiguity or correct<|endoftext|>"},"task":{"kind":"string","value":"{\"file\": \"/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz\"}"}}},{"rowIdx":97,"cells":{"text":{"kind":"string","value":"<|endoftext|>The Group evaluates each uncertain tax position (including the potential application of interest and penalties) based on the technical merits, and measure the unrecognized benefits associated with the tax positions. As of March 31, 2021, and 2020, the Group did not have any significant unrecognized uncertain tax positions. \n7. \n### Operating Leases \nThe Company has entered into a non-cancellable office operating lease. The future aggregate minimum lease payments under this non-cancellable operating lease are as follows: \nThe Company recorded rent expenses of US$41,552 and US$38,570 in general and administrative expenses in the statements of operations and comprehensive loss during the years ended March 31, 2021 and 2020, respectively. \n### Other Commitments \nThe Company did not have other significant commitments, long-term obligations, or guarantees as of March 31, 2021. \nContingencies \nThe Company is subject to legal proceedings and regulatory actions in the ordinary course of business. The results of such proceedings cannot be predicted with certainty, but the Company does not anticipate that the final outcome arising out of any such matter will have a material adverse effect on our business, financial position, cash flows or results of operations taken as a whole. As of March 31, 2021, the Company is not a party to any material legal or administrative proceedings. \n8. Loss Per Share \nBasic and diluted net loss per share for each of the years presented are calculated as follows: \nBasic loss per share is computed using the weighted average number of ordinary shares outstanding during the period. Diluted earnings per share is computed using the weighted average number of ordinary shares and dilutive ordinary share equivalents outstanding during the period. \n9. Subsequent Events \nIn accordance with ASC 855-10, the Company has analyzed its operations subsequent to March 31, 2021 has determined that it does not have any other material subsequent events to disclose in these financial statements other than the ones below: \nOn April 29, 2021, the Company consummated an initial closing of a best efforts self-underwritten public offering of our common stock, par value $0.0001 per share, in which the Company issued and sold an aggregate of 501,250 shares of our common stock at a price of $0.40 per share to certain investors, generating gross proceeds of $200,500. \nOn May 17, 2021, upon receipt of a conversion notice from Huihe Zheng, the Company issued 4,049,254 shares of the Companys common stock, par value $0.0001 per share, upon conversion of an aggregate of 368,114 Series C Preferred Shares at a conversion ratio of 1-for-11. \n### Item 9. \n\nNone. \n### Item 9A \nControls and Procedures \nDisclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is accumulated and communicated to our Certifying Officers or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure. \nUnder the supervision of our Chief Executive Officer and Chief Financial Officer (the Certifying Officers), we evaluated the effectiveness of the design and operation of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based on the foregoing, our Certifying Officers concluded that our disclosure controls and procedures were not effective as of the end of the period covered by this Report due to the material weakness in our internal control over financial reporting discussed below. \n\nIn order to evaluate the effectiveness of internal control over financial reporting, as required by Section 404 of the Sarbanes-Oxley Act. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework. We have identified the following material weaknesses, which are indicative of many small companies with small staff, as of March 31, 2021: (i) lack of proper segregation of duties and risk assessment process; \nBecause of these material weaknesses, management has concluded that we did not maintain effective internal control over financial reporting as of March 31, 2021, based on the criteria established in 2013 Internal Control-Integrated Framework issued by COSO. \nThe Company will plan to design and implement the internal control procedures commensurate to the size of the Company to remediate the above three areas of material weaknesses when resources are available. \nManagements report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the SEC that permit us to provide only managements report. \n\nThere were no changes in our internal control over financial reporting during the fiscal quarter ended March 31, 2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. \nItem 9B. \n### Other Information \nNone. \nItem 9C. \n\nNot applicable. \n### PART III \nItem \n10. \n\nThe following tables set forth the respective positions and ages of the directors and executive officers of the Company as of the date of this Report. Each director of the Company has been elected to hold office until the next annual meeting of stockholders and thereafter until his or her successor is elected and has qualified. \n### Biographical Information \nHuihe Zheng has more than twenty years of experience in investment and wealth management. Mr. Zheng has served as President, Treasurer and Secretary of Sleepaid Holding Co., a company incorporated in Nevada since March 2020, a director of the company since March 2019 and is a principal stockholder of the company. Mr. Zheng has also served as Chairman of Shanghai Dingchan Industrial Co., Ltd., a company primarily engaged in wholesale and distribution of computer equipment and components since he founded the company in November 2013. Mr. Zheng has served as Chief Executive Officer and Chairman of Shanghai Hewu Investment Management Co., Ltd., an investment company, since he founded the company in January 2016. Mr. Zheng has also served as a director, Chief Executive Officer and President of 24/7 Kid, the Companys wholly owned subsidiary since March 2020. From 1999 to 2016, Mr. Zheng primarily focused on securities trading in stock markets in China and abroad for his own account. We believe Mr. Zhengs experience in business management, investment and capital market qualifies him to serve on our board of directors. \nTim Shannon has served as the Chief Financial Officer of 24/7 Kid, the wholly owned subsidiary of the Company, since June 2005 and director of 24/7 Kid from inception until May 2020. Mr. Shannon served as President and Chief Executive Officer of 24/7 Kid from November 1998 until March 2020. From 1990 to 1994, Mr. Shannon was an investment advisor with Great Western Securities and Hearn Financial Services in Orlando, Florida. In 1995, he co-founded Shannon/Rosenbloom Marketing, a marketing and investor relations company, with Brian Rosenbloom, a former director of 24/7 Kid and served as its Vice President July 1995 until November 1998. Mr. Shannon spent six years as a system engineer and marketing representative with IBM after graduating in 1983 from the University of South Floridas Engineering College with a bachelors degree in Computer Science. \nTimothy Miles has been the president and owner of Happiness Now Hypnosis, a hypnotherapy company, since 2016. Mr. Miles has also served as a director of 24/7 Kid since January 2020. From 1999 through 2016, Mr. Miles was the president of Littlepond Enterprises, Inc., a business consulting firm. Mr. Miles attended the University of California at Davis, but did not receive a degree. We believe Mr. Miles decades experience in business management and consulting qualifies him to serve on our board of directors. \nHuili Shen has served as the managing graphic designer at Ctrip Travel Network Technology Co., Ltd., a travel services company, since November 2010. From May 2006 to October 2010, Ms. Shen was an assistant graphic designer at Huiguang Technology Co., Ltd, a software company. Ms. Shen worked as a graphic designer at Haotian Technology Shanghai Co., Ltd., a software company, from September 2003 to April 2006. Ms. Shen graduated from Sanda University with a bachelors degree in graphic design. We believe Ms. Shens experience in management qualified her to serve on our board of directors. \n### Director Independence \nWe are not currently listed on a national stock exchange and not required to maintain a majority of independent directors. However, we believe that Timothy Miles qualifies as an independent director as defined under the rules of the OTCQB Marketplace. \nFamily Relationships \n\n### The Board and Committees \nWe are not required to maintain a majority of independent directors or the foregoing committees under the rules applicable to companies that do not have securities listed or quoted on a national securities exchange. Our board of directors does not maintain a separate audit, nominating, or compensation committee. Functions customarily performed by such committees are performed by our board of directors as a whole. \n\nNone of our directors and executive officers have been involved in any of the following events during the past ten years: any bankruptcy petition filed by or against such person or any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time; \n\nWe currently do not have a Code of Ethics and plan to adopt one as we develop our business. \nSection 16 Compliance \nSection 16(a) of the Securities Exchange Act of 1934, as amended, requires the Companys officers, directors and persons who beneficially own more than ten percent of its Common Stock to file reports of ownership and changes in ownership with the SEC. These reporting persons are also required to furnish the Company with copies of all Section 16(a) forms they file. Based solely on our review of such forms furnished to us, we believe that all reports applicable to our executive officers, directors and greater than ten percent beneficial owners were filed in a timely manner in accordance with Section 16(a) of the Exchange Act except that each of Messrs. Zheng and Miles was late for filing a Form 4. \nItem 11. \n### Executive Compensation. \nThe following table sets forth the cash and non-cash compensation awarded to or earned by each individual who served as the executive officer during the fiscal years ended March 31, 2021 and 2020. \nSummary of Executive Compensation Table \n(1) \nMr. Zheng was appointed as Chief Executive Officer and director of YeeTah on December 30, 2019. \n(2) \nDuring the fiscal year ended March 31, 2020, Mr. Shannons salary was $10,000 per month. The Company converted $55,000 of Mr. Shannons accrued compensation to common stock as part of the 710,000 shares issued. Each of Mr. Zheng and Mr. Shannon received additional compensation for his services as a director. See - \n### Director Compensation \n\nNone. \n### Employment Agreements \nWe presently do not have any employment agreements or other compensation arrangements with our executive officers. \nDirector Compensation \nDirectors received stock compensation in the fiscal year ended March 31, 2021 in the form of shares of common stock. The following table shows for the fiscal year ended March 31, 2021, certain information with respect to the stock compensation of our directors: \nOn April 12, 2021, the Board of Directors approved an annual cash compensation of $6,000 to each of Tim Shannon, the Chief Financial Officer of the Company and Timothy Miles, a director of the Company to retain their services. The annual cash compensation of Mr. Shannon and Mr. Miles is paid on a quarterly basis in advance, commencing on April 1, 2021. \nDirectors received stock compensation in the fiscal year ended March 31, 2020 in the form of Series B Preferred Stock. An aggregate of 13,500 Series B Preferred Stock with value of $212,985 were issued to director services rendered in the fiscal year ended March 31, 2020. \n### Item 12. \n\nThe following table sets forth certain information known to us with respect to the beneficial ownership of common stock by (i) each person, entity or group (as that term is used in Section 13(d)(3) of the Exchange Act) known to us to be the beneficial owner of more than 5% of the outstanding shares<|endoftext|>Obligation under the employment agreement or the Operating Agreement; (iii)the material diminution in Mr.Schwartzs title, duties or authority from those set forth in his employment agreement without his prior written consent, provided, that the Companys reduction in the scope of its business or the number of properties it manages or jurisdictions in which it operates any online gaming operation shall not constitute good reason; or (iv)any relocation of the Companys corporate headquarters from Chicago, Illinois that would require Mr.Schwartz to relocate his family residence outside of the Chicago metropolitan area. \n### Mattias Stetz \nMr.Stetz previously entered into an offer letter with us in connection with his appointment as Chief Operating Officer. The offer letter with Mr.Stetz provides for an annual base salary of $275,000 and entitles him to participate in the Companys discretionary annual cash bonus plan, with a target annual cash bonus opportunity equal to 50% of his base salary for the relevant plan year. If Mr.Stetz is terminated by us without cause, he will be entitled to a severance payment equal to six months of his base salary, subject to his compliance with certain restrictive covenants (which are generally the same as those that apply to Mr.Schwartz) through such period and execution of a severance and release agreement. \nUnder Mr.Stetzs offer letter, cause means Mr.Stetzs (i)failure to abide by the Companys policies and procedures, (ii)misconduct, gross negligence, insubordination, or inattention to the Companys business; (iii)failure to perform the duties required of him up to the standards established by us or other material breach of the terms of his offer letter or (iv)failure or inability to obtain and maintain all permits and licenses required by the statutes, rules and regulations relating to gaming in jurisdictions where we have operations or seeks to have operations (the Gaming Laws), as well as to assist the Company in satisfying the requirements of the Gaming Laws. \n### Director Compensation \n\nPrior to the closing of the Business Combination, none of the individuals who served on dMYs board of directors in 2020 received any compensation for services rendered to dMY. The then-current directors were reimbursed for any out-of-pocket expenses related to identifying, investigating, negotiating and completing an initial business combination. dMYs then-current audit committee reviewed on a quarterly basis all payments that were made to, among others, the dMY directors. \n### At and Following the Business Combination \nSubsequent to the closing of the Business Combination, in April 2021 we adopted a new Board compensation program (the Director Compensation Program) that is designed to provide competitive compensation necessary to attract and retain high quality non-employee directors and to encourage their ownership of our stock to further align their interests with those of our stockholders. Our non-employee directors who are determined to not be founders of RSILP or affiliated with dMY (the eligible directors) will be eligible to participate in the Director Compensation Program. The initial eligible directors under the Director Compensation Program are Leslie Bluhm, Judith Gold, James Gordon, Sheli Rosenberg and Paul Wierbicki. \nThe Director Compensation Program provides an annual equity retainer with a grant date fair value equal to $125,000 to our eligible directors. This annual retainer will be paid in the form of restricted stock units of the Company, which will vest in its entirety into shares of our Class A Common Stock on the date of the next annual meeting of stockholders following the grant date, subject to continued service. With respect to the directors compensation for the period from December 29, 2020 (the date the Business Combination closed) through the date of the Annual Meeting, we granted the eligible directors a prorated annual retainer to reflect the shortened service period. \nCompensation under the Director Compensation Program is subject to the annual limits on non-employee director compensation set forth in our Equity Incentive Plan. \n\nNone of our officers currently serves, and in the past year has not served, (i)as a member of the compensation committee or the board of directors of another entity, one of whose officers served on our Compensation Committee of the Board, or (ii)as a member of the compensation committee of another entity, one of whose officers served on the Board. \nITEM 12. \nThe following table sets forth information with respect to the beneficial ownership of our voting securities as of April 27, 2021, for: each person who is known to be the beneficial owner of more than 5% of shares of any class of our outstanding voting securities; each of our current NEOs and directors; \nPursuant to our Charter, each share of ClassA Common Stock and each share of Class V Common Stock, representing a non-economic interest in the Company, entitle the holder to one vote per share. The table below represents beneficial ownership of our voting securities based on 218,911,668 shares of our Common Stock, comprised of ClassA Common Stock and Class V Common Stock, issued and outstanding as of April 27, 2021. The expected beneficial ownership percentages set forth below do not take into account shares of Class A Common Stock reserved for issuance under the Equity Incentive Plan. Unless otherwise indicated, the address of each person named in the table below is c/o Rush Street Interactive Inc., 900 N. Michigan Avenue, Suite 950, Chicago, Illinois 60611 \nUnless otherwise indicated, the Company believes that all persons named in the table below have sole voting and investment power with respect to the voting securities beneficially owned by them. \n* less than 1% \n(1) \nClass V Voting Stock represents a non-economic interest in the Company and entitles the holder thereof to one vote per share. Subject to the terms and limitations of the Amended and Restated Limited Partnership Agreement of RSILP (the RSI A&R LPA), from and after the six-month anniversary of the closing of the Business Combination, up to four times per calendar year, the RSILP Units, together with an equal number of shares of Class V Common Stock, are exchangeable for shares of Class A Common Stock on a one-for-one basis. \n(2) \nRepresents the percentage of voting power of the holders of Class A Common Stock and Class V Common Stock voting together as a single class. \n(3) \nRepresents the aggregate number of shares of Class V Common Stock held by Greg Carlin in his individual capacity and by the Greg and Marcy Carlin Family Trust. \n(4) \nRepresents the aggregate number of shares of Class V Common Stock held by Neil Bluhm, the NGB 2013 Grandchildrens Dynasty Trust and Rush Street Interactive GP, LLC, of which Mr. Bluhm is a manager and controls 81% of the voting interests in that entity. \n(5) \nThe Class V Common Stock beneficially owned by Judith Gold are held of record and registered to her husband, Dan Kotcher. \n(7) \nIncludes 6,288,201 shares of Class A Common Stock acquired by Fidelity Institutional Asset Management Trust Company and Fidelity Management & Research Company LLC, each of which are subsidiaries of FMR LLC, based solely on the Amendment No. 1 to Schedule 13G filed by FMR LLC with the SEC on February 8, 2021. Abigail P. Neither FMR LLC nor Abigail P. Johnson has the sole power to vote or direct the voting of the shares owned directly by the various investment companies registered under the Investment Company Act advised by Fidelity Management & Research Company, LLC, a wholly owned subsidiary of FMR LLC, which power resides with the Fidelity Funds Boards of Trustees. Fidelity Management & Research Company, LLC carries out the voting of the shares under written guidelines established by the Fidelity Funds Boards of Trustees. \n\nThe following table provides information as of December 31, 2020, with respect to our Equity Incentive Plan, under which our Class A Common Stock is authorized for issuance. Our stockholders approved the Equity Incentive Plan at a special meeting of stockholders held on December 29, 2020. On December 31, 2020, 13,400,000 shares of our Class A Common Stock were available for issuance under the Equity Incentive Plan. \nITEM 13. \n\nWe have adopted a formal written Related Party Transactions Policy providing that our officers, directors, nominees for election as directors, beneficial owners of more than 5% of any class of the Companys voting securities, any member of the immediate family of any of the foregoing persons and any firm, corporation or other entity in which any of the foregoing persons is employed or is a general partner or principal or in a similar position or in which such person has a 5% or greater beneficial ownership interest, are not permitted to enter into a related party transaction with us without the approval of the independent directors of the Board (or a committee thereof, which may include the Audit Committee) who have no interest in the proposed related party transaction, subject to the exceptions described below. \nA related party transaction is generally a transaction, arrangement or relationship, or any series of similar transactions, arrangements or relationships, in which the Company and any related person are, were or will be participants in which the amount involved exceeds $120,000. \nUnder the policy, we collect information that we deem reasonably necessary from each director, executive officer and, to the extent feasible, significant stockholder, to enable us to identify any existing or potential related-party transactions and to effectuate the terms of the policy. In addition, under our Code of Ethics, employees and directors have an affirmative responsibility to disclose any transaction or relationship that reasonably could be expected to give rise to a conflict of interest. \nThe policy requires that, in determining whether to approve, ratify or reject a related party transaction, the independent directors of the Board (or a committee thereof, which may include the Audit Committee), must consider, in light of known circumstances, whether the transaction is in, or is not inconsistent with, the Companys best interests and those of our stockholders, as such independent directors or committee thereof (which may include the Audit Committee), determines in the good faith exercise of its discretion. Our independent directors have determined that certain transactions will not require the approval of the independent directors of the Board or a committee thereof, including certain employment arrangements of officers, director compensation, transactions with another company at which a related partys only relationship is as a director, non-executive employee or beneficial owner of less than 10% of that companys outstanding capital stock, transactions where a related partys interest arises solely from the ownership of the Companys Common Stock and all holders of the Companys Common Stock received the same benefit on a pro rata basis and transactions available to all employees generally. \n### dMYs Related Party Transactions \nFounder Shares \nOn November 27, 2019, the Sponsor paid for certain offering costs for an aggregate price of $25,000 in exchange for issuance of 5,750,000 Class B common stock, par value $0.0001 per share, of dMY (the Founder Shares). \nHowever, this lockup was replaced in its entirety by the terms of the Investor Rights Agreement as described in more detail below. \n\nOn February 25, 2020, simultaneously with the consummation of dMYs IPO, dMY consummated the private placement of 6,600,000 private placement warrants, at a price of $1.00 per private placement warrant (the Private Placement Warrants), to the Sponsor, generating proceeds of $6.6million. \nEach whole Private Placement Warrant was exercisable for one whole share of ClassA Common Stock at a price of $11.50 per share. A portion of the proceeds from the sale of the Private Placement Warrants to the Sponsor was added to the proceeds from the IPO held in the trust account. The Private Placement Warrants were non-redeemable for cash and exercisable on a cashless basis so long as they were held by the Sponsor or its permitted transferees. The Sponsor agreed, subject to limited exceptions, not to transfer, assign or sell any of its Private Placement Warrants until 30 days after the closing of the Business Combination. \nOn March 26, 2021, the Private Placement Warrants were exercised in full on a cashless basis, and none of the Private Placement Warrants remain outstanding as of the date hereof.<|endoftext|>Stock Options to which they relate are exercisable. Upon the exercise of a Stock Appreciation Right, a holder will be entitled to receive an amount in cash, Purchaser Shares or both, which in the aggregate is equal in value to the difference in the fair market value of the Purchaser Shares at the date of exercise less the fair market value of the Purchaser Shares at the date of grant. \nStock Awards may be directly issued under the Plan, subject to such terms, conditions, performance requirements, restrictions, forfeiture provisions, contingencies and limitations as the administrator of the Plan may determine. \nSubject to adjustment as provided in the Plan, the aggregate number of shares of common stock which may be delivered under the Plan shall not exceed a number equal to 15% of the total number of shares of common stock outstanding. The maximum number of shares of common stock which may be delivered under the Plan shall automatically increase by a number sufficient to cause the number of shares of common stock covered by the Plan to equal 15% of the total number of shares of common stock then outstanding, assuming for this purpose the conversion into common stock of all outstanding securities that are convertible by their terms (directly or indirectly) into common stock. The exercise price per share of common stock purchasable under a Stock Option shall be determined by the administrator of the Plan; provided, however, that the exercise price per share shall be not less than the Fair Market Value (as defined in the Plan) per share on the date the Stock Option is granted, or if the Stock Option is intended to qualify as an Incentive Stock Option and is granted to an individual who is a Ten Percent Holder (as defined in the Plan), not less than 110% of such Fair Market Value per share. The term of each Stock Option shall be fixed by the administrator of the Plan, but no Incentive Stock Option shall be exercisable more than 10 years (or five years in the case of an individual who is a Ten Percent Holder) after the date the Incentive Stock Option is granted. \n\nBelow is a list of securities sold by the Company from January 1, 2020 through the date of filing which were not registered under the Securities Act. \nThe securities issued in the above-mentioned transactions were issued in connection with private placements exempt from the registration requirements of Section 5 of the Securities Act of 1933, as amended, pursuant to the terms of Section 4(2) of that Act and Rules 504 and 506 of Regulation D. \n### ITEM 6. SELECTED FINANCIAL DATA \nAs a smaller reporting company, it is not required to provide the information required by this Item. \nITEM 7. \nThe following discussion should be read in conjunction with the Companys audited financial statements and the notes thereto. \n\nThis annual report contains forward-looking statements and information relating to the Company that are based on the beliefs of its management as well as assumptions made by, and information currently available to, its management. When used in this report, the words believe, anticipate, expect, estimate, intend, plan and similar expressions, as they relate to the Company or its management, are intended to identify forward-looking statements. These statements reflect managements current view of the Company concerning future events and are subject to certain risks, uncertainties and assumptions, including among many others: a general economic downturn; a downturn in the securities markets; federal or state laws or regulations having an adverse effect on proposed transactions that the Company desires to effect; Securities and Exchange Commission regulations which affect trading in the securities of penny stocks; Should any of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in this report as anticipated, estimated or expected. The accompanying information contained in this registration statement, including, without limitation, the information set forth under the heading Managements Discussion and Analysis and Plan of Operation Risk Factors identifies important additional factors that could materially adversely affect actual results and performance. You are urged to carefully consider these factors. All forward-looking statements attributable to the Company are expressly qualified in their entirety by the foregoing cautionary statement. \nBusiness Overview \nAlliance Bioenergy Plus, Inc (the Company) is a technology company focused on emerging technologies in the renewable energy, biofuels, and bioplastics technologies sectors. \nIn January 2018, the Companys technology experts developed a technology system it calls Cellulose-to-Sugar or CTS 2.0, and a patent application was filed. CTS 2.0 can convert virtually any cellulosic material like grasses, wood, paper, farm waste, yard waste, forestry products, energy crops like hemp or King Grass, and the cellulosic portion of municipal solid waste into sugars and subsequently into biofuels and bioplastics without the use of enzymes or liquid acids. \nManagement fought and eliminated millions in debts and disputed debts, and the Company exited Chapter 11 on September 18, 2019, while keeping all classes, including shareholders, unimpaired. \nThe Company completed its 4 th generation CTS 2.0 prototype system in July 2020, and has upgraded that later in 2020. The upgraded 4 th generation prototype system is currently being tested to optimize various parameters towards the engineering and scale up to a commercial size reactor. \n### Plan of Operation \nThe Companys goal is to develop this CTS 2.0 technology to a commercial scale and then seek to either joint venture or acquire existing bioenergy and ethanol plants to install the CTS technology. To minimize dilution to shareholders, the Company will seek project-based financing to build (or acquire and retrofit) or joint venture with existing ethanol producers to produce cellulosic ethanol and lignin/bioplastics from its patented CTS 2.0 system. Retrofitting existing plants with the CTS 2.0 technology may achieve more rapid commercialization than building new plants. \n\n\n\n\nAs of this date, the Company has generated $194,319 in revenue, however it has not generated any revenues from its core business. \n### Capital Formation \nFrom December 2019 through March 2020, the Company issued 6,500,000 shares to an insider and a former insider at a price of $0.05 per share for total aggregate proceeds of $325,000. \nFrom May 2020 through January 5, 2021, the Company issued 10,201,794 shares at prices ranging from 6.5 cents to 9 cents per share, for proceeds of $773,130. \nFrom July 10, 2020 through the end of 2020, 6,639,344 warrants were exercised for proceeds of $350,000. \nFrom January 1, 2021, through the date of filing, 13,655,009 warrants were exercised for proceeds of $1,302,817. \nFrom January 20, 2021, through the date of filing, the Company issued 7,100,000 shares at a price of $0.25 per share for proceeds of $1,775,000. \nFrom January 1, 2021, through the date of filing, 350,000 options were exercised for proceeds of $12,900. \nFrom January 1, 2020 through the date of filing, the Company issued an aggregate of 956,130 shares of its common stock for services valued at $84,430. \nFrom January 1, 2020 through the date of filing, the Company issued an aggregate of 1,166,667 warrants for services. Using a Black-Scholes asset-pricing model, these warrants were valued at $72,090. These warrant agreements have terms of one year with an exercise price of $0.15 per share. \nFrom January 1, 2020 through the date of filing, the aggregate number of options the Company issued to its employees, consultants, and independent directors, including cancellations, is 39,180,000. The number of vested options that remain are 12,167,099 with exercise prices ranging from $0.042 to $0.45 and terms range from five (5) to ten (10) years. 31,770,000 options vest over the next 5 years or upon the commercialization of the CTS 2.0 technology or other performance objectives. \n\nThe Company has never purchased, nor does it own, any equity securities of any other issuer. \nGoing Concern \nThe Company has incurred losses since inception, has a working capital deficiency, and may be unable to raise further capital. At December 31, 2020 the Company had a working capital deficiency of $766,555 and had incurred accumulated losses of $46,682,093 since its inception. The Company expects to incur significant additional losses in connection with its continued start-up activities. As disclosed in Note 2 to the financial statements, there is substantial doubt as to the Companys ability to continue as a going concern based upon recurring operating losses and its need to obtain additional financing to sustain operations. \n### Results of Operations \nComparison of the year ended December 31, 2020 to December 31, 2019 \nFor the year ended December 31, 2020, the Company recognized $0 in revenue as opposed to $60,000 in 2019. \nFor the year ended December 31, 2020, the Companys general and administrative expenses increased by $188,962 to $1,227,776 from $1,038,814 in 2019. This increase is primarily due to non-cash options packages valued at $876,291 in 2020 as compared to $294,846 non-cash stock compensation in 2019. \nInterest expense increased in the year ended December 31, 2020 by $190,192 from $0 in 2019. This increase is due to the Companys decision to accrue interest on the back pay due to management. \nFor the year ended December 31, 2020, the Company had a gain of $0 from the extinguishment of debt as compared to $2,125,250 in 2019. \nFor the year ended December 31, 2020, the Company had a gain of $0 from derivative liabilities as compared to a gain of $656,533 in 2019. \n### Research and Development \nFor the years ended December 31, 2020, and 2019, the amounts charged to research and development expenses were $763,159 and $797,862, respectively. \nThe reduction is due to conserving resources during the COVID pandemic. \n\nLiquidity \nAs of December 31, 2020 the Company had $286,579 in cash and total stockholders equity at December 31, 2020 was negative $3,336,764. As of December 31, 2019, the Company had $110,630 in cash and total stockholders equity at December 31, 2019 was negative $3,331,809. Total debt, including advances, accounts payable and other notes payable at December 31, 2020, together with interest payable thereon and contingent liabilities, was $4,229,266 an increase of $287,871 from December 31, 2019, where it stood at $3,941,395. This increase is primarily attributable to interest payable to related parties and a paycheck protection program loan from the SBA. $2,942,132 of the remaining debt was renegotiated to be payable out of future revenue or future profits and otherwise does not come due. \nDuring the fiscal year ended December 31, 2020, the Companys operating expenses increased $154,259 to $1,990,935 from $1,836,676 in 2019. This increase can primarily be attributed to an increase in non-cash options expense. \nDuring the fiscal year ended December 31, 2020, the Companys investing activities used $206,315 in cash. This can be primarily attributed to $147,189 used to purchase machinery and equipment, and $59,126 in patent expenses. \nDuring the fiscal year ended December 31, 2020, the Company generated an aggregate of $1,303,710 through its financing activities, which is a decrease of $20,109 from $1,323,819 during the fiscal year ended December 31, 2019. This decrease from the prior year can primarily be attributed to an overall slowdown in capital raising due to COVID-19, partially offset by a $66,330 paycheck protection program loan. There was an increase of proceeds of $350,000 from the exercise of warrants from $0 in 2019, offset by a reduction of $289,000 from the issuance of stock and a $100,000 reduction to $0 in proceeds from the issuance of convertible debts. \n### Capital Resources \nAt this time, the Company has limited liquidity and capital resources. To continue funding its operations, the Company will need to generate revenue or obtain additional financing for current and future operations. The Company anticipates needing around $10 million to optimize and scale up its CTS 2.0 system to be commercially ready. The Company anticipates reaching this stage around 18 months after financing. Although some of the financing has come in in 2021, there is no guarantee that we will achieve all of the additional funding that is needed. \nAs of the date of filing, the Company has raised $3,001,467 in 2021, through the<|endoftext|>Approximately $416.0 million of borrowings outstanding under our unsecured credit facility (including the term loan feature of our unsecured credit facility). During 2016 and 2017, we issued an aggregate of $975.0 million of debt. All of these items are senior to our common shares upon liquidation, and we may in the future make offerings of debt or preferred equity securities which may be senior to our common shares for purposes of dividend distributions or upon liquidation, any of which may materially adversely affect the per share market price of our common shares. \nAs of December 31, 2020, there were approximately $416.0 million of borrowings outstanding under our unsecured credit facility (including the term loan feature of our unsecured credit facility). During 2016 and 2017, we issued $975.0 million of aggregate principal amount of senior notes. In the future, we may attempt to increase our capital resources by making additional offerings of debt or equity securities (or causing the Operating Partnership to issue debt securities), including medium-term notes, senior or subordinated notes, and classes or series of preferred shares. Upon liquidation, holders of our debt securities and lenders with respect to other borrowings will be entitled to receive our available assets prior to distribution to the holders of our common shares. Additionally, any convertible or exchangeable securities that we issue in the future may have rights, preferences, and privileges more favorable than those of our common shares and may result in dilution to owners of our common shares. Holders of our common shares are not entitled to preemptive rights or other protections against dilution. Because our decision to issue securities in any future offering will depend on market conditions and other factors beyond our control, we cannot predict or estimate the amount, timing, or nature of our future offerings. Thus, our shareholders bear the risk that our future offerings could reduce the per share market price of our common shares and dilute their interest in us. \nThe derivative instruments that we may use to hedge against interest rate fluctuations may not be successful in mitigating our risks associated with interest rates and could reduce the overall returns on our shareholders investment. \nWe may use derivative instruments to hedge exposure to changes in interest rates on certain of our variable rate loans, but no hedging strategy can protect us completely. We cannot assure our shareholders that our hedging strategy and the derivatives that we use will adequately offset the risk of interest rate volatility or that our hedging of these transactions will not result in losses. Any settlement charges incurred to terminate unused derivative instruments may result in increased interest expense, which may reduce the overall return on our investments. These instruments may also generate income that may not be treated as qualifying REIT income for purposes of the 75% or 95% REIT income tests. \nWe rely upon external sources of capital to fund future capital needs, and, if we encounter difficulty in obtaining such capital, we may not be able to make future acquisitions necessary to grow our business or meet maturing obligations. \nIn order to qualify as a REIT under the Internal Revenue Code of 1986, as amended (the Code), we are required, among other things, to distribute each year to our shareholders at least 90% of our taxable income, without regard to the deduction for dividends paid and excluding net capital gain. Because of this distribution requirement, we may not be able to fund all of our future capital needs from cash retained from operations, including capital needed to make investments and to satisfy or refinance maturing obligations. Our access to capital will depend upon a number of factors over which we have little or no control, including general stock and bond market conditions and investor interest, the markets perception of our current and potential future earnings, analyst reports about us and the REIT industry, cash distributions and the market price of our common shares, and other factors such as governmental regulatory action and changes in REIT tax laws. We may not be in a position to take advantage of attractive investment opportunities for growth if we are unable to access the capital markets on a timely basis on favorable terms. Moreover, additional equity offerings may result in substantial dilution of our shareholders interests, and additional debt financing may substantially increase our leverage, either of which could cause the per share price of our common shares to decline. \nIf we become highly leveraged in the future, the resulting increase in outstanding debt could adversely affect our ability to make debt service payments, to pay our anticipated distributions, to obtain additional financing, and to make the distributions required to qualify as a REIT. \nAs of December 31, 2020, our indebtedness represented approximately 28% of our gross assets. If we become more highly leveraged, the resulting increase in outstanding debt could adversely affect our ability to make debt service payments, to pay our anticipated distributions, to obtain additional financing, and to make the distributions required to qualify as a REIT. The occurrence of any of the foregoing risks could adversely affect our business, financial condition, and results of operations, or credit ratings, our ability to make distributions to our shareholders, and the market price of our common shares. \nWe are subject to covenants in our debt agreements that may restrict or limit our operations and acquisitions and our failure to comply with the covenants in our debt agreements could have a material adverse impact on our business, results of operations, and financial condition. \nThe terms of the instruments governing our existing indebtedness require us to comply with a number of customary financial and other covenants, such as maintaining certain leverage and coverage ratios and minimum tangible net worth requirements. Our continued ability to incur additional debt and to conduct business in general is subject to our compliance with these covenants, which limit our operational flexibility. Breaches of these covenants could result in defaults under the instruments governing the applicable indebtedness, in addition to any other indebtedness cross-defaulted against such instruments. Any such default could have a material adverse impact on our business, results of operations, and financial condition or our ability to make distributions to our shareholders. \nA downgrade in our credit ratings could materially adversely affect our business and financial condition. \nOur credit rating and the credit ratings assigned to our debt securities could change based upon, among other things, our financial condition. These ratings are subject to ongoing evaluation by credit rating agencies, and any rating could be changed or withdrawn by a rating agency in the future if, in its judgment, circumstances warrant such action. \nIf any of the credit rating agencies that have rated our securities downgrades or lowers its credit rating, or if any credit rating agency indicates that it has placed any such rating on a watch list for a possible downgrade or lowering, or otherwise indicates that its outlook for that rating is negative, such action could have a material adverse effect on our costs and availability of funding, which could in turn have a material adverse effect on our financial condition, results of operations, cash flows, the market price of our securities, and our ability to satisfy our debt service obligations, among other obligations. \nIf securities analysts downgrade our common shares or the health care-related real estate sector, the market price of our common shares could decline. \nThe market for our common shares depends in part upon the research and reports that industry or financial analysts publish about us and our industry. We have no control over these analysts. Furthermore, if one or more of the analysts who do cover us downgrades our shares or our industry, or the stock of any of our competitors, the price of our common shares could decline. If one or more of these analysts ceases coverage of our company, we could lose attention in the market which in turn could cause the market price of our common shares to decline. \n### Risks Related to Our Portfolio and Structure \nWe have no direct operations and rely upon funds received from the Operating Partnership to meet our obligations. \nThe Trust conducts substantially all of its operations through the Operating Partnership. As of February 22, 2021, the Trust owned approximately 97.4% of the OP Units and apart from this ownership interest, the Trust does not have any independent operations. As a result, the Trust relies upon distributions from the Operating Partnership to pay any distributions that the Trust might declare on the Trusts common shares. We also rely upon distributions from the Operating Partnership to the Trust to meet our obligations, including tax liability on taxable income allocated to the Trust from the Operating Partnership (which might make distributions to the Trust not equal to the tax on such allocated taxable income). Shareholders claims will consequently be structurally subordinated to all existing and future liabilities and obligations (whether or not for borrowed money) of the Operating Partnership and its subsidiaries. Therefore, in the event of bankruptcy, liquidation or reorganization of the Trust, claims of the Trusts shareholders will be satisfied only after all of the Trusts and the Operating Partnerships and its subsidiaries liabilities and obligations have been paid in full. \nOur business could be harmed if key personnel terminate their employment with us or if we are unsuccessful in integrating new personnel into our operations. \nOur success depends, to a significant extent, on the continued services of Mr.Thomas, our President and Chief Executive Officer and the rest of our executive leadership team. We do not maintain key person life insurance on any of our officers. Our ability to continue to acquire and develop health care properties depends upon the significant relationships that our senior management team has developed over many years. \nAlthough the Trust has entered into employment agreements with our management team we cannot provide any assurance that any of them will remain employed by the Trust. Our ability to retain our leadership team, or to attract suitable replacements should any member of the senior management team leave, is dependent on the competitive nature of the employment market. The loss of services of, or the failure to successfully integrate one or more new members of, our senior management team could adversely affect our business and our prospects. \nCertain provisions of Maryland law, the Trusts declaration of trust and the partnership agreement of the Operating Partnership contain limits and restrictions on transferability of our outstanding shares of beneficial interest, which may have the effect of delaying, discouraging or preventing a transaction or change of control of our company. \nIn order for us to qualify as a REIT, no more than 50% of the value of the Trusts outstanding shares of beneficial interest may be owned, beneficially or constructively, by five or fewer individuals at any time during the last half of each taxable year. Subject to certain exceptions, the Trusts declaration of trust prohibits any shareholder from owning beneficially or constructively more than 9.8% in value or number of shares, whichever is more restrictive, of the outstanding shares of any class or series of our shares of beneficial interest, though the Trust has granted, and may in the future grant, a waiver from the ownership limitations. The constructive ownership rules under the Code are complex and may cause the outstanding shares owned by a group of related individuals or entities to be deemed to be constructively owned by one individual entity. As a result, the acquisition of less than 9.8% of our outstanding shares of any class or series by an individual or entity could cause that individual or entity to own constructively in excess of 9.8% of the outstanding shares of any class or series of our shares of beneficial interest and to be subject to the Trusts declaration of trusts ownership limit. The Trusts declaration of trust also prohibits, among other prohibitions, any person from owning our shares of beneficial interest that would result in our being<|endoftext|>(14) \nIncorporated by reference from the Companys Current Report on Form 8-K dated December 14, 2009 and filed with the Commission on December 18, 2009. \n(15) \nIncorporated by reference from the Companys Current Report on Form 8-K dated January 5, 2010 and filed with the Commission on January 7, 2010. \n(16) \nIncorporated by reference from the Companys Current Report on Form 8-K dated March 11, 2010 and filed with the Commission on March 15, 2010. \n(17) \nIncorporated by reference from the Companys Current Report on Form 8-K dated June 25, 2010 and filed with the Commission on June 25, 2010. \n(18) \nIncorporated by reference from the Companys Current Report on Form 8-K dated June 30, 2010 and filed with the Commission on July 28, 2010. \n(19) \nIncorporated by reference from the Companys Current Report on Form 8-K dated August 3, 2010 and filed with the Commission on August 4, 2010. \n(20) \nIncorporated by reference from the Companys Current Report on Form 8-K dated August 20, 2010 and filed with the Commission on August 23, 2010. \n(21) \nIncorporated by reference from the Companys Current Report on Form 8-K dated August 20, 2010 and filed with the Commission on August 30, 2010. \n(22) \nIncorporated by reference from the Companys Current Report on Form 8-K/A dated August 20, 2010 and filed with the Commission on November 1, 2010. \n(23) \nIncorporated by reference from the Companys Current Report on Form 8-K dated November 15, 2010 and filed with the Commission on November 17, 2010. \n(24) \nIncorporated by reference from the CompanysCurrent Report on Form 8-K dated December 31,2010 and filed with the Commission on January 6, 2011 \n(25) \nIncorporated by reference from the Companys Current Report on Form 8-K dated March 2, 2011 and filed with the Commission on March 7, 2011. \n(26) \nIncorporated by reference from the Companys Current Report on Form 8-K dated April 1, 2011 and filed with the Commission on June 2, 2011. \n(27) \nIncorporated by reference from the Companys Current Report on Form 8-K dated August 1, 2011 and filed with the Commission on August 3, 2011. \n(28) \nIncorporated by reference from the Companys Current Report on Form 8-K dated August 22, 2011 and filed with the Commission on September 9, 2011. \n(29) \nIncorporated by reference from the Companys Current Report on Form 8-K dated October 26, 2011 and filed with the Commission on January 4, 2012. \n(30) \nIncorporated by reference from the Companys Current Report on Form 8-K dated December 15, 2011 and filed with the Commission on January 5, 2012. \n(31) \nIncorporated by reference from the Companys Current Report on Form 8-K dated February 2, 2012 and filed with the Commission on February 9, 2012. \n(32) \nIncorporated by reference from the Companys Current Report on Form 8-K dated March 18, 2012 and filed with the Commission on March 23, 2012. \n(33) \nIncorporated by reference from the Companys Current Report on Form 8-K/A dated February 2, 2012 and filed with the Commission on March 26, 2012. \n(34) \nIncorporated by reference from the Companys Current Report on Form 8-K dated April 27, 2012 and filed with the Commission on May 2, 2012. \n(35) \nIncorporated by reference from the Companys Current Report on Form 8-K dated May 10, 2012 and filed with the Commission on May 16, 2012. \n(40) \nIncorporated by reference from the Companys Current Report on Form 8-K dated June 5, 2013 and filed with the Commission on June 6, 2013. \n(41) \nIncorporated by reference from the Companys Current Report on Form 8-K dated December 19, 2013 and filed with the Commission on December 23, 2013. \n(42) \nIncorporated by reference from the Companys Current Report on Form 8-K dated December 31, 2013 and filed with the Commission on January 2, 2014. \n(43) \nIncorporated by reference from the Companys Current Report on Form 8-K dated January 21, 2015 and filed with the Commission on January 21, 2015. \n(44) \nIncorporated by reference from the Companys Current Report on Form 8-K dated December 31, 2014 and filed with the Commission on March 31, 2015. \n(45) \nIncorporated by reference from the Companys Current Report on Form 8-K dated May 5, 2015 and filed with the Commission on May 6, 2015. \n(46) \nIncorporated by reference from the Companys Current Report on Form 8-K dated March 10, 2016 and filed with the Commission on March 15, 2016. \n(47), (48) \nIncorporated by reference from the Companys Current Report on Form 8-K dated September 12, 2016 and filed with the Commission on October 14, 2016. \n(49) \nIncorporated by reference from the Companys Current Report on Form 8-K dated June 27, 2018 and filed with the Commission on June 28, 2018. \n(50) \nIncorporated by reference from the Companys Current Report on Form 8-K dated July 31, 2018 and filed with the Commission on August 6, 2018. \n(51) \nIncorporated by reference from the Companys Current Report on Form 8-K dated March 1, 2007 and filed with the Commission on March 8, 2007 \n(52) \nIncorporated by reference from the Companys Current Report on Form 8-K dated November 5, 2019 and filed with the Commission on November 6, 2019. \n(53), (54) \nIncorporated by reference from the Companys Current Report on Form 8-K dated February 21, 2020 and filed with the Commission on February 24, 2020. \n(55), (56) \nIncorporated by reference from the Companys Current Report on Form 8-K dated April 28, 2020 and filed with the Commission on April 29, 2020. \n(57), (58) \nIncorporated by reference from the Companys Current Report on Form 8-K dated August 3, 2020 and filed with the Commission on August 31, 2020. \n(59) \nIncorporated by reference from the Companys Current Report on Form 8-K dated October 19, 2020 and filed with the Commission on October 19, 2020. \n(60) \nIncorporated by reference from the Companys Current Report on Form 8-K dated October 22, 2020 and filed with the Commission on October 28, 2020. \n(61) \nIncorporated by reference from the Companys Current Report on Form 8-K dated December 15, 2020 and filed with the Commission on December 21, 2020. \n(62), (63), (64), (65) \nIncorporated by reference from the Companys Current Report on Form 8-K dated December 21, 2020 and filed with the Commission on January 5, 2021. \n(66) \nIncorporated by reference from the Companys Current Report on Form 8-K dated January 21, 2021 and filed with the Commission on January 27, 2021. \n# \nFiled herewith \n## \nFurnished, not filed. \n### ATHENA GOLD CORPORATION \n\nPage \n\n\n\nConsolidated Statements of Stockholders Deficit \n\n\n\n\nAthena Gold Corporation \n\nWe have audited the accompanying consolidated balance sheets of Athena Gold Corporation (formerly Athena Silver Corporation) and its subsidiary (collectively, the Company) as of December 31, 2020 and 2019, and the related consolidated statements of operations, stockholders deficit, and cash flows for the years then ended, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and the results of their operations and their cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America. \n### Going Concern Matter \nAs discussed in Note 1 to the financial statements, the Company has suffered recurring losses from operations and has a net capital deficiency that raises substantial doubt about its ability to continue as a going concern. \nBasis for Opinion \nWe are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (\"PCAOB\") and are required to be independent with respect to the Company in accordance with the U.S. \n\n\n/s/ MaloneBailey, LLP www.malonebailey.com \nWe have served as the Company's auditor since 2011. \n### Houston, Texas \nFebruary 25, 2021 \nATHENA GOLD CORPORATION \n\n\n\nATHENA GOLD CORPORATION \n\n\n\nATHENA GOLD CORPORATION \n\n### CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT \n\nATHENA GOLD CORPORATION \n\n\n\n\n### Note 1 Organization, Liquidity and Going Concern \nNature of Operations \nIn January 2021, the companys Board of Directors approved a name change from Athena Minerals, Inc., to Athena Gold Corporation. We were incorporated in Delaware on December 23, 2003 and began our mining operations in 2010. \n(Athena Minerals) which owns and operates our mining interests and property in California. John Gibbs, a related party, in a non-cash exchange. This transaction is discussed in further detail in Note 3 Sale of Athena Minerals, Inc. \nDetails of this transaction are further discussed in Note 4 Mineral Rights Excelsior Springs. \n### Liquidity and Going Concern \nOur consolidated financial statements have been prepared on a going concern basis, which assumes that we will be able to meet our obligations and continue our operations during the next fiscal year. \n\n\n### COVID-19 pandemic \n: The occurrence of an uncontrollable event such as the COVID-19 pandemic may negatively affect our operations. \nNote 2 Summary of Significant Accounting Policies \n\nOn December 31, 2020, we sold our 100% interest in Athena Minerals, Inc. As such, the Balance Sheet at December 31, 2020 includes only the accounts of Athena Gold Corporation. The consolidated Statements of Operations and Cash Flows include the accounts of Athena Minerals, Inc. through December 31, 2020. Our consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP). \n### Reclassifications \nCertain reclassifications may have been made to our prior years consolidated financial statements to conform to our current year presentation. These reclassifications had no effect on our previously reported results of operations or accumulated deficit. \nUse of Estimates \nGAAP requires us to make estimates, assumptions and judgments that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of expenses during the periods presented. \nWe make our estimate of the ultimate outcome for these items based on historical trends and other information available when the financial statements are prepared. Changes in estimates are recognized in accordance with the accounting rules for the estimate, which is typically in the period when new information becomes available. \nWe believe that our significant estimates, assumptions and judgments are reasonable, based upon information available at the time they were made. \n\nWe value our financial assets and liabilities using fair value measurements. Our financial instruments primarily consist of cash and cash equivalents, mining rights, accounts payable, accrued liabilities, amounts due to related parties and notes payable to related parties. Fair value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The carrying amounts of cash and cash equivalents, accounts payable, accrued liabilities, notes payable to related parties and other amounts due to related parties approximate fair value because of the short-term nature of these financial instruments. \n\nOur financial instruments that potentially subject us to credit risk are our cash and cash equivalents. We maintain our cash and cash equivalents at reputable financial institutions and currently, we are not exposed to significant credit risk. \n### Cash \nWe consider all amounts on deposit with financial institutions and highly liquid investments with an original maturity of three months or less to be cash equivalents. \nMineral Rights - Unproven \n\n\n\n\n\nNotes Payable and Credit Facility Related Parties \nNotes payable and the credit facility payable to related parties are classified as current liabilities as the note holders are control persons and have the ability to control the repayment dates of the notes. \n### Exploration Costs \n\nShare-based Payments \n\n\n### Income Taxes \n\nWe follow a two-step approach to recognizing and measuring tax benefits associated with uncertain tax positions taken or expected to be taken in a tax return. \n\nWe compute basic net loss per common share by dividing our net loss attributable to common shareholders by our weighted-average number of common shares outstanding during the period. Computation of diluted net loss per common share is similar to our computation of basic net loss per common share except that the numerator is increased to exclude charges which would not have been incurred, and<|endoftext|>Property was classified as a capital lease. This assessment was not required to be reassessed upon adoption of ASC 842. As such, future minimum rental payments are included in both the finance lease obligations table above as well as the operating lease table in Note 12. \nThe weighted-average discount rate for this finance lease obligation at December 31, 2019 was 3.5%. Interest on this finance lease obligation amounted to $0.8 million for 2019. \nCROSSAMERICA PARTNERS LP \n\nNote 12. OPERATING LEASES \nOperating Leases of Retail Sites as Lessee \nWe lease 391 retail sites from third parties under certain non-cancelable operating leases that expire from time to time through 2033. The weighted-average remaining lease term was 5.8 years as of December 31, 2019. \nLease expense for 2019 as measured under ASC 842 was classified in the statement of income as follows (in thousands): \nVariable lease payments included in the above table are based on inflation, revenues or volumes and totaled $1.8 million for 2019. Short-term lease payments included in the table above that are excluded from the lease liability was $0.6 million for 2019. Cash paid for amounts included in the measurement of lease liabilities under operating leases totaled $25.8 million for 2019. \nLease expense as measured under ASC 840 was $21.5 million and $21.3 million for 2018 and 2017, respectively. Contingent rent expense, based on gallons sold, as measured under ASC 840 was $1.9 million for 2018 and 2017. \nAs of December 31, 2019, future minimum rental payments under operating leases, excluding variable lease payments or short-term payments, were as follows (in thousands). The weighted-average discount rate as of December 31, 2019 was 6.9%. \nWe generally do not include renewal options in our lease term for purposes of measuring our lease liabilities and right-of-use assets unless the sublease to our customer extends beyond the term of the head lease. \nSubstantially all these retail sites are then subleased to lessee dealers (including DMS) or commission agents under leases with terms generally ranging from one to ten years and which may include renewal options. Sublease rental income amounted to $38.2 million for 2019. \nCROSSAMERICA PARTNERS LP \n\nOperating Leases of Retail Sites as Lessor \nMotor fuel stations are leased to tenants under operating leases with various expiration dates ranging through 2033. We generally do not include renewal options in our lease term. Future minimum rental payments under non-cancelable operating leases with third parties and DMS as of December 31, 2019 were as follows (in thousands): \nThe future minimum rental payments presented above do not include contingent rent based on future inflation, future revenues or volumes of the lessee, or non-lease components for amounts that may be received as tenant reimbursements for certain operating costs. \nDeferred rent income from straight-line rent relates to the cumulative amount by which straight-line rental income recorded to date exceeds cash rents billed to date under the lease agreement and totaled $7.1 million and $6.3 million at December 31, 2019 and 2018, respectively. \n### Note 13. RELATED PARTY TRANSACTIONS \nTransactions with Circle K \nAs a result of the GP Purchase, Circle K is no longer a related party from November 19, 2019 forward. However, for comparability purposes, we have disclosed balance sheet disclosures as of December 31, 2019 and income statement amounts for transactions with Circle K for the full year of 2019. \n### Fuel Sales and Rental Income \nWe sell wholesale motor fuel under a master fuel distribution agreement to 47 Circle K retail sites and lease real property on 46 retail sites to Circle K under a master lease agreement each having initial 10-year terms. The fuel distribution agreement provides us with a fixed wholesale mark-up per gallon. The master lease agreement is a triple net lease. \nRevenues from wholesale fuel sales and real property rental income from Circle K were as follows (in thousands): \nAccounts receivable from Circle K for fuel amounted to $3.1 million and $2.6 million at December31, 2019 and 2018, respectively \n### CST Fuel Supply Equity Interests \nCST Fuel Supply provides wholesale motor fuel distribution to the majority of CSTs legacy U.S. retail sites at cost plus a fixed markup per gallon. Since July 1, 2015, we have owned a 17.5% total interest in CST Fuel Supply. We account for the income derived from our equity interest of CST Fuel Supply as Income from CST Fuel Supply equity interests on our statements of income, which amounted to $14.8 million, $14.9 million and $14.9 million for 2019, 2018, and 2017, respectively. \nAccounts receivable from Circle K related to this income amounted to $0.9 million and $1.0 million at December31, 2019 and 2018, respectively. \nAlthough Circle K is no longer a related party, we continue to hold an interest in CST Fuel Supply and are continuing to recognize income from CST Fuel Supply equity interests since November 19, 2019. See Note 25 for disclosure of the CST Fuel Supply Exchange. \nCROSSAMERICA PARTNERS LP \n\nIn connection with the CST Merger, the FTC approved a final order requiring the divestiture of certain CST retail fuel stations. As a result, in September 2017, \n61 sites were sold to a third party and removed from the fuel distribution agreement between CST Marketing and Supply and CST Services. CST Marketing and Supply no longer supplies fuel to such sites. To compensate for the decrease in the amount of motor fuels sold by CST Marketing and Supply, Circle K agreed to purchase at least \n114.9 million gallons annually (the Annual Commitment) in addition to the volumes continued to be sold under the fuel distribution agreement to retail fuel stations that remain with Circle K after the divestiture. In addition, should Circle-K fail to purchase all or a portion of the Annual Commitment, Circle K has agreed to make monthly payments to CST Marketing and Supply in the amount of the sellers margin of \n$0.05 per gallon under the fuel distribution agreement multiplied by the number of gallons not physically sold pursuant to the Annual Commitment. Consequently, the Partnership, by virtue of its \n17.5 \n% ownership interest in CST Fuel Supply, the \n100% owner ofCST Marketing and Supply, will continue to receive its share from the volumes sold to the \n61 retail sites prior to the FTC mandated divestiture. This agreement continues until the fuel distribution agreement between CST Marketing and Supply and CST Services is terminated, which had an initial term of \n10 years expiring in December 2024. \nSupplemental balance sheet information for CST Fuel Supply was as follows (in thousands): \nCST Fuel Supply purchases gasoline for immediate distribution to specified retail locations through a supply contract with Valero. Fuel purchases are priced at the prevailing daily rack rates at terminals serving the specified locations. Revenues of CST Fuel Supply represent a $0.05 fixed markup on cost of gallons purchased. As a result of the pass-through nature of the fuel supply operations of CST Fuel Supply, we have presented supplemental income statement information beginning with gross profit as the most meaningful measure relevant to users, supplemented by the disclosure of gallons purchased by CST Fuel Supply disclosed in Note 2. CST Fuel Supply does not enter into any other transactions beyond the purchase and resale activities described above. Supplemental income statement information for CST Fuel Supply was as follows (in thousands): \nSupplemental income statement information for CST Fuel Supply was as follows for the four quarters of 2019 and 2018 (in thousands): \nCROSSAMERICA PARTNERS LP \n\nPurchase of Fuel from Circle K \nDuring 2019, we purchased the fuel supplied to the following sets of sites from Circle K: retail sites acquired in the Jet-Pep Assets acquisition; \nFranchised Holiday Stores in the Upper Midwest; we also pay a franchise fee to Circle K, which amounted to $0.5 million for 2019, $1.0 million for 2018 and was insignificant for 2017; retail sites in which we have a leasehold interest that we acquired from Circle K in March and May of 2018 for $0.5 million; retail sites acquired from CST in February 2015; retail sites acquired from Circle K in the first two tranches of the asset exchange; and certain other retail sites at which we are evaluating our fuel supply options. \nIn total, we purchased $263.5 million, $191.0 million and $11.3 million for 2019, 2018 and 2017, respectively. \nEffective February 1, 2018, Couche-Tard began renegotiating fuel carrier agreements, including our wholesale transportation agreements, with third-party carriers. The independent conflicts committee of our Board approved an amendment to the Circle K Omnibus Agreement effective February 1, 2018 providing for the payment by us to an affiliate of Couche-Tard of a commission based on the volume purchased by us on the renegotiated wholesale transportation contracts. This commission is to compensate such affiliate of Couche-Tard for its services in connection with the renegotiations of our fuel carrier agreements with third-party carriers, which resulted in overall reductions in transportation costs to us. This commission amounted to $0.9 million and $0.5 million for 2019 and 2018, respectively. \nAmounts payable to Circle K related to these fuel purchases and freight commissions totaled $13.9 million and $4.3 million at December 31, 2019 and 2018, respectively. \n### Circle K Omnibus Agreement and Management Fees \nWe incurred costs and expenses under the Circle K Omnibus Agreement of $11.6 million (including costs under the Transitional Omnibus Agreement as described below), $11.8million and $13.9 million for 2019, 2018 and 2017, respectively, including incentive compensation costs and non-cash stock-based compensation expense, which are recorded as a component of operating expenses and general and administrative expenses in the statements of income. \nIn addition, the Partnership recognized charges for severance, benefit and retention costs allocated by Circle K of $0.1 million and $0.8 million for 2019 and 2018, respectively. Such costs are included in general and administrative expenses in the statements of income. \nOn October 29, 2019, the Circle K Omnibus Agreement was amended and restated, effective as of April 29, 2019, to: a) remove references to fixed and variable management fees and call for a simplified quarterly settlement based on actual underlying costs incurred by Circle K; and b) permit for a one-time charge of $183,000 from Circle K to us related to costs incurred by Circle K in connection with the strategic review of our fuel supply. \nAmounts payable to Circle K related to expenses incurred by Circle K on our behalf in accordance with the Circle K Omnibus Agreement, including the separation benefits discussed above, totaled $11.5 million and $20.2 million at December 31, 2019 and 2018, respectively. Concurrent with the closing of the GP Purchase, we paid Circle K $14.2 million of omnibus charges. The liability balance at December 31, 2019 includes $9.2 million of omnibus charges that will be paid in eight quarterly payments starting March 31, 2020. As such, $4.6 million is classified within other noncurrent liabilities on the December 31, 2019 balance sheet. \nUpon the closing of the GP Purchase, the Partnership entered into a Transitional Omnibus Agreement, dated as of November 19, 2019 (the Transitional Omnibus Agreement), among the Partnership, the General Partner and Circle K. Pursuant to the Transitional Omnibus Agreement, Circle K has agreed, among other things, to continue to provide, or cause to be provided, to the Partnership certain management, administrative and operating services, as provided under the Circle K Omnibus Agreement through June 30, 2020 with respect to certain services, unless earlier terminated or unless the parties extend the term of certain services. In addition, from January 1, 2020 until the closing of the CST Fuel Supply Exchange (see Note 25), the General Partner will provide Circle K with certain administrative and operational services, on the terms and conditions set forth in the Transitional Omnibus Agreement. \nSee Note 25 for disclosure regarding the effective January 1, 2020. \nCROSSAMERICA PARTNERS LP \n\nCommon Units Issued to Circle K as Consideration for Amounts due Under the Circle K Omnibus Agreement \nAs approved by the independent conflicts committee of the Board, the Partnership and Circle K mutually agreed to settle, from time to time, some or all of the amounts due<|endoftext|>On a national securities exchange such that it satisfies the definition of a covered security under Section 18(b)(1) of the Securities Act, we may, at our option, require holders of public warrants who exercise their warrants to do so on a cashless basis in accordance with Section 3(a)(9) of the Securities Act and, in the event we so elect, we will not be required to file or maintain in effect a registration statement, but we will use our best efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available. In no event will we be required to net cash settle any warrant, or issue securities or other compensation in exchange for the warrants in the event that we are unable to register or qualify the shares underlying the warrants under applicable state securities laws. In such event, holders who acquired their warrants as part of a purchase of units will have paid the full unit purchase price solely for the shares of common stock included in the units. \nThe grant of registration rights to our initial stockholders and holders of our private placement units may make it more difficult to complete our initial business combination, and the future exercise of such rights may adversely affect the market price of our common stock. \nPursuant to an agreement entered into concurrently with the issuance and sale of the securities in our initial public offering, our initial stockholders and their permitted transferees can demand that we register their shares of our common stock at the time of our initial business combination. In addition, holders of our private placement units and their permitted transferees can demand that we register the common stock, private placement warrants and the shares of common stock issuable upon exercise of the private placement warrants, underlying the private placement units, and holders of securities that may be issued upon conversion of working capital loans may demand that we register such warrants or the common stock issuable upon exercise of such warrants. The registration and availability of such a significant number of securities for trading in the public market may have an adverse effect on the market price of our common stock. This is because the stockholders of the target business may increase the equity stake they seek in the combined entity or ask for more cash consideration to offset the negative impact on the market price of our common stock that is expected when the common stock owned by our initial stockholders, holders of our private placement units or holders of our working capital loans or their respective permitted transferees are registered. \nWe may issue additional shares of common stock or preferred stock to complete our initial business combination or under an employee incentive plan after completion of our initial business combination, and any such issuances would dilute the interest of our stockholders and likely present other risks. \nOur amended and restated certificate of incorporation authorizes the issuance of up to 100,000,000 shares of common stock, par value $0.001 per share, and 1,000,000 shares of undesignated preferred stock, par value $0.001 per share. There are 69,908,000 authorized but unissued shares of common stock available for issuance, which amount takes into account shares of common stock reserved for issuance upon exercise of outstanding warrants. \nWe may issue a substantial number of additional shares of common stock, and may issue shares of preferred stock, in order to complete our initial business combination or under an employee incentive plan after completion of our initial business combination (although our amended and restated certificate of incorporation provides that we may not issue securities that can vote with common stockholders on matters related to our pre-business combination activity). However, our sponsor, officers, directors, and GW Sponsor 2, LLC have agreed, pursuant to a written agreement with us, that they will not propose any amendment to our amended and restated certificate of incorporation (A) to modify the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial business combination within 21 months from the closing of our initial public offering or (B) with respect to any other provision relating to stockholders rights or pre-business combination activity, unless we provide our public stockholders with the opportunity to redeem their shares of common stock upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (which interest shall be net of taxes payable), divided by the number of then outstanding public shares. and may adversely affect prevailing market prices for our common stock and/or warrants. \nIn order to effectuate an initial business combination, blank check companies have, in the recent past, amended various provisions of their charters and modified governing instruments. \nIn order to effectuate a business combination, blank check companies have, in the recent past, amended various provisions of their charters and modified governing instruments. For example, blank check companies have amended the definition of business combination, increased redemption thresholds and extended the time period in which the company must consummate its initial business combination. We cannot assure you that we will not seek to amend our charter or governing instruments in order to effectuate our initial business combination. \n\nCertain agreements, including the underwriting agreement relating to our initial public offering, the investment management trust agreement between us and Continental Stock Transfer& Trust Company, the letter agreements among us and our sponsor, anchor investors, officers, directors, and GW Sponsor 2, LLC, the registration rights agreement among us and our sponsor, anchor investors, officers, directors, and GW Sponsor 2, LLC, the administrative services agreement between us and affiliate of one of our directors, and the business combination marketing agreement may be amended without stockholder approval. \n\nAlthough we believe that the net proceeds of our initial public offering and the sale of the private placement units will be sufficient to allow us to complete our initial business combination, because we have not yet identified any prospective target business we cannot ascertain the capital requirements for any particular transaction. If the net proceeds of our initial public offering and the sale of the private placement units prove to be insufficient, either because of the size of our initial business combination, the depletion of the available net proceeds in search of a target business, the obligation to repurchase for cash a significant number of shares from stockholders who elect redemption in connection with our initial business combination or the terms of negotiated transactions to purchase shares in connection with our initial business combination, we may be required to seek additional financing or to abandon the proposed business combination. None of our officers, directors or stockholders is required to provide any financing to us in connection with or after our business combination. \n\nOur initial stockholders own 20.0% of our issued and outstanding shares of common stock (excluding the common stock underlying the private placement units and underlying any units purchased in our initial public offering). If our initial stockholders purchase additional shares of common stock in the aftermarket or in privately negotiated transactions, this would increase their influence. \n\nAlthough our ability to amend the terms of the public warrants with the consent of at least 65% of the then outstanding public warrants is unlimited, examples of such amendments could be amendments to, among other things, increase the exercise price of the warrants, shorten the exercise period or decrease the number of shares of our common stock purchasable upon exercise of a warrant. \nWe may redeem our unexpired warrants prior to their exercise at a time that is disadvantageous to the warrant holder, thereby making the warrants worthless. \nWe have the ability to redeem outstanding warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01 per warrant, provided that the last reported sales price of our common stock equals or exceeds $18.00 per share for any 20 trading days within a 30 trading-day period ending on the third trading day prior to the date we send the notice of redemption to the warrant holders. Redemption of the outstanding warrants could force a holder (i) to exercise the warrants and pay the exercise price therefor at a time when it may be disadvantageous for the holder to do so, (ii) to sell the warrants at the then-current market price when the holder might otherwise wish to hold the warrants or (iii)to accept the nominal redemption price which, at the time the outstanding warrants are called for redemption, is likely to be substantially less than the market value of the warrants. \nOur warrants may have an adverse effect on the market price of our common stock and make it more difficult to effectuate our initial business combination. \nWe issued warrants to purchase 8,500,000 shares of our common stock as part of the units offered in our initial public offering and, simultaneously with the closing of our initial public offering, we issued warrants underlying the private placement units that are exercisable to purchase an aggregate of 114,000 shares of our common stock in a private placement. In addition, if our initial stockholders make any working capital loans, up to $1,500,000 of such loans may be convertible, at the option of the lender, into private placement units at a price of $10.00 per unit of the post business combination entity. To the extent we issue shares of common stock to effectuate a business combination, the potential for the issuance of a substantial number of additional shares of common stock upon exercise of these warrants could make us a less attractive acquisition vehicle to a target business. Such warrants, if and when exercised, would increase the number of issued and outstanding shares of our common stock and reduce the value of the shares of common stock issued to complete the business combination. Therefore, our warrants may make it more difficult to effectuate a business combination or increase the cost of acquiring the target business. \nThe private placement warrants are identical to the warrants sold as part of the units in our initial public offering except that, so long as they are held by the original holders or their permitted transferees, (i) they will not be redeemable by us, (ii) they (including the common stock issuable upon exercise of these warrants) may not, subject to certain limited exceptions, be transferred, assigned or sold until 30 days after the completion of our initial business combination; (iii)they may be exercised by the holders on a cashless basis; and (iv) the founder shares are subject to registration rights. \n\nIf, upon exercise of the warrants, a holder would be entitled to receive a fractional interest in a share, we will, upon exercise, round down to the nearest whole number the number of shares of common stock to be issued to the warrant holder. \n\nThe federal proxy rules require that a proxy statement with respect to a vote on a business combination meeting certain financial significance tests include historical and/or pro forma financial statement disclosure. These financial statements may be required to be prepared in accordance with, or be reconciled to, accounting principles generally accepted in the United States of America, or GAAP, or international financial reporting standards depending on the circumstances and the historical financial statements may be required to be audited in accordance with the standards of the Public Company Accounting Oversight Board (United States), or PCAOB. \nWe are an emerging growth company within the meaning of the Securities Act, and we are takng advantage of certain exemptions from disclosure requirements available to emerging growth companies, which could make our securities less attractive to investors and may make it more difficult to compare our performance with other public companies. \nWe are an emerging growth company within the meaning of the Securities Act, as modified by the JOBS Act, and we are taking advantage of certain exemptions from various reporting<|endoftext|>HOVNANIAN ENTERPRISES, INC. \n\nPartIII Those portions of the registrants definitive proxy statementfiled pursuant to Regulation14A in connection with registrants annual meeting of stockholders to be held on March 30, 2021, which are responsive to those parts of PartIII, Items10, 11, 12, 13 and 14 as identified herein. \nEXPLANATORY NOTE \nThis Amendment No. 2on Form 10-K/A (Amendment No. 2) amendsthe Annual Report on Form 10-K for the year ended October 31, 2020of Hovnanian Enterprises, Inc. (HEI), which HEI filed with the Securities and Exchange Commission (SEC) on December 22, 2020 and which was amended by Amendment No. 1 filed with the SEC on December 23, 2020(as amended by Amendment No. 1, the Original Form 10-K). HEI is filing this Amendment No. 2to amend Item 15 of the Original Form 10-K to include the consolidated financial statements and the related reports of the independent auditors of its equity method investees, Port Imperial Partners, LLC and Hovsite Holdings III LLC, as of and for the years ended December 31, 2020, 2019and 2018(the financial statements), in accordance with Rule 3-09 of Regulation S-X, and also to include the related consents of independent auditors. The financial statements were not included in the Original Form 10-K because Port Imperial Partners, LLCs and Hovsite Holdings III LLCs fiscal years ended on December 31, 2020, which was after the date of the filing of the Original Form 10-K. \nThis Amendment No. 2includes new certifications under Sections 302 and 906 of the Sarbanes-Oxley Act of 2002 by our Chief Executive Officer and Chief Financial Officer as Exhibits 31(a), 31(b), 32(a) and 32(b). Except as otherwise described above, this Amendment No. 2does not modify or update in any way (i) the consolidated balance sheets, the consolidated statements of operations, equity and cash flows of HEI or (ii) the disclosures in or exhibits to the Original Form 10-K nor does it reflect events occurring after the filing of the Original Form 10-K. 2should be read in conjunction with the Original Form 10-K and HEIs other filings made with the SEC subsequent to the filing of the Original Form 10-K. \n### ITEM 15 \nExhibits: \n3(a) \nRestated Certificate of Incorporation of the Registrant (Incorporated by reference to Exhibits to Current Report of the Registrant on Form \n8-K filed on March 29, 2019). \n3(b) \nAmended and Restated Bylaws of the Registrant (Incorporated by reference to Exhibits to Current Report on Form 8-K of the Registrant filed December 3, 2018). \n4(a) \n### Specimen Class \nA Common Stock Certificate (Incorporated by reference to Exhibits to Current Report of the Registrant on Form \n8-K filed on March 29, 2019). \n4(b) \n### Specimen Class \nB Common Stock Certificate (Incorporated by reference to Exhibits to Current Report of the Registrant on Form \n8-K filed on March 29, 2019). \n4(c) \nCertificate of Designations, Powers, Preferences and Rights of the 7.625% Series \n### A Preferred Stock of Hovnanian Enterprises, \nInc., dated July \n12, 2005 (Incorporated by reference to Exhibits to Current Report on Form 8-K of the Registrant filed on July 13, 2005). \n4(d) \n### Certificate of Designations of the Series \nB Junior Preferred Stock of Hovnanian Enterprises, \nInc., dated August \n14, 2008 (Incorporated by reference to Exhibits to Quarterly Report on Form 10-Q for the quarter ended July 31, 2008 of the Registrant). \n4(e) \n### Rights Agreement, dated as of August \n14, 2008, between Hovnanian Enterprises, \nInc. and National City Bank, as Rights Agent, which includes the Form of Certificate of Designation as Exhibit \n### A, Form of Right Certificate as Exhibit \nB and the Summary of Rights as Exhibit \nC (Incorporated by reference to Exhibits to the Registration Statement on Form 8-A of the Registrant filed August 14, 2008). \n4(f) \nAmendment No. 1 to Rights Agreement, dated as of January 11, 2018, between Hovnanian Enterprises, Inc. and Computershare Trust Company, N.A (as successor to National City Bank), as Rights Agent, which includes the amended and restated Form of Rights Certificate as Exhibit 1 and the amended and restated Summary of Rights as Exhibit 2 (Incorporated by reference to Exhibits to Current Report on Form 8-K of the Registrant filed January 11, 2018). \n4(g) \nIndenture, dated as of February 1, 2018, relating to the 13.5% Senior Notes due 2026 and 5.0% Senior Notes due 2040, by and among K. , the other guarantors party thereto and Wilmington Trust, National Association, as Trustee, including the forms of 13.5% Senior Notes due 2026 and 5.0% Senior Notes due 2040 (Incorporated by reference to Exhibits to Current Report on Form 8-K of the Registrant filed February 2, 2018). \n4(h) \nSecond Supplemental Indenture, dated as of May 30, 2018, relating to the 13.5% Senior Notes due 2026 and 5.0% Senior Notes due 2040, among K. , the other guarantors party thereto and Wilmington Trust, National Association, as trustee (Incorporated by reference to Exhibits to Current Report on Form 8-K of the Registrant filed May 30, 2018). \n4(i) \nSixth Supplemental Indenture, dated as of October 31, 2019, relating to the 13.5% Senior Notes due 2026 and 5.0% Senior Notes due 2040, among K. \n4(j) \nIndenture dated as of July 27, 2017, relating to the 10.000% Senior Secured Notes due 2022 and the 10.500% Senior Secured Notes due 2024, among K. , the other guarantors party thereto and Wilmington Trust, National Association, as trustee and collateral agent, including the forms of 10.000% Senior Secured Notes due 2022 and the 10.500% Senior Secured Note due 2024 (Incorporated by reference to Exhibits to Current Report on Form 8-K of the Registrant filed on July 28, 2017). \n4(k) \nSecond Supplemental Indenture, dated January 16, 2018, relating to the 10.500% Senior Secured Notes due 2024, by and among K. , the other guarantors party thereto and Wilmington Trust, National Association, as trustee and collateral agent (Incorporated by reference to Exhibits to Current Report on Form 8-K of the Registrant filed January 16, 2018). \n4(l) \nNinth Supplemental Indenture, dated as of October 30, 2019, relating to the 10.000% Senior Secured Notes due 2022 and 10.500% Senior Secured Notes due 2024, among K. , the other guarantors party thereto and Wilmington Trust, National Association, as trustee and collateral agent (Incorporated by reference to Exhibits to Current Report on Form 8-K of the Registrant filed on October 31, 2019). \n4(m) \nIndenture, dated as of November 5, 2014, relating to the 8.000% Senior Notes due 2027, among K. , the other guarantors party thereto and Wilmington Trust, National Association, as Trustee, including the form of 8.000% Senior Notes (Incorporated by reference to Exhibits to Current Report on Form 8-K of the Registrant filed November 5, 2014). \n4(n) \nEighteenth Supplemental Indenture, dated as of October 17, 2019, relating to the 8.000% Senior Notes due 2027, among K. \n4(o) \nNineteenth Supplemental Indenture, dated as of October 31, 2019, relating to the 8.000% Senior Notes due 2027, among K. \n4(p) \nTwentieth Supplemental Indenture, dated as of November 1, 2019, relating to 8.000% Senior Notes due 2027, among K. , the other guarantors party thereto and Wilmington Trust, National Association, as trustee (Incorporated by reference to Exhibits to Current Report on Form 8-K of the Registrant filed November 5, 2019). \n4(q) \nIndenture, dated as of October 31, 2019, relating to the 7.75% Senior Secured 1.125 Lien Notes due 2026, among K. , the other guarantors party thereto and Wilmington Trust, National Association, as trustee and collateral agent, including the form of 7.75% Senior Secured 1.125 Lien Notes due 2026 (Incorporated by reference to Exhibits to Current Report on Form 8-K of the Registrant filed on October 31, 2019). \n4(r) \nFirst Supplemental Indenture, dated as of November 27, 2019, relating to the 7.75% Senior Secured 1.125 Lien Notes due 2026, among K. \n4(s) \nIndenture, dated as of October 31, 2019, relating to the 10.5% Senior Secured 1.25 Lien Notes due 2026, among K. , the other guarantors party thereto and Wilmington Trust, National Association, as trustee and collateral agent, including the form of 10.5% Senior Secured 1.25 Lien Notes due 2026 (Incorporated by reference to Exhibits to Current Report on Form 8-K of the Registrant filed on October 31, 2019). \n4(t) \nFirst Supplemental Indenture, dated as of November 27, 2019, relating to the 10.5% Senior Secured 1.25 Lien Notes due 2026, among K. \n4(u) \nTenth Supplemental Indenture, dated as of December 6, 2019, relating to the 10.500% Senior Secured Notes due 2024, by and among K. , the other guarantors party thereto and Wilmington Trust, National Association, as trustee and collateral agent (Incorporated by reference to Exhibits to Current Report on form 8-K of the Registrant filed December 6, 2019). \n4(v) \nIndenture, dated as of October 31, 2019, relating to the 11.25% Senior Secured 1.5 Lien Notes due 2026, among K. , the other guarantors party thereto and Wilmington Trust, National Association, as trustee and collateral agent, including the form of 11.25% Senior Secured 1.5 Lien Notes due 2026 (Incorporated by reference to Exhibits to Current Report on Form 8-K of the Registrant filed on October 31, 2019). \n4(w) \nFirst Supplemental Indenture, dated as of November 27, 2019, relating to the 11.25% Senior Secured 1.5 Lien Notes due 2026, among K. \n4(x) \nIndenture, dated as of December 10, 2019, relating to the 10.000% Senior Secured 1.75 Lien Notes due 2025, among K. , the other guarantors party thereto and Wilmington Trust, National Association, as trustee and collateral agent, including the form of 10.000% Senior Secured 1.75 Lien Notes due 2025 (Incorporated by reference to Exhibits to Current Report on Form 8-K of the Registrant filed December 11, 2019). \n4(y) \nDescription of the Registrant s securities.(Incorporated by reference to Exhibits to Annual Report on Form 10-K for the year ended October 31, 2019 of the Registrant). \n4(z) \nFourth Supplemental Indenture, dated as of March 25, 2020, relating to the additional 11.25% Senior Secured 1.5 Lien Notes due 2026, among K. , the subsidiary guarantors named therein and Wilmington Trust, National Association, as Trustee and Collateral Agent, including the form of the additional 11.25% Senior Secured 1.5 Lien Notes due 2026 (Incorporated by reference to Exhibits to Current Report on Form 8-K of the Registrant field on March 26, 2020). \n10(a) \nCredit Agreement, dated as of October 31, 2019, by and among K. Hovnanian Enterprises Inc., Hovnanian Enterprises, Inc., the other guarantors party thereto, Wilmington Trust, National Association, as Administrative Agent, and the lenders party thereto (Incorporated by reference to Exhibits to Current Report on Form 8-K of the Registrant filed on October 31, 2019). \n10(b) \nFirst Amendment, dated as of November 27, 2019, to the Credit Agreement, dated as of October 31, 2019, among Hovnanian Enterprises, Inc., K. Hovnanian Enterprises Inc., the subsidiary guarantors party thereto, the lenders party thereto and Wilmington Trust, National Association, as administrative agent (Incorporated by reference to Exhibits to Current Report on Form 8-K of the Registrant filed December 3, 2019). \n10(c) \n$212,500,000 Credit Agreement, dated as of January 29, 2018, by and among K. Hovnanian Enterprises Inc., Hovnanian Enterprises, Inc., the other guarantors party thereto, Wilmington Trust, National Association, as Administrative Agent, and the lenders party thereto (Incorporated by reference to Exhibits to Current Report on Form 8-K of the Registrant filed February 2, 2018). \n10(d) \nFirst Amendment, dated as of May 14, 2018, to the $212,500,000 Credit Agreement, dated as of January 29, 2018, among Hovnanian Enterprises, Inc., K. Hovnanian Enterprises Inc., the subsidiary guarantors party thereto, the lenders party thereto and Wilmington Trust, National Association, as administrative agent (Incorporated by reference to Exhibits to Current Report on Form 8-K of the Registrant filed May 14, 2018). \n10(e) \nSecond Amendment, dated as of October 31, 2019, to the $212,500,000 Credit Agreement, dated as of January 29, 2018, among Hovnanian Enterprises, Inc., K. Hovnanian Enterprises Inc., the subsidiary guarantors party thereto, the lenders party thereto and Wilmington Trust, National Association, as administrative agent \n(Incorporated by reference to Exhibits to Annual Report on Form 10-K for the year ended October 31, 2019 of the Registrant). \n10(f) \nCollateral Agency Agreement, dated as of July 27, 2017, among K. , the other guarantors party thereto, Wilmington Trust,<|endoftext|>Effective and maintain a current prospectus relating to the common stock issuable upon exercise of the warrants, until the expiration of the warrants in accordance with the provisions of the warrant agreement. \n\nNotwithstanding the above, if our common stock is at the time of any exercise of a warrant not listed on a national securities exchange such that it satisfies the definition of a covered security under Section18(b)(1) of the Securities Act, we may, at our option, require holders of public warrants who exercise their warrants to do so on a cashless basis in accordance with Section3(a)(9) of the Securities Act and, in the event we so elect, we will not be required to file or maintain in effect a registration statement, but we will be required to use our best efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available. \nIf the issuance of the shares upon exercise of the warrants is not so registered or qualified or exempt from registration or qualification, the holder of such warrant shall not be entitled to exercise such warrant and, if the holder does not sell the warrant, such warrant may have no value and expire worthless. \nThe grant of registration rights may make it more difficult to negotiate the terms of our initial business combination, and the future exercise of such rights may adversely affect the market price of our common stock. \nPursuant to an agreement entered into concurrently with the issuance and sale of the securities in our IPO, our sponsor and its transferees can demand that we register their founder shares, private placement warrants and the shares of common stock issuable upon exercise of the private placement warrants held by them, as well as any warrants and underlying shares of common stock that may be issued upon conversion of working capital loans. In addition, the existence of the registration rights may make negotiating the terms of our initial business combination more difficult. This is because the stockholders of the target business may increase the equity stake they seek in the combined entity or ask for more cash consideration to offset the negative impact on the market price of our common stock that may occur when the securities owned by our initial stockholders, holders of the private placement warrants or their respective permitted transferees are registered. \nIn the event that the Proposed Lion Transaction were to be terminated, you would be unable to ascertain the merits or risks of any alternative target business prior to our entry into an alternative business combination agreement. \nIn the event that the Proposed Lion Transaction were to be terminated, we would expect to focus our search on an alternative target business involved in the ownership, financing and management of societal infrastructure, but we may seek to complete a business combination with a target business in any industry or sector. Unless and until we have identified and publicly announced a business combination transaction, there is no basis to evaluate the possible merits or risks of any particular target business or of the terms of any combination with any such target business, and we cannot assure you that any such transaction would be more or less favorable than the Proposed Lion Transaction, or would or would not result in a reduction in the value of our public shares. \nWe may seek acquisition opportunities in industries or sectors outside of our managements area of expertise. \nWe may consider a business combination outside of our managements area of expertise if a target business is presented to us and we determine that such target offers an attractive acquisition opportunity for our company. \n\nAlthough we have identified general criteria and guidelines for evaluating prospective target businesses, we may enter into a business combination with a target that does not have all of these positive attributes. In addition, if we announce a prospective business combination with a target that does not meet our general criteria and guidelines, a greater number of stockholders may exercise their redemption rights, which may make it difficult for us to meet any closing condition with a target business that requires us to have a minimum amount of cash. \n\n\nWe are not required to obtain an opinion from an independent investment banking firm or from another independent firm that commonly renders valuation opinions, and consequently, you may have no assurance from an independent source that the price we are paying for the business is fair to our company from a financial point of view. \n\nWe may issue additional shares of common stock or preferred stock to complete our initial business combination or thereafter. \nOur certificate of incorporation authorizes the issuance of up to 50,000,000 shares of common stock, par value $0.0001 per share, and 1,000,000 shares of undesignated preferred stock, par value $0.0001 per share. As of February 28, 2021, there were 10,068,320 authorized but unissued shares of common stock available for issuance, and 1,000,000 authorized but unissued shares of preferred stock available for issuance. We may issue additional shares of common stock and shares of preferred stock to complete our initial business combination, or for any purpose at any time thereafter, including under an employee incentive plan. The issuance of additional shares of common or preferred stock: may significantly dilute the equity interest of investors in our IPO; could cause a change of control if a substantial number of shares of common stock are issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers and directors; \n\n\n\nAny of our key personnel may negotiate employment or consulting agreements in connection with the business combination. Such negotiations would take place simultaneously with the negotiation of the business combination and could provide for such individuals to receive compensation in the form of cash payments and/or our securities for services they would render to us or the target business after the completion of the business combination. However, whether or not any such individuals remain with the post-transaction company after the completion of our business combination will be a factor in our decision as to whether or not we will proceed with any potential business combination only to the extent that we believe that it would materially benefit our stockholders following the business combination. \nWe may have a limited ability to assess the skills, qualifications or abilities of management of a prospective target business, which could negatively impact the value of our stockholders investment in the post-transaction company. \nWhen evaluating the desirability of affecting our initial business combination with a prospective target business, our ability to assess the target businesss management may be limited due to a lack of time, resources or information. \nOur officers and directors are engaged in other business activities, which may limit their availability to us, which could have a negative impact on our ability to complete our initial business combination. \nThe conflicts of interest could have a negative impact on our ability to complete our initial business combination. \nOur officers and directors are affiliated with one or more entities engaged in business activities similar to those conducted by us, and to which they owe contractual and fiduciary duties, and as a result may have conflicts of interest in determining to which entity a particular business opportunity should be presented. \nOur directors and officers presently have, and any of them in the future may have, fiduciary or contractual obligations to other entities pursuant to which such officer or director is or will be required to present a business combination opportunity to such entity. If any of our officers or directors becomes aware of a business combination opportunity which is suitable for an entity to which he or she then has fiduciary or contractual obligations, he or she will honor his fiduciary or contractual obligations to present such opportunity to such entity. \nPursuant to the terms of our Business Combination Agreement with Lion Electric, our officers and directors and other representatives are prohibited from soliciting, evaluating, or negotiating alternative business combinations involving us or on our behalf. However, if our Business Combination Agreement with Lion Electric were to be terminated, our officers and directors may have conflicts of interest in determining whether to present possible business combination opportunities to us or to any other such entity. \nWithout limiting the foregoing, all of our officers and directors have fiduciary and contractual duties to Northern Genesis Holdings Inc. and/or to certain companies in which it has invested or may invest, by reason of his or her position with such company. These entities currently include Northern Genesis II and Northern Genesis III, each of which may compete with us for acquisition opportunities, and each of which is currently focused, like us, on target businesses making a positive contribution to sustainability through the ownership, financing and management of societal infrastructure. \n\nWe have not adopted a policy that prohibits our directors, officers, security holders or affiliates from having a direct or indirect pecuniary or financial interest in any investment to be acquired or disposed of by us or in any transaction to which we are a party or have an interest. In addition, we do not have a policy that prohibits any such persons from engaging for their own account in business activities of the types conducted by us. Accordingly, such persons or entities may have conflicts between their interests and ours. \nWe may engage in a business combination with one or more target businesses that have relationships with entities that may be affiliated with our sponsor, initial stockholders, officers, directors or their affiliates which may raise potential conflicts of interest. \nIf our Business Combination Agreement with Lion Electric were to be terminated, we may decide to acquire one or more businesses affiliated with our sponsor, any of our officers or directors, or affiliates of any of the foregoing. Although we will not be specifically focusing on, or targeting, any transaction with any affiliated entities, we would pursue such a transaction if we determined that such a transaction was attractive and in the best interests of our stockholders. Despite our agreement to obtain an opinion from an independent investment banking firm or from another independent entity that commonly renders valuation opinions regarding the fairness of such a transaction, potential conflicts of interest still may exist and, as a result, the terms of the business combination may not be as advantageous to our public stockholders as they would be absent any conflicts of interest. \nSince our initial stockholders, officers and directors will lose their entire investment in us if our business combination is not completed, a conflict of interest may arise in determining whether a particular business combination target is appropriate for our initial business combination. \nOur sponsor holds, and our officers and directors have an indirect financial interest in, our 7,986,336 founder shares and 8,139,069 private placement warrants, each exercisable for one share of common stock at $11.50 per share, all of which will be worthless if we do not complete a business combination. In addition, we may obtain loans from our initial stockholders, officers, directors or their affiliates which likely would not be repaid if we do not consummate an initial business combination. \n\nWe may choose to incur substantial debt to complete our business combination, provided that such debt is non-recourse to funds held in the trust account and, as such, will not affect the per-share amount available for redemption from the trust account. \nIf our business combination is with only one target business, we would be solely dependent on this single business which may have a limited number of products or services. \nAccordingly, the prospects for our success may be solely dependent upon the performance of a single business, property or asset, or dependent upon the development or market acceptance of a single or limited number of products, processes or services. \n\nIf we attempt to simultaneously complete business combinations with<|endoftext|>Credited to participants accounts will immediately vest, if not already vested in accordance with the normal vesting schedule provided in the plan. \nThe following tables set forth the estimated value of the payments and benefits that would have been paid to the named executive officers under the terms of the Long-Term Incentive Plan and all predecessor equity-based incentive compensation plans, and the change in control agreements for each named executive officer, in each case assuming the event giving rise to the payment occurred on December31, 2020, which was the last business day of 2020. Information presented in these tables reflects the following: \nAmounts shown do not include any proceeds from employer-paid life insurance policies. \nThe annual cash incentive amount actually paid to each named executive officer for 2020 is shown in the Summary Compensation Table in the column headed \n### Non-Equity \nIncentive Plan Compensation. \nEquity values are based on the $12.93 closing price of our common stock on December31, 2020. \nWith the exception of Messrs. Barnes and Powlus who were participants in the former Chittenden Corporation Pension Account Plan (merged into the Peoples United Bank, N.A. Employees Retirement Plan), none of the named executive officers is a participant in any of our defined benefit pension plans. \nFor all named executive officers, health benefits continue for two additional years in the event of a change in control. Mr.Walters is eligible to continue participating in the Companys health plans until he is eligible for Medicare, and health benefits continue for two additional years under a change in control. The amounts shown assume 2020 rates. \nAmounts shown for the change-in-control value of restricted stock awards and unexercisable options may differ slightly from amounts calculated by reference to the table entitled Outstanding Equity Awards at Fiscal \nYear-End due to rounding. \n### John P. Barnes \nLee C. Powlus \nR. David Rosato \n### Jeffrey J. Tengel \nKirk W. Walters \n\nThe Compensation Committee of our board of directors is composed solely of individuals who are neither officers nor employees of Peoples United, or any of our direct or indirect subsidiaries. During the fiscal year ended December31, 2020, George Carter, Janet M. Hansen and Mark W. Richards served on the Compensation Committee and there were no interlocks, as defined under the rules and regulations of the Securities and Exchange Commission, between members of the Compensation Committee or our executive officers and entities with which such persons are affiliated. \n### Pay Ratio Disclosure \n\nS-K as adopted by the Securities and Exchange Commission in August 2015 (Item 402(u)), the Company is providing the following reasonable estimate of the ratio of the median of the annual total compensation of all of our employees except John P. Barnes, our Chief Executive Officer (CEO), to the annual total compensation of Mr.Barnes, calculated in a manner consistent with Item402(u). For 2020, our last completed fiscal year: \nThe median of the annual total compensation of all of our employees, excluding our CEO, was $74,977. \nThe annual total compensation of our CEO was $5,898,111. \nThe ratio of the annual total compensation of our CEO to the median of the annual total compensation of all of our employees except our CEO was 79 to 1. \nWe determined that, as of December31, 2020, our employee population consisted of approximately 5,987 individuals, including full-time, part-time and temporary employees (as reported in Item 1, Business, in our Annual Report on Form \n10-K filed with the Securities and Exchange Commission on March1, 2021), all of whom were located in the United States. \nTo identify the median employee from our employee population as of December31, 2020, we obtained the following compensation data from our internal payroll records for each employee in our employee population: (1)actual gross wages paid in 2020 which was comprised of (a)base pay plus overtime if applicable, (b)paid time off and holiday time, (c)incentive pay, (d)taxable stock events, and (e)any other income; (2)employer paid retirement benefits ( i.e. \n, 401(k) Employee Savings Plan including for eligible employees an employer retirement contribution, and Employee Stock Ownership Plan); and (3)employer paid health, welfare& life insurance (the sum of 1, 2 and 3 for each such employee is such employees 2020 Compensation). We then ranked the 2020 Compensation received by all of the employees in our employee population as of December31, 2020 other than our CEO to determine our median employee. Once we identified our median employee, to calculate our pay ratio for 2020, we combined all of the elements of such employees compensation for 2020 in accordance with the requirements of Item 402(c)(2)(x) of Regulation \nS-K for the Summary Compensation Table. With respect to the annual total compensation of our CEO, we used the amount reported in the Total column of our Summary Compensation Table as set forth above. \n### Director Compensation \nCompensation of the Board of Directors is established by the Board, upon recommendation of the Compensation Committee. Directors who are employed by us or any of our affiliates are not entitled to additional compensation for board or committee service. The non-employee directors receive compensation according to the following table: \nNo separate compensation was paid to a director of the Bank who attends a board meeting that is held jointly with a board meeting of Peoples United and who is compensated for that meeting. \nAs noted above, non-employee directors also receive director equity compensation in the form of our common stock under the Peoples United Financial, Inc. Directors Equity Compensation Plan. Each director who is not an employee is granted an annual award of shares of our common stock based on a target dollar value of $95,000. These grants are made immediately following each annual meeting of shareholders. A person appointed as a director between annual meetings is eligible for a full or partial grant of an annual award at the time of his or her appointment, in the discretion of the Compensation Committee. No stock options may be granted pursuant to the Directors Equity Compensation Plan. A total of 258,714 shares remained available for issuance as stock grants pursuant to this Plan as of March31, 2021. Information about vesting requirements applicable to shares awarded pursuant to this Plan appear in the text following the table headed Directors Equity Compensation Plan appearing below. \nNon-employee directors may also receive compensation in the form of stock awards and stock options under the 2014 Long-Term Incentive Plan, as amended and restated in 2017 (hereinafter the 2014 Long-Term Incentive Plan) and from time to time thereafter. The board of directors does not intend to make recurring grants under this Plan to non-employee directors, or otherwise to use this Plan as a routine source of equity compensation for directors. No grants were made to directors in 2020 under this Plan. \nCash dividends payable with respect to shares of common stock issued to directors under the Directors Equity Compensation Plan and, when applicable, under the 2014 Long-Term Incentive Plan are paid in the same amount and at the same time as dividends are paid to shareholders generally. Stock dividends, stock splits and similar transactions will have the same effect on shares of stock issued pursuant to the Directors Equity Compensation Plan and, when applicable, under the 2014 Long-Term Incentive Plan as on all other outstanding shares of our common stock. \n\nThe following table sets forth information relating to the compensation of our directors during 2020. Amounts shown in the table include compensation paid to the named individuals as directors of the Bank. \n\n(1) \n(1) \nThe columns disclosing option awards, non-equity incentive plan compensation, all other compensation and changes in pension value and nonqualified deferred compensation earnings have been omitted from the table because no director earned any compensation during 2020 of a type required to be disclosed in those columns. \n(2) \nIncludes annual cash retainer and Committee chair retainer (if applicable). \n(3) \nReflects grant-date value ($11.30 per share) of 8,363 shares awarded on May21, 2020, pursuant to the Directors Equity Compensation Plan, to each director. \n(4) \nMr.Bottomley did not stand for re-election following the Companys 2020 annual meeting when his term ended. \nInformation about shares awarded under equity compensation plans in 2020 or in prior years that had not vested as of December31, 2020 is as follows (values determined by reference to the $12.93 closing price of our common stock on December31, 2020): \n### Directors Equity Compensation Plan \nShares of common stock issued under this plan become vested on the earliest to occur of (a)the first anniversary of the grant date, (b)the date of the annual meeting of shareholders in the year following the grant date, (c)the date a directors board service terminates due to death or disability, or (d)a change in control of Peoples United. These shares are not subject to any post-vesting transfer restriction period. As of March31, 2021, a total of 75,267 shares issued pursuant to the Directors Equity Compensation Plan remained unvested. \nNo stock or stock option grants were made in 2020 to non-employee directors under any other equity compensation plan maintained by the Company. No shares awarded to directors under any other equity compensation plan in prior years remain unvested. \nPrior to 2008, Messrs. Dwight and Richards deferred a portion of their director compensation pursuant to a non-qualified deferred compensation plan maintained by Chittenden for the benefit of its directors. We assumed responsibility for this plan in 2008. Account balances for Messrs. Dwight and Richards under this plan are deemed invested in shares of our common stock, and future distributions from the plan will be made to Messrs. Dwight and Richards in the form of shares of our common stock rather than in cash. For the period from January1, 2020 through December31, 2020, the value of Mr.Dwights and Mr.Richards accounts under this plan decreased by $216,953 and $609,930, respectively. The change in value during the year reflects the effect of scheduled distributions made to Mr.Richards from the plan during 2020, changes in the market price of our stock and the effect of the deemed reinvestment of dividends paid on an equivalent number of shares of our stock. \nItem12. \n\n\nThe following table sets forth information as of March2, 2021 with respect to beneficial ownership of our common stock by any person or group as defined in Section13(d)(3) of the Securities Exchange Act of 1934 who is known by us to be the beneficial owner of more than five percent of the common stock. \n(1) \nBased on information in the most recent Schedule 13D or 13G filed with the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, unless otherwise indicated. \n(2) \nShares reported as owned as of the date indicated on the Schedule as filed, expressed as a percentage of shares outstanding as of March2, 2021. \n(3) \nBlackRock, Inc. reports having sole voting power with respect to 29,157,435 of these shares, and sole dispositive power with respect to all of these shares. \n(4) \nState Street Corporation reports having shared voting power with respect to 59,267,172 of these shares and shared dispositive power with respect to 60,773,210 of these shares. \n(5) \nThe Vanguard Group, Inc. reports having sole voting power with respect to none of these shares, shared voting power with respect to 571,256 of these shares, sole dispositive power with respect to 45,296,807 of these shares, and shared dispositive power with respect to 1,505,394 of these shares. \nWe do not know of any other person who is the beneficial owner of more than 5% of our common stock as of the specified date. \nStock Ownership Guidelines for Directors and Executive Officers \n\nWe have adopted guidelines for stock ownership by directors in order to encourage members of the Board to increase their ownership of our common stock over time. Under the guidelines, directors with at least five years of board service are expected to own shares of the Companys common stock with an aggregate value of at least $400,000. The stock ownership of all members of the Board of Directors with at least five years of service was in compliance with applicable guidelines as of December31, 2020. Ms.Chwick joined the<|endoftext|>Of a target business, the obligation to redeem for cash a significant number of shares from shareholders who elect redemption in connection with our initial business combination or the terms of negotiated transactions to purchase shares in connection with our initial business combination, we may be required to seek additional financing or to abandon the proposed business combination. The COVID-19 pandemic and recent economic environment has made it difficult for companies to obtain acquisition financing. \nWe may only be able to complete one business combination with the proceeds of the Public Offering, the Private Placement and the forward purchase securities, which will cause us to be solely dependent on a single business which may have a limited number of products or services. \nThe net proceeds from the Public Offering, the Private Placement, and forward purchase securities will provide us with $320,100,000 that we may use to complete our business combination (after deducting payment of offering expenses of approximately $1,000,000 and underwriting commissions of $15,180,000, but not deducting any of the proceeds not held in trust which may be used to pay working capital expenses). \n\n\n\n\n\n\n\n\n\n\n\n\nOur amended and restated memorandum and articles of association do not provide a specified maximum redemption threshold, except that in no event will we redeem our public shares in an amount that would cause our net tangible assets to be to be less than $5,000,001 upon consummation of our initial business combination and after payment of deferred underwriters commissions (so that we are not subject to the SECs penny stock rules) or any greater net tangible asset or cash requirement that may be contained in the agreement relating to our initial business combination. \n\n\nIn order to effectuate our initial business combination, special purpose acquisition companies have, in the recent past, amended various provisions of their charters and other governing instruments, including their warrant agreements. \nAmending our amended and restated memorandum and articles of association will require a special resolution under Cayman Islands law, which requires the affirmative vote of a majority of at least two-thirds of the shareholders who attend and vote at a general meeting of the company, and amending our warrant agreement will require a vote of holders of at least 65% of the public warrants and, solely with respect to any amendment to the terms of the private placement warrants or the forward purchase warrants or any provision of the warrant agreement with respect to the private placement warrants or forward purchase warrants, 65% of the then outstanding private placement warrants or forward purchase warrants. In addition, our amended and restated memorandum and articles of association requires us to provide our public shareholders with the opportunity to redeem their public shares for cash if we propose an amendment to our amended and restated memorandum and articles of association to modify the substance or timing of our obligation to provide for the redemption of our public shares in connection with an initial business combination or to redeem 100% of our public shares if we do not complete an initial business combination by November 27, 2021 prior to the applicable Contractual Redemption Date if extended at our sponsors option or during any Extension Period. \n\nIn those companies, amendment of these provisions typically requires approval by between 90% and 100% of the companys shareholders attending and voting at a general meeting. Our amended and restated memorandum and articles of association provide that any of its provisions related to pre-business combination activity (including the requirement to deposit proceeds of the Public Offering and the Private Placement into the Trust Account and not release such amounts except in specified circumstances, and to provide redemption rights to public shareholders as described herein) may be amended if approved by special resolution under Cayman Islands law, which requires the affirmative vote of a majority of at least two-thirds of the shareholders who attend and vote at a general meeting of the Company, and corresponding provisions of the trust agreement governing the release of funds from our trust account may be amended if approved by holders of at least 65% of our ordinary shares. Our initial shareholders, who collectively beneficially own, on an as converted basis, approximately 20% of our issued and outstanding ordinary shares following the Public Offering, will participate in any vote to amend our amended and restated memorandum and articles of association and/or trust agreement and will have the discretion to vote in any manner they choose. \nOur Sponsor, officers and directors and the forward purchaser have agreed, pursuant to a written agreement with us, that they will not propose any amendment to our amended and restated memorandum and articles of association that would affect the substance or timing of our obligation to provide for the redemption of our public shares in connection with an initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination by November 27, 2021, prior to the applicable Contractual Redemption Date if extended at our Sponsors option or during any Extension Period, unless we provide our public shareholders with the opportunity to redeem their Class A ordinary shares upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account and not previously released to us to pay our taxes, if any (less up to $100,000 of interest to pay dissolution expenses and net of taxes payable) divided by the number of then outstanding public shares. \n\nIf our initial shareholders purchase any additional Class A ordinary shares, this would increase their control. \nThe forward purchaser may own a substantial interest in us prior to the consummation of our initial business combination and thus may exert a substantial influence on actions requiring a shareholder vote, potentially in a manner that you do not support. \nWe have entered into a forward purchase agreement with our Sponsor which provides for the purchase of an aggregate of 5,000,000 Class A ordinary shares, plus an aggregate of 2,500,000 redeemable warrants to purchase one Class A ordinary share at $11.50 per share, for an aggregate purchase price of $50,000,000, or $10.00 per Class A ordinary share, in one or multiple a private placements to close prior to or concurrently with the closing of our initial business combination. Accordingly, the forward purchaser may own a substantial interest in us prior to the consummation of our initial business combination and may exert a substantial influence on actions requiring a shareholder vote, potentially in a manner that you do not support, including amendments to our memorandum and articles of association, at least until the completion of our initial business combination. \nOur sponsor contributed $25,000, or approximately $0.004 per founder share, and, accordingly, holders of our Class A common stock have experienced substantial dilution and may experience further substantial dilution. \nOur sponsor acquired the founder shares at a nominal price, significantly contributing to the dilution of holders of our Class A common stock in the Public Offering. This dilution will increase to the extent that the anti-dilution provisions of the Class B common stock result in the issuance of Class A shares on a greater than one-to-one basis upon conversion of the Class B common stock at the time of our initial business combination and would become exacerbated to the extent that public stockholders seek redemptions from the Trust Account. \n\n\n\nWe have the ability to redeem the outstanding warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01 per warrant, if, among other things, the Reference Value (as defined in the warrant agreement) equals or exceeds $18.00 per share (as adjusted for share sub-divisions, share capitalizations, reorganizations, recapitalizations and the like). Redemption of the outstanding warrants as described above could force you to (i) exercise your warrants and pay the exercise price therefor at a time when it may be disadvantageous for you to do so, (ii) sell your warrants at the then-current market price when you might otherwise wish to hold your warrants or (iii) accept the nominal redemption price which, at the time the outstanding warrants are called for redemption, we expect would be substantially less than the Market Value (as defined in the warrant agreement) of your warrants. \nIn addition, we have the ability to redeem the outstanding warrants at any time after they become exercisable and prior to their expiration, at a price of $0.10 per warrant if, among other things, the Reference Value equals or exceeds $10.00 per share (as adjusted for share sub-divisions, share dividends, rights issuances, subdivisions, reorganizations, recapitalizations and the like). Please see Description of SecuritiesWarrantsRedemption of Warrants When the Price per Class A Ordinary Share Equals or Exceeds $10.00. \n\nWe have issued warrants to purchase 13,800,000 of our Class A ordinary shares as part of the units offered in the Public Offering and an aggregate of 10,280,000 private placement warrants, each exercisable to purchase one Class A ordinary share at $11.50 per share. Our sponsor also has an option to purchase up to 8,280,000 additional private placement warrants in order to extend the period of time to consummate a business combination. Our initial shareholders currently hold 6,900,000 Class B ordinary shares. Pursuant to the forward purchase agreement, we will also issue 2,500,000 forward purchase warrants concurrently with the closing of the sale of the forward purchase shares and the forward purchaser has an option to subscribe, in the forward purchasers sole discretion, for up to 2,500,000 additional forward purchase warrants. In addition, if our sponsor or an affiliate of our Sponsor makes any working capital loans, he or it may convert those loans into up to an additional 2,000,000 private placement warrants, at the price of $1.00 per warrant. Our public warrants are also redeemable by us for Class A ordinary shares. \nTo the extent we issue Class A ordinary shares for any reason, including to effectuate a business combination, the potential for the issuance of a substantial number of additional Class A ordinary shares upon exercise of these warrants and conversion rights could make us a less attractive acquisition vehicle to a target business. Such warrants when exercised will increase the number of issued and outstanding Class A ordinary shares and reduce the value of the Class A ordinary shares issued to complete the business transaction. \n\nThis is different from other blank check companies whose units include one ordinary share and one whole warrant to purchase one whole share. We have established the components of the units in this way in order to reduce the dilutive effect of the warrants upon completion of a business combination since the warrants will be exercisable in the aggregate for half of the number of shares compared to units that each contain a whole warrant to purchase one whole share, thus making us, we believe, a more attractive business combination partner for target businesses. \n\nUnlike most blank check companies, if (i) we issue additional ordinary shares or equity-linked securities for capital raising purposes in connection with the closing of our initial business combination at a Newly Issued Price (as defined in the warrant agreement) of less than $9.20 per ordinary share, (ii) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of our initial business combination on the date of the completion of our initial business combination (net of redemptions), and (iii) the Market Value is below $9.20 per share, then the exercise price of the warrants will be adjusted to be equal to 115% of the higher of the Market Value and the Newly Issued Price, and the $10.00 and $18.00 per share redemption trigger prices will be adjusted (to the nearest cent) to be equal to 100% and 180% of the higher of the Market Value and the Newly Issued Price, respectively. \n\n\n\n\n\nWe will remain a smaller reporting company until<|endoftext|>By the Broadway board of directors pursuant to the Incentive Plan at the beginning of each year and discretionary amounts as determined by the Broadway board of directors compensation and benefits committee (compensation committee). The compensation committee evaluates the performance results at the beginning of the following year and approves the amounts of bonuses to be paid. \n(4) \nIncludes amounts paid by Broadway to the 401(k) account of the NEO and allocations under Broadways Employee Stock Ownership Plan. Also includes perquisites and other benefits consisting of automobile and telephone allowances, health benefits and life insurance premiums. The amount shown for Broadways CEO includes country club dues. \n### Grants of Plan-Based Awards in 2020 and 2019 \nRestricted stock awards totaling 84,373 shares were granted to the NEOs for the year ended December 31, 2020 as follows: 37,371 shares, 16,173 shares, 17,048 shares, and 13,781 shares were granted to Mr. Bradshaw, Ms. Battey, Mr. Bellefeuille, and Mrs. McCloud, respectively. These restricted stock awards, granted in 2020, became fully vested due to the merger with CFBanc Corporation on April 1, 2021. \nDuring 2019, Restricted stock awards totaling 305,589 shares were granted to the NEOs as follows: 194,390 shares, 38,264 shares, 40,332 shares, and 32,603 shares were granted to Mr. Bradshaw, Ms. Battey, Mr. Bellefeuille, and Mrs. McCloud, respectively. These restricted stock awards, granted in 2019, were fully vested on February 26, 2021. \nThere were no grants of restricted stock units or stock options to the NEOs for the years ended December 31, 2020 and 2019. \n### Code of Ethics \nThe Board has adopted a Code of Ethics for the Companys directors and a Code of Conduct for all employees, including the executive officers. Our directors and executive officers are expected to adhere to these policies at all times. Stockholders may obtain copies of the policies, free of charge, upon written request to: Broadway Financial Corporation, 5055 Wilshire Boulevard, Suite 500, Los Angeles, California 90036, Attention: Brenda Battey. \nAudit Committee \nThe Audit Committee consists of Dr. Longbrake (Chairman), Ms. Johns, Ms. Donovan and Mr. Thompson. This committee is responsible for the engagement and oversight of the Companys independent registered public accounting firm. The Audit Committee, together with the corresponding committee of the Banks Board of Directors, is also responsible for oversight of the internal audit function of the Company, assessment of accounting and internal control policies, and monitoring of regulatory compliance. The Audit Committee held fourteen meetings during 2020. The Audit Committee has a written charter, which is available on the Companys website at www.broadwayfederalbank.com. All of the members of the Audit Committee are independent directors as defined under the Nasdaq listing standards. In addition, Dr. Longbrake meets the definition of audit committee financial expert, as defined by the SEC. \n\nThe following table sets forth information concerning outstanding equity awards held by each NEO as of December 31, 2020. \n(1) \nOptions vest in equal annual installments on each anniversary date over a period of five years commencing on the date of grant. \n(2) \nBased upon the fair market value of a share of Company common stock on the date of grant. \n(3) \nTerms of outstanding stock options are for a period of ten years from the date the option is granted. \n(4) \nThere were no vested restricted stock awards as of December 31, 2020. \n(5) \nBased upon a market value of $1.85 per share for the Companys common stock as of December 31, 2020. \n### Director Compensation \nMembers of the Board of Directors of Broadway Financial Corporation do not receive separate compensation for their service on the Board of Directors of Broadway Federal Bank. \nDuring the year ended December 31, 2020, each member of the Board received $1,000 per meeting for attending monthly and special board meetings. The Chairman of the Board received an additional annual retainer of $10,000. Committee members received an additional annual retainer of $8,000 and Committee Chairpersons received an additional annual retainer of $6,000 for such service, except for the Corporate Governance Committee Chair, who received an additional annual retainer of $4,000. \nThe following table summarizes the compensation paid to non-employee directors for the year ended December 31, 2020. \n(1) \nIncludes payments of annual retainer fees, fees paid to chairmen and members of Board committees, and meeting attendance fees. \n(2) \nThe amounts shown reflect the aggregate fair value of stock awards on the grant date, as determined in accordance with FASB ASC Topic 718. \n(3) \nIncludes premiums paid for dental and vision insurance. \nITEM 12. \n\n\n### AND MANAGEMENT \nThe following table sets forth information as of April 20, 2021 concerning the shares of the Companys Common Stock owned by each person known to the Company to be a beneficial owner of more than 5% of the Companys Common Stock, each director, each NEO, and all current directors and executive officers as a group. \n*Less than 1%. \n(1) \nThe Class B non-voting common stock may not be converted to common stock. \n(2) \nThe Class C non-voting common stock automatically converts to Class A voting common stock upon certain prescribed forms of sales to third parties that are not affiliated with the holders thereof. \n(3) \nPercentages are based on the total of Class A voting, Class B non-voting and Class C non-voting common stock held by the respective stockholders shown in the table. \n(4) \nChristopher J. Acito, managing member of Christopher J. Acito (CJA) & Associates LLC, has sole investment and voting power with respect to these shares. CJA & Associates LLC is the managing member of CJA Private Equity Financial Restructuring GP I Ltd., which is the general partner of CJA Private Equity Financial Restructuring Master Fund I LP. The address for CJA & Associates LLC is 654 Madison Avenue, Suite 601, New York, NY 10065. CJA & Associates LLC is an affiliate of Gapstow Capital Partners located at 654 Madison Avenue, Suite 601, New York, NY 10065. \n(5) \nThe address for City First Enterprises is 1 Thomas Circle, NW, Suite 700, Washington, D.C. 20005. \n(6) \nThe address for JP Morgan Chase Community Development Corporation c/o JP Morgan Chase Bank, NA is 237 Park Avenue, 7 th \nFloor, New York, NY 10017. \n(7) \nThe address for National Community Investment Fund is 135 South LaSalle Street, Suite 3025, Chicago, IL 60603. \n(8) \nThe address for the CDFI Fund is 601 Thirteenth Street NW, Suite 200 South, Washington, DC 20005. \n(9) \nThe address for each of the directors and named executive officers is 5055 Wilshire Boulevard, Suite 500, Los Angeles, CA 90036. \n(10) \nIncludes 41,630 allocated shares under the Broadway Employee Stock Ownership Plan (ESOP). \n(11) \nIncludes 70,000 shares that are held by the Robert and Alice Davidson Trust, dated August 11, 1982. Robert Davidson and Alice Davidson share investment and voting power with respect to the shares held by the Robert and Alice Davidson Trust in their capacities as trustees of the trust. \n(12) \nIncludes 29,037 allocated shares under the ESOP and 150,000 shares subject to options granted under the LTIP, which options are all currently exercisable as of March 31, 2021. \n(13) \nIncludes 29,013 allocated shares under the ESOP and 200,000 shares subject to options granted under the LTIP, which options are all currently exercisable as of March 31, 2021, and 52,500 shares held jointly with his spouse with whom voting and investment power are shared. \n(14) \nIncludes 26,516 allocated shares under the ESOP and 100,000 shares subject to options granted under the LTIP, which options are all currently exercisable as of March 31, 2021. \nITEM 13. \n\n\nThe Companys current loan policy provides that all loans made by the Company or its subsidiary to its directors and executive officers or their associates must be made on substantially the same terms, including interest rates, collateral and repayment terms, as those prevailing at the time for comparable transactions with other persons of similar creditworthiness who are not related to the Company and must not involve more than the normal risk of collectability or present other unfavorable features. As of December 31, 2020, the Company did not have any loans to related parties or affiliates. \nEmployment Agreement for Brian Argrett \nThe Company and our President and Chief Executive Officer, Mr. Argrett, are parties to an employment agreement dated as of December 29, 2017, pursuant to which Mr. Argrett serves as our President and Chief Executive Officer. The current term of the agreement extends until December 31, 2022. The term of agreement may be extended, modified, or renewed upon written agreement of the parties. Under the agreement, Mr. Argrett receives a current base salary of $450,000, which is reviewed by the Board on an annual basis and may be increased at the Boards discretion; an annual incentive bonus as determined by the Board; and deferred compensation determined by the Board (see Nonqualified Deferred Compensation Plan for Brian Argrett below). These determinations may be delegated to the compensation committee of the Board. Mr. Argrett is entitled to participate in the Companys generally available employee benefit plans. \nMr. Argretts agreement contains post-employment noncompetition and nonsolicitation restrictions. Under such provisions, for a period of one year following his termination or the expiration of the agreement Mr. Argrett is prohibited from (i) calling upon for the purpose or with the intent of hiring or hiring any person who is or was within the 6 months preceding Mr. Argretts date of termination, a sales, or management employee of the Company or (ii) calling upon any person who is at that time or has been within the 12 months preceding Mr. Argretts date of termination, a customer or prospective customer of the Company for the purpose of soliciting or selling products or services in direct competition with the Company. \nIn the event of termination of Mr. Argretts agreement by the Company without cause, or if upon or following a change in control Mr. Argrett resigns with good reason as such terms are defined in the agreement, Mr. Argrett would be entitled to receive salary at his then-current rate of salary for a period of 18 months, subject to his timely execution and delivery of a general release. \nNonqualified Deferred Compensation Plan for Brian Argrett \nOn December 5, 2018, City First Bank established a non-qualified deferred compensation plan that permits Mr. Argrett to defer receipt of a percentage of his salary. The Board determines in its sole discretion the percentage to be contributed each year. Mr. Argrett is the only participant of the plan. \n### Other NEO Employment Agreements \nEach of the other NEOs serve in their current positions pursuant to employment agreements entered into by the Company and the Bank with the respective NEOs effective in May 2017 and subsequently amended in certain respects. The employment agreements provided for initial terms of employment of three years, subject to annual one-year extensions by mutual agreement of the parties. The employment agreements provided for the payment of annual base salaries, which are currently in the following amounts, subject in each case to annual review and possible increase by the board of directors of the Company: Ms. Battey $247,230; Mr. Bellefeuille $260,594; and Ms. McCloud $210,655.72. The employment agreements also provide for participation in the Banks Employee Stock Ownership Plan, eligibility to receive equity-based awards pursuant to the Companys Long Term Incentive Plan of such types and in such amounts as are determined by the Companys board of directors and eligibility to participate in all employee benefit plans applicable to senior executive officers, including the Banks annual cash incentive compensation plan, the Companys 401(k) plan (with continuation of the Companys employee contribution matching policy as of the effective date of the employment agreements), and medical, dental, life and long-term disability programs. \nThe employment agreements may be terminated by the Company with or without Cause (including failure by the Company to request an annual extension of an agreements term), may be terminated by the NEO with or without Good Reason, and will also terminate in the event of the death or Disability (as defined in the employment agreements) of an NEO. Cause is defined in<|endoftext|>"},"task":{"kind":"string","value":"{\"file\": \"/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz\"}"}}},{"rowIdx":98,"cells":{"text":{"kind":"string","value":"<|endoftext|>Stockholders to redeem their shares for cash may make our financial condition unattractive to potential business combination targets, which may make it difficult for us to enter into our initial business combination with a target. \nWe may enter into a transaction agreement with a prospective target that requires as a closing condition that we have a minimum net worth or a certain amount of cash. If too many public stockholders exercise their redemption rights, we may not be able to meet such closing condition, and as a result, would not be able to proceed with the business combination. Prospective targets would be aware of these risks and, thus, may be reluctant to enter into our initial business combination transaction with us. \nWe may be unable to consummate an initial business combination if a target business requires that we have a certain amount of cash at closing, in which case public stockholders may have to remain stockholders of our company and wait until our redemption of the public shares to receive a pro rata share of the trust account or attempt to sell their shares in the open market. \nA potential target may make it a closing condition to our initial business combination that we have a certain amount of cash in excess of the $5,000,001 of net tangible assets we are required to have pursuant to our organizational documents available at the time of closing. If the number of our public stockholders electing to exercise their conversion rights has the effect of reducing the amount of money available to us to consummate an initial business combination below such minimum amount required by the target business and we are not able to locate an alternative source of funding, we will not be able to consummate such initial business combination and we may not be able to locate another suitable target within the applicable time period, if at all. In that case, public stockholders may have to remain stockholders of our company and wait the full 18 months in order to be able to receive a portion of the trust account, or attempt to sell their shares in the open market prior to such time, in which case they may receive less than they would have in a liquidation of the trust account. \nWe may require public stockholders who wish to convert their shares of common stock in connection with a vote of stockholders on a proposed business combination to comply with specific requirements for conversion that may make it more difficult for them to exercise their conversion rights prior to the deadline for exercising their rights. \nIn connection with any stockholder meeting called to approve a proposed initial business combination, each public stockholder will have the right, regardless of whether he or she is voting for or against such proposed business combination, to demand that we convert his or her shares of common stock into a share of the trust account. We may require public stockholders seeking to convert their shares in connection with a stockholder vote on a proposed business combination, whether they are a record holder or hold their shares in street name, to either tender their certificates to our transfer agent or to deliver their shares to the transfer agent electronically using Depository Trust Companys DWAC (Deposit/Withdrawal At Custodian) System, at the holders option, at least two business days on the initial business combination (a tender of shares is always required in connection with a tender offer). While we have been advised that it takes a short time to deliver shares through the DWAC System, this may not be the case. Under Delaware law and our bylaws, we are required to provide at least 10 days advance notice of any stockholder meeting, which would be the minimum amount of time a public stockholder would have to determine whether to exercise conversion rights. \nIf we require public stockholders who wish to convert their shares of common stock to comply with the delivery requirements discussed above for conversion, such converting stockholders may be unable to sell their securities when they wish to in the event that the proposed business combination is not approved. \nIf we require public stockholders who wish to convert their shares of common stock to comply with the delivery requirements discussed above for conversion and such proposed business combination is not consummated, we will promptly return such certificates to the tendering public stockholders. Accordingly, investors who attempted to convert their shares in such a circumstance will be unable to sell their securities after the failed business combination until we have returned their securities to them. \n\nTherefore, our ability to compete in consummating our initial business combination with certain sizable target businesses may be limited by our available financial resources. This inherent competitive limitation gives others an advantage in pursuing a business combination with certain target businesses. Furthermore, seeking stockholder approval of our initial business combination may delay the consummation of a transaction. Additionally, our outstanding warrants and the future dilution they represent (entitling the holders to receive shares of our common stock on close of the business combination), may not be viewed favorably by certain target businesses. Any of the foregoing may place us at a competitive disadvantage in successfully negotiating our initial business combination. \nOur ability to consummate an attractive business combination may be impacted by the market for initial public offerings. \nOur efforts to identify a prospective target business will not be limited to any particular industry or geographic region. If the market for initial public offerings is limited, we believe there will be a greater number of attractive target businesses open to consummating an initial business combination with us as a means to achieve publicly held status. Alternatively, if the market for initial public offerings is robust, we believe that there will be fewer attractive target businesses amenable to consummating an initial business combination with us to become a public reporting company. Accordingly, during periods with strong public offering markets, it may be more difficult for us to complete an initial business combination. \nWe may be unable to obtain additional financing, if required, to complete our initial business combination or to fund the operations and growth of the target business, which could compel us to restructure or abandon a particular business combination. \nAlthough we believe that the net proceeds of the Initial Public Offering will be sufficient to allow us to consummate a business combination, because we have not yet identified any prospective target business, the capital requirements for any particular transaction remain to be determined. If the net proceeds of the Initial Public Offering prove to be insufficient, either because of the size of the business combination, the depletion of the available net proceeds in search of a target business, or the obligation to convert into cash a significant number of shares of common stock, we will be required to seek additional financing. \nOur insiders, officers and directors, will control a substantial interest in us and thus may influence certain actions requiring a stockholder vote. \nAs of the date of this Annual Report on Form10-K, our insiders, officers and directors, collectively beneficially own approximately 20.0% of our issued and outstanding shares of common stock. None of our insiders, officers, directors, or their affiliates has committed to purchase additional units or any units or shares from persons in the open market or in private transactions. In addition, our insiders, officers, directors or their affiliates could determine in the future to make such purchases in the open market or in private transactions, to the extent permitted by law, in order to influence the vote. In connection with any vote for a proposed business combination, our insiders, officers and directors have agreed to vote the shares of common stock owned by them immediately before the Initial Public Offering as well as any shares of common stock acquired in the Initial Public Offering or in the aftermarket in favor of such proposed business combination, and therefore will have a significant influence on the vote. \nIf we seek stockholder approval of our business combination, our sponsor, founders, directors, officers, advisors and their affiliates may elect to purchase shares from stockholders, in which case they may influence a vote in favor of a proposed business combination that you do not support. \nIf we seek stockholder approval of our business combination and we do not conduct redemptions in connection with our business combination pursuant to the tender offer rules, our sponsor, founders, directors, officers, advisors or their affiliates may purchase shares in privately negotiated transactions either prior to or following the consummation of our initial business combination. Such purchases will not be made if our sponsor, founders, directors, officers, advisors or their affiliates are in possession of any material non-public information that has not been disclosed to the selling stockholder. Such a purchase would include a contractual acknowledgement that such stockholder, although still the record holder of our shares is no longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights. In the event that our sponsor, founders, directors, officers, advisors or their affiliates purchase shares in privately negotiated transactions from public stockholders who have already elected to exercise their redemption rights, such selling stockholders would be required to revoke their prior elections to redeem their shares. It is intended that, if Rule 10b-18 would apply to purchases by our sponsor, founders, directors, officers, advisors or their affiliates, then such purchases will comply with Rule 10b-18 under the Exchange Act, to the extent it applies, which provides a safe harbor for purchases made under certain conditions, including with respect to timing, pricing and volume of purchases. \nThe purpose of such purchases would be to (1)increase the likelihood of obtaining stockholder approval of the business combination or (2)satisfy a closing condition in an agreement with a target that requires us to have a minimum net worth or a certain amount of cash at the closing of the business combination, where it appears that such requirement would otherwise not be met. This may result in the consummation of an initial business combination that may not otherwise have been possible. \nOur board of directors is divided into three classes and, therefore, our insiders will continue to exert control over us until the closing of a business combination. \nIt is unlikely that there will be an annual meeting of stockholders to elect new directors prior to the consummation of our initial business combination, in which case all of the current directors will continue in office until at least the consummation of the business combination. If there is an annual meeting, as a consequence of our staggered board of directors, fewer than half of the board of directors will be considered for election and our insiders, because of their ownership position, will have considerable influence regarding the outcome. Accordingly, our insiders will continue to exert control at least until the consummation of our initial business combination. \n\nUnder Section211(b) of the Delaware General Corporation Law, we are, however, required to hold an annual meeting of stockholders for the purposes of electing directors in accordance with our bylaws unless such election is made by written consent in lieu of such a meeting. It is unlikely that there will be an annual meeting of stockholders to elect new directors prior to the consummation of our initial business combination, and thus we may not be in compliance with Section211(b) of the Delaware General Corporation Law, which requires an annual meeting. Therefore, if our stockholders want us to hold an annual meeting prior to the consummation of our initial business combination, they may attempt to force us to hold one by submitting an application to the Delaware Court of Chancery in accordance with Section211(c) of the Delaware General Corporation Law. \n\nOur amended and restated certificate of incorporation will provide that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware shall, to the fullest extent<|endoftext|>As administrative agent, collateral agent and swing line lender, BMO Harris Bank N.A., as a letter of credit issuer, and Bank of Montreal, Chicago Branch, as a letter of credit issuer. The Credit Agreement provides GCMH with a senior secured term loan facility (the Term Loan Facility) and for commitments for a $50.0 million revolving credit facility (the Revolving Credit Facility and, together with the Term Loan Facility, the Senior Secured Credit Facilities). Under the Revolving Credit Facility, $15.0 million is available for letters of credit and $10.0 million is available for swingline loans. The Credit Agreement provides the right for GCMH to incur additional commitments under either the Term Loan Facility or the Revolving Credit Facility, subject to an aggregate increase of $150.0 million, plus any amounts previously voluntarily prepaid, plus additional amounts if certain leverage ratios are achieved. As of December31, 2020, GCMH had borrowings of $340.3 million outstanding under the Term Loan Facility and no outstanding balance under the Revolving Credit Facility. The maturity date of all of the outstanding borrowings under the \nTerm Loan Facility is March 29, 2025, and the maturity date for the full amount of the Revolving Credit Facility is March 29, 2023. \n\n\nSee Note 15 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for a summary of our outstanding indebtedness. \n### Dividend Policy \nHowever, management of GCM Grosvenor expects to cause GCMH to make distributions to its members, including us, in an amount at least sufficient to allow us to pay all applicable taxes, to make payments under the Tax Receivable Agreement, and to pay our corporate and other overhead expenses. On January4, 2021, we declared a quarterly dividend of $0.06 per share of Class A common stock to record holders at the close of business on March1, 2021. On February25, 2021, we declared a quarterly dividend of $0.08 per share of Class A common stock to record holders at the close of business on June1, 2021. The payment of cash dividends on shares of our Class A common stock in the future, in this amount or otherwise, will be within the discretion of our board of directors at such time. \nTax Receivable Agreement \nExchanges of Grosvenor common units by limited partners of GCMH will result in increases in the tax basis in our share of the assets of GCMH and its subsidiaries that otherwise would not have been available. These increases in tax basis are expected to increase our depreciation and amortization deductions and create other tax benefits and therefore may reduce the amount of tax that we would otherwise be required to pay in the future. The Tax Receivable Agreement requires us to pay 85% of the amount of these and certain other tax benefits, if any, that we realize (or are deemed to realize in certain circumstances) to the TRA Parties. As of December31, 2020, the payable to related parties pursuant to the tax receivable agreement was $60.5 million. \n\nWe do not invest in any off-balance sheet vehicles that provide liquidity, capital resources, market or credit risk support, or engage in any activities that expose us to any liability that is not reflected in our consolidated financial statements. \n\nThe following table represents our contractual obligations as of December31, 2020, aggregated by type. \n____________ \n(1) \nRepresents scheduled debt obligation payments under our Term Loan Facility and Revolving Credit Facility. \n(2) \nRepresents interest to be paid on our debt obligations. The interest payments are calculated using the interest rate of 3.75% on our Term Loan Facility in effect as of December31, 2020. \n(3) \nRepresents general partner capital funding commitments to several of the GCM Funds. These amounts are generally due on demand and are therefore presented in the less than one-year category, however, based on historical precedent, are likely to be due over a substantially longer period of time. \nDuring the year ended December31, 2020, we made principal payments on the Term Loan Facility of $91.2 million and repaid our Revolving Credit Facility on November 23, 2020, resulting in no outstanding Revolving Credit Facility borrowings as of December31, 2020. \nFollowing the consummation of the Transaction, we are obligated to make payments under the Tax Receivable Agreement. The table above does not include any payments that we are obligated to make under the Tax Receivable Agreement, as the actual timing and amount of any payments that may be made under the Tax Receivable Agreement are unknown at this time and will vary based on a number of factors. However, we expect that the payments that we are required to make to the TRA Parties in connection with the Tax Receivable Agreement will be substantial. Any payments made by us to the TRA Parties under the Tax Receivable Agreement will generally reduce the amount of cash that might have otherwise been available to us or to GCMH. To the extent that we are unable to make payments under the Tax Receivable Agreement for any reason, the unpaid amounts will accrue interest until paid. Our failure to make any payment required under the Tax Receivable Agreement (including any accrued and unpaid interest) within 60 calendar days of the date on which the payment is required to be made will generally constitute a material breach of a material obligation under the Tax Receivable Agreement, which may result in the termination of the Tax Receivable Agreement and the acceleration of payments thereunder, unless the applicable payment is not made because (i) we are prohibited from making such payment under applicable law or the terms governing certain of our secured indebtedness or (ii) we do not have, and cannot by using commercially reasonable efforts obtain, sufficient funds to make such payment. \n### Mosaic Transaction \nOverview of Mosaic Transaction \nIn a transaction, effective January 1, 2020, GCMH and its affiliates transferred certain indirect partnership interests related to historical investment funds managed by GCMH and its affiliates to Mosaic Acquisitions 2020, L.P. (Mosaic) in a transaction we refer to as the Mosaic Transaction. The limited partners of Mosaic are a third-party investor affiliated with the Canada Pension Plan Investment Board (the third-party investor), which funded nearly all of the Mosaic Transaction through Mosaic Feeder, L.P. (Mosaic Feeder), Holdings and GCMH. GCMH also acts as the general partner of Mosaic. In connection with the closing of the Transaction, Holdings interests and liabilities related to Mosaic were transferred to GCMH, and the terms described below reflect such transfer. Mosaic holds limited partnership interests representing the following financial assets: a right to 80 \n90% of our share of the carried interest generated by funds raised prior to December 31, 2019 (the Mosaic Carry); and certain funded general partner interests, which at the time of the Mosaic Transaction had a book value of $58.0million, and to-be-funded general partner interests, as detailed below. \nIn exchange for such interests, we received $125.4million in cash, which we used primarily to pay down outstanding debt, and Mosaic received $48.0million of incremental cash from the third-party investor to prefund future fund investment obligations of Mosaic, which were previously our obligations. \n### Distribution of Proceeds \nDistributable proceeds received by Mosaic for certain of its assets are distributed to its limited partners in accordance with their respective capital contributions with respect to such assets until such time as the third-party investor has received a certain specified multiple of its capital contributions, and thereafter to GCMH. Distributable proceeds received by Mosaic for its other assets are distributed to its limited partners in accordance with their respective capital contributions with respect to such assets. In the event that the third-party investor has received amounts attributable to the Mosaic Carry in excess of certain specified thresholds prior to certain specified dates, and certain net asset value thresholds are exceeded, then the percentage of the Mosaic Carry allocated to the third-party investor will be adjusted downward. \nBased on cash flows up to the relevant date, the \nPartnership and several subsidiaries could be required to pay additional amounts as long as Mosaic Feeder has an ownership interest in the transferred interests (Potential Payments) based on cash flows up to the relevant dates as defined in the Agreement up to a maximum of $19.9million, which is broken down as a maximum of $4.9million on December31, 2020, $7.5million on December31, 2021 and $7.5million on December31, 2022. \n\n\n### Call Option \nGCMH has the option to purchase the interest in Mosaic held by the third-party investor (or the underlying assets) at any time, at a purchase price equal to the greater of (x) 130% of amounts contributed to Mosaic by the third-party investor and (y) a 12% pre-tax internal rate of return on amounts contributed to Mosaic by the third-party investor (the Mosaic Call Right). The exercise of the Mosaic Call Right would result in the interest held by the third-party investor no longer being accounted for as a redeemable noncontrolling interest. \nGCMH paid a premium of $2.6 million on \nDecember31, 2020 in exchange for being granted the Mosaic Call Right. \nWe believe the following are important metrics relating to Mosaic which highlight the assets in the entity that are subject to the Mosaic Call Right: \n___________ \n(1) \nBased on a threshold equal to 130% of amounts contributed to Mosaic by the third-party investor, net of $32.2 million of Mosaic cash. As of December31, 2020, the purchase price to exercise the Mosaic Call Right based on a 12% pre-tax internal rate of return on amounts contributed to Mosaic by the third-party investor would have been $138.7 million, net of Mosaic cash. Upon any exercise of the Mosaic Call Right or the Mosaic Put Right (as defined below), the actual purchase price will be equal to the greater of the two alternatives. \n(2) \nThe amount shown represents the redeemable noncontrolling interest reflected in our consolidated financial statements for the twelve-month period ended December31, 2020. Had the transaction occurred on December 31, 2019 and included all tax carry attributable to the Mosaic interests from such time forward, the redeemable noncontrolling interest amount reflected in our consolidated financial statements for the twelve-month period ended December31, 2020 would have been $13.6 million. \n(3) \nWe define Mosaic Carry Dollars at Work as aggregate limited partner commitments to the relevant GCM fund in which Mosaic has an interest, multiplied by the percentage of carried interest provided for in the governing documents of the relevant fund, multiplied by Mosaics share. \nDefaults and Put Right Under the Mosaic Agreements \nIn the event of a default by us of obligations to make the Potential Payments the purchase price upon exercise of the Mosaic Call Right or Mosaic Put Right would be increased to the greater of (x) 140% of amounts contributed to Mosaic by the third-party investor and (y) a 15% pre-tax internal right of return on amounts contributed to Mosaic by the third-party investor. \nIn the event of certain uncured actions by us or involving the relevant funds that could impair the value of the third-party investors investment, or upon uncured breaches of certain representations by us, the third-party investor will have the right to cause us to either (a) reacquire the third-party investors full interest in Mosaic or (b) the underlying assets of Mosaic at the Mosaic Call Right purchase price (the Mosaic Put Right). In such an event, GCMH will have sole discretion in choosing whether we reacquire the interest in Mosaic (or the underlying assets). Should we choose not to reacquire the third-party investors full interest or assets, the purchase price under the Mosaic Call Right will increase. \n\nWe prepare our consolidated financial statements in accordance with GAAP. In applying many of these accounting principles, we need to make assumptions, estimates or judgments that affect the reported amounts of assets, liabilities, revenues and expenses in our consolidated financial statements. We base our estimates and judgments on historical experience and other assumptions that we believe are reasonable under the circumstances. These assumptions, estimates or judgments, however, are both subjective and subject to change, and actual results may differ from<|endoftext|>For the years ended July 31, 2020 and 2019, $37,676 and $14,099 of interest income were recognized, respectively. \nThe remaining related party receivable of $49,300 and $39,088 as of July 31, 2020 and 2019, respectively, represents the operating advances made to the affiliates which are managed by the same management team. \nThe loan was paid back by the Company in the following quarter. \n### Related Party Payables \nAs of July 31, 2020 and 2019, amounts of $674,830 and $526,963, are payable to SH Qiaohong, respectively. Majority of the balance was part of the liability assumed through HFSH acquisition. This payable balance does not bear interest and due on demand. \nAs of July 31, 2020 and 2019, amount of $594,965 and $602,821, respectively, is payable to Shanghai Qiao Garden Property Management Group (Qiao Garden Group), an entity managed by the same management team. The balance was part of the liability assumed through HZLJ acquisition. This payable balance does not bear interest and is considered due on demand. \nThe Company had payable balances to Shanghai Oversea Chinese Culture Media Ltd. (SH Oversea), a company under common control, in the amounts of $1,012,650 and $50,808 as of July 31, 2020 and 2019, respectively. The payable is funding support from SH Oversea for operation, bears no interest and due on demand. \nThe remaining related party payable of $92,100 and $146,967 as of July 31, 2020 and 2019, respectively, represents the unpaid portion of operating advances made to the Company by affiliates which are managed by the same management team. \nAs of July 31, 2020 and 2019, the Company has $592,106 and $585,146, respectively, short-term and long-term payable to Shanghai DuBian Assets Management Ltd. (Dubian), which is owned by the Companys CEOs relative. The payable balance was assumed from the acquisition transaction. On April 30, 2019, both parties entered a long-term agreement to convert the payable to a long-term debt, with expiration date on April 30, 2021, bearing approximately 2.5 percent of annual interest. $14,445 and $3,739 of interest expense were recognized during the years ended July 31, 2020 and 2019, respectively. The unpaid principle and interest will be due on the maturity date. This loan payable is not exposed to market risk due to the stable and fixed interest rates in accordance with the loan agreements. As of July 31, 2020 and 2019, the estimated fair value of long-term loan payable were Nil and $584,674, respectively. \n\nOffice space at Rosemead, CA is provided to Hartford Great Health Corp. at no cost by the sole executive officer. \nOn September 30, 2019, HF Intl Education entered two debt agreements with the related parties, SH Qiao Hong and SH Oversea. Each debt agreement provides a line of credit up to RMB9.0 million with two-year term, bearing 3.0% annum interest rate. The unpaid principle and interest will be due on the maturity dates. As of July 31, 2020, no balance were withdrawn from these two line of credits by HF Intl Education. \n### NOTE 15. NONCONTROLLING INTERESTS \nNoncontrolling interests consisted of the following as of July 31, 2020 and 2019: \n*90% equity of SHHZJ, a limited partnership and 10% shareholder of HF Intl Education, is held by Mr. Song, CEO of the Company on behalf of an unrelated individual. However, HF Intl Education does not have the obligation to absorb losses of SHHZJ or a right to receive benefits from SHHZJ that could potentially be significant to SHHZJ, thus, SHHZJ is not considered a VIE of HF Intl Education. \n### NOTE 16. \nThere has been below material contractual obligations and other commitments except the lease commitments disclosed in Note 13 Leases. \nOn June 2018 and January 2019, HFSH and HF Intl Education (the Subtenants) entered two lease agreements with Shanghai Longjin Corporate Management Co., Ltd (the Tenant) to lease some office spaces. On April 13, 2020, HFSH and HF Intl Education received Notices of Lease Termination from the Tenant for late payments. HFSH and HF Intl Education then filed a civil case against the Tenant for over-charged rent fees because of fictitious office size and requested refund in the total amount approximately $481,000 (RMB3.3 million) till July 10, 2020. The Tenant was in default under the lease agreements due to its lease agreement with the landlord of the office properties (the Landlord) was terminated on June 1, 2020 by the Landlord. HF Intl Education entered a new lease agreement with the Landlord directly on June 1, 2020 for the same office spaces with a five-year term. The Company accrued the full amount of rent expense for the period ended May 31, 2020 and the accrued rental payable was $252,154 associated with the Tenant under the two lease agreements as of July 31, 2020. \nOn July 8, 2020, HF Intl Education entered a book publishing contract with Shanghai Joint Publishing to publish childcare education books in three series. Pursuant to the contract, HF Intl Education authorizes Shanghai Joint Publishing to publish those books as initial publication within two years and commit to purchase total 180,000 books in a total price of RMB 2 million. HF Intl Education holds the copyrights of the three series books after internally developed and registered with National Publishing Agency in the PRC in May 2020. Management decided not to capitalize the internal development cost related to those books and expensed instead when it occurs for the year ended July 31, 2020. As of July 31, 2020, $86,019 (RMB600,000) was prepaid toward the contract and the remaining purchase price will be due on December 31, 2020. \n### NOTE 17. INCOME TAXES \nFor the years ended July 31, 2020 and 2019, we recorded income tax expense of $800 and $0, respectively, due to the loss position for the years since inception. \nHartford Great Health Corp.s deferred tax assets, valuation allowance, and change in valuation allowance are as follows: \nIncome taxes at the statutory rate are reconciled to reported income tax expense (benefit) as follows: \nAt this time, the Company is unable to determine if it will be able to benefit from its deferred tax asset. There are limitations on the utilization of net operating loss carry-forwards, including a requirement that losses be offset against future taxable income, if any. In addition, there are limitations imposed by certain transactions which are deemed to be ownership changes. Accordingly, a valuation allowance has been established for the entire deferred tax asset. Other temporary differences and estimated permanent differences are considered immaterial. Open tax years subject to examination by the IRS range from August 1, 2016 to the present. The Company has no uncertain tax positions. \nshareholder income. \n\nThe Company has been in loss position for years since inception and zero balances of deferred tax assets and liabilities as of the reporting periods ended. \n\n### NOTE 18. SEGMENT INFORMATION \nThe Company currently operates in following industry segments: hospitality (hotel and travel agency) and early childhood education industry in China. \nSegment information on assets as of July 31, 2020 and revenue generated during the year ended July 31, 2020, as follows: \nAs of July 31, 2019, the company only operated at hospitality industry in China. The subsidiary had an amount of $2,547,989 in total assets, excluding inter-company balances, and it generated $56,174 in revenue. There was no revenue generated from inter-company transactions. \n### NOTE 19. SUBSEQUENT EVENTS \nIn accordance with ASC 855 \n, Subsequent Events \n, the Company has evaluated subsequent events through the date of issuance of these unaudited financial statements and has noted the following subsequent events to be disclosed. \nFrom September 2020 to February 2021, the Company subsequently borrowed several notes in a total amount $100,000, in form of a short-term loan at 5% per annum from a related party. \nOn September 1, 2020, Gelinke entered a five-year new lease agreement at the same location upon the completion of the acquisition. Approximately $1.21 million ROU and $1.26 million lease liability were recorded associated with the new lease as of October 31, 2020. \nOn December 31, 2020, HFSH entered an agreement with SH Qiaohong and Qiao Garden Intl Travel and settled around $721,000 (RMB$5,031,699) receivable and payable with the same related party, SH Qiaohong. \nOn December 31, 2020, HFSH disposed its 90 percent owned subsidiary - Qiao Garden Intl Travel to an individual with zero price. \nOn December 31, 2020, HFSH withdraw from the two acquisition agreements entered on early 2019, which were to acquire 85 percent ownership of SH Senior and 55 percent ownership of SH Pasadena Ltd. No penalty is resulted from the withdrawn. \nITEM 9. \nNot Applicable. \nItem 9A. Controls and Procedures. \n\nAn evaluation was performed under the supervision of our management, including our Chief Executive Officer and Chief Financial Officer (principal financial officer), of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) as of the end of the period covered by this Annual Report. Based on that evaluation, our management, including our Chief Executive Officer and Chief Financial Officer, concluded that, as of July 31, 2020, our disclosure controls and procedures were not effective to ensure that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SECs rules and forms due to material weaknesses in our internal controls described below. \n\nOur management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Exchange Act Rule 13a-15(f). Our internal control system is intended to provide reasonable assurance to our management and board of directors regarding the preparation and fair presentation of published financial statements and that we have controls and procedures designed to ensure that the information required to be disclosed by us in our reports that we will be required to file under the Exchange Act is accumulated and communicated to our management as appropriate to allow timely and informed decisions regarding financial disclosure. \nBased on this assessment, management believes that as of July 31, 2020, our internal control over financial reporting was not effective based on those criteria. \nManagements assessment identified several material weaknesses in our internal control over financial reporting. These material weaknesses include the following: \nThe Company has yet established an internal control system over financial reporting, including sufficient and thorough financial reporting procedures, competence accounting personnel and a well written accounting policies manual under US GAAP in place. \n\nOur management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures or our internal controls will prevent all errors and all fraud. Our control systems are designed to provide such reasonable assurance of achieving their objectives. These inherent limitations include, but are not limited to, the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. \n\nWe have made no change in our internal control over financial reporting during the last fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. \n\nManagements report was not subject to attestation by our independent registered public accounting firm pursuant to temporary rules of the SEC that permit us to provide only managements report in this annual report on Form 10-K. \n### ITEM 9B. OTHER INFORMATION \nNone. \nPART III \nITEM 10. \n\nThe following individual presently serves as our officers and directors: \nBoard \n### Name and \nPosition \nMunicipality of Residence \nAge \n### Positions With the Company \nHeld Since \nLianyue Song \n### Los Angeles, CA \n\n### Sheng-Yih Chang \nLos Angeles, CA \nChief<|endoftext|>Agreements. \n\n\n\nOur initial stockholders currently own shares representing 20.0% of our issued and outstanding shares of common stock. \n\nIf: we issue additional shares or equity-linked securities for capital raising purposes in connection with the closing of our initial business combination at a Newly Issued Price of less than $9.20 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like), the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of our initial business combination on the date of the consummation of our initial business combination (net of redemptions), and the Market Value is below $9.20 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like), then the exercise price of each warrant will be adjusted such that the effective exercise price per full share will be equal to 115% of the higher of the Market Value and the Newly Issued Price, and the $10.00 and $18.00 per-share redemption trigger prices will be adjusted (to the nearest cent) to be equal to 100% and 180% of the higher of the Market Value and the Newly Issued Price, respectively. \n\n\nThe \nCOVID-19 pandemic has adversely affected, and other events (such as terrorist attacks, natural disasters or a significant outbreak of other infectious diseases) could adversely affect, the economies and financial markets worldwide, and the business of any potential target business with which we consummate a business combination could be materially and adversely affected. \nThe extent to which \n\n\nIf the disruptions posed by \nCOVID-19 or other events (such as terrorist attacks, natural disasters or a significant outbreak of other infectious diseases) continue for an extensive period of time, our ability to consummate a business combination, or the operations of a target business with which we ultimately consummate a business combination, may be materially adversely affected. \nIn addition, our ability to consummate a transaction may be dependent upon its ability to raise equity and debt financing which may be impacted by \nCOVID-19 and other events (such as terrorist attacks, natural disasters or a significant outbreak of other infectious diseases), including as a result of increased market volatility, decreased market liquidity in third-party financing being unavailable on terms acceptable to us or at all. \n\nThese financial statements may be required to be prepared in accordance with, or be reconciled to, GAAP or IFRS, depending on the circumstances and the historical financial statements may be required to be audited in accordance with PCAOB standards. These financial statement requirements may limit the pool of potential target businesses we may acquire because some targets may be unable to provide such financial statements in time for us to disclose such financial statements in accordance with federal proxy rules and complete our initial business combination by December 22, 2022. \n\n\n10-K for the year ending December 31, 2021. \nOur certificate of incorporation requires, to the fullest extent permitted by law, that derivative actions brought in our name, actions against our directors, officers, other employees or stockholders for breach of fiduciary duty and other similar actions may be brought only in the Court of Chancery in the State of Delaware and, if brought outside of Delaware, the stockholder bringing the suit will be deemed to have consented to service of process on such stockholders counsel, which may have the effect of discouraging lawsuits against our directors, officers, other employees or stockholders. \nOur certificate of incorporation requires, to the fullest extent permitted by law, that derivative actions brought in our name, actions against our directors, officers and employees for breach of fiduciary duty and certain other actions may be brought only in the Court of Chancery in the State of Delaware, except any action (A)as to which the Court of Chancery in the State of Delaware determines that there is an indispensable party not subject to the jurisdiction of the Court of Chancery (and the indispensable party does not consent to the personal jurisdiction of the Court of Chancery within ten days following such determination), (B) which is vested in the exclusive jurisdiction of a court or forum other than the Court of Chancery or (C)for which the Court of Chancery does not have subject matter jurisdiction. \n\nOur certificate of incorporation provides that the exclusive forum provision will be applicable to the fullest extent permitted by applicable law, subject to certain exceptions. \n\ntariffs and trade barriers; rates of inflation; employment regulations; \n\n\nIf we effect a business combination with a company located outside of the United States, the laws of the country in which such company operates will likely govern almost all of the material agreements relating to its operations. \n\n\n\nFor instance, our share price would generally be required to be at least $4.00 per share, our global market capitalization would be required to be at least $200million, the aggregate market value of our publicly-held shares would be required to be at least $40million and we would be required to have a minimum of 400 round lot holders and 1,100,000 publicly held shares. \n\nBecause our securities are listed on the NYSE, our securities are covered securities under such statute. \n\nIf we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our certificate of incorporation provides that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a group (as defined under Section13 of the Exchange Act), will be restricted from redeeming its shares with respect to more than an aggregate of 15% of the shares sold in our initial public offering (the Excess Shares), without our prior consent. \n\n\nIf the shares of our ClassA common stock issuable upon exercise of the warrants are not registered under the Securities Act, we will be required to permit holders to exercise their warrants on a cashless basis in which case the number of shares of our ClassA common stock that you will receive upon cashless exercise will be based on a formula subject to a maximum number of shares equal to 0.361 shares of our ClassA common stock per warrant (subject to adjustment). \n\n\nOur ability to require holders of our warrants to exercise such warrants on a cashless basis after we call the warrants for redemption or if there is no effective registration statement covering the shares of our ClassA common stock issuable upon exercise of these warrants will cause holders to receive fewer shares of our ClassA common stock upon their exercise of the warrants than they would have received had they been able to pay the exercise price of their warrants in cash. \nFor example, if the holder is exercising 875 public warrants at $11.50 per share through a cashless exercise when the shares of our ClassA common stock have a fair market value of $17.50 per share when there is no effective registration statement, then upon the cashless exercise, the holder will receive 300 shares of our ClassA common stock. \n\nIn certain situations, including if we are not the surviving entity in our initial business combination, the warrants may become exercisable for a security other than the shares of our ClassA common stock. \n\nPursuant to a registration rights agreement, our initial stockholders and their permitted transferees can demand that we register the resale of their founder shares, after those shares convert to shares of our ClassA common stock. This is because the shareholders of the target business may increase the equity stake they seek in the combined entity or ask for more cash consideration to offset the negative impact on the market price of our ClassA common stock that is expected when the common stock owned by our initial stockholders, holders of our private placement warrants or holders of our working capital loans or their respective permitted transferees are registered for resale. \nWe may also issue shares of ClassA common stock upon the conversion of the ClassB common stock at a ratio greater than one-to-one at the time of our initial business combination as a result of the anti- dilution provisions contained in our certificate of incorporation. \nOur certificate of incorporation authorizes the issuance of up to 200,000,000 shares of ClassA common stock, par value $0.0001 per share, 20,000,000 shares of ClassB common stock, par value $0.0001 per share, and 1,000,000 shares of preferred stock, par value $0.0001 per share. As of March 25, 2021, there were 165,500,000 and 11,375,000 authorized and unissued shares of ClassA common stock and ClassB common stock, respectively, which amount does not take into account the shares of ClassA common stock reserved for issuance upon exercise of any outstanding warrants or the shares of ClassA common stock issuable upon conversion of ClassB common stock. As of March 25, 2021, there are no shares of preferred stock issued and outstanding. \nWe may also issue shares of ClassA common stock to redeem the warrants or upon conversion of the ClassB common stock at a ratio greater than one-to-one at the time of our initial business combination as a result of the anti-dilution provisions contained in our certificate of incorporation. However, our certificate of incorporation provides, among other things, that prior to our initial business combination, we may not issue additional securities that would entitle the holders thereof, to (1)receive funds from the trust account or (2)vote as a class with our public shares (a)on any initial business combination or (b)to approve an amendment to our certificate of incorporation. The issuance of additional shares of common or preferred stock: may significantly dilute the equity interest of investors in our initial public offering, which dilution would increase if the anti-dilution provisions in the ClassB common stock resulted in the issuance of ClassA shares on a greater than one-to-one basis upon conversion of the ClassB common stock; \n\nThe founder shares will automatically convert into shares of our ClassA common stock at the time of our initial business combination, or earlier at the option of the holder, on a one-for-one basis, subject to adjustment for stock splits, stock dividends, reorganizations, recapitalizations and the like, and subject to further adjustment as described herein. In the case that additional shares of ClassA common stock, or equity-linked securities, are issued or deemed issued in excess of the amounts issued in our initial public offering and related to the closing of our initial business combination, including pursuant to a specified future issuance, the ratio at which shares of ClassB common stock shall convert into shares of ClassA common stock will be adjusted (unless the holders of a majority of the then-outstanding shares of ClassB common stock agree to waive such adjustment with respect to any such issuance or deemed issuance, including pursuant to a specified future issuance) so that the number of shares of ClassA common stock issuable upon conversion of all shares of ClassB common stock will equal, in the aggregate, on an as-converted basis, 20% of the sum of the total number of all shares of common stock outstanding upon the completion of our initial public offering plus all shares of ClassA common stock and equity-linked securities issued or deemed issued in connection with our initial business combination (excluding any shares or equity-linked securities issued or issuable to any seller in the initial business combination). \n\n\n\nWe have the ability to redeem outstanding warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01 per warrant, provided that the last reported sales price of our ClassA common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a 30 trading-day period commencing once the warrants become exercisable and ending on the third trading day prior to the date on which we send the notice of redemption to the warrant holders and provided certain other conditions are met. Redemption of the outstanding warrants could force<|endoftext|>Valued at the closing price on 3/2/20, the date of the award, which was $59.01; and the sign-on award to Mr.Bourdon was valued at the closing price on 10/1/20, the date of the award, which was $76.05. \nThe figures shown in the Stock Awards column above do not include shares issued upon settlement of previously-disclosed PSU awards but rather the grant date fair values of the awards made in the years in question. The PSU awards that were made on 3/3/17 were settled and shares were issued on 3/3/20 at 64% of the target numbers of shares awarded after vesting on 3/3/20, see \n\nValue Realized on Vesting of Stock Awards \nThe PSU awards that were made on 3/5/18 did not achieve the threshold performance level based on the companys TSR during the period 1/1/18 to 12/31/20, so no shares were issued upon settlement of those awards on 3/5/21. The awards which were settled on these dates are listed at their target values in the \nOutstanding Equity Awards at December31, 2020 table below. \n### Option Awards Column \nThe amounts shown in the Option Awards column above represent the grant date fair values of the options awarded to certain of the NEOs in 2020, 2019 and 2018, computed in accordance with ASC Topic 718. The values and assumptions used to determine the compensation expense of the awards for financial reporting purposes differ from the values and assumptions used by the Management Compensation Committee to determine the size of the awards. The option award to Mr.Murray on 1/2/20 represents a sign-on award which was valued for financial reporting purposes based on the following assumptions: \nFor further information regarding the determination of the fair value of the options, see Note 6 to our financial statements included in the Original Report. \n### Non-Equity Incentive Plan Compensation Column \nThe amounts shown in the Non-Equity Incentive Plan Compensation column above for the NEOs represent performance-based cash compensation amounts actually awarded under the ICP for service during the indicated year but paid in the following year. See \nCompensation Discussion and Analysis Compensation Program Components and Rationale for our Named Executive Officers Annual Bonuses above for a discussion of the targets, formulas and criteria for the ICP awards, including the discretion of the Management Compensation Committee to adjust formula awards. \n\nMr.Bourdons amount represents a negotiated sign-on cash bonus award of $500,000 which was made in two installments on 9/18/20 and 12/30/20. Mr.Haddocks amount includes a $525,000 performance bonus outside of the ICP relating to the successful divestiture of Magellan Complete Care as of 12/31/20. The other amounts set forth in the All Other Compensation column above include: \nSupplemental LTD amounts are supplemental long-term disability insurance coverage provided to certain executives. Tax gross-up payment amounts are described below under \nNarrative to the Summary Compensation Table and the Grants of Plan-Based Awards Table Perquisites \n\nThe following table sets forth, for the year ended December31, 2020, information regarding grants of non-equity incentive plan awards and all other stock and option awards to the NEOs. \nEstimated Future Payouts Under Non-Equity Incentive Plan Awards Columns \nThe values in these columns above represent possible formula cash awards under the ICP. For a discussion of the operation of the ICP, see \nThe threshold award represents 40% of the applicable target formula award while the maximum award represents 200% of the applicable target formula award, which is a specified percentage of the NEOs base salary. The committee retains discretion to award a higher amount than under the formula portion of the ICP if it considers warranted. The figures do not include discretionary bonuses which were paid to the NEOs for 2020 under the terms of the ICP for individual performance during 2020, nor a discretionary bonus paid to Mr.Haddock outside of the ICP for his work in connection with the divestiture of Magellan Complete Care. Mr.Bourdon was not eligible for a 2020 ICP award under the terms of his employment agreement; however, he did receive a sign-on bonus in the amount of $500,000 and a discretionary bonus as described above. Mr.Haddocks ICP target award is a pro-rated award based on his date of hire. If it were not pro-rated, his target would be $341,250, threshold would be $136,500 and maximum formula award would be $682,500. \nEstimated Future Payouts Under Equity Incentive Plan Awards Columns \nThe values in these columns above represent pro forma settlement of PSUs which were awarded during 2020 at threshold, target and maximum share award levels. The actual number of shares to be settled on those awards depends on the Companys TSR for the three-year performance period beginning in the year of the award relative to the S&P Health Services Index, as described under \nThe grant date fair values of PSUs shown in this column represent the amounts used by the company for financial reporting purposes, calculated in accordance with ASC Topic 718. The grant date fair values of the PSU awards for purposes of determining the size of the awards and the assumptions used in calculating those values are described above under \nCompensation Discussion and Analysis Equity Awards \n### All Other Stock Awards Column \nThe share amounts in this column represent time-vesting RSUs which were awarded during 2020. For further information on these awards, see \nCompensation Discussion and AnalysesEquity Awards above. \n### All Other Option Awards Column \nThe share amount in this column represents a sign-on option award to Mr.Murray which was made in 2020. \nGrant Date Fair Value of Stock and Option Awards Column \nThe grant date fair values of the annual PSU awards to Messrs.Fasola, Murray, Kamal and Rubin and the sign-on PSU awards to Messrs.Bourdon, Murray and Haddock for purposes of determining the size of the awards was based on a Monte Carlo simulation using target numbers of PSUs. The grant date fair values of the annual RSU awards to Messrs.Fasola, Murray, Kamal and Rubin for purposes of determining the size of the awards was based on the closing price of the companys stock on the date of the award. The grant date fair values of the sign-on RSU awards to Messrs.Bourdon, Murray and Haddock for purposes of determining the size of the awards was based on the closing price of the companys stock on the dates of the awards, as prescribed by the companys equity award policy. \nThe grant date fair value of the sign-on option award to Mr.Murray represents the amount used by the company for financial reporting purposes, calculated in accordance with ASC Topic 718, as set forth in the \nThe grant date fair value of the option award for purposes of determining the size of the award and the assumptions used in calculating that value are described under \n\nNARRATIVE TO THE SUMMARY COMPENSATION TABLE AND THE GRANTS OF PLAN-BASED AWARDS TABLE \n### Base Salary. \nThe base salary and the other terms of our employment agreements with our NEOs are set forth under \nCompensation Discussion and AnalysesCompensation of Named Executive Officers upon a Change of Control and Other Terminations of Employment above, and under \n\n### Annual Incentive Plan. \nIn 2020, the executive officers other than Mr.Bourdon were eligible to participate in the companys ICP, which was designed to provide bonus awards to officers and other employees based on the achievement of company and business segment goals tied to segment profit performance company-wide and for our business units. In 2020, the target formula bonus award levels for the executive officers ranged from 65% to 100% of their base salary, generally as specified in their employment agreements. For 2020, Messrs.Fasola, Murray, Kamal, Haddock and Rubin were entitled to an annual target formula bonus opportunity of 100%, 85%, 80%, 65% and 85%, respectively. In 2020 Mr.Bourdon received a negotiated sign-on cash bonus of $500,000 in lieu of an ICP bonus for 2020. Based on performance in relation to applicable targets, the amount of formula bonus can range from 0% to 200% of this target percentage, depending on company performance, and this formula result can then be adjusted by the committee for the individual performance for our executive officers and all other employees who participate in the ICP. Formula bonus pool funding and awards were based on the company or a particular business unit meeting or exceeding its segment profit goals, as described in \n\nThe following table summarizes the total bonus and base salary payments to each of the NEOs and shows the percentage that those cash payments represent of the NEOs total compensation for 2020. \n2020 Bonus and Base Salary Payments \n(1) \nBonus amounts reflect committee-approved bonuses taking into account formula target percentages, segment profit performance and individual performance during the year. \n(2) \nBase salary and total compensation is as set forth in the \n\n(3) \nMr.Fasolas bonus payment amount was determined by the committee taking into consideration the target formula bonus based on segment profit performance for Magellan Health as adjusted by the committee in its discretion for individual performance. \n(4) \nMr.Bourdon began serving as chief financial officer on 9/8/20 and under the terms of his employment agreement was not eligible for an ICP bonus award for 2020. In lieu of an ICP bonus, he received a negotiated sign-on cash bonus of $500,000 which was paid in two installments with $250,000 paid on 9/18/20 and $250,000 on 12/31/20. He also received a $100,000 discretionary bonus that was paid at the same time as all other ICP awards. \n(5) \nMr.Murrays formula bonus payment amount was determined by the committee taking into consideration the target formula bonus based on segment profit performance for Magellan Health as adjusted by the committee in its discretion for individual performance. \n(6) \nMr.Kamals bonus amount was determined by the committee based on target formula bonus based on segment profit performance for Magellan Rx Management as adjusted by the committee in its discretion for individual performance. \n(7) \nMr.Haddocks bonus amount was determined by the committee taking into consideration the target formula bonus based on segment profit performance for Magellan Health, which was pro-rated based on his date of hire, as adjusted by the committee in its discretion for individual performance. He also received a $525,000 discretionary bonus outside of the ICP for the successful divestiture of Magellan Complete Care as of 12/31/20. \n(8) \nMr.Rubin ceased serving as chief financial officer on 9/8/20 and his employment terminated on 12/31/20. His ICP bonus was determined by the committee taking into consideration the target formula bonus based on segment profit performance for Magellan Health. \n2016 Management Incentive Plan. \nThe stockholders originally approved the 2016 MIP at the annual meeting of stockholders held on May18, 2016. The stockholders also approved an amendment which increased the number of shares available for awards under the plan to 4,000,000 on May18, 2016. The 2016 MIP is administered by the Management Compensation Committee of the board and allows several types of long-term incentives including stock options, stock appreciation rights, restricted stock awards, RSUs, PSUs and performance-based cash awards. The plan authorizes awards covering a total of up to 4,000,000 shares of common stock, plus the amount of future forfeitures and expirations under the 2011 Management Incentive Plan, the 2008 Management Incentive Plan, the 2006 Management Incentive Plan, the 2003 Management Incentive Plan and the 2006 Directors Equity Compensation Plan. The 2016 MIP also permits grants of equity to non-employee directors. \nOn March4, 2020, the company awarded to Messrs.Fasola, Murray, Kamal and Rubin RSUs under the 2016 MIP for 33,295, 21,850, 18,724 and 15,763 shares, respectively. The RSUs vest in three equal installments on March4, 2021, 2022 and 2023 if the executive remains in the companys service on those dates. On the same date, the company awarded to Messrs.Fasola, Murray, Kamal and Rubin PSUs for 27,743, 18,206, 15,602 and 13,134 target shares, respectively. The PSUs entitle the grantee to receive a number of shares of the companys common stock determined based on the companys total shareholder return during a three-year performance period ending on December31, 2022 and vesting on March4, 2023, the settlement date, provided that the executive remains in the companys service on that date. \nIn<|endoftext|>Other limitations under Rule144. \nAs restrictions on resale end, the market price of the common stock could drop significantly if the holders of these shares sell them or are perceived by the market as intending to sell them. These factors could also make it more difficult for us to raise additional funds through future offerings of common stock or other securities. \nIn addition, common stock reserved for future issuance under our equity incentive plans will become eligible for sale in the public market once those shares are issued, subject to provisions relating to various vesting agreements,lock-upagreements and, in some cases, limitations on volume and manner of sale applicable to affiliates under Rule144, as applicable. The aggregate number of shares of common stock reserved for future issuance under our equity incentive plans is 17,552,435. The compensation committee of our board of directors will determine the exact number of shares to be issued during 2021 and the number of shares reserved for future issuance under its equity incentive plans at its discretion. We have filed and may in the future file one or more registration statements on FormS-8under the Securities Act to register shares of common stock or securities convertible into or exchangeable for shares of common stock issued pursuant to our equity incentive plans. Any such FormS-8registration statements will automatically become effective upon filing. \nWe have issued and plan to issue shares of common stock in connection with the recently-consummated V12 Data acquisition and the recently-announced pending HOA acquisition. Certain of the total consideration in these acquisitions is earnout consideration, which, if payable, will be in the form of shares of common stock issuable in the future. We may also issue securities in connection with investments or acquisitions in the future. The amount of shares of common stock issued in connection with an investment or acquisition could constitute a material portion of our then-outstanding shares of common stock. \n\n### Outstanding Public \nWarrants to purchase an aggregate of 14,325,000 shares of our common stock became exercisable as of 30 days after the completion of the Merger. Each warrant entitles the holder thereof to purchase one (1) share of our common stock at a price of $11.50 per whole share, subject to adjustment. Public Warrants may be exercised only for a whole number of shares of common stock. In addition, on March 17, 2021 \n, the Company delivered notice to holders of Public Warrants issued in connection with PTACs initial public offering that such warrants will be redeemed for $0.01 per warrant on April 16, 2021 pursuant to the \n### Companys warrant agreement. Private \nWarrants that are held by PTAC founders and their Permitted Transferees (as defined in the Companys warrant agreement) are not redeemable. Holders of our \nPublic Warrants may exercise their warrants for cash at any time prior to 5:00 p.m. Eastern time on such redemption date. We anticipate that substantially all of our outstanding Public Warrants will be exercised for cash prior to 5:00 p.m. Eastern time on the April 16, 2021 redemption date, which will likely result in significant near-term dilution to our existing stockholders and increase the number of shares eligible for resale in the public market. Sales of substantial numbers of such shares in the public market (or the perception that such sales may occur in the near future) could adversely affect the market price of our common stock. \n\nThe Company qualifies as an emerging growth company as defined in Section2(a)(19) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012, which we refer to as the JOBS Act. As such, the Company will take advantage of certain exemptions from various reporting requirements applicable to other public companies that are not emerging growth companies for as long as it continues to be an emerging growth company, including (i)the exemption from the auditor attestation requirements with respect to internal control over financial reporting under Section404 of the Sarbanes-Oxley Act, (ii)the exemptions fromsay-on-pay,say-on-frequencyandsay-on-goldenparachute voting requirements and (iii)reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements. The Company will remain an emerging growth company until the earliest of (i)the last day of the fiscal year (a)following November 26, 2024, the fifth anniversary of the closing of PTACs initial public offering, (b)in which the Company has total annual gross revenue of at least $1.07billion or (c)in which the Company is deemed to be a large accelerated filer, which means the market value of our common stock that are held bynon-affiliatesexceeds $700million as of the last business day of the Companys prior second fiscal quarter, and (ii)the date on which the Company has issued more than $1.0billion innon-convertibledebt during the prior three-year period. \nIn addition, Section107 of the JOBS Act also provides that an emerging growth company can take advantage of the exemption from complying with new or revised accounting standards provided in Section7(a)(2)(B) of the Securities Act as long as Porch is an emerging growth company. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply tonon-emerginggrowth companies, but any such election to opt out is irrevocable. \nWe cannot predict if investors will find our common stock less attractive because the Company will rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for common stock and our stock price may be more volatile. \nNASDAQ may delist the Companys securities from trading on its exchange, which could limit investors ability to make transactions in its securities and subject the Company to additional trading restrictions. \nCurrently, our common stock and Public Warrants are publicly traded on the NASDAQ under the symbols PRCH and PRCHW, respectively, upon the closing of the merger. We cannot assure investors that our securities will continue to be listed on the NASDAQ. In order to continue listing our securities on the NASDAQ, the Company will be required to maintain certain financial, distribution and stock price levels. Generally, the Company will be required to maintain a minimum amount in stockholders equity (generally $2,500,000 for companies trading on the NASDAQ Capital Market) and a minimum number of holders of our securities (generally 300 public holders). \nIf NASDAQ delists the Companys securities from trading on its exchange and the Company is not able to list its securities on another national securities exchange, we expect our securities could be quoted on an over-the-counter market. a determination that the Company common stock is a penny stock which will require brokers trading in Company common stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities; \nSince the Companys common stock and Public Warrants are listed on the NASDAQ, they are covered securities. Although the states are preempted from regulating the sale of its securities, the federal statute does allow the states to investigate companies if there is a suspicion of fraud, and, if there is a finding of fraudulent activity, then the states can regulate or bar the sale of covered securities in a particular case. If the Company was no longer listed on the NASDAQ, its securities would not be covered securities and it would be subject to regulation in each state in which it offers its securities. \nBecause there are no current plans to pay cash dividends on the Companys common stock for the foreseeable future, you may not receive any return on investment unless you sell your common stock for a price greater than that which you paid for it. \nThe Company intends to retain future earnings, if any, for future operations, expansion and debt repayment and there are no current plans to pay any cash dividends for the foreseeable future. The declaration, amount and payment of any future dividends on shares of the common stock will be at the sole discretion of the Companys board of directors. The Companys board of directors may take into account general and economic conditions, the Companys financial condition and results of operations, the Companys available cash and current and anticipated cash needs, capital requirements, contractual, legal, tax, and regulatory restrictions, implications on the payment of dividends by the Company to its stockholders or by its subsidiaries to it and such other factors as the Companys board of directors may deem relevant. In addition, the Companys ability to pay dividends is limited by covenants of Porchs existing and outstanding indebtedness and may be limited by covenants of any future indebtedness the Company incurs. As a result, investors may not receive any return on an investment in the Companys common stock unless they sell the Companys common stock for a price greater than that which the investor paid for it. \nIf securities analysts do not publish research or reports about the Companys business or if they downgrade the Companys stock or the Companys sector, the Companys stock price and trading volume could decline. \nThe trading market for the Companys common stock will rely in part on the research and reports that industry or financial analysts publish about the Company or its business. The Company will not control these analysts. In addition, some financial analysts may have limited expertise with Porchs model and operations. Furthermore, if one or more of the analysts who do cover the Company downgrade its stock or industry, or the stock of any of its competitors, or publish inaccurate or unfavorable research about its business, the price of the Companys stock could decline. If one or more of these analysts ceases coverage of the Company or fails to publish reports on it regularly, the Company could lose visibility in the market, which in turn could cause its stock price or trading volume to decline. \nAnti-takeover provisions in the Companys organizational documents could delay or prevent a change of control. \nCertain provisions of the Companys Amended and Restated Charter and Amended and Restated Bylaws may have an anti-takeover effect and may delay, defer or prevent a merger, acquisition, tender offer, takeover attempt or other change of control transaction that a stockholder might consider in its best interest, including those attempts that might result in a premium over the market price for the shares held by the Companys stockholders. \nThese provisions provide for, among other things: the ability of the Companys board of directors to issue one or more series of preferred stock; advance notice for nominations of directors by stockholders and for stockholders to include matters to be considered at the Companys annual meetings; and the Companys board of directors have the express authority to make, alter or repeal the Companys amended and restated bylaws. \nThese anti-takeover provisions could make it more difficult for a third party to acquire the Company, even if the third partys offer may be considered beneficial by many of the Companys stockholders. As a result, the Companys stockholders may be limited in their ability to obtain a premium for their shares. These provisions could also discourage proxy contests and make it more difficult for any stockholders to elect directors of their choosing and to cause the Company to take other corporate actions they desire. \nThe Companys Amended and Restated Charter designates the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by the Companys stockholders, which could limit the Companys stockholders ability to obtain a favorable judicial forum for disputes with the Company or its directors, officers, employees or stockholders. \nThe Companys Amended and Restated Charter provides that, subject to limited exceptions, any (1)derivative action or proceeding brought on behalf of the Company, (2)action asserting a claim of breach of a fiduciary duty owed by any director, officer, stockholder or employee to the Company or its stockholders, (3)action asserting a claim arising pursuant to any provision of the DGCL or the Companys amended and restated certificate of incorporation or the Companys<|endoftext|>Franchises, which we refer to as \"franchises.\"The local franchises often impose certain obligations to build out the network and require payment of fees to the local government, which fees are often are based on a percentage of gross revenues. In private communities and mobile home parks, we may be required to obtain the consent of the homeowners association or other property owners to provide services, and we often have to pay a fee to obtain access to the property and provide our services. Finally, to deploy our networks, we frequently must obtain agreements from local power utilities to use their poles and in some cases easements from landowners. \n### Acquisition and Financing \nStrategy \n### Acquisition Selection \nOur management will have broad discretion in identifying and selecting prospective target acquisitions.In evaluating a prospective target acquisition, our management will consider, among other factors, the following: \nManagements understanding of the business and its competitive environment; \nManagements view of the business durability, capital intensity, and prospective returns on the capital employed over time; \nManagements assessment of the financial attractiveness of a particular target relative to other available targets; and \nCapital requirements and managements assessment of the ability to finance a particular target. \n### Issuance of senior and additional securities. \nTo the extent that our Board of Directors determines to obtain additional capital, it may issue debt or equity securities.Existing stockholders have no preemptive rights to common or preferred stock issued in any securities offering by us, and any such offering might cause a dilution of a stockholders investment in our Company. \n333-216040) declared effective on June 15, 2017, we commenced the 2017 public offering for 6,538,462 shares of our Class A common stock at $13.00 per share that raised gross proceeds of $97,049,446. Cowen acted as the sole underwriter and received a discount of 4.4853% per share. We also granted Cowen a 30-day option to purchase up to an additional 980,769 shares of Class A common stock, pursuant to which an additional 926,880 shares were sold. None of the underwriting discounts and commissions or offering expenses were incurred or paid to any director or officer of ours, to any of their associates, to persons owning 10% or more of our common stock or to any affiliates of ours. \nOn February 22, 2018, we entered into a Class A Common Stock Purchase Agreement, pursuant to which the Company sold to MBOC I, MBOC II, and BBOC $150,000,000 in unregistered shares of Class A common stock at a price of $23.30, a slight premium to the closing price of shares of Class A common stock of $23.29 on the NASDAQ Capital Market, as reported by NASDAQ on the date of the Class A Common Stock Purchase Agreement. Commencing in February 2021, the limited partners of these funds may begin to have their shares registered on a demand and/or piggyback basis, for resale or receive shares held in these funds as a distribution. \nAdditionally, in February 2018, we filed a shelf Registration Statement on Form S-3 (File No. 333-222853) that was declared effective on February 9, 2018, relating to the offering of Class A common stock, preferred stock, debt securities and warrants of the Company for up to $200,000,000. On March 2, 2018, the Company entered into a Sales Agreement with Cowen, pursuant to which the Company sold from time to time in an at the market offering a total of $49,999,625of shares of Class A common stock through Cowen as sales agent. Sales under the at the market offering were made pursuant to a prospectus supplement, filed with the SEC on March 2, 2018, to the Companys shelf Registration Statement on Form S-3, declared effective by the SEC on February 9, 2018. \nThis shelf registration statement recently expired and we expect to shortly file a new shelf registration statement to access capital on an as needed basis. \nFrom March 2018 through August 20, 2019, we sold through Cowen an aggregate of 2,141,452 shares of our Class A common stock under this at the market offering, resulting in gross proceeds to us of $49,999,625. For the period from January 1, through August 20, 2019, we sold through Cowen 942,223 shares of our Class A common stock under this at-the-market offering, resulting in gross proceeds to us of $22,753,943 and net proceeds of $22,059,015 after offering costs of $694,928. \nOn August 13, 2019, we entered into a second Sales Agreement with Cowen, which has subsequently expired, relating to the sale of additional shares of our Class A common stock to be offered. Cowen was not required to sell any specific amount of securities, but will act as our sales agent using commercially reasonable efforts consistent with its normal trading and sales practices, on mutually agreed terms between Cowen and us. From August 21, 2019 through December 31, 2019, we sold through Cowen 448,880shares of our Class A common stock under the second at the market offering, resulting in gross proceeds to us of $9,450,789and net proceeds of $9,122,227, after offering costs of $328,562. We have provided Cowen with customary indemnification and contribution rights under each Sales Agreement. In connection with sales of Class A common stock on our behalf, Cowen is deemed to be an underwriter within the meaning of the Securities Act and the compensation paid to Cowenis deemed to be underwriting commissions or discounts \nOn May28, 2020, we entered into the underwriting agreement with Wells Fargo Securities, LLC and Cowen as joint lead book-running managers for a public offering of 3,200,000shares of our Class A common stock at a public offering price of $16.00per share. Under the terms of the underwriting agreement, we granted the underwriters an option, exercisable for 30 days, to purchase up to an additional 480,000 shares of Class A common stock at the public offering price less underwriting discounts and commissions. On June 2, 2020, we announced the completion of the public offering for a total of 3,680,000shares, resulting in total gross proceeds to us of $58,880,000. \n### Borrowing of money. \nOn August 12, 2019, Link Media Holdings, Inc., (Link), our wholly owned subsidiary, which owns and operates our billboard businesses, entered into a Credit Agreement (the Credit Agreement) with First National Bank of Omaha (the Lender) under which Linkcould borrow up to $40,000,000(the Credit Facility). The Credit Agreement provides for an initial term loan (Term Loan1 \n), an incremental term loan (Term Loan2 \n) and a revolving line of credit. These loans are not guaranteed by us or any of our non-billboard businesses. \nAs ofDecember 31, 2020 \n, \nLink borrowed $18,060,000through Term Loan1and $5,500,000through Term Loan2under the Credit Facility. These principal payments commenced onJuly 1, 2020 for Term Loan1and on October 1, 2020for Term Loan2.Both term loans are payable in full onAugust 12, 2026.Term Loan1and Term Loan2havefixed interest rates of4.25% and3.375%, respectively, per annum. \n\nLong-term debt included within our consolidated balance sheetas ofDecember 31, 2020consists of Term Loan1and Term Loan2borrowings of $23,057,650,of which $1,282,504is classified as current. There werenoamounts outstanding related to the revolving line of credit as of December 31, 2020 and 2019. \nDuring the term of the Credit Facility, Link is required to comply with the following financial covenants: A consolidated leverage ratio for any test period ending on the last day of any fiscal quarter of Link (a) beginning with the fiscal quarter endingDecember 31, 2019ofnotgreater than3.50to1.00,(b) beginning with the fiscal quarter endingDecember 31, 2020ofnotgreater than3.25to1.00,and (c) beginning with the fiscal quarter endingDecember 31, 2021and thereafter, ofnotgreater than3.00to1.0;minimum consolidated fixed charge coverage ratio ofnotless than1.15to1.00measured quarterly, based on rollingfourquarters, with testing to commence as ofDecember 31, 2019based on theDecember 31, 2019audited financial statements. The Company was in compliance with these covenants as of December 31, 2020. \nUpon the occurrence of an event of default the Lendermayaccelerate the loans. \nAs of December 31, 2020, we had approximately $45million in unrestricted cash and $38 million short-term treasury securities. We also expect to continue to sell additional shares of our Class A common stock in the at the market offering if we deem the pricing attractive relative to our potential uses of capital. We currently expect that our current cash will be sufficient to fund existing operations for at least the next 12 months. Depending on the amount of significant acquisitions and investments we make, we may need to raise additional financing to make additional acquisitions and/or investments and expect to file a new shelf registration statement. \nWe may in the future use a number of different sources to finance our acquisitions and operations, including cash flows from operations, seller financing, private financings (such as bank credit facilities, which may or may not be secured by our assets), additional common or preferred equity issuances or any combination of these sources, to the extent available to us, or other sources that may become available from time to time, which could include asset sales and issuance of debt securities. Any debt that we incur may be recourse or non-recourse and may be secured or unsecured. \nWe expect to use leverage on terms we find attractive, assessing the appropriateness of new equity or debt capital based on market conditions, including assumptions regarding future cash flow, the creditworthiness of customers and future rental rates. Our certificate of incorporation, which, as amended from time to time, we refer to as our certificate of incorporation and bylaws, which, as amended from time to time, we refer to as our bylaws, do not limit the amount of debt that we may incur. If we adopt a debt policy, our Board of Directors may from time to time modify such policy in light of then-current economic conditions, relative costs of debt and equity capital, market values of our properties, general conditions in the market for debt and equity securities, fluctuations in the market price of our common stock if then trading on any exchange, growth and acquisition opportunities and other factors. \nPurchase and sale (or turnover) of acquired businesses \nWe do not currently intend to dispose of any of our properties in the near future as our strategy is to acquire assets which have the potential to generate significant cash flow over an extended period of time. However, we reserve the right to do so if, based upon managements periodic review of our portfolio, our Board of Directors determines that such action would be in our best interest. \n### Offering of securities in exchange for property. \nWe may in the future issue shares of common stock in connection with acquisitions of other businesses.For issuances of shares in connection with acquisitions, our Board of Directors will determine the timing and size of the issuances.Our Board of Directors intends to use its reasonable business judgment to fulfill its fiduciary obligations to our then existing stockholders in connection with any such issuance, including its determination of whether the issuance is accretive to intrinsic value. Nonetheless, future issuances of additional shares could cause immediate and substantial dilution to the net tangible book value of shares of our Class A common stock issued and outstanding immediately before such transaction.In addition, we may have sellers rollover a portion of their equity holdings into an equity holding in the newly acquired business. In those situations, we may provide the seller with an option to put its holding to us and similarly, we may have an option to purchase the rollover equity stake.Any future decrease in the net tangible book value of such issued and outstanding shares could materially and adversely affect the market value of shares of our Class A common stock \nAvailable Information \nYou can find more information about us at our Internet website located at www.bostonomaha.com. Our Annual Report on Form 10-K, our Quarterly Reports on Form 10-Q, our Current Reports on Form 8-K and any amendments to those reports are available free of charge through our website as soon as reasonably practicable after we electronically file such material with, or furnish such material to, the SEC. The contents of our website are not deemed to be part of this Annual Report on Form<|endoftext|>Condition, which is dependent upon the Companys achieving a certain level of Adjusted EBITDA, as publicly reported by the Company. The performance period is any four consecutive fiscal quarters during the sixteen-quarter period beginning with the fiscal quarter in which the awards were granted. The performance target must be met during the performance period in order for the restriction to lapse and the awards to vest, and the Company believes that it is probable that the performance condition will be achieved during the performance period. \n\n### Overview \nPayments \n### Pursuant to the \nEmployment \nAgreements \nUnder each of the employment agreements discussed above under \n### Narrative \nDisclosure to \n### Summary \nCompensation \nTable \n, if the Company terminates the employment of the named executive officer with cause, or the named executive officer terminates employment without good reason, the Company is required to pay the named executive officer his salary, prior year bonus (if any) and benefits, in each case, already earned but unpaid through the date of such termination (Accrued Obligations). If the Company terminates the employment of Mr.Stout without cause, including non-renewal by the Company or if Mr.Stout resigns for good reason, Mr.Stout will receive the Accrued Obligations and will also be entitled to receive (i)a lump sum cash payment equal to 2.99 times his base salary then in effect, (ii)a lump sum cash payment equal to 2.99 times the greater of (a)the cash bonus paid, or earned but not yet paid, in respect of the previous fiscal year or (b)the average bonus paid, or earned but not yet paid, in respect of the last three years, and (iii)health insurance benefits substantially commensurate with the Companys standard health insurance benefits for Mr.Stout and his spouse and dependents for a period of two years, with such benefits terminating prior to the end of such two-year period if he receives substantially similar coverage and benefits from a subsequent employer. For each of Messrs. Parkey and Moore, the applicable severance amounts payable under their respective employment agreements in the event of a termination of employment by us without cause or a resignation by the named executive officer for good reason include (i)the Accrued Obligations, (ii)a lump sum cash payment equal to 2.00 times his base salary then in effect, (iii)a lump sum cash payment equal to 2.00 times the greater of (a)the cash bonus paid, or earned but not yet paid, in respect of the previous fiscal year or (b)the average bonus paid, or earned but not yet paid, in respect of the last three fiscal years, and (iv)health insurance benefits substantially commensurate with our standard health insurance benefits for the named executive officers and his spouse and dependents for a period of up to two years, with such benefits terminating prior to the end of such two-year period if he receives substantially similar coverage and benefits from a subsequent employer. For Mr.Stout, who is also a party to a Severance Benefits Agreement (more fully described below under \nPayments Made Pursuant to the Severance Benefits Agreement \n) entitling him to 18 months salary upon termination of employment by the Company without cause or resignation by him for good reason, the applicable severance amounts payable under the employment agreements in the event of termination without cause and for good reason are reduced by amounts actually paid under his Severance Benefits Agreement. \nUnder the employment agreements, in the event of termination without cause or if the named executive officer resigns for good reason, each within the 36-month period following a change in control, each named executive officer will be entitled to receive the severance payments and benefits described above; however, for Messrs. Moore and Parkey the severance multiple is increased from 2.00 to 2.99, and for each of Messrs. Stout, Moore and Parkey the duration of the health insurance benefits continuation is increased from a period of up to two years to a continuation of up three years. In addition, all unvested equity incentive plan awards held by the named executive officer will vest upon a termination without cause or if the named executive officer resigns for good reason within the 36-month period following a change in control. Further, pursuant to the terms of each of the agreements, each named executive officer is prohibited from (i) competing with the Company (A) during the term of his employment and (B) for a period of one year following termination of employment if the named executive receives payments under the employment agreements in connection with termination without cause or by the named executive for good reason and (ii) soliciting, without our written consent, the services of the Companys executive officers (or otherwise soliciting our executive officers to terminate their employment or agency with us) for a period of one year following termination of employment if the named executive officer receives payments under the employment agreements in connection with termination without cause or by the named executive officer for good reason. \nUnder the employment agreements, the Company may terminate the employment of the named executive officers with cause upon the occurrence of any of the following events (after the Company has provided proper notice and given the named executive officer the opportunity to remedy the condition in accordance with the procedures set forth in his respective employment agreement): (i)conviction of a felony or a crime involving misappropriation or embezzlement; (ii)willful and material wrongdoing on the part of the named executive officer, including, but not limited to, acts of dishonesty or fraud, which have a material adverse effect on us or any of our subsidiaries; (iii)repeated material failure of the named executive officer to follow our direction or the direction of our Board regarding the material duties of employment; or (iv)material breach by the named executive officer of a material obligation under his employment agreement. Under the employment agreements, the named executive officers may terminate their employment for good reason within two years of the occurrence of any of the following events (after the named executive officers have provided proper notice and given us the opportunity to remedy the condition in accordance with the procedures set forth in his respective employment agreement): (i)a material reduction by us in the named executive officers title or position, or a material reduction by us in the named executive officers authority, duties or responsibilities (which, in the case of Mr.Stout, includes no longer serving on our Board) or the assignment by us to the named executive officers of any duties or responsibilities that are materially inconsistent with such title, position, authority, duties or responsibilities; (ii)a material reduction in the named executive officers base salary; (iii)any material breach of the named executive officers employment agreement by us; or (iv)our requiring the named executive officer to relocate his office location more than 50 miles from Nashville, Tennessee. \nThe applicable position, title, authority, duties and responsibilities are those held with the Company immediately prior to the applicable change in control. \nIn the employment agreements, change in control of the Company is defined to include (i)the acquisition of 35% or more of the combined voting power of our then outstanding securities by any person, entity or group; (ii)the change in ownership of a majority of the combined voting power of our then outstanding securities as the result of, or in connection with, any cash tender or exchange offer, merger or other business combination transaction, sales of all or substantially all assets or contested election, or any combination of the foregoing; or (iii)a change, during any period of two consecutive years, in a majority of our directors, unless such newly elected directors were approved by a vote of at least two-thirds of the directors in office at the beginning of such period. \nEach of Messrs. Stout, Parkey and Moores employment agreements provides for certain tax reimbursement payments to the extent any payment made under the employment agreement becomes subject to excise taxes imposed by Section4999 of the Code or any interest or penalties incurred by the named executive officer with respect to such excise tax. \n### Payments \nMade \n### Pursuant to the \nSeverance \nBenefits \n### Agreement. \nIn 1989, JAC entered into a Severance Benefits Agreement with Mr.Stout (the Severance Benefits Agreement) pursuant to which Mr.Stout would receive lump sum payments representing 18 months of his salary upon termination by us without cause or resignation by Mr.Stout for reason following a change in control (for purposes of this agreement a change in control has previously occurred). Under the Severance Benefits Agreement as amended by a July 30, 2012 letter agreement, Mr.Stout has reason to terminate his employment if his present job responsibilities change or there is a decrease in his compensation or some other economic loss. Under the Severance Benefits Agreement, Mr.Stout would not be entitled to severance benefits if he were terminated for cause. Under the Severance Benefits Agreement, we will have cause only if termination was the result of an act or acts of dishonesty by Mr.Stout constituting a felony and resulting in or intended to result in substantial gain or personal enrichment at our expense. As described above, any payments actually made under the Severance Benefits Agreement to Mr.Stout will offset and reduce any amounts that become payable under his employment agreement. \nPayments \n### Made \n### Pursuant to the \nAmended and \n### Restated \nSalary \n### Continuation and \nSeverance \nBenefits \n### Agreements. \nThe Company is a party to Amended and Restated Salary Continuation Agreements with each of Messrs. Stout, Parkey and Moore that provide for annual retirement benefits payable upon termination of employment. The amounts described below assume that terminations occurred as of January 3, 2021. \nThe Amended and Restated Salary Continuation Agreements, which were amended in connection with, and prior to, the 2012 acquisition of JAC by FNF, provide for an annual retirement benefit of 50% of the employees base salary on the date of the termination of service with the Company for any reason other than death if such termination occurs on or after attaining the age of 65. Pursuant to 2012 letter agreements that amended the terms of the Amended and Restated Salary Continuation Agreements, for the purpose of calculating benefits under the Amended and Restated Salary Continuation Agreements, Messrs. Stouts and Moores base salary is set at their respective base salaries on the date of the acquisition of JAC by FNF, which was $430,400 and $176,700, respectively; for Mr.Parkey, base salary is set at $200,000 pursuant to a July1, 2014 letter agreement. The retirement benefit is payable over 15 years commencing within 30 days of the employees retirement. The same benefit is available to the beneficiaries of an employee who dies while in office, but after age 65. The Amended and Restated Salary Continuation Agreements also provide that in the event an employee dies while in the employ of the Company before attaining the age of 65, his beneficiaries will receive specified benefit payments for a period of ten years, or until such time as the employee would have attained age 65, whichever period is longer. The payments in this instance are 100% of the employees base salary, in the amounts set forth above, for the first year after death and 50% of the employees base salary, in amounts set forth above, each year thereafter in the death benefits period. The annual payment for the first year after death for Messrs. Stout, Parkey and Moore would be $430,400, $200,000 and $176,700, respectively. \nIn connection with the 2012 acquisition of JAC by FNF, the Amended and Restated Salary Continuation Agreements with each of Messrs. Stout, Parkey and Moore were also amended to suspend the Companys obligation and that of our successors to establish and fund a rabbi trust with respect to certain retirement benefits upon a change in control of JAC (which occurred when FNF acquired JAC in 2012), in exchange for a guarantee by FNF and certain of its affiliates of these obligations. Under the 2012 letter agreements, our obligation to fund a rabbi trust would resume once FNF no longer held direct or indirect<|endoftext|>Pursuant to the tender offer rules, our sponsor, initial shareholders, directors, officers, advisors or their affiliates may purchase shares or public warrants in privately negotiated transactions or in the open market either prior to or following the completion of such initial business combination, although they are under no obligation to do so. There is no limit on the number of shares our initial shareholders, directors, officers, advisors or their affiliates may purchase in such transactions, subject to compliance with applicable law and the Nasdaq rules. \nIn the event that our sponsor, initial shareholders, directors, officers, advisors or their affiliates purchase shares in privately negotiated transactions from public shareholders who have already elected to exercise their redemption rights, such selling shareholders would be required to revoke their prior elections to redeem their shares. The purpose of any such purchases of shares could be to vote such shares in favor of the Proposed Transaction or such other business combination, and thereby increase the likelihood of obtaining shareholder approval of the Proposed Transaction or such other business combination or to satisfy a closing condition in an agreement with a target, such as Bakkt, that requires us to have a minimum net worth or a certain amount of cash at the closing of our initial business combination, where it appears that such requirement would otherwise not be met. The purpose of any such purchases of public warrants could be to reduce the number of public warrants outstanding or to vote such warrants on any matters submitted to the warrant holders for approval in connection with the Proposed Transaction or such other initial business combination. Any such purchases of our securities may result in the completion of the Proposed Transaction or such other initial business combination that may not otherwise have been possible. \n\nIf a shareholder fails to receive notice of our offer to redeem our public shares in connection with our initial business combination, including the Proposed Transaction, or fails to comply with the procedures for submitting or tendering its shares, such shares may not be redeemed. \nWe will comply with the proxy rules or tender offer rules, as applicable, when conducting redemptions in connection with our initial business combination, including the Proposed Transaction. In addition, proxy materials or tender offer documents, as applicable, that we will furnish to holders of our public shares in connection with the Proposed Transaction or another initial business combination will describe the various procedures that must be complied with in order to validly tender or submit public shares for redemption. In the case of proxy materials, as we expect to distribute in connection with the Proposed Transaction, this date may be up to two business days prior to the scheduled vote on the proposal to approve the initial business combination. In addition, if we conduct redemptions in connection with a shareholder vote, as we expect to do in connection with the Proposed Transaction, we intend to require a public shareholder seeking redemption of its public shares to also submit a written request for redemption to our transfer agent two business days prior to the scheduled vote in which the name of the beneficial owner of such shares is included. \n\n\n\n\nWhile we believe there are numerous target businesses, including Bakkt, we could potentially acquire with the net proceeds of the initial public offering and the sale of the private placement warrants, our ability to compete with respect to the acquisition of certain target businesses that are sizable will be limited by our available financial resources. Furthermore, we are obligated to offer holders of our public shares the right to redeem their shares for cash at the time of our initial business combination, including the Proposed Transaction, in conjunction with a shareholder vote or via a tender offer. Target companies, such as Bakkt, will be aware that this may reduce the resources available to us for our initial business combination. \nIf the net proceeds of the initial public offering not being held in the trust account are insufficient to allow us to operate for at least until September25, 2022, it could limit the amount available to fund our search for a target business or businesses and complete the Proposed Transaction or another initial business combination, and we will depend on loans from our sponsor or management team to fund our search and to complete our initial business combination. \nOf the net proceeds of the initial public offering, only approximately $1,000,000 were available to us initially outside the trust account to fund our working capital requirements. We believe that the funds available to us outside of the trust account are sufficient to allow us to operate for at least until September25, 2022; We could also use a portion of the funds as a down payment or to fund a no-shop provision (a provision in letters of intent or merger agreements designed to keep target businesses from shopping around for transactions with other companies or investors on terms more favorable to such target businesses) with respect to a particular proposed business combination, although we do not have any current intention to do so and have not done so in connection with the Proposed Transaction. \nPrior to the completion of our initial business combination, including the Proposed Transaction, we do not expect to seek loans from parties other than our sponsor or an affiliate of our sponsor as we do not believe third parties will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in our Trust Account. If we are unable to complete the Proposed Transaction or another initial business combination because we do not have sufficient funds available to us, we will be forced to cease operations and liquidate the Trust Account. \n\nAlthough we seek to have all vendors, service providers, prospective target businesses and other entities (except for our Independent Registered Public Accounting Firm) with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account for the benefit of our public shareholders, such parties may not execute such agreements, or even if they execute such agreements they may not be prevented from bringing claims against the Trust Account, including, but not limited to, fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain advantage with respect to a claim against our assets, including the funds held in the Trust Account. WithumSmith+Brown, PC, our independent registered independent public accounting firm, and the underwriters of our initial public offering will not execute agreements with us waiving such claims to the monies held in the Trust Account. \nUpon redemption of our public shares, if we are unable to complete the Proposed Transaction or another initial business combination within the prescribed timeframe, or upon the exercise of a redemption right in connection with such initial business combination, we will be required to provide for payment of claims of creditors that were not waived that may be brought against us within the 10 years following redemption. \nAs a result, if any such claims were successfully made against the Trust Account, the funds available for the Proposed Transaction or another initial business combination and redemptions could be reduced to less than $10.00 per public share. In such event, we may not be able to complete the Proposed Transaction or another initial business combination, and you would receive such lesser amount per share in connection with any redemption of your public shares. \n\nWhile we currently expect that our independent directors would take legal action on our behalf against our Sponsor to enforce its indemnification obligations to us, it is possible that our independent directors in exercising their business judgment and subject to their fiduciary duties may choose not to do so in any particular instance, if for example, the cost of such legal action is deemed by the independent directors to be too high relative to the amount recoverable or if the independent directors determine that a favorable outcome is not likely. \n\nIn addition, our board of directors may be viewed as having breached its fiduciary duty to our creditors and/or having acted in bad faith, by paying public shareholders from the Trust Account prior to addressing the claims of creditors, thereby exposing itself and us to claims of punitive damages. \nIf, before distributing the proceeds in the Trust Account to our public shareholders, we file a bankruptcy petition or insolvency or an involuntary bankruptcy or insolvency petition is filed against us that is not dismissed, the claims of creditors in such proceeding may have priority over the claims of our shareholders and the per-share amount that would otherwise be received by our shareholders in connection with our liquidation may be reduced. \n\n\nand restrictions on the issuance of securities, each of which may make it difficult for us to complete our initial business combination, including the Proposed Transaction. \n\n\nThe Trust Account is intended as a holding place for funds pending the earliest to occur of either: (i)the completion of our initial business combination, including the Proposed Transaction; (ii)the redemption of any public shares properly submitted in connection with a shareholder vote to amend our amended and restated memorandum and articles of association (A)to modify the substance or timing of our obligation to allow redemption in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination by September25, 2022; or (B)with respect to any other material provisions relating to shareholders rights or pre-initial business combination activity, or (iii)absent an initial business combination by September25, 2022, our return of the funds held in the trust account to our public shareholders as part of our redemption of the public shares. \nChanges in laws or regulations, or a failure to comply with any laws and regulations, may adversely affect our business, including our ability to negotiate and complete the Proposed Transaction or another initial business combination, and results of operations. \nIn addition, a failure to comply with applicable laws or regulations, as interpreted and applied, could have a material adverse effect on our business, including our ability to negotiate and complete the Proposed Transaction or another initial business combination, and results of operations. \n\n\n\nIn addition, as holders of our ClassA ordinary shares, our public shareholders will not have the right to vote on the appointment of directors until after the consummation of our initial business combination, including the Proposed Transaction. \n\nIn particular, we currently expect to complete the Proposed Transaction with Bakkt. Our management team has extensive experience in identifying and executing strategic investments globally and has done so successfully in a number of sectors, including the consumer brands sectors. To the extent we complete the Proposed Transaction or another initial business combination, we may be affected by numerous risks inherent in the business operations or Bakkt or another target with which we combine. Although our officers and directors will endeavor to evaluate the risks inherent in a particular target business, and have done so in connection with the Proposed Transaction, we cannot assure you that we have or will properly ascertain or assess all of the significant risk factors or that we will have adequate time to complete due diligence. Furthermore, some of these risks may be outside of our control and leave us with no ability to control or reduce the chances that those risks will adversely impact Bakkt or another target business. We also cannot assure you that an investment in our units will ultimately prove to be more favorable to investors than a direct investment, if such opportunity were available, in Bakkt or another business combination target. \n\nWe have and will consider business combinations outside of our managements areas of expertise if a business combination candidate is presented to us and we determine that such candidate offers an<|endoftext|>(i) to exercise your warrants and pay the exercise price therefor at a time when it may be disadvantageous for you to do so, (ii) to sell your warrants at the then-current market price when you might otherwise wish to hold your warrants or (iii) to accept the nominal redemption price which, at the time the outstanding warrants are called for redemption, is likely to be substantially less than the market value of your warrants. \nOur warrants and founder shares may have an adverse effect on the market price of our Class A common stock and make it more difficult to complete our business combination. \nWe issued warrants to purchase 5,000,000 shares of our Class A common stock as part of the units offered in our initial public offering and, simultaneously with the closing of our initial public offering, we issued in a private placement warrants to purchase an aggregate of 4,000,000 shares of Class A common stock at $11.50 per share. Our initial stockholders currently own 2,500,000 founder shares following the forfeiture of 375,000 founder shares as described herein. The founder shares are automatically convertible into shares of Class A common stock at the closing of our initial business combination on a one-for-one basis, subject to adjustment as set forth herein. In addition, if our sponsor makes any working capital loans, up to $1,500,000 of such loans may be converted into warrants, at the price of $1.00 per warrant at the option of the lender. Such warrants would be identical to the private placement warrants, including as to exercise price, exercisability and exercise period. \nTo the extent we issue shares of Class A common stock to complete a business combination, the potential for the issuance of a substantial number of additional shares of Class A common stock upon exercise of these warrants and conversion rights could make us a less attractive acquisition vehicle to a target business. Any such issuance will increase the number of issued and outstanding shares of our Class A common stock and reduce the value of the shares of Class A common stock issued to complete the business combination. Therefore, our warrants and founder shares may make it more difficult to complete a business combination or increase the cost of acquiring the target business. \nThe private placement warrants are identical to the warrants sold as part of the units in our initial public offering except that, so long as they are held by our sponsor or its permitted transferees, (i) they will not be redeemable by us, (ii)they (including the Class A common stock issuable upon exercise of these warrants) may not, subject to certain limited exceptions, be transferred, assigned or sold by our sponsor until 30 days after the completion of our initial business combination and (iii) they may be exercised by at the option of the holders thereof on a cashless basis. \n\n\nAs described elsewhere in this Annual Report, we identified a material weakness in our internal control over financial reporting related to the accounting for the warrants we issued in connection with our initial public offering in November 2019. \nWhile we have processes to identify and appropriately apply applicable accounting requirements, we plan to enhance these processes to better evaluate our research and understanding of the nuances of the complex accounting standards that apply to our consolidated financial statements. For a discussion of managements consideration of the material weakness identified related to our accounting for the warrants we issued in connection with the November 2019 initial public offering, see Note 2Restatement of Previously Issued Financial Statements to the accompanying consolidated financial statements, as well as Part II, Item 9A: Controls and Procedures included in this Annual Report. \nFailure to timely file will cause us to be ineligible to utilize short form registration statements on Form S-3, which may impair our ability to obtain capital in a timely fashion to execute our business strategies or issue shares to effect an acquisition. \n\nThe restatement of our financial statements in May 2021 has subjected us to additional risks and uncertainties, including increased professional costs and the increased possibility of legal proceedings. \nOn April 12, 2021, the staff of the SEC issued a public statement entitled Staff Statement on Accounting and Reporting Considerations for Warrants issued by Special Purpose Acquisition Companies (SPACs) (the Statement). In the Statement, the SEC staff expressed its view that certain terms and conditions common to SPAC warrants may require the warrants to be classified as liabilities on the SPACs balance sheet as opposed to equity. \nAs a result of the restatement of our financial statements, we have become subject to additional risks and uncertainties, including, among others, increased professional fees and expenses and time commitment that may be required to address matters related to the restatements, and scrutiny of the SEC and other regulatory bodies which could cause investors to lose confidence in our reported financial information and could subject us to civil or criminal penalties or shareholder litigation. We could face monetary judgments, penalties or other sanctions that could have a material adverse effect on our business, financial condition and results of operations and could cause our stock price to decline. \n\nFollowing the restatement of our historical financial statements, we account for our warrants as a warrant liability and recorded at fair value upon issuance any changes in fair value each period reported in earnings as determined by us based upon a valuation report obtained from its independent third party valuation firm. \n\nThe price of our securities may vary significantly due to one or more potential business combinations and general market or economic conditions. \nWe are an emerging growth company and a smaller reporting company within the meaning of the Securities Act, and if we take advantage of certain exemptions from disclosure requirements available to emerging growth companies and smaller reporting companies, this could make our securities less attractive to investors and may make it more difficult to compare our performance with other public companies. \nWe are an emerging growth company within the meaning of the Securities Act, as modified by the JOBS Act, and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, 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 and stockholder approval of any golden parachute payments not previously approved. We could be an emerging growth company for up to five years, although circumstances could cause us to lose that status earlier, including if the market value of our Class A common stock held by non-affiliates exceeds $700 million as of any June 30 before that time, in which case we would no longer be an emerging growth company as of the following December 31. \nThis may make comparison of our financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accountant standards used. \nAdditionally, we are a smaller reporting company as defined in Rule 10(f)(1) of Regulation S-K. We will remain a smaller reporting company until the last day of the fiscal year in which (1) the market value of our common stock held by non-affiliates exceeds $250 million as of the end of the prior June 30 th \n, or (2) our annual revenues exceeded $100 million during such completed fiscal year and the market value of our common stock held by non-affiliates exceeds $700 million as of the prior June30 th \n\nProvisions in our amended and restated certificate of incorporation and Delaware law may inhibit a takeover of us, which could limit the price investors might be willing to pay in the future for our Class A common stock and could entrench management. \n\n\n### General Risk Factors \nWe are a company with no operating history and no revenues, and you have no basis on which to evaluate our ability to achieve our business objective. \nWe are a company with no operating results. We may be unable to complete our business combination. If we fail to complete our business combination, we will never generate any operating revenues. \n\nIn addition, a failure to comply with applicable laws or regulations, as interpreted and applied, could have a material adverse effect on our business, investments and results of operations. \nPast performance by our management team, our advisors and our Founders may not be indicative of future performance of an investment in us. \nInformation regarding performance by, or businesses associated with our management team and our Founders and their affiliates is presented for informational purposes only. Past performance by our management team and our Founders is not a guarantee either (i) of success with respect to any business combination we may consummate or (ii) that we will be able to locate a suitable candidate for our initial business combination. Our officers, directors and advisors have not had management experience with special purpose acquisition corporations in the past. You should not rely on the historical record of our management teams, our advisors and our Founders respective performance as indicative of our future performance of an investment in us or the returns we will, or are likely to, generate going forward. Furthermore, an investment in us is not an investment in either of our Founders. \nOur officers and directors may allocate their time to other businesses, thereby causing conflicts of interest in their determination as to how much time to devote to our affairs. \nOur Founders, including certain of our officers and directors, have fiduciary responsibility to dedicate substantially all their business time to our Founders respective affairs and their respective portfolio companies. However, this responsibility does not require any of our officers or directors to commit his or her full time to our affairs in particular, which may result in a conflict of interest in allocating their time between our operations and our search for a business combination and their other businesses, including other business endeavors for which he or she may be entitled to substantial compensation. We do not intend to have any full-time employees, except Mr. Kapoor, our President, prior to the completion of our initial business combination. In addition, each of our officers and certain of our directors are employed by or affiliated with our Founders, which makes investments in securities or other interests of or relating to companies in industries we may target for our initial business combination. Our independent directors also serve as officers or board members for other entities. If our officers and directors other business affairs require them to devote substantial amounts of time to such affairs in excess of their current commitment levels, it could limit their ability to devote time to our affairs, which may have a negative impact on our ability to complete our initial business combination. \n\nUntil we consummate our initial business combination, we will continue to engage in the business of identifying and combining with one or more businesses. Our officers and directors are, and may in the future become, affiliated with entities (such as operating companies or investment vehicles) that are engaged in a similar business. \nOur officers and directors also may become aware of business opportunities which may be appropriate for presentation to us and the other entities in the future to which they owe certain fiduciary or contractual duties, including our Founders. \nOur Founders, sponsor, officers, directors, security holders and their respective affiliates may have competitive pecuniary interests that conflict with our interests. \nIn fact (subject to certain approvals and consents) we may enter into a business combination with a target business that is affiliated with our Founders, sponsor, our directors or officers, or their respective affiliates, although we do not intend<|endoftext|>Timing of our obligation to allow redemption in connection with our initial business combination or to redeem 100% of our public shares if we do not complete an initial business combination by October6, 2022 or (B)with respect to any other material provisions relating to shareholders rights or pre-initial business combination activity. \n\n\nOur sponsor, officers and directors have agreed, pursuant to a written agreement with us, that they will not propose any amendment to our amended and restated memorandum and articles of association (A)to modify the substance or timing of our obligation to allow redemption in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination by October6, 2022 or (B)with respect to any other material provisions relating to shareholders rights or pre-initial business combination activity, unless we provide our public shareholders with the opportunity to redeem their ClassA ordinary shares upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account and not previously released to us to pay our taxes, divided by the number of then outstanding public shares. \n\nThe letter agreement may be amended without shareholder approval (although releasing the parties from the restriction not to transfer the founder shares until April4, 2021 will require the prior written consent of the underwriter). \n\n\nWe may seek acquisition opportunities with an early stage company, a financially unstable business or anentity lacking an established record of revenue or earnings. \n\n\nIf (i)we issue additional ordinary shares or equity-linked securities for capital raising purposes in connection with the closing of our initial business combination at a Newly Issued Price of less than $9.20 per ClassA ordinary share, (ii)the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of our initial business combination, and (iii)the Market Value of our ClassA ordinary shares is below $9.20 per share, then the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value and the Newly Issued Price, and the $10.00 and $18.00 per share redemption trigger prices will be adjusted (to the nearest cent) to be equal to 100% and 180% of the higher of the Market Value and the Newly Issued Price, respectively. \n\nWe have issued warrants to purchase 16,951,666 ClassA ordinary shares, at a price of $11.50 per whole warrant as part of the units offered in our initial public offering and, in connection with our initial public offering, we issued in a private placement an aggregate of 8,113,999 private placement warrants, each exercisable to purchase one ClassA ordinary share at a price of $11.50 per share. \n\nAffiliates of the Virgin Group have similar or overlapping investment objectives and guidelines, and we may not be presented investment opportunities that may otherwise be suitable for us. \nAffiliates of the Virgin Group currently invest and plan to continue to invest in, incubate, and grow successful businesses in sectors across travel& leisure, financial services, health& wellness, music& entertainment, media& mobile, space, and renewable energy. There may be overlap of investment opportunities with affiliates of the Virgin Group that are actively investing and similar overlap with future Virgin Group affiliates. \nPast performance by our management team, Virgin Group and their affiliates, including investments and transactions in which they have participated and businesses with which they have been associated, may not be indicative of future performance of an investment in the Company. \nInformation regarding our management team, Virgin Group and their affiliates, including investments and transactions in which they have participated and businesses with which they have been associated, is presented for informational purposes only. Any past experience and performance by our management team, Virgin Group and their affiliates and the businesses with which they have been associated, is not a guarantee that we will be able to successfully identify a suitable candidate for our initial business combination, that we will be able to provide positive returns to our shareholders, or of any results with respect to any initial business combination we may consummate. You should not rely on the historical experiences of our management team, Virgin Group and their affiliates, including investments and transactions in which they have participated and businesses with which they have been associated, as indicative of the future performance of an investment in us or as indicative of every prior investment by each of the members of our management team, Virgin Group or their affiliates. \n\n\n\n\n\n\n\n\n\nOur public shareholders will be entitled to receive funds from the trust account only upon the earliest to occur of: (i)our completion of an initial business combination, and then only in connection with those ClassA ordinary shares that such shareholder properly elected to redeem, subject to the limitations and on the conditions described herein, (ii)the redemption of any public shares properly submitted in connection with a shareholder vote to amend our amended and restated memorandum and articles of association (A)to modify the substance or timing of our obligation to allow redemption in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination by October6, 2022 or (B)with respect to any other material provisions relating to shareholders rights or pre-initial business combination activity, and (iii)the redemption of our public shares if we have not completed an initial business combination by October6, 2022, subject to applicable law and as further described herein. \n\n\n\n\n\nsecurities laws. However, because we have net tangible assets in excess of $5,000,000 as of the successful completion of our initial public offering and the sale of the private placement warrants and we filed a Current Report on Form \n8-K, including an audited balance sheet of the Company demonstrating this fact, we are exempt from rules promulgated by the SEC to protect investors in blank check companies, such as Rule 419. \n\n\nIf the net proceeds of our initial public offering and the sale of the private placement warrants not being held in the trust account are insufficient to allow us to operate for at least until October6, 2022, it could limit the amount available to fund our search for a target business or businesses and complete our initial business combination, and we will depend on loans from our sponsor or management team to fund our search and to complete our initial business combination. \nWe believe that, upon closing of our initial public offering, the funds available to us outside of the trust account will be sufficient to allow us to operate for at least until October6, 2022; \n\n\n\n\n\nPursuant to the letter agreement which is filed as Exhibit 10.1 to this Annual Report, our sponsor has agreed that it will be liable to us if and to the extent any claims by a third party (other than WithumSmith+Brown, PC, our independent registered public accounting firm) for services rendered or products sold to us, or a prospective target business with which we have entered into a written letter of intent, confidentiality or other similar agreement or business combination agreement, reduce the amount of funds in the trust account to below the lesser of (i) $10.00 per public share and (ii)the actual amount per public share held in the trust account as of the date of the liquidation of the trust account, if less than $10.00 per share due to reductions in the value of the trust assets, less taxes payable, provided that such liability will not apply to any claims by a third party or prospective target business who executed a waiver of any and all rights to the monies held in the trust account (whether or not such waiver is enforceable) nor will it apply to any claims under our indemnity of the underwriter of our initial public offering against certain liabilities, including liabilities under the Securities Act. \n\nIn the event that the funds in the trust account are reduced below the lesser of (i) $10.00 per share and (ii)the actual amount per public share held in the trust account as of the date of the liquidation of the trust account if less than $10.00 per share due to reductions in the value of the trust assets, in each case less taxes payable, and our sponsor asserts that it is unable to satisfy his obligations or that he has no indemnification obligations related to a particular claim, our independent directors would determine whether to take legal action against our sponsor to enforce its indemnification obligations. \n\n\nWhile short-term U.S. \n\n\n\n\nIf we are unable to consummate our initial business combination by October6, 2022, our public shareholders may be forced to wait beyond such date before redemption from our trust account. \nIf we are unable to consummate our initial business combination by October6, 2022, the funds then on deposit in the trust account, including interest earned on the funds held in the trust account (less taxes payable and up to $100,000 of interest income to pay dissolution expenses), will be used to fund the redemption of our public shares, as further described herein. In that case, investors may be forced to wait beyond October6, 2022 before the redemption proceeds of our trust account become available to them, and they receive the return of their pro rata portion of the funds from our trust account. \n\n\n\n\n\n\n\n\n\n\n\n\n\n\nPursuant to an agreement that was entered into concurrently with the consummation of our initial public offering, our initial shareholders and their permitted transferees can demand that we register the ClassA ordinary shares into which founder shares are convertible, holders of our private placement warrants and their permitted transferees can demand that we register the private placement warrants and the ClassA ordinary shares issuable upon exercise of the private placement warrants, and holders of securities that may be issued upon conversion of working capital loans may demand that we register such units, shares, warrants or the ClassA ordinary shares issuable upon exercise of such warrants. \ninvestors. \nWe urge U.S. \n\n\n\n\n\n\n\n\n\nWe have the ability to redeem the outstanding warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01 per warrant, if, among other things, the last reported sales price of our ClassA ordinary shares equals or exceeds $18.00 per share (as adjusted for share sub-divisions, share capitalizations, reorganizations, recapitalizations and the like). Redemption of the outstanding warrants as described above could force you to (i)exercise your warrants and pay the exercise price therefor at a time when it may be disadvantageous for you to do so, (ii)sell your warrants at the then-current market price when you might otherwise wish to hold your warrants or (iii)accept the nominal redemption price which, at the time the outstanding warrants are called for redemption, we expect would be substantially less than the volume-weighted average trading price of our ClassA ordinary shares during the 20 trading day period starting on the trading day prior to the day on which we complete our initial business combination of your warrants. \nIn addition, we have the ability to redeem the outstanding warrants at any time after they become exercisable and prior to their expiration, at a price of $0.10 per warrant if, among other things, the last reported sales price of our ClassA ordinary shares equals or exceeds $10.00 per share (as adjusted for share sub-divisions, share capitalizations, reorganizations, recapitalizations and the like). \n\n\n\n\nFederal courts may be limited. \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nEach of our officers is engaged in other business endeavors, including the Virgin Group, for which he may be entitled to substantial compensation, and our officers are not obligated to contribute any specific number of hours per week to our affairs. For example, the continued \nCOVID-19 pandemic might distract our management team related to their ongoing obligations. \n\n\n\n\n\nCertain members of our management team may be involved in and have a greater financial interest in the<|endoftext|>Act, we will be required to permit holders to exercise their warrants on a cashless basis, in which case the number of shares of our Class A common stock that you will receive upon cashless exercise will be based on a formula subject to a maximum number of shares equal to 0.361 shares of our Class A common stock per warrant (subject to adjustment). \n\nPursuant to an agreement entered into at the time of the closing of our IPO, our initial stockholders and their permitted transferees can demand that we register their founder shares, after those shares convert to our Class A common stock at the time of our initial Business Combination. \nThis is because the shareholders of the target business may increase the equity stake they seek in the combined entity or ask for more cash consideration to offset the negative impact on the market price of our Class A common stock that is expected when the common stock owned by our initial stockholders, holders of our private placement warrants, or holders of our working capital loans or their respective permitted transferees are registered. \n\nAlthough we may pursue targets in any industry, we intend to initially focus our search on identifying a prospective target business in the homebuilding, manufacturing serving the homebuilding market, financial services and commercial real estate industries. \n\n\n\nIf we are unable to complete our initial Business Combination, our public stockholders may receive only approximately $10.20 per share, or less in certain circumstances, on the liquidation of our trust account and our warrants will expire worthless. \n\n\nWe are generally not required to obtain an opinion from an independent investment banking firm or from an independent accounting firm, and consequently, you may have no assurance from an independent source that the price we are paying for the business is fair to our company from a financial point of view. \n\nWe may issue additional shares of common stock or preferred stock to complete our initial Business Combination, and may issue shares of common stock to redeem the warrants or issue shares of common stock or preferred stock under an employee incentive plan after completion of our initial Business Combination. \nAs of March 11, 2021, there were 186,401,102and 16,600,276 authorized but unissued shares of Class A common stock and Class B common stock, respectively, available for issuance, which amount does not take into account the shares of Class A common stock reserved for issuance upon exercise of any outstanding warrants, or the shares of Class A common stock issuable upon conversion of Class B common stock. \nWe may issue a substantial number of additional shares of common or preferred stock to complete our initial Business Combination or under an employee incentive plan after completion of our Business Combination. The issuance of additional shares of common or preferred stock: may significantly dilute the equity interest of stockholder; \nIf we are unable to complete our initial Business Combination, our public stockholders may receive only approximately $10.20 per share, or less than such amount in certain circumstances, on the liquidation of our trust account and our warrants will expire worthless. \n\n\n\nWe do not have an employment agreement with, or key-person insurance on the life of, any of our directors or officers. \nOur ability to successfully complete our initial Business Combination and to be successful thereafter will be totally dependent upon the efforts of members of our management team, some of whom may not join us following our initial Business Combination. \n\n\nor allow them to receive compensation as a result of the consummation of a particular Business Combination. These agreements may provide for them to receive compensation as a result of or following our Business Combination and as a result, may cause them to have conflicts of interest in determining whether a particular Business Combination is the most advantageous. \nSuch negotiations could take place simultaneously with the negotiation of the Business Combination and could provide for such individuals to receive compensation in the form of cash payments and/or our securities for services they would render to us after the completion of the Business Combination. There is no certainty, however, that any members of our management team will remain with us after the completion of a Business Combination. \n\n\nOur assessment of the capabilities of the targets management, therefore, may prove to be incorrect and such management may lack the skills, qualifications or abilities we expected. \n\nOur officers and directors will allocate their time to other businesses, thereby causing conflicts of interest in their determination as to how much time to devote to our affairs. \nIn addition, certain of our officers and directors are affiliated with BOC, which is a holding company with many operating subsidiaries that make investments and operates in industries we might target for our initial Business Combination. \n\n\n\nFor a complete discussion of our officers and directors business affiliations and the potential conflicts of interest that you should be aware of, please see the sections of this Annual Report on Form 10-K entitled Management Officers and Directors, Management Conflicts of Interest and Certain Relationships and Related Party Transactions. \n\nIn fact (subject to certain approvals and consents) we may enter into a Business Combination with a target business that is affiliated with our sponsor, our directors or officers, although we do not intend to do so. \nIn particular, BOC is a holding company with operating subsidiaries which operate and hold investments in varied industries. As a result, there may be substantial overlap between companies that would be a suitable Business Combination for us and companies that would make an attractive target for BOC. \n\nOur directors also serve as officers and board members for other entities described in Management.. \n\nOur sponsor, along with BOC Yellowstone II LLC, holdin the aggregate 3,399,724 founder shares, representing 20% of the total outstanding shares as of the date of this Report. In addition, our sponsor holds an aggregate of 7,719,779 private placement warrants that will also be worthless if we do not complete a Business Combination. \nSince our sponsor paid only approximately \n$0.007 \n35 per share for the founder shares, our officers and directors could potentially make a substantial profit even if we acquire a target business that subsequently declines in value. \nOur sponsor acquired 3,399,724 founder shares for an aggregate purchase price of $25,000, or approximately $0.00735 per share. Subsequently, our sponsor established BOC Yellowstone II LLC which holds 206,250 of the founder shares. Subsequent to the completion of our IPO, an investor in our IPO paid our sponsor $309,375 for the right to receive these 206,250 shares upon the completion of a Business Combination. In addition, our founder paid $7,719,779 for the 7,719,779 private placement warrants it purchased in connection with the IPO. Each private placement warrant is exercisable into a share of Class A common stock at the same exercise price as the warrants sold in the IPO. The low acquisition cost of the founder shares creates an economic incentive whereby our officers and directors and sponsor could potentially make a substantial profit even if we acquire a target business that subsequently declines in value and is unprofitable for public investors, notwithstanding the founders purchase of the private placement warrants. \n\n\nWe may only be able to complete one Business Combination with the proceeds of our \nIPO \n, the sale of the private placement warrants, which will cause us to be solely dependent on a single business which may have a limited number of products or services. \nAs of December 31, 2020, the net proceeds from our IPO and the sale of the private placement warrants provided us with approximately $ \n138,716,226, inclusive of earned interest on investments held in the trust account, tha t we may use to complete our initial Business Combination and pay related fees and expenses (excluding $4,759,615of deferred underwriting commissions being held in the trust account). \n\n\n\n\n\n\n\nEven if the post-transaction company owns 50% or more of the voting securities of the target, our stockholders prior to the Business Combination may collectively own a minority interest in the post-transaction company, depending on relative valuations ascribed to the target and us in the Business Combination transaction. \n\n\n\n\n\nSome other blank check companies have a provision in their charter that prohibits the amendment of certain of its provisions, including those which relate to a companys pre-Business Combination activity, without approval by a certain percentage of the companys stockholders. Our amended and restated certificate of incorporation provides that any of its provisions related to pre-Business Combination activity (including the requirement to deposit proceeds of our IPO and the private placement of warrants into the trust account and not release such amounts except in specified circumstances, and to provide redemption rights to public stockholders as described herein) may be amended if approved by holders of 65% of our common stock entitled to vote thereon, and corresponding provisions of the trust agreement governing the release of funds from our trust account may be amended if approved by holders of 65% of our common stock entitled to vote thereon. The holders of our founder shares, who collectively beneficially owned 20% of our common stock as of the date of this Report, will participate in any vote to amend our amended and restated certificate of incorporation and/or trust agreement and will have the discretion to vote in any manner they choose. As a result, we may be able to amend the provisions of our amended and restated certificate of incorporation that govern our pre-Business Combination behavior more easily than some other blank check companies, and this may increase our ability to complete a Business Combination with which you do not agree. \nOur sponsor, officers and directors have agreed, pursuant to a letter agreement with us, that they will not propose any amendment to our amended and restated certificate of incorporation that would affect the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial Business Combination by January 25, 2022, unless we provide our public stockholders with the opportunity to redeem their shares of Class A common stock upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (which interest shall be net of amounts released to us to pay taxes and expenses related to the administration of the trust), divided by the number of then outstanding public shares. Our stockholders are not parties to, or third-party beneficiaries of, this letter agreement and, as a result, will not have the ability to pursue remedies against our sponsor, officers or directors for any breach of the letter agreement. \n\nAlthough we believe that the net proceeds of our IPO and the sale of the private placement warrants will be sufficient to allow us to complete our initial Business Combination, because we have not yet selected any prospective target business we cannot ascertain the capital requirements for any particular transaction. If the net proceeds of our IPO and the sale of the private placement warrants prove to be insufficient, either because of the size of our initial Business Combination, the depletion of the available net proceeds in search of a target business, the obligation to repurchase for cash a significant number of shares from stockholders who elect redemption in connection with our initial Business Combination or the terms of negotiated transactions to purchase shares in connection with our initial Business Combination, we may be required to seek additional financing or to abandon the proposed Business Combination. If we are unable to complete our initial Business Combination, our public stockholders may receive only approximately $10.20 per share plus any pro rata interest earned on the funds held in the trust account (and not previously released to us to pay our franchise and income taxes as well as expenses relating to the administration of the trust account) on the liquidation of our trust account and our warrants will expire worthless. If we are unable to complete our initial Business<|endoftext|>"},"task":{"kind":"string","value":"{\"file\": \"/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz\"}"}}},{"rowIdx":99,"cells":{"text":{"kind":"string","value":"<|endoftext|>SEC. \n\nCohen, Jones and Pontonio. Mr.Pontonio serves as chair of the nominating and corporate governance committee. \n\n\n### Code of Ethics \nWe have filed a copy of our form of Code of Ethics applicable to our directors, officers and employees, our audit committee charter, our compensation committee charter and our nominating and governance committee charter as exhibits to the Registration Statement. You will be able to review these documents by accessing our public filings at the SECs website at www.sec.gov or by visiting our website at [IDX] \n\nItem11. \nExecutive Compensation. \n\nWe pay an affiliate of our Chief Financial Officer a total of $3,000 per month for office space, utilities and secretarial and administrative support. \nAll of these fees will be fully disclosed to shareholders, to the extent then known, in the tender offer materials or proxy solicitation materials furnished to our shareholders in connection with a proposed initial business combination. \n\n### Item12 \n\nThe following table sets forth information regarding the beneficial ownership of our ordinary shares as of March 25, 2021 based on information obtained from the persons named below, with respect to the beneficial ownership of shares of our ordinary shares, by: each person known by us to be the beneficial owner of more than 5% of our outstanding ordinary shares; each of our executive officers and directors that beneficially owns shares of our ordinary shares; \n\n(1) \nOur sponsor is the record holder of such ordinary shares. Galileo Founders GP Corp. (the Sponsor GP) is the general partner of the sponsor. Luca Giacometti directly and indirectly through an entity he controls (Gaburo, SRL), and Alberto Recchi, the Companys Chief Financial Officer and Director, through an entity he controls (Ampla Capital, LLC), are the sole directors and officers of the Sponsor GP. As such, the Sponsor GP and each of Messrs. Giacometti and Recchi may be deemed to have beneficial ownership of such ordinary shares held directly by the sponsor. \n(2) \nThe principal place of business for each of these entities and individuals is: C/O Galileo Acquisition Corp., 1049 Park Avenue. 14A, New York, NY 10028. \n(3) \nEach of these individuals hold an interest in our sponsor. \n(4) \nPursuant to a Schedule 13G filed by Glazer Capital, LLC with the SEC on January 11, 2021, on behalf of Glazer Capital, LLC, a Delaware limited liability company (Glazer Capital) and Paul J. Glazer, a US citizen (Mr. Glazer, together with Glazer Capital, the Reporting Persons). The principal place of business of each of the Reporting Persons is 250 West 55 th \nStreet, Suite 30A, NewYork, NewYork 10019. Glazer Capital serves as investment manager for certain funds and managed accounts (collectively, the Glazer Funds) that hold the ordinary shares as reported therein. Mr. Glazer serves as the Managing Member of Glazer Capital, with respect to the shares of ordinary shares held by the Glazer Funds. Glazer Enhanced Offshore Fund, Ltd, a Glazer Fund, has the right to receive or the power to direct the receipt of the proceeds from the sale of more than 5% of the ordinary shares reported therein. \n(5) \nPursuant to a Schedule 13G filed by Magnetar Financial LLC (Magnetar Financial) with the SEC on February 13, 2020, the ordinary shares reported therein relate to the units held for Magnetar Constellation Master Fund, Ltd (Constellation Master Fund), Magnetar Constellation Fund II, Ltd (Constellation Fund), Magnetar Xing He Master Fund Ltd (Xing He Master Fund), Magnetar SC Fund Ltd (SC Fund), Magnetar Capital Master Fund Ltd, (Master Fund) and Magnetar Structured Credit Fund, LP (Structured Credit Fund), all Cayman Islands exempted companies except for Structured Credit Fund which is a Delaware limited partnership , collectively (the Magnetar Funds). The Principal place of business for each of these entities and individuals is: 1603 Orrington Avenue, 13 th \n### Floor, Evanston, Illinois 60201. \nThe table above does not include the ordinary shares underlying the private warrants or forward purchase securities held or to be held by our sponsor or the other listed individuals or entities because these securities are not exercisable within 60 days of this report. \nChanges in Control \nNot applicable. \n### Item13. \n\nIn August2019, we issued an aggregate of 2,875,000 ordinary shares to our sponsor for $25,000, at a purchase price of $0.009 share. On October 17, 2019, we effected a share dividend of 0.2 of a share for each ordinary share in issue, resulting in our sponsor holding an aggregate of 3,450,000 founder shares. \nOur sponsor and EarlyBirdCapital purchased an aggregate of 4,110,000 private warrants at $1.00 per private warrant (for a total purchase price of $4,110,000). Our sponsor purchased an aggregate of 3,562,000 private warrants and EarlyBirdCapital and/or its designees purchased an aggregate of 548,000 private warrants. The private warrants are identical to the public warrants. These purchases took place on a private placement basis simultaneously with the consummation of our initial public offering. All of the proceeds we received from these purchases was placed into an account in the United States maintained by Continental, as trustee. The purchasers have agreed not to transfer, assign or sell any of the private warrants or the underlying securities (except to the same permitted transferees as the insider shares) until the completion of our initial business combination. In addition, for as long as the private warrants are held by EarlyBirdCapital or its designees or affiliates, they may not be exercised after fiveyears from the effective date of the Registration Statement. \nIn order to meet our working capital needs following the consummation of our initial public offering, our initial shareholders, officers and directors and their respective affiliates may, but are not obligated to, loan us funds, from time to time or at any time, in whatever amount they deem reasonable in their sole discretion. The notes would either be paid upon consummation of our initial business combination, without interest, or, at the lenders discretion, up to $1,000,000 of the notes may be converted upon consummation of our business combination into warrants at a price of $1.00 per warrant. Our shareholders have approved the issuance of the warrants and underlying securities upon conversion of such notes, to the extent the holder wishes to so convert them at the time of the consummation of our initial business combination. In the event that the initial business combination does not close, we may use a portion of the working capital held outside the trust account, or interest earned on the trust account that is available to us, to repay such loaned amounts, but no proceeds from our trust account other than the interest earned thereon would be used for such repayment. \nThe holders of our insider shares issued and outstanding, as well as the holders of the representative shares, the private warrants (and all underlying securities) and any securities our initial shareholders, officers, directors or their affiliates may be issued in payment of working capital loans made to us, will be entitled to registration rights pursuant to an agreement to be signed prior to or on the effective date of the Registration Statement. The holders of the majority of the insider shares can elect to exercise these registration rights at any time commencing threemonths prior to the date on which these ordinary shares are to be released from escrow. The holders of a majority of the representative shares, the private warrants or securities issued in payment of working capital loans made to us can elect to exercise these registration rights at any time after we consummate a business combination. \nPrior to our initial public offering, our sponsor loaned us an aggregate of $61,452 to be used to pay formation expenses and a portion of the expenses of our initial public offering. The loan was payable without interest on the earlier of March31, 2020 or on the date on which we consummated our initial public offering. The loan was repaid upon the consummation of our initial public offering. \n\nWe will reimburse our officers and directors for any reasonable out-of-pocket business expenses incurred by them in connection with certain activities on our behalf such as identifying and investigating possible target businesses and business combinations. There is no limit on the amount of out-of-pocket expenses reimbursable by us; provided, however, that to the extent such expenses exceed the available proceeds not deposited in the trust account and the interest income earned on the amounts held in the trust account, such expenses would not be reimbursed by us unless we consummate an initial business combination. Our audit committee will review and approve all reimbursements and payments made to any initial shareholder or member of our management team, or our or their respective affiliates, and any reimbursements and payments made to members of our audit committee will be reviewed and approved by our board of directors, with any interested director abstaining from such review and approval. \nOur sponsor, an affiliate of Luca Giacometti, our Chairman and Chief Executive Officer and Alberto Recchi, our Chief Financial Officer, has agreed that, commencing on the date of effective date of the Registration Statement through the earlier of our consummation of our initial business combination or our liquidation, it will make available to us certain general and administrative services, including office space, utilities and secretarial support, as we may require from time to time. We have agreed to pay an affiliate of our Chief Financial Officer an aggregate of approximately $3,000 per month for these services. \nOther than the rent and the approximately $3,000 per month administrative fee, no compensation or fees of any kind, including finders fees, consulting fees or other similar compensation, will be paid to any of our initial shareholders, officers or directors who owned our ordinary shares prior to the initial public offering, or to any of their respective affiliates, prior to or with respect to the business combination (regardless of the type of transaction that it is). \nSuch transactions, including the payment of any compensation, will require prior approval by a majority of our uninterested independent directors (to the extent we have any) or the members of our board who do not have an interest in the transaction, in either case who had access, at our expense, to our attorneys or independent legal counsel. We will not enter into any such transaction unless our disinterested independent directors (or, if there are no independent directors, our disinterested directors) determine that the terms of such transaction are no less favorable to us than those that would be available to us with respect to such a transaction from unaffiliated third parties. \n### Related Party Policy \n\n\n\n\n### Director Independence \nCohen, Jones, Pontonio and Pecori Giraldi are independent directors as defined in the NYSE listing standards and applicable SEC rules. We will only enter into a business combination if it is approved by a majority of our independent directors. Additionally, we will only enter into transactions with our officers and directors and their respective affiliates that are on terms no less favorable to us than could be obtained from independent parties. Any related-party transactions must also be approved by our audit committee and a majority of disinterested independent directors. \nItem 14. \n\nThe firm of Withum, acts as our independent registered public accounting firm. \nAudit Fees \nDuring the year ended December 31, 2020 and the period from July 30, 2019 (inception) through December 31, 2019, the aggregate audit fees for our independent registered public accounting firm were approximately $45,000 and $65,000, respectively. These amounts include the services Withum performed in connection with our initial public offering and the audit of our December 31, 2020 and 2019 financial statements, as well as attendance at audit committee meetings. \n### Audit-Related Fees \nDuring the year ended December 31, 2020 and the period from July 30, 2019 (inception) through December 31, 2019, our independent registered public accounting firm did not render assurance and related services related to financial accounting and reporting standards. The aggregate audit-related fees paid to Withum totaled 0 and 0 for the year ended December 31, 2020 and the period from July 30, 2019 (inception) through December<|endoftext|>Acies Acquisition Corp. (the Company) is filing this Amendment No.1 on Form10-K/A(this Amendment No.1) to amend the Companys Annual Report on Form10-Kfor the fiscal year ended December31, 2020, which was initially filed with the U.S. Securities and Exchange Commission (the SEC) on March26, 2020 (the Original 2020 Form10-K).The sole purpose of this Amendment No.1 is to include the XRBL hyperlinks to certain of the exhibits included with the Original 2020 Form10-K. There have been no other changes made to the Original 2020 Form 10-K. \nUnless otherwise stated in this Annual Report on Form 10-K (the Report), references to: \nAcies Class A Ordinary Shares are to the Class A ordinary shares, par value $0.0001 per share, of the Company; \nAcies Class B Ordinary Shares are to the Class B ordinary shares, par value $0.0001 per share, of the Company; \nBusiness Combination are toeither the Companys merger with Playstudios,or prospective merger with an alternative business; \nCompletion Window are to the period following the completion of our Initial Public Offering at the end of which, if we have not completed our initial Business Combination, we will redeem 100% of the public shares at a per share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account and not previously released to us to pay our taxes , if any (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, subject to applicable law and certain conditions and as further described herein. The Completion Window ends October 27, 2022, or January 27, 2023 if we have executed a letter of intent, agreement in principle or definitive agreement for an initial Business Combination by October 27, 2022; \nFounders are to Daniel Fetters, Edward King, James Murren and Andrew Pascal; \nFounder Shares are to the Acies Class B Ordinary Shares initially issued to our Sponsor in a private placement prior to our Initial Public Offering and the Acies ClassA Ordinary Shares that will be issued upon the automatic conversion of the Acies Class B Ordinary Shares at the time of our initial Business Combination or earlier at the option of the holders thereof (for the avoidance of doubt, such Acies ClassA Ordinary Shares will not be public shares); \nInitial Public Offering are to the Companys initial public offering of Units; \nOrdinary Shares are to the Acies ClassA Ordinary Shares and the Acies Class B Ordinary Shares; \nPrivate Placement Warrants are to the warrants issued to our Sponsor in a private placement simultaneously with the closing of our Initial Public Offering and upon conversion of working capital loans, if any; public shares are to the Acies ClassA Ordinary Shares sold as part of theunits in our Initial Public Offering (whether they are purchased in our Initial Public Offering or thereafter in the open market); public shareholders are to the holders of our public shares, including our Sponsor and management team to the extent our Sponsor and/or members of our management team purchase public shares, provided that our Sponsors and each member of our management teams status as a public shareholder will only exist with respect to such public shares; \nSponsor are to Acies Acquisition LLC, a Delaware limited liability company; \nTrust Account are to the trust account established for the benefit of the Companys public shareholders maintained by Continental Stock Transfer & Trust Company, acting as trustee, in which proceeds from the Initial Public Offering and sale of Private Placement Warrants are held; \nUnits are to the units sold in the Initial Public Offering, consisting of Acies Class A Ordinary Shares and warrants to purchase one-third of one Acies Class A Ordinary Share; and we, us, our, the Company, our company or Acies are to Acies Acquisition Corp., a Cayman Islands exempted company. \n\nThis Report, including, without limitation, statements under the heading , includes forward-looking statements within the meaning of Section27A of the Securities Act of 1933, as amended (the Securities Act) and Section21E of the Securities Exchange Act of 1934, as amended (the Exchange Act). These statements are based on managements current expectations, but actual results may differ materially due to various factors, including, but not limited to: our ability to complete our initial Business Combination; our officers and directors allocating their time to other businesses and potentially having conflicts of interest with our business or in approving our initial Business Combination, as a result of which they would then receive expense reimbursements; or our financial performance. \n\n### PART I \nItem 1. \nBusiness \n### General \nWe are an early-stage blank check company incorporated as a Cayman Islands corporation and formed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar Business Combination with one or more businesses, which we refer to throughout this Report as our initial Business Combination. \nInitial Public Offering \nEach Unit consists of one ClassA Ordinary Share of the Company and one-third of one redeemable warrant of the Company (warrant), with each whole warrant entitling the holder thereof to purchase one ClassA Ordinary Share for $11.50 per share. On November 5, 2020, the underwriters exercised their over-allotment option in part and, on November 9, 2020, the underwriters purchased an additional 1,525,000 Units (Over-Allotment Units) at an offering price of $10.00 per Unit, generating gross proceeds to the Company of $15,250,000. \n\n\nThe 5,750,000 Class B Ordinary Shares held by the Sponsor (prior to the exercise of the over-allotment option) included 750,000 shares subject to forfeiture to the extent that the underwriters over-allotment option was not exercised in full, so that the initial shareholders of the Company would collectively own 20.0% of the issued and outstanding Ordinary Shares of the Company after the Initial Public Offering. Since the underwriters did not exercise the over-allotment option in full, the Sponsor forfeited 368,750 Class B Ordinary Shares, which were canceled by the Company. As a result of such forfeiture, there are currently 5,381,250 Class B Ordinary Shares issued and outstanding. \nSince our Initial Public Offering, we have focused on identifying a Business Combination target within the live, location-based and mobile experiential entertainment industries. It is the job of our Sponsor and management team to complete our initial Business Combination. Our management team is led by Edward King, our Co-Chief Executive Officer, Daniel Fetters, our Co-Chief Executive Officer, and James Murren, our Chairman, who have many years of experience investing in ventures and building companies with operations. We must complete our initial Business Combination by the Completion Window. If our initial Business Combination is not consummated by the Completion Window, then our existence will terminate, and we will distribute all amounts in the Trust Account. \n- PlayStudios \nThe Mergers \nOn February 1, 2021, we entered into an Agreement and Plan of Merger (the Merger Agreement) with Catalyst Merger Sub I, Inc., a Delaware corporation and a direct wholly owned subsidiary of ours (First Merger Sub), Catalyst Merger Sub II, LLC, a Delaware limited liability company and a direct wholly owned subsidiary of ours (Second Merger Sub), and PlayStudios, Inc., a Delaware corporation (PlayStudios). The Merger Agreement provides that, subject to the approval of Acies shareholders and upon the terms and subject to the conditions thereof, the following transactions will occur (together with the other agreements and transactions contemplated by the Merger Agreement, the Business Combination): \n(i)at the closing of the transactions contemplated by the Merger Agreement (the Closing) (x) in accordance with the Delaware General Corporation Law, as amended (the DGCL), First Merger Sub will merge with and into PlayStudios and PlayStudios will be the surviving corporation and a wholly owned subsidiary of Acies (the First Merger) and (y) immediately following the First Merger, and as part of an integrated transaction with the First Merger, PlayStudios will merge with and into Second Merger Sub, with Second Merger Sub being the surviving entity of the Second Merger and a wholly owned subsidiary of Acies (the Second Merger and, together with the First Merger, the Mergers); \n(ii)as a result of the Mergers, among other things, each outstanding share of common stock of PlayStudios (PlayStudios Common Stock) and each share of preferred stock of PlayStudios (PlayStudios Preferred Stock) issued and outstanding as of the effective time of the First Merger (the Effective Time) will be cancelled in exchange for the right to receive the following: \n(a)if the holder of such share makes an election to receive cash (Cash Electing Share), an amount of cash, without interest, equal to the quotient of $1,041,000,000 divided by the sum of, as of immediately prior to the Effective Time, (x) the number of issued and outstanding shares of PlayStudios Common Stock (including, without duplication, the number of issued and outstanding shares of PlayStudios Preferred Stock on an as-converted basis); (y) the number of shares of PlayStudios Common Stock issued or issuable upon the exercise of all outstanding, vested and unexercised options to purchase shares of PlayStudios Common Stock; and (z) the shares of PlayStudios Common Stock underlying any issued and outstanding warrants of PlayStudios, in the case of (y) and (z) as determined on a net exercise basis (the Per Share Merger Consideration Value); provided \n, however \n, that (1)the aggregate amount of Cash Electing Shares available to each holder shall not exceed 15% of the shares of PlayStudios capital stock held by such holder; and (2)if the sum of the aggregate number of Dissenting Shares (as defined in the Merger Agreement) and the aggregate number of Cash Electing Shares multiplied by (y) the Per Share Merger Consideration Value (such product, the Aggregate Cash Election Amount), exceeds the Available Cash Consideration (as defined in the Merger Agreement, such Available Cash Consideration not to exceed $150,000,000), then each Cash Electing Share shall be converted into the right to receive (A) an amount in cash, without interest, equal to the product of (1)the Per Share Merger Consideration Value and (2)a fraction, the numerator of which shall be the Available Cash Consideration and the denominator of which shall be the Aggregate Cash Election Amount (such fraction, the Cash Fraction) and (B) an amount of the stock consideration described in clause (b), below, multiplied by one minus the Cash Fraction; \n(b)if the holder of such share does not make a cash election, a number of validly issued, fully paid and nonassessable shares of New PlayStudios Class A Common Stock (as defined below) equal to the quotient obtained by dividing (A) the Per Share Merger Consideration Value by (B) $10.00, except that if any such shares are owned by Andrew S. Pascal (the Founder), or any member of the Pascal Family Trust and their respective affiliates (collectively, the Founder Group), such share will instead receive a number of validly issued, fully paid and nonassessable shares of New PlayStudios Class B Common Stock par value $0.0001 per share (the New PlayStudios Class B Common Stock), equal to the quotient obtained by dividing (A) the Per Share Merger Consideration Value by (B) $10.00. The shares of New PlayStudios Class B Common Stock will have the same economic terms as the shares of New PlayStudios Class A Common Stock, but the shares of New PlayStudios Class A Common Stock will be entitled to one vote per share, and the shares of New PlayStudios Class B Common Stock will be entitled to 20 votes per share. Any shares of New PlayStudios Class B Common Stock that are transferred outside the Founder Group (except for certain permitted transfers) will automatically convert into shares of New PlayStudios Class A Common Stock. In addition, the outstanding shares of New PlayStudios Class B Common Stock will be subject to a sunset provision by which all outstanding shares of New PlayStudios Class B Common Stock will automatically convert into shares of New PlayStudios Class A Common Stock (i) if holders representing a majority of the New PlayStudios Class B Common Stock vote to convert the New PlayStudios Class B Common Stock into New PlayStudios Class A Common<|endoftext|>Of the change of control. The Employment Agreements provide each NEO with, among other things: (i) an annual base salary of $834,000, $505,000, $425,000, $435,000 and $360,000, for Messrs. Wood, Moore, Hicks, Craine and Sluiter, respectively, (ii) eligibility to earn a target annual bonus under the Companys annual incentive plan equal to 125%, 100%, 90%, 90% and 60% of base salary for Messrs. Wood, Moore, Hicks ,Craine and Sluiter, respectively, (iii) eligibility for annual grants of equity awards as determined in the sole discretion of the Compensation Committee pursuant to the Companys equity compensation plans; provided that, with respect to the calendar year ending December \n31, 2020, each of Messrs. Wood, Moore, Hicks and Craine were entitled to receive awards with a target aggregate fair value of 500%, 350%, 200% and 200% of base pay, respectively, and (iv) benefits that are customarily provided to similarly situated executives of the Company. In addition, our NEOs will be entitled to receive specified payments and benefits upon certain termination events pursuant to the Employment Agreements, including termination following a change of control. The Compensation Committee believes that these provisions will encourage our NEOs to remain in our employment in the event of a change of control of the Company and during circumstances which indicate that a change of control might occur. The Compensation Committee believes termination and change of control benefits are important in maintaining strong leadership and in encouraging retention in these situations and encourages our NEOs to act in the best interests of stockholders without distraction based on uncertainty regarding their employment status. Under the Employment Agreements, if a NEOs employment is terminated without cause by the Company or by the NEO for good reason during such time that is not within the 24 month period following a change of control (as such terms are defined or described in the Employment Agreements), such NEO will be entitled to severance compensation equal to: \n100% of annual base salary and target annual bonus; pro \n-rata target annual bonus; pro \n-rata vesting of the NEOs unvested equity awards (with performance award vesting based on performance through the termination date); immediate vesting of any Company matching or other contributions to the Companys non \n-qualified deferred compensation plans, if any (Company Non \n-Qualified \nContributions); a lump sum payment of any PTO pay accrued but unused through the termination date; and a lump sum payment equal to the NEOs monthly COBRA premium for a 12 \n-month period. \nIf, however, a NEOs employment is terminated without cause by the Company or by the NEO for good reason, in each case, within 24 months following a change of control, a NEO will be entitled to severance compensation equal to: \n200% of annual base salary and target annual bonus for Messrs. Wood, Moore, Hicks and Craine and 100% of annual base salary and target annual bonus for Mr. \n### Sluiter; pro \n-rata target annual bonus; immediate vesting of the NEOs unvested equity awards (with performance award vesting based on performance through the termination date); immediate vesting of any Company Non \n-Qualified \nContributions; and a lump sum payment equal to the NEOs monthly COBRA premium for an 18 \n-month period. \nNotwithstanding the terms described above, the agreement each NEO entered into in connection with the Revised 2020 Incentive Compensation Program provides that the NEO will not be entitled to any severance amount with respect to a pro \n-rated annual bonus for a termination that occurs in 2020 or 2021. In addition, upon a termination without cause or a resignation for good reason (i) the Retention Component of the Revised 2020 Incentive Compensation Program will be fully vested and no longer subject to clawback and (ii) the Performance Component of the Revised 2020 Incentive Compensation Program will remain outstanding and eligible to vest based on actual performance through the end of the performance period as if the NEOs employment had not terminated, and any vested portion of the performance component will no longer be subject to clawback. \n### Under the Current Employment Agreements: \nGood reason is generally defined as (i) the elimination of the NEOs position, a material reduction in the duties and/or reassignment of the NEO to a new position of materially less authority; or (ii) a material reduction in the NEOs base salary, in either case, subject to a cure period of 30 days. \nCause is generally defined as (i) the NEOs willful and continued failure to perform substantially such NEOs duties with the Company (other than any such failure resulting from incapacity due to physical or mental illness) or (ii) the NEOs willful engaging in illegal conduct or gross misconduct which is materially and demonstrably injurious to the Company. \nSeverance benefits payable under the Employment Agreements are generally conditioned on timely execution of a waiver and release of claims. Each Employment Agreement also contains a one \n-year post \n-employment non \n-solicitation clause and standard confidentiality, trade secrets and cooperation provisions. \n### Termination, Resignation or Change of Contro l \nThe following tables provide information regarding potential payments as of December \n31, 2020 to each of our named executive officers as of December \n31, 2020 in connection with certain termination events, including a termination related to a change of control of the Company. \n(1)Information in this table assumes a termination date of December 31, 2020 and a price per share of our common stock of $0.04 (the closing market price per share on December 31, 2020, the last trading day of 2020), and applies the terms of the executives compensation agreements. Because the Companys \nChapter 11 proceeding was still ongoing as of December 31, 2020, notwithstanding the terms of the executives compensation arrangements, the actual amounts potentially payable to each executive may have been reduced as a result of limitations imposed by the United States Bankruptcy Code. \n(2)Upon death or disability, the executive or their estate, as applicable, is entitled to receive all accrued and unpaid salary, immediate vesting of all restricted stock units and performance stock units and other compensation payable to the executive (including vacation and sick pay) with respect to services rendered through the termination date. \n(3)Reflects receipt by the executive of a payment representing their earned but unpaid compensation, as well as an amount of severance equal to the annual base salary and target bonus in effect as of December 31, 2020 (the severance payment), payable in accordance with the terms of the agreement. \n(4)Reflects receipt by the executive of a payment representing their earned but unpaid compensation, as well as an amount of severance equal to two times the annual base salary and target bonus, with the exception of Mr. \nSluiter who receives one times the annual base salary and target bonus, in effect as of December 31, 2020 (the severance payment), payable in accordance with the terms of the agreement. \n(5)Unvested restricted stock units and performance stock units vest upon death or disability, or upon termination by the Company other than for cause or termination by executive for good reason within 24 months following a change of control. Upon a termination by the Company other than for cause or termination by the executive for good reason and not in connection with a change of control, a prorated portion of the unvested restricted stock units and performance stock units will vest. For the purposes of this table, we assume target performance in the valuation of performance stock units. \n(6)In the event of a termination by the Company other than for cause or termination by the executive for good reason and not in connection with a change of control, reflects the value of Company \n-paid continuation coverage under the Companys group health plans and under COBRA for the executive and eligible family members for a period of 12 months following the date of termination. \n(7)In the event of termination by the Company other than for cause or termination by the executive for good reason within 24 months following a change of control, reflects the value of Company \n-paid continuation coverage under the Companys group health plans and under COBRA for the executive and eligible family members for a period of 18 months following the date of termination. \nPursuant to Item 402(u) of Regulation S \n-K \n, we are disclosing the pay ratio and supporting information comparing the median of the annual total compensation of our employees (including full \n-time \n, part \n-time \n, seasonal and temporary employees) other than Mr. \nWood, our Chief Executive Officer and President, and the annual total compensation of Mr. \nWood, our Chief Executive Officer and President. The pay ratio is calculated in a manner consistent with Item 402(u) of Regulation S \n-K \n### For the year ended December \n31, 2020, our last completed fiscal year: \nThe median of the annual total compensation of all our employees, other than Mr. \nWood was $114,103. \nThe annual total compensation of Mr. \n### Wood was $2,773,653. \n\nWood, our Chief Executive Officer and President, to the median of the annual total compensation of all other employees was approximately 24:1. \n### We selected December \n31, 2020 as the date upon which we identified the median employee. To identify the median employee, we examined the Medicare Taxable Earnings as reported on IRS Form W \n(Box 5) for 2020 for all individuals employed by us on December \n31, 2020 (other than Mr. \n### Wood). \nOnce we identified our median employee, we calculated that employees annual total compensation for 2020 in the same manner that we determined the total compensation of our named executive officers for purposes of the Summary Compensation Table set forth above. This resulted in an annual total compensation of $114,103 for the identified employee for the year ended December \n31, 2020. The calculation of the total compensation for Mr. \nWood is included in the Summary Compensation Table set forth above. We made no material assumptions, adjustments, or estimates to identify the median employee or to determine total compensation, and we did not annualize the compensation for any employees that were not employed by us the entire year. \nWe believe that the above pay ratio is a reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation S \n-K \nIn addition, because the Securities and Exchange Commission rules for identifying the median employee allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their compensation practices, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies may have different employment and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios. \n### DIRECTOR COMPENSATION \nOur policy is that members of our Board of Directors who are also our officers or employees do not receive compensation for their services as directors. The compensation of our non \n-employee directors for 2020 is described below. \n### Cash Compensation \nEffective January \n1, 2019, based on the recommendation of Pearl Meyer, our Board of Directors eliminated attendance fees for Board and Committee meetings and established an annual retainer for each non \n-employee director of $85,000. The Chairman of the Board receives an additional $85,000 annual retainer and the chairperson of each of our Board Committees receives an additional annual retainer as set forth in the table below. On June \n1, 2020, the Companys Board of Directors voluntarily chose to take a 10% reduction in board retainer fees for the remainder of 2020. \n### Equity Compensation \nEffective January \n1, 2019, our Board of Directors, based on the recommendation of the independent compensation consultant and the Compensation Committee, approved an annual grant of restricted stock units for our non \n-employee directors from an aggregate value of approximately $175,000 based on the closing price of our common stock on the date of grant, which represents approximately two \n-thirds of our non \n-employee directors annual compensation. Each grant of restricted stock will vest on the earlier of (a) the date of our next annual meeting of stockholders<|endoftext|>Shares of our common stock equal to dividing the amount equal to the greater of the stated value of $1,000 of such Series B Preferred Stock, plus any dividends declared but unpaid thereon, or such amount per share as would have been payable had each such share been converted into our common stock immediately prior to a liquidation, by sixty cents ($0.60) (as adjusted to $6.00 following effectuation of the Reverse Stock Split in January 2020 and subject to further adjustment in the event of any stock dividend, stock split, combination, or other similar recapitalization affecting such shares). The aggregate number of shares of our common stock that may be issued through conversion of the currently outstanding Series B Preferred Stock is 78,333,334 shares (as adjusted to 7,833,334 shares following effectuation of the Reverse Stock Split and subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization affecting such shares). On any matter presented to our stockholders for their action or consideration at any meeting of stockholders of the Company (or by written consent of stockholders in lieu of meeting), each holder of outstanding shares of Series B Preferred Stock will be entitled to cast the number of votes equal to the number of whole shares of our common stock into which the shares of Series B Preferred Stock held by such holder are convertible as of the record date for determining stockholders entitled to vote on such matter. Except as provided by law or by the Certificate of Designation, holders of Series B Preferred Stock will vote together with the holders of common stock as a single class and on an as-converted to common stock basis. \nThe Series B Preferred Stock entitles the holders thereof to certain protective provisions. In particular, for so long as any shares of Series B Preferred Stock are outstanding, the written consent of the holders of at least seventy five percent (75%) of the then outstanding shares of Series B Preferred Stock (voting as a single class) is required for us to amend, waive, alter or repeal the preferences, rights, privileges or powers of the holders of the Series B Preferred Stock, amend, alter or repeal any provision of the Certificate of Designation in a manner adverse to the holders of the Series B Preferred Stock, authorize, create or issue any equity securities senior to or pari passu with the Series B Preferred Stock, or increase or decrease the number of directors constituting the Board. Moreover, for so long as thirty percent (30%) of the Series B Preferred Stock outstanding as of January 15, 2020 remains outstanding (subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization affecting such shares, including the Reverse Stock Split effected in January 2020), the written consent of the holders representing at least seventy-five percent (75%) of the of the outstanding shares of Series B Preferred Stock (voting as a single class) is required for us to: (A) authorize, create or issue any debt securities for borrowed money or funded debt (1) pursuant to which we issue shares, warrants or any other convertible security, or (2) in excess of $4,500,000.00 initially, with such amount to be increased in connection with an aggregate consolidated revenue milestone, but excluding certain specified permitted transactions; (B) merge with or acquire all or substantially all of the assets of one or more other companies or entities with a value in excess of $20,000,000.00, to be increased in connection with an aggregate consolidated revenue milestone; (C) materially change our business; (D) consummate any Liquidation (as defined in the Certificate of Designation); (E) transfer material intellectual property rights other than in the ordinary course of business; (F) declare or pay any cash dividend or make any cash distribution on any of our equity interests other than the Series B Preferred Stock; (G) repurchase or redeem any shares of our capital stock, except for the redemption of the Series B Preferred Stock pursuant to the terms of the Certificate of Designation, or repurchases of our common stock under agreements previously approved by the Board with employees, consultants, advisors or others who performed services for us in connection with the cessation of such employment or service; (H) incur any additional individual debt, indebtedness for borrowed money or other additional liabilities pursuant to we issue shares, warrants or any other convertible security, or incur any individual debt, indebtedness for borrowed money or other liabilities pursuant to which we do not issue shares, warrants or any other convertible security exceeding, in each case, $4,500,000.00 initially, with such amount to be increased in connection with an aggregate consolidated revenue milestone, but excluding certain specified permitted transactions; (I) change any of our accounting methods, except for those changes required by GAAP or applicable regulatory agencies or authorities; or (J) conduct a public offering of common stock registered with the SEC, including any at-the-market offering of our common stock. \nDuring April 2020, the Company applied for various federal stimulus loans, grants and advances made available under Title 1 of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, including a loan request under the Small Business Administration (SBA) Paycheck Protection Program (PPP). In connection with the Companys application for the PPP loan, both Ampersand and 1315 Capital consented to, and agreed to vote their shares of Series B Preferred Stock in favor of any Fundamental Action taken by the Company as determined by the Companys Board of Directors. \nInterpace Biosciences, Inc. \n\nReverse Stock Split \nAt a Special Meeting of Stockholders held on December 13, 2019, our stockholders authorized our Board, in its discretion, to amend our certificate of incorporation, as amended, to effect a reverse split of our outstanding common stock at a ratio between one-for-five (1:5) and one-for-fifteen (1:15), with such final ratio to be determined by the Board following the special meeting (the \n### Reverse Stock Split \n). On January 14, 2020, the Board determined to set the Reverse Stock Split ratio at one-for-ten (1:10) and approved the final form of the certificate of amendment to our certificate of incorporation to effectuate the Reverse Stock Split, which was filed with the Secretary of State of the State of Delaware on January 14, 2020. The Reverse Stock Split became effective in accordance with the terms of the certificate of amendment at 12:01a.m. Eastern Time on Wednesday, January 15, 2020, at which time every ten (10) shares of common stock issued and outstanding automatically combined into one (1) share of issued and outstanding common stock, without any change in the par value per share. Fractional shares were not issued as a result of the Reverse Stock Split. Instead, any fractional shares of our common stock that would have otherwise resulted from the Reverse Stock Split were rounded up to the nearest whole share. \nThe Reverse Stock Split resulted in a proportionate adjustment to the per share exercise price and the number of shares of common stock issuable upon the exercise of our outstanding stock options and warrants, as well as the number of shares of common stock eligible for issuance under the Interpace Biosciences, Inc. 2019 Equity Incentive Plan and the Interpace Biosciences, Inc. Employee Stock Purchase Plan. \nExcept as otherwise indicated, all share and per share information herein gives effect to the Reverse Stock Split. \n### Appointment of Chairman of the Board of Directors \nOn April 16, 2020, Robert Gorman was elected to serve as the Companys Chairman of the Board of Directors (the Board) by the Nominating and Corporate Governance Committee of the Board. Mr. Gorman previously served in a consulting role for the Company under an agreement dated January 29, 2020; such consulting agreement is effectively terminated with his appointment as Chairman. Mr. Gorman shall serve as Chairman through the anniversary date of his appointment and continuing thereafter so long as he is elected as a member of the Board by the Companys shareholders. \nAvailable Information \nWe maintain an internet website at www.interpace.com. Our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports are available free of charge through the Investor Relations portion of our website, as soon as reasonably practicable after they are filed with the SEC. The content contained in, or that can be accessed through, our website is not incorporated into this Form 10-K. \n### ITEM 1A. RISK FACTORS \nIn addition to the other information provided in this Annual Report on Form 10-K, including our financial statements and the related notes in Part II - Item 8, you should carefully consider the following factors in evaluating our business, operations and financial condition. Additional risks and uncertainties not presently known to us, which we currently deem immaterial or that are similar to those faced by other companies in our industry or businesses in general, such as competitive conditions, may also impair our business operations. The occurrence of any of the following risks could have a material adverse effect on our business, financial condition, results of operations or cash flows. \n\n### Adverse Impact of Coronavirus (COVID-19) Pandemic \nThe world is currently suffering a coronavirus (COVID-19) pandemic which is resulting in social distancing, travel bans and quarantines. Currently volume of testing in our clinical services labs has substantially slowed and we have furloughed a significant number of employees as a result of reductions in customer demand. In particular, the continued spread of the coronavirus globally is adversely affecting global economies and financial markets resulting in an economic downturn which could materially and adversely impact our operations including, without limitation, the functioning of our laboratories, the availability of supplies including reagents, the progress and data collection of our pharma services, demand for our services and travel, customer demand and employee health and availability. Additionally, laying off or furloughing employees may result in our losing critical employees that we will need to replace when our business returns as expected. Not furloughing personnel before volume drops or if volume drops more than expected may mean that we are not able to reduce cost quickly enough to meet our plans or preserve cash. It appears likely that the COVID-19 pandemic will have an adverse impact on our revenue, results of operations and financial condition. \nInterpace Biosciences, Inc. \n\nWe have a history of operating losses, and our clinical and pharma services have generated limited revenue. We expect to incur net losses for the foreseeable future and may never achieve or sustain profitability. \nFor the year ended December 31, 2019, we had a net loss of $26.7 million and as of December 31, 2019, we had an accumulated deficit of $185.7 million. Although we expect our revenue to grow in the future, there can be no assurance that we will achieve revenue sufficient to offset expenses. Over the next several years, we expect to (i) continue to devote resources to increase adoption of, and reimbursement for, our clinical services tests and assays and to use our bioinformatics data to develop and enhance our clinical services products and services, (ii) leverage and invest in our pharma services to expand and enhance our pharma services and (iii) develop and acquire additional products and services. However, our business may never achieve or sustain profitability, and our failure to achieve and sustain profitability in the future could have a material adverse effect on our business, financial condition and results of operations, as well as cause the market price of our common stock to decline. \nWe have a limited operating history, which may make it difficult for you to evaluate the success of our business to date and to assess our future viability. \nWe began commercial sales of our molecular diagnostic tests in late 2014. On July 15, 2019, we acquired the Biopharma Business from the secured creditors of CGI and Gentris. We conduct our business through our wholly-owned subsidiaries, Interpace Diagnostics, LLC, which was formed in Delaware in 2013, Interpace Diagnostics Corporation (formerly<|endoftext|>Reasonable analytics designed to identify unwanted calls. In March 2020, the FCC required that all voice service providers implement the STIR/SHAKEN caller ID authentication framework in the Internet Protocol (IP) portions of their networks by June 30, 2021. There is significant uncertainty regarding how STIR/SHAKEN will work. For example, there is currently no accepted standard by which voice service providers that do not have authorization to directly obtain telephone numbers will be able to authenticate calls originated by their customers. We have obtained authorization to directly obtain telephone numbers in the U.S. in order to be able to authenticate calls under STIR/SHAKEN originated by our subscribers. The STIR/SHAKEN framework will likely be used throughout the world. It is likely that the standards to obtain STIR/SHAKEN signing authority in other countries will differ from the U.S. requirements and similar to the U.S., there are no accepted standards yet for how voice service providers that donot have direct STIR/SHAKEN signing authority will be able to authenticate calls originated by their customers. In addition, foreign regulators have allowed terminating voice service providers to block voice traffic to address robo-calling or other unwanted calls.If we do not have a solution in place for STIR/SHAKEN when STIR/SHAKEN becomes widely adopted, our business could be harmed as we would beunable to authenticate originating calls from our subscribers telephone numbers under STIR/SHAKEN. Call recipients would be less likely to answer non-authenticated calls. In addition, the terminating voice service providers may block calls that are not authenticated under STIR/SHAKEN as the lack of authentication could be viewed as a reasonable indication that the call is unwanted by the recipient. This would make our service less desirable for our customers.Further if we do not have STIR/SHAKEN caller ID authentication in place when required, we could be subject to regulatory enforcement action. \n### Table of \nContents \nRisks Related to Intellectual Property \nOur infringement of a third party's proprietary technology could disrupt our business. \nIf we are found to be infringing on the intellectual property rights of any third-party in lawsuits or proceedings that may be asserted against us, we could be subject to monetary liabilities for such infringement, which could be material. We could also be required to refrain from using, manufacturing or selling certain products or using certain processes, either of which could have a material adverse effect on our business and operating results. Our broad range of current and former technology, including IP telephony systems, digital and analog circuits, software, and semiconductors, increases the likelihood that third parties may claim infringement by us of their intellectual property rights. We have received and may continue to receive in the future, notices of claims of infringement, misappropriation or misuse of other parties' proprietary rights. There can be no assurance that we will prevail in these discussions and actions or that other actions alleging infringement by us of third-party patents will not be asserted or prosecuted against us. Furthermore, lawsuits like these may require significant time and expense to defend, may divert management's attention away from other aspects of our operations and, upon resolution, may have a material adverse effect on our business, results of operations, financial condition and cash flows. \nInability to protect our proprietary technology would disrupt our business. \nWe rely, in part, on patent, trademark, copyright, and trade secret law to protect our intellectual property in the United States and abroad. We seek to protect our software, documentation, and other written materials under trade secret and copyright law, which afford only limited protection. We currently have several United States patent applications pending. We cannot predict whether such pending patent applications will result in issued patents, and if they do, whether such patents will effectively protect our intellectual property. The intellectual property rights we obtain may not be sufficient to provide us with a competitive advantage, and could be challenged, invalidated, infringed or misappropriated. We may not be able to protect our proprietary rights in the United States or internationally (where effective intellectual property protection may be unavailable or limited), and competitors may independently develop technologies that are similar or superior to our technology, duplicate our technology or design around any patent of ours. \nLitigation may be necessary in the future to enforce our intellectual property rights, to determine the validity and scope of our proprietary rights or the rights of others, or to defend against claims of infringement or invalidity. Such litigation could result in substantial costs and diversion of management time and resources and could have a material adverse effect on our business, financial condition, and operating results. Any settlement or adverse determination in such litigation would also subject us to significant liability. \nOur inability to use software licensed from third parties, or our use of open source software under license terms that interfere with our proprietary rights, could disrupt our business. \nOur technology platform incorporates software licensed from third parties, including some software, known as open source software, which we use without charge. Although we monitor our use of open source software, the terms of many open source licenses to which we are subject have not been interpreted by U.S. or foreign courts, and there is a risk that such licenses could be construed in a manner that imposes unanticipated conditions or restrictions on our ability to provide our platform to our customers. In the future, we could be required to seek licenses from third parties in order to continue offering our platform, which licenses may not be available on terms that are acceptable to us, or at all. Alternatively, we may need to re-engineer our platform or discontinue use of portions of the functionality provided by our platform. In addition, the terms of open source software licenses may require us to provide software that we develop using such software to others on unfavorable license terms. Our inability to use third-party software could result in disruptions to our business, or delays in the development of future offerings or enhancements of existing offerings, which could impair our business. \n\nServicing our debt, including the paying down of principal, requires the use of cash, and we may not have sufficient cash flow from our business to pay down our substantial debt. \nAs of November 21, 2019, we had issued $362.5 million aggregate principal amount of our 0.50% convertible senior notes due 2024 in a private placement. Pursuant to an indenture dated as of February 19, 2019 between us and Wilmington Trust, National Association, as trustee, the notes bear interest at a rate of 0.50% per annum, payable semi-annually in arrears in cash on February 1 and August 1 of each year, and they will mature on February 1, 2024, unless earlier converted, redeemed or repurchased. \nOur ability to make scheduled payments of the principal of, to pay interest on or to refinance our indebtedness, including the amounts payable under the notes, depends on our future performance, which is subject to economic, financial, competitive and other factors beyond our control. Our business may not continue to generate cash flow from operations in the future sufficient to service our debt, including paying off the principal when due, and make necessary capital expenditures. \n### Table of \nContents \nWe may not have the ability to raise the funds necessary to settle conversions of the notes in cash or to repurchase the notes upon a fundamental change, and our future debt may contain limitations on our ability to pay cash upon conversion or repurchase of the notes. \nHolders of the notes have the right to require us to repurchase their notes upon the occurrence of a fundamental change at a repurchase price equal to 100% of the principal amount of the notes to be repurchased, plus accrued and unpaid interest, if any. In addition, upon conversion of the notes, unless we elect to deliver solely shares of our common stock to settle such conversion (other than paying cash in lieu of delivering any fractional share), we will be required to make cash payments in respect of the notes being converted. However, we may not have enough available cash or be able to obtain financing at the time we are required to make repurchases of notes surrendered therefor or notes being converted. In addition, our ability to repurchase the notes or to pay cash upon conversions of the notes may be limited by law, by regulatory authority or by agreements governing our future indebtedness. Our failure to repurchase notes at a time when the repurchase is required by the indenture or to pay any cash payable on future conversions of the notes as required by the indenture would constitute a default under the indenture. A default under the indenture or the occurrence of the fundamental change may also lead to a default under agreements governing our future indebtedness. If the repayment of the related indebtedness were to be accelerated after any applicable notice or grace periods, we may not have sufficient funds to repay the indebtedness and repurchase the notes or make cash payments upon conversions thereof. \nThe conditional conversion feature of the notes, if triggered, may adversely affect our financial condition and operating results. \nIn the event the conditional conversion feature of the notes is triggered, holders of notes will be entitled to convert the notes at any time during specified periods at their option. If one or more holders elect to convert their notes, unless we elect to satisfy our conversion obligation by delivering solely shares of our common stock (other than paying cash in lieu of delivering any fractional share), we would be required to settle a portion or all of our conversion obligation through the payment of cash, which could adversely affect our liquidity. In addition, even if holders of notes do not elect to convert their notes, we could be required under applicable accounting rules to reclassify all or a portion of the outstanding principal of the notes as a current rather than long-term liability, which would result in a material reduction of our net working capital. \nThe accounting method for convertible debt securities that may be settled in cash, such as our notes, could have a material effect on our reported financial results. \nUnder Accounting Standards Codification 470-20, Debt with Conversion and Other Options (ASC 470-20), an entity must separately account for the liability and equity components of the convertible debt instruments (such as the notes) that may be settled entirely or partially in cash upon conversion in a manner that reflects the issuers economic interest cost. The effect of ASC 470-20 on the accounting for the notes is that the equity component is required to be included in the additional paid-in capital section of stockholders equity on our consolidated balance sheet at the issuance date and the value of the equity component would be treated as debt discount for purposes of accounting for the debt component of the notes. As a result, we will be required to record a greater amount of non-cash interest expense as a result of the amortization of the discounted carrying value of the notes to their face amount over the term of the notes. We will report larger net losses (or lower net income) in our financial results because ASC 470-20 will require interest to include both the amortization of the debt discount and the instruments non-convertible coupon interest rate, which could adversely affect our reported or future financial results, the trading price of our common stock and the trading price of the notes. \nIn addition, under certain circumstances, convertible debt instruments (such as the notes) that may be settled entirely or partly in cash may be accounted for utilizing the treasury stock method, the effect of which is that the shares issuable upon conversion of such notes are not included in the calculation of diluted earnings per share except to the extent that the conversion value of such notes exceeds their principal amount. If we are unable or otherwise elect not to use the treasury stock method in accounting for the shares<|endoftext|>Closing. However, if the sale of some of or all of the forward purchase securities, or of the Pubco securities pursuant to the A&R Forward Purchase Agreement, does not close for any reason, we may lack sufficient funds to consummate our initial business combination. The obligations under the forward purchase agreement will not depend on whether any public shareholders elect to redeem their shares and will provide us with a minimum funding level for the initial business combination. The forward purchase agreement contains customary closing conditions, the fulfillment of which is a condition for the sponsor to purchase the forward purchase securities, including that our initial business combination must be consummated substantially concurrently with, and immediately following, the purchase of forward purchase securities. In the event of any such failure to fund, any obligation is so terminated or any such condition is not satisfied and not waived, we may not be able to obtain additional funds to account for such shortfall on terms favorable to us or at all. \n\nAdditionally, since our board of directors may complete our initial business combination without seeking shareholder approval, public shareholders may not have the right or opportunity to vote on the business combination, unless we seek such shareholder approval. \nThe ability of our public shareholders to redeem their shares for cash may make our financial condition unattractive to potential business combination targets, which may make it difficult for us to enter into an initial business combination with a target. \nFurthermore, in no event will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 (so that we do not then become subject to the SECs penny stock rules) or any greater net tangible asset or cash requirement which may be contained in the agreement relating to our initial business combination. \n\nRaising additional third- party financing may involve dilutive equity issuances or the incurrence of indebtedness at higher than desirable levels. \n\n\n\nAny potential target business with which we enter into negotiations concerning an initial business combination will be aware that we must complete our initial business combination by August 10, 2022. This risk will increase as we get closer to the prescribed time frame. \n\nOn January 31, 2020, the U.S. Health and Human Services declared a public health emergency for the United States, and on March 11, 2020 the World Health Organization characterized the outbreak as a pandemic. \nThe COVID-19 outbreak has resulted, and other infectious diseases could result, in a widespread health crisis that has adversely affected the economies and financial markets worldwide, and the business of any potential target business with which we consummate a business combination could be materially and adversely affected. If the disruptions posed by COVID-19 or other matters of global concern continue for an extensive period of time, our ability to consummate a business combination, such as the proposed business combination with Nexters Global, or the operations of a target business with which we ultimately consummate a business combination, may be materially adversely affected. \n\n\n\nAttractive deals could also become scarcer for other reasons, such as economic or industry sector downturns, geopolitical tensions or increases in the cost of additional capital needed to close business combinations or operate targets post- business combination. \n\n\n\nThe need for run- off insurance would be an added expense for the post-business combination entity and could interfere with or frustrate our ability to consummate an initial business combination on terms favorable to our investors. \nWe may not be able to complete our initial business combination within the prescribed time frame, in which case we would cease all operations except for the purpose of winding up and we would redeem our public shares and thereafter commence a voluntary liquidation, in which case our public shareholders may receive only $10.00 per share, or less than such amount in certain circumstances, and our warrants will expire worthless. \nOur sponsor, officers and directors agreed that we must complete our initial business combination by August 10, 2022. Additionally, the outbreak of the COVID-19 coronavirus and other events (such as terrorist attacks, natural disasters or a significant outbreak of other infectious diseases) may negatively impact businesses we may seek to acquire. \nIf we have not completed our initial business combination within such time period, we will: (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per share price, payable in cash, equal to the aggregate amount then on deposit in the trust account including interest earned on the funds held in the trust account and not previously released to us to pay our taxes, if any (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public shareholders rights as shareholders (including the right to receive further liquidation distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders and our board of directors, proceed to commence a voluntary liquidation and thereby a formal dissolution of the company, subject in each case to our obligations under the laws of the British Virgin Islands to provide for claims of creditors and the requirements of other applicable law. \n\nIf we seek shareholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our sponsor, directors, executive officers, advisors or any of their affiliates may purchase shares in privately negotiated transactions or in the open market either prior to or following the completion of our initial business combination, although they are under no obligation to do so. In the event that our sponsor, directors, executive officers, advisors or any of their affiliates purchase public shares in privately negotiated transactions from public shareholders who have already elected to exercise their redemption rights, such selling shareholders would be required to revoke their prior elections to redeem their shares. The purpose of such purchases could be to vote such shares in favor of our initial business combination and thereby increase the likelihood of obtaining shareholder approval of our initial business combination, or to satisfy a closing condition in an agreement with a target that requires us to have a minimum net worth or a certain amount of cash at the closing of our initial business combination, where it appears that such requirement would otherwise not be met. \n\n\nFor example, we may require our public shareholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in street name, to either tender their certificates to our transfer agent prior to the date set forth in the tender offer documents or proxy materials mailed to such holders, or up to two business days prior to the vote on the proposal to approve the business combination in the event we distribute proxy materials, or to deliver their shares to the transfer agent electronically. In the event that a shareholder fails to comply with these or any other procedures, its shares may not be redeemed. \nThe shares beneficially owned by our sponsor, our officers and directors will not participate in liquidation distributions and, therefore, our officers and directors may have a conflict of interest in determining whether a particular target business is appropriate for our initial business combination. \nOur sponsor, officers and directors have entered into respective letter agreements with us, pursuant to which our sponsor has agreed to waive its redemption rights with respect to its founder shares, and our sponsor, officers and directors have agreed to waive their redemption rights with respect to any public shares they may acquire, in connection with the completion of our initial business combination. Our sponsor has also waived its right to receive distributions with respect to its founder shares upon our liquidation if we are unable to consummate our initial business combination. Accordingly, the founder shares will be worthless if we do not consummate our initial business combination. The private placement warrants and any other warrants they acquire will also be worthless if we do not consummate an initial business combination. The personal and financial interests of our sponsor, officers and directors may influence their motivation in timely identifying and selecting a target business and completing a business combination. \n\nSince the net proceeds of our initial public offering and the sale of the private placement warrants are intended to be used to complete our initial business combination with a target business that has not been identified, we may be deemed to be a blank check company under the U.S. securities laws. However, because we had net tangible assets in excess of $5,000,000 upon the completion of our initial public offering and the sale of the private placement warrants and filed a Current Report on Form 8-K, including an audited balance sheet demonstrating this fact, we are exempt from rules promulgated by the SEC to protect investors in blank check companies, such as Rule 419. \n\nFurthermore, in the event we seek shareholder approval of our initial business combination and we are obligated to pay cash for our ordinary shares, it will potentially reduce the resources available to us for our initial business combination. Any of these obligations may place us at a competitive disadvantage in successfully negotiating our initial business combination. See If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share redemption amount received by shareholders may be less than \n$10.00 per share and other risk factors herein. \nIf the funds not being held in the trust account are insufficient to allow us to operate until August 10, 2022, we may be unable to complete our initial business combination. \nThe funds available to us outside of the trust account may not be sufficient to allow us to operate until August 10, 2022, assuming that our initial business combination is not completed during that time. We have incurred and expect to continue to incur significant costs in pursuit of our acquisition plans. Managements plans to address this need for capital and potential loans from certain of our affiliates are discussed in the section of this Annual Report titled Managements Discussion and Analysis of Financial Condition and Results of Operations. \nWe believe that the funds available to us outside of the trust account will be sufficient to allow us to operate until August 10, 2022; Of the funds available to us, we have used and in the future may use a portion of the funds available to us to pay fees to consultants to assist us with our search for a target business. \n\nAs of December 31, 2020, we had approximately $0.8 million outside of the trust account, approximately $64,000 of investment income available in the trust account to pay for tax obligations, if any (less up to $100,000 of interest to pay dissolution expenses), and a working capital of approximately $0.4 million. In such case, our public shareholders may receive only $10.00 per share, or less in certain circumstances, and our warrants will expire worthless., our public shareholders may receive less than $10.00 per share on the redemption of their shares. \n\nunless they are able to successfully claim that the reduction was due to the breach by our officers or directors of a duty of care or other fiduciary duty owed by them to our company, or if they are able to successfully bring a private claim under securities laws that the tender offer materials or proxy statement relating to the business combination contained an actionable material misstatement or material omission. \nIf we liquidate, distributions, or part of them, may be delayed while the liquidator determines the extent of potential creditor claims. \nIf we do not complete our initial business combination by August 10, 2022, we will be required to redeem our public shares<|endoftext|>PEOPLES UNITED FINANCIAL, INC. \n### Explanatory Note \nThis Amendment No.1 (the Amendment) on Form \n10-K/A is being filed with respect to Peoples United Financial, Inc.s Annual Report on Form \n10-K for the fiscal year ended December31, 2020, filed with the Securities and Exchange Commission (the SEC) on March1, 2021 (the Form \n10-K). \nThis Amendment updates Part III (Items \n10-14) to contain certain additional information required therein. This information was previously omitted from the Form \n\n\n10-K by reference from the Companys definitive proxy statement if such statement is filed no later than 120 days after the Companys fiscal year-end. \nThis Amendment amends and restates in their entirety Items 10, 11, 12, 13 and 14 of Part III of the Form \n10-K. \nIn addition to the changes to Part III to provide the omitted information, this Amendment amends Item 15 of Part IV to include certain exhibits in the exhibit index. \nS-K, paragraphs 3, 4 and 5 of the certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 filed herewith have been omitted. The cover page of the Form \n10-K is also amended to delete the reference to incorporation by reference of the Companys definitive proxy statement. This Amendment makes no other changes to the Form \n10-K. \n\n10-K or modify disclosures affected by subsequent events. Accordingly, this Amendment should be read in conjunction with our Form \n10-K and with our filings with the SEC subsequent to the filing of our Form \n10-K. \nThe Company expected to hold its 2021 Annual Meeting of Shareholders in May 2021. On February22, 2021, Peoples United Financial, Inc. and M&T Bank Corporation (M&T) announced the execution of a definitive Agreement and Plan of Merger, dated as of February21, 2021, pursuant to which M&T will acquire Peoples United in an all-stock transaction. Due to the fact that the Company now expects to hold a Special Meeting of Shareholders in approximately the second quarter of 2021, and the Company and M&T expect the merger to close in the fourth quarter of 2021, subject to the satisfaction of customary closing conditions including receipt of regulatory approvals and approval by the shareholders of each company, the Board of Directors has decided a 2021 Annual Meeting will not be held at this time while the merger is pending. In the event the Company decides to hold a 2021 Annual Meeting, a press release will be issued, with sufficient notice to shareholders, announcing: (i)the date, time and location of the 2021 Annual Meeting; and (ii)the new deadline for receipt of shareholder proposals submitted pursuant to Rule \n14a-8 under the Securities Exchange Act of 1934 for inclusion in the Companys proxy materials for a 2021 Annual Meeting. \nAs used in this Amendment, the terms the Company, we, our and us refer to Peoples United Financial, Inc. and the Bank refers to Peoples United Bank, N.A., a wholly-owned subsidiary of the Company. Other terms used but not defined herein are as defined in the Form \n10-K. \n### As required by Rule \n12b-15 under the Exchange Act, new certifications by our principal executive officer and principal financial officer are filed as exhibits to this Amendment under Part IV, Item 15. \n### Part III \nItem10. \nDirectors \nSet forth below is information about each of the Companys directors and executive officers including ages as of March1, 2021 and the business experience of each during the past five years. Information regarding each directors length of service as a director includes such persons term of service as a director of the Bank, if he or she was elected prior to 2007. \n### John P. Barnes \n, age 65, since June 2018, is Chairman of the Board and Chief Executive Officer of Peoples United. Previously, he served as President and Chief Executive Officer since July 2010. Mr.Barnes previously served as Senior Executive Vice President and Chief Administrative Officer for Peoples United following the acquisition of Chittenden Corporation in early 2008. Mr.Barnes served as an Executive Vice President of Chittenden since 1997. He became a member of our board in 2010. Mr.Barnes also serves as the chairman of The Peoples United Community Foundation. \nMr.Barnes has worked in the financial services industry since 1983, when he joined Chittenden after five years with the FDIC in Boston. He became Senior Vice President and Chief Credit Policy Officer of Chittenden in 1988. In 1990 he was named to head the Credit Policy and Administration division. In 2002, he was appointed Executive Vice President in charge of the newly formed Chittenden Services Group, which provided all centralized services for the corporation. Mr.Barnes is a graduate of Northeastern University and received his M.B.A. from the University of Vermont. \n### Qualifications: \nThe board believes that Mr.Barnes, as our chief executive officer, has a critical role to play as a representative of management on the board. For this reason, the board expects that for as long as Mr.Barnes serves as our chief executive officer, the board will recommend him for election to our board of directors. \nCollin P. Baron \n, age 73, is a member of the law firm of Pullman& Comley, LLC, a full-service law firm with offices in major Connecticut cities and in White Plains, N.Y. He has been affiliated with the firm since 1973. He serves as a member of the Companys Enterprise Risk Committee and has been a director since 2001. \nA graduate of the University of Virginia and the George Washington University National Law Center, Mr.Baron has more than 40 years of experience in corporate, health care and banking law. He is a member of the Connecticut Health Lawyers Association and American Health Lawyers Association. He is a member of the Banking Law Committee of the American Bar Association. He has also been an active member of the greater Bridgeport business, legal and philanthropic community. \n### Qualifications: \nIn evaluating Mr.Barons qualifications for board service, the board determined that Mr.Barons expertise in corporate and banking law, coupled with his past experience as a member of the Banks and the Companys board of directors and thus his familiarity with our operations and our Connecticut market, qualify him to serve on our board and enhance the overall mix of skills among board members. \nGeorge P. Carter \n, age 84, is the former President of Connecticut Foods, Inc. He currently serves as our Lead Director and also serves as a member of the Companys Audit, Compensation and Enterprise Risk Committees, and serves as Chairman of the Nominating and Corporate Governance Committee. \nMr.Carter has significant experience as a member of both the board of directors and the audit committee of a financial services company, having served as a member of the Banks board of directors since 1976 and as a member of its audit committee since 1981. He became Chairman of the Banks audit committee in 1987 and Chairman of the Companys Audit Committee at the time of its formation in 2007 until 2017. Mr.Carter served as non-executive \nChairman of the Board from 2008 until June 2018. He graduated from Michigan State University with a B.S. in business and has been a business owner since 1969. He is active in community and philanthropic affairs and serves as a member of the board of directors of The Peoples United Community Foundation. The Board has identified Mr.Carter as an audit committee financial expert. \n### Qualifications: \nIn considering Mr.Carters contributions to the board and his skills and qualifications for board service, the board noted that, over his more than 40years of board service, Mr.Carter has developed a level of expertise in banking matters and an in-depth familiarity with Peoples United, our various businesses and the Connecticut market that enhance his contributions to the board. The board also cited the benefit to the boards deliberative process provided by Mr.Carters long-term perspective, noting that Mr.Carter has been a member of the board throughout a number of business cycles. \n### Jane Chwick \n, age 58, was elected to the Board of Directors of the Bank and the Company on September21, 2017. Ms.Chwick was a partner at Goldman Sachs where she had a \n30-year career in technology, including most recently as the \n### Co-Chief \nOperating Officer of the technology division. As \nCo-COO, she was responsible for financial business planning, setting the technical strategy and management of an \n8,000-person organization within the firm. While at Goldman, Ms.Chwick served on many governance committees, including the firms Finance Committee, the firm-wide New Activity Committee and the Technology Risk Committee, and she was co-chair of the Technology Division Operating Committee. \n### Ms.Chwick was also the \nCo-founder and \nCo-CEO of Trewtec, Inc., providing corporate directors, chief executive officers and chief technology officers with the information they need to improve their oversight of a companys technology division. \nMs.Chwick currently serves on a number of boards for corporate and not for profit organizations including Voya Financial, MarketAxess, Thoughtworks, Inc. and Essent Group. She is chair of the Technology, Innovation and Operations Committee at Voya Financial and Essent, and is the chair of the Risk Committee at MarketAxess. In addition, Ms.Chwick is on the Executive Board of Trustees and the Vice Chair of the Queens College Foundation. She earned an undergraduate degree in Mathematics from Queens College, and an M.B.A. with a concentration in quantitative analysis from St. Johns University. Ms.Chwick is a member of the Companys Enterprise Risk and Nominating and Corporate Governance Committees. \n### Qualifications: \nThe board believes that Ms.Chwicks extensive technology leadership experience, gained in a global financial services firm, combined with her in-depth knowledge of the New York market and industry insight, bring valuable skills and strategic perspective to the board. \n### William F. Cruger, Jr. \n, age 62, was, until August 2013, Vice Chairman of Investment Banking at J.P. Morgan Chase& Co., a leading global financial services firm. His responsibilities included senior client relationship management and transaction leadership with a primary focus on financial institutions, among other sectors. Mr.Cruger was Managing Director, Financial Institutions Group at J.P. Morgan Chase from 1996 until 2011 when he was elevated to the position of Vice Chairman. He also ran the firms investment banking practices in Japan from 1991 to 1996, in Latin America from 1989 to 1991, and in Emerging Asia from 1984 to 1988. He began his career at J.P. Morgan Chase in 1982. \nCurrently Mr.Cruger is a member of the board of MarketAxess Holdings Inc., serving as a member of the Audit and Investment Committees and the Chairman of the Nominating and Corporate Governance Committee, and of Virtu Financial, Inc., serving as Chairman of the Audit Committee. He has also served on the boards of Archipelago, Capital IQ and Credittrade. \nMr.Cruger has developed extensive experience in the evaluation of financial statements and has a thorough understanding of generally accepted accounting principles and financial reporting procedures.He currently serves as a member of the audit committee of two public companies. \n### Qualifications: \nMr.Cruger is a member of the Companys Enterprise Risk and Nominating and Corporate Governance Committees, and currently serves as Chairman of the Companys Audit Committee. He has been a director since 2014. The board believes that Mr.Crugers diverse experience in investment banking at a global financial services firm, his extensive knowledge of financial institutions and financial markets (including the New York market), his leadership roles as a director of other financial services firms, and his international business experience bring critical skills and strategic insight to the board. Based on this background and experience, the board has identified Mr.Cruger as an audit committee financial expert. \nJohn K. Dwight \n, age 76, had served as a director of Chittenden since 1999. He is the founder and Chairman of Dwight Asset Management Company, a registered investment advisor managing over $60billion in fixed income assets for insurance companies, stable value funds, and other institutional clients. Mr.Dwight is a former director of Old Mutual Asset Management US Holdings, Inc., a founding member of the Stable Value Investment Association and the Vermont Security Analysts Chapter. In addition, Mr.Dwight is a past trustee of St. Lawrence University and the Shelburne Museum. \nMr.Dwight has more than<|endoftext|>On April 26, 2021 by China Grand Pharmaceutical & Healthcare Holdings Ltd (CGP) and Grand Decade Developments Limited (Grand Decade). CGP and Grand Decade may each be deemed to beneficially own 16,798,036 shares of our common stock and have shared dispositive power as to 16,798,036 shares of our common stock. The address of CGP and Grand Decade is Unit 3302,33/F, The Center, 99 Queens Road Central, Hong Kong. \n(12) \nBased solely upon a Form 4 filed on April 26, 2021 by Sirtex Medical US Holdings, Inc. (Sirtex). Sirtex beneficially owns 3,359,607 shares of our common stock and has sole dispositive power as to 3,359,607 shares of our common stock. The address of Sirtex is 300 Unicorn Park Drive, Woburn MA 01801, USA. \n(13) \nBased solely upon a Schedule 13G/A filed on February 16, 2021 by Avidity Partners Management LP, Avidity Partners Management LP, Avidity Partners Management (GP) LLC, Avidity Capital Partners Fund (GP) LP, Avidity Capital Partners (GP) LLC, Avidity Master Fund LP, David Witzke, and Michael Gregory (Avidity). Avidity beneficially owns 1,952,000 shares of our common stock and has sole dispositive power as to 1,952,000 shares of our common stock. The address of Avidity is 2828 N Harwood Street, Suite 1220 Dallas, Texas 75201. \n\nThe following table provides information as of July 31, 2021 regarding compensation plans under which our equity securities are authorized for issuance: \n(1) \n2,521,642 of these shares were subject to stock options outstanding under the OncoSec Medical Incorporated 2011 Stock Incentive Plan (the 2011 Plan) and 442,749 were subject to restricted stock units outstanding under the 2011 Plan. \n(2) \nRepresents (i) an aggregate of 808,516 shares of common stock available for future issuance under the 2011 Plan, and (ii) an aggregate of 29,794shares of common stock available for future issuance under the OncoSec Medical Incorporated 2015 Employee Stock Purchase Plan. \n(3) \nRepresents (i) 590,000 stock option awards that were not granted under the 2011 Plan. These out-of-plan stock option awards were granted as follows: (i) a stock option award to purchase up to 300,000 shares on October 9, 2020 to a new employee as an inducement material to entering into employment with the Company, 25% vested at grant and remaining 75% cliff vesting at 1 year anniversary; (ii) a stock option award to purchase up to 150,000 shares on February 2, 2021 to a new employee as an inducement material to entering into employment with the Company, 25% vested at grant remaining 75% vesting quarterly over 2 years; (iii) a stock option award to purchase up to 35,000 shares on February 2, 2021 to a new employee as an inducement material to entering into employment with the Company, 25% vested at grant remaining 75% vesting quarterly over 2 years; (iv) a stock option award to purchase up to 35,000 shares on February 18, 2021 to a new employee as an inducement material to entering into employment with the Company, 25% vested at grant remaining 75% vesting quarterly over 2 years; (v) a stock option award to purchase up to 35,000 shares on May 17, 2021 to a new employee as an inducement material to entering into employment with the Company, 25% vested at grant remaining 75% vesting quarterly over 2 years; and (vi) a stock option award to purchase up to 35,000 shares on June 14, 2021 to a new employee as an inducement material to entering into employment with the Company, 25% at grant remaining 75% vesting quarterly over 2 years. \nITEM 13. \n\nExcept as described below and except for employment arrangements and compensation for Board service, which are described under Executive Compensation above, since August 1, 2019, there has not been, nor is there currently proposed, any transaction in which we are or were a participant, the amount involved exceeds the lesser of $120,000 or 1% of the average of our total assets at year-end for the last two completed fiscal years, and any of our directors, executive officers, holders of more than 5% of our common stock or any immediate family member of any of the foregoing had or will have a direct or indirect material interest. \nIn general, these indemnification agreements require the Company to indemnify a director to the fullest extent permitted by law against liabilities that may arise in connection with that directors service as a director for the Company. \n\nPursuant to its charter and in accordance with applicable NASDAQ rules, our Audit Committee has the responsibility to review and approve in advance any transactions with a related party. In addition, our Code of Business Conduct and Ethics addresses conflicts of interest and requires that the existence of any actual or potential conflict be disclosed to the Chairman of the Audit Committee to enable the committees full review of the potential conflict. The Audit Committee intends to approve only those related party or conflict of interest transactions that are considered to be in the best interests of the Company and our stockholders. In considering whether to approve any such transaction, the Audit Committee considers such factors as it deems appropriate, and generally focuses on whether the terms of the transaction are at least as favorable to us as terms we would receive on an arms-length basis from an unaffiliated third party and whether any such transaction might impair the independence of a director or present a conflict of interest for a director or executive officer. \nDirector Independence and Controlled Company Exemption \nThe Companys common stock is listed on the NASDAQ Capital Market. The rules of NASDAQ require our Board to make an affirmative determination as to the independence of each director and require a majority of the Companys directors be independent directors, as defined by NASDAQ rules. In addition, NASDAQ rules require that, subject to specified exceptions, each member of a companys audit, compensation and nominating committee be independent. Audit committee and compensation committee members must also satisfy enhanced independence criteria under certain SEC rules and corresponding NASDAQ rules. \nConsistent with these rules, our Board undertook its annual review of director independence on May 6, 2021. During the review, our Board considered relationships and transactions during Fiscal Year 2021 and since inception between each director or any member of his immediate family, on the one hand, and the Company and our subsidiaries and affiliates, on the other hand. The purpose of this review was to determine whether any such relationships or transactions were inconsistent with a determination that the director is independent. Based on this review, our Board determined that Dr. Margaret Dalesandro Ph.D., Dr. James M. DeMesa, M.D., Dr. Herbert Kim Lyerly, M.D., and Mr. Robert E. Ward are independent under the criteria established by Nasdaq and our Board. \nUpon the Closing of the Transaction described above, CGP and Sirtex, acting as a group for purposes of Section 13(d) of the Exchange Act, collectively beneficially owns common stock representing more than 50% of the voting power of our Common Stock eligible to vote in the election of directors. As a result, we qualify as a controlled company and avail ourselves of certain controlled company exemptions under the Nasdaq corporate governance rules. As a controlled company, we are not required to have a majority of independent directors on our Board as defined under the Nasdaq rules, or have a compensation, nominating or governance committee composed entirely of independent directors. In light of our status as a controlled company, our Board has determined to utilize the majority board independence exemption. \n### ITEM 14. \nThe following table presents the aggregate fees billed to the Company for professional services rendered by Mayer Hoffman McCann P.C. (MHM) in our fiscal years ended July 31, 2021 and 2020. \n(1) \nAudit Fees consist of fees for professional services rendered by MHM for the audit of our annual consolidated financial statements and review of our interim consolidated financial statements included in our quarterly reports on Form 10-Q, as well as audit services that are normally provided in connection with other statutory and regulatory filings, including consents related to registration statements on Forms S-3 and S-8, and prospectus supplement review or comfort letter preparation related thereto. \n(2) \nAudit-Related Fees consist of fees for assurance and related services that are reasonably related to the performance of the audit or review of the Companys financial statements and are not reported as Audit Fees. \n(3) \n\n(4) \nAll Other Fees consist of fees billed for all products and services provided that are not included in (1), (2) and (3) above. No such fees were billed by MHM for any such services during the periods presented. \n(5) \nSubstantially all MHMs personnel, who work under the control of MHM shareholders, are employees of wholly-owned subsidiaries of CBIZ, Inc., which provides personnel and various services to MHM in an alternative practice structure. \n\nOur Audit Committees charter requires the Audit Committee to pre-approve all audit and permissible non-audit services to be performed for the Company by our independent registered public accounting firm, as well as the fees and terms for these services, subject to certain exceptions for de minimis amounts as permitted by applicable SEC rules. In considering such services and fees for approval, the Audit Committee considers whether the provision of the services and the payment of the related fees are compatible with maintaining the independence of our independent registered public accounting firm. \nPART IV \n### ITEM 15. \n(a)(1) The following financial statements of OncoSec Medical Incorporated are filed as part of this report under Item 8 Financial Statements and Supplementary Data: \n(a)(2) All financial statement schedules are omitted because they are not required, or are not applicable, or the required information is shown in the consolidated financial statements or notes thereto included in this report. \n(a)(3) The exhibits listed in the Exhibit Index, which appears immediately following the last page of this report and is incorporated herein by reference, are filed or incorporated by reference as part of this report. \n\n\nStockholders of \nOncoSec Medical Incorporated \n\n\nOncoSec Medical Incorporated \n(the Company) as of July 31, 2021 and 2020, and the related consolidated statements of operations, comprehensive loss, stockholders equity, and cash flows for each of the years in the two-year period ended July 31, 2021, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of July 31, 2021 and 2020, and the results of its operations and its cash flows for each of the years in the two-year period ended July 31, 2021, in conformity with accounting principles generally accepted in the United States of America. \n\nAs discussed in Note 3 to the financial statements, the Company has incurred recurring losses from operations, and is dependent on additional financing to fund operations. Managements plans in regard to these matters are described in Note 3 to the financial statements. The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the outcome of this uncertainty. \nBasis for Opinion \n\n\n\n### Critical Audit Matters \n\nCo-Promotion and Funded Research Agreement \nAs described in Note 12 to the financial statements, in January 2021 the Company entered into a co-promotion and funded research agreement with a related party, pursuant to which the Company granted the related party the option to co-promote one of the Companys product candidates. In consideration for the option, the Company received an upfront, non-refundable payment of $5.0 million. If the related party exercises the option, the Company will receive an additional non-refundable and non-creditable option exercise fee of $25.0 million, comprised of $20.0 million in cash, and $5.0 million purchase of common shares. Under the terms of the co-promotion agreement, if the related party exercises the co-promote option, the Company will pay to the related party a royalty fee for sales of the product candidate in accordance with the terms of the agreement. \nWe identified auditing the Companys classification and presentation of the co-promotion<|endoftext|>Escalon Medical Corp. \n### Form 10K/A \n\nPage \n### Part III \nItem 10. \n\nItem 11. \n### Executive Compensation \nItem 12. \nand Related Stockholder Matter \n### Item 13. \n\nItem 14. \n\nSignature \nPartIII. \n### Item10. \n\n\nThe following table sets forth information with respect to our directors and our executive officers as of October 22, 2021. \nSet forth below are the names, positions held and business experience, including during the past five years, of our directors and executive officers as of October 22, 2021. \nMr.DePiano, Jr. has been a Class I director since May 9, 2013, and was appointed our President and General Counsel of the Company on January1, 2008 and our Chief Executive Officer on September 28, 2013. Previously, he was Chief Operating Officer and General Counsel. Mr.DePiano, Jr. joined us in November of 2000 as Vice President Corporate and Legal Affairs. He currently serves as a member of the board of directors, and served as President from 2008 to 2009 of the Delaware Valley Corporate Counsel Association (DELVACCA). Mr.DePiano, Jr. also serves as a member of the nominations committee, Chairman of the law school initiative committee and member of the pro-bono committee of DELVACCA. He also is vice chairman of the board of directors of the Montgomery County Industrial Development Authority. \nMr.Wallace was appointed our Chief Operating Officer on January1, 2008. He was also appointed the Principal Financial and Accounting Officer on July 7, 2017. Mr.Wallace has worked with us since 1997. Previous to being appointed Chief Operating Officer he was Executive Vice President of our Escalon Digital Solutions and Trek Medical subsidiaries. He has jointly held the position of Vice President-Quality, with quality and regulatory responsibilities for all of our companies, and has also previously served as Operations Manager at Sonomed, Inc. and our Quality Manager. He had previously worked with Lunar Corp. (now GE Healthcare) and Trek Medical. He holds a B.S. in Industrial Engineering and a M.S. in Manufacturing Systems Engineering, both from the University of Wisconsin-Madison, is a senior member of the American Society of Quality, and has over 20years experience in the medical device industry. \nMs.Napolitano has served on our board of directors since 2003. She is a ClassII director. Ms.Napolitano has served as a Tax Manager at Global Tax Management, Inc., a provider of compliance support services for both federal and state taxes, since 1998. Ms.Napolitano is a Certified Public Accountant in Pennsylvania. Ms.Napolitano qualifies for our board of directors and audit committee based on her extensive experience in public accounting and through her understanding of internal controls, accounting principles, business operations and regulatory compliance. We believe that Ms.Napolotanos financial, operational and regulatory experience qualifies her to serve as a member of our board of directors and our audit committee. \nMr. Trusk was appointed as a member of our Board in 2015 as a Class I director. He is President of BroadBase Solutions, Inc., an information technology staffing and consulting firm since 2000. Mr. Trusk was a sales executive with CB Technologies an IT consulting firm based in the Philadelphia suburbs. Before joining CB Technologies Mr. Trusk held several sales and sales management positions within the disposable medical equipment markets. B. Braun Medical from 1994 to 1997 and Calgon Vestal Labs, a subsidiary of Merck & Co.; Inc. from 1991 to 1994. We believe Mr. Trusks operational, executive and professional experience qualifies him to serve as a member of our Board and our Audit Committee. \nMr. Jacovini was appointed as a Class III Director in February 2018. He currently serves as the Chief Financial Officer of LaFrance Corp, a global manufacturer specializing in on-product branding. Previously, he was President and Founder of Innovator Management LLC, a sponsor of mutual funds and exchange traded funds, from 2011 to 2017. He served as Chief Executive Officer and portfolio manager of Academy Asset Management LLC from 2007 to 2015. Between 2007 and 2017 he held the positions of President, Treasurer, and Trustee of the Academy Funds Trust, a registered investment company. Prior to that, he worked on Wall \nStreet as a derivatives marketer at Deutsche Bank AG and as a municipal strategist at Prudential Securities Incorporated. He holds a BA from the College of the Holy Cross and an MBA from the MIT Sloan School of Management.We believe Mr. Jacovini's operational, executive and professional experience qualifies him to serve as a member of our Board and our Audit Committee. \nMr. Dogum was appointed as a Class II director in February 2018. John P. Dogum is a partner at Martin Law where he has been working since 2003. He has concentrated his practice on litigating Pennsylvania workers compensation cases since 1992. Mr. Dogum has served as consultant to major insurers in addition to frequently appearing before Workers Compensation Judges in the Eastern region of Pennsylvania. Mr. Dogum has argued a case of first impression before the Third Circuit Court of Appeals. He has also litigated claims under the Federal Longshore and Harbor Workers Compensation Act. Mr. Dogum has been listed as a Pennsylvania Super Lawyer since 2009 as well as a Top 100 Philadelphia Super Lawyer in 2009. He has been listed as a Best Lawyer since 2013 by Best Lawyers in America. He holds a BS from the Susquehanna University and JD from the Widener University School of Law.We believe Mr. Dogum's operational, executive and professional experience qualifies him to serve as a member of our Board and our Audit Committee. \n\nSection16(a) of the Securities Exchange Act of 1934 requires our directors, executive officers and 10% shareholders to file initial reports of ownership and reports of changes in ownership of our common stock and other equity securities with the Securities and Exchange Commission (the \"SEC\"). The directors, executive officers and 10% shareholders are required to furnish us with copies of all Section16(a) reports they file. Based on a review of the copies of such reports furnished to us and written representations from our directors and executive officers that no other reports were required, we believe that our directors, executive officers and 10% shareholders complied with all Section16(a) filing requirements applicable to them for the year ended June30, 2021. \n\nOur board of directors has adopted a Code of Conduct and Ethics, which applies to all of our directors, the principal executive officer, principal financial officer, principal accounting officer or controller and persons performing similar functions, officers and employees. Our Code of Conduct and Ethics is posted in the Corporate Governance section of our Internet web site at www.escalonmed.com. Any amendments to, or grant of waiver with respect to, any provision of our Code of Conduct and Ethics, will be disclosed noting the nature of such amendment or waiver in the Corporate Governance section of our Internet web site at www.escalonmed.com or by other appropriate means as required or permitted under the applicable regulations of the SEC. \nAudit Committee Members and Financial Expert \nThe members of the audit committee of our board of directors are Ms.Napolitano, Mr.Trusk, John P. Dogum and David J. Jocavini. Our board of directors has determined that each audit member has the attributes, education and experience of, and therefore is, an audit committee financial expert, as such term is defined in Item407(d)(5) of RegulationS-K, and that each member of our audit committee is independent, as such term is defined in the applicable regulations of the Securities. \n### Item11. Executive Compensation \nOverview of Executive Employment Agreements and Equity-Based Awards \nDePiano Sr. \n\n\n\nMr. DePiano Sr. Richard DePiano Jr. Mr. DePiano, Jr. DePiano Sr.'s estate. \n\nSummary Compensation Table \nThe following table sets forth certain summary information concerning compensation that we paid or accrued to or on behalf of each of our executive officers (the Named Executive Officers) during each of the fiscal years ended June30, 2021, 2020 and 2019. \n(1) \nIncludes payment of, (a)an automobile allowance and (b)insurance premiums paid for life insurance. \n### Grants of Plan Based Awards \n\nThe following table sets forth certain information regarding grants of equity awards held by the named executive officers as of June30, 2021. \n\nThe compensation committee of our board recommends director compensation to our board of directors based on factors it considers appropriate, market conditions and trends and the recommendations of management. In fiscal 2021, none of our non-employee directors received any compensation. \n\nOn July1, 2007, we adopted in the FASB issued authoritative guidance related to share based payments. Under this accounting standard, we are required to value stock options granted in fiscal year 2007 and in subsequent fiscal years under the fair value method and expense those amounts in the income statement over the vesting period of the stock option. We were also required to value unvested stock options granted prior to our adoption of the FASB issued authoritative guidance related to share based payments under the fair value method and amortize such expense in the income statement over the stock options remaining vesting period. A material portion of such amortizing expense relates to option grants made to our executive officers. \nITEM12. \n\n\nThe following table indicates, as of October 21, 2021 information about the beneficial ownership of our common stock by (1)each director as of October 21, 2021, (2)each Named Executive Officer, (3)all directors and executive officers as of October 21, 2021 as a group and (4)each person who we know beneficially owns more than 5% of our common stock. All such shares were owned directly with sole voting and investment power unless otherwise indicated. \nBeneficial Ownership Table \n(*) \nLess than on percent \n(1) \nInformation furnished by each individual named. This table includes shares that are owned jointly, in whole or in part with the persons spouse, or individually by his or her spouse. No shares held by board members or named executive officers are pledged as collateral. \n\nThe following table sets forth information, as of June30, 2021, with respect to compensation plans under which shares of our common stock are authorized for issuance. \nItem13. \n\n\nWe recognize that related person transactions present a heightened risk of conflicts of interest and can create the appearance of a conflict of interest. Therefore, all proposed related person transactions are disclosed to our board of directors before we enter into the transaction, and, if the transaction continues for more than one year, the continuation is reviewed annually by our board of directors. \nDePiano Sr. \n\n\n\nMr. DePiano Sr. Richard DePiano Jr. Mr. DePiano, Jr. DePiano Sr.'s estate. \n### Director Independence \nOur board of directors has determined that, Lisa Napolitano, C. Todd Trusk, John P. Dogum and David J. Jocavini are independent, as such term is defined in the applicable rules of the SEC. \nITEM14. \n\nFriedman LLP has been our our principal accountant since January 18, 2018. The following table sets forth the aggregate fees billed to us by Friedman LLC, for the fiscal years ended June30, 2021 and 2020. \nIn the table above, pursuant to definitions under the applicable regulations of the SEC, audit fees are fees for professional services rendered for the audit of our annual financial statements and review of our financial statements included in our quarterly reports on Form 10-Q and for services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements; audit-related fees are fees for assurance and related services that are reasonably related to the performance of the audit and review of our financial statements, and primarily include accounting consultations and audits in connection with potential acquisitions; \nOur audit committee is responsible for pre-approving all audit services and permitted non-audit services to be performed by our principal accountant, except in those instances which do not require such pre-approval pursuant to the applicable regulations of the SEC. \n### Signatures \nDated: October 22, 2021 \n31.1 \nCertification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes Oxley Act of 2002. \n31.2 \nCertification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes Oxley Act of 2002.<|endoftext|>Rule would prohibit the release of any interest earned on funds held in the trust account to us unless and until the funds in the trust account were released to us in connection with our completion of an initial business combination. \n\nIf we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our amended and restated certificate of incorporation will provide that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a group (as defined under Section13 of the Exchange Act), will be restricted from seeking redemption rights with respect to more than an aggregate of 15% of the shares sold in our Public Offering without our prior consent, which we refer to as the Excess Shares. \n\n\n\n\nThe pro rata portion of our trust account distributed to our public stockholders upon the redemption of our public shares in the event we do not complete our initial business combination within 24 months from the closing of our Public Offering (or 27 months from the closing of our Public Offering if we have executed a letter of intent, agreement in principle or definitive agreement for a business combination within 24 months from the closing of our Public Offering) may be considered a liquidating distribution under Delaware law. However, it is our intention to redeem our public shares as soon as reasonably possible following the 24 th month from the closing of our Public Offering (or 27 th month from the closing of our Public Offering if we have executed a letter of intent, agreement in principle or definitive agreement for a business combination within 24 months from the closing of our Public Offering) in the event we do not complete our business combination and, therefore, we do not intend to comply with the foregoing procedures. \nFurthermore, if the pro rata portion of our trust account distributed to our public stockholders upon the redemption of our public shares in the event we do not complete our initial business combination within 24 months from the closing of our Public Offering (or 27 months from the closing of our Public Offering if we have executed a letter of intent, agreement in principle or definitive agreement for a business combination within 24 months from the closing of our Public Offering) is not considered a liquidating distribution under Delaware law and such redemption distribution is deemed to be unlawful, then pursuant to Section174 of the DGCL, the statute of limitations for claims of creditors could then be six years after the unlawful redemption distribution, instead of three years, as in the case of a liquidating distribution. \n\nOur amended and restated certificate of incorporation authorizes the issuance of up to 250,000,000 shares of ClassA common stock, par value $0.0001 per share, 20,000,000 shares of ClassB common stock, par value $0.0001 per share, and 1,000,000 undesignated shares of preferred stock, par value $0.0001 per share. There are 215,500,000 and 8,625,000 authorized but unissued ClassA common stock and ClassB common stock, respectively, available for issuance, which amount does not take into account ClassA common stock reserved for issuance upon exercise of outstanding warrants, or shares issuable upon conversion of ClassB common stock. Our ClassB common stock is automatically convertible into ClassA common stock at the time of our initial business combination, initially at a one-for-one ratio but subject to adjustment as set forth herein. Our ClassB common stock is convertible into ClassA common stock initially at a one-for-one ratio but subject to adjustment as set forth herein, including in certain circumstances in which we issue ClassA common stock or equity-linked securities related to our initial business combination. \nThe issuance of additional shares of common or preferred stock: may significantly dilute the equity interest of investors in our Public Offering; \nUnlike some other similarly structured blank check companies, our initial stockholders will receive additional shares of ClassA common stock if we issue shares to consummate an initial business combination. \nThe founder shares will automatically convert into shares of ClassA common stock at the time of our initial business combination on a one-for-one basis, subject to adjustment for stock splits, stock dividends, reorganizations, recapitalizations and the like and subject to further adjustment as provided herein. In the case that additional shares of ClassA common stock or equity-linked securities convertible or exercisable for shares of ClassA common stock are issued or deemed issued in excess of the amounts sold in our Public Offering and related to the closing of our initial business combination, the ratio at which founder shares will convert into shares of ClassA common stock will be adjusted so that the number of shares of ClassA common stock issuable upon conversion of all founder shares will equal, in the aggregate, 20% of the sum of our shares of common stock outstanding upon completion of our Public Offering plus the number of shares of ClassA common stock and equity-linked securities issued or deemed issued in connection with our initial business combination, excluding any shares of ClassA common stock or equity-linked securities issued, or to be issued, to any seller in our initial business combination. \n\nAlthough we have no commitments as of the date of this Annual Report on Form 10-K to issue any notes or other debt securities, or to otherwise incur outstanding debt following our Public Offering, we may choose to incur substantial debt to complete our business combination. \n\n\n\n\n\nPursuant to the letter agreement our Sponsor has agreed that it is liable to us if and to the extent any claims by a third party (other than our independent public accountants) for services rendered or products sold to us, or a prospective target business with which we have entered into a written letter of intent, confidentiality or other similar agreement or business combination agreement, reduce the amount of funds in the trust account to below the lesser of (i) $10.00 per public share and (ii)the actual amount per public share held in the trust account as of the date of the liquidation of the trust account, if less than $10.00 per share due to reductions in the value of the trust assets, in each case net of the interest which may be withdrawn to pay taxes, provided that such liability will not apply to any claims by a third party or prospective target business who executed a waiver of any and all rights to the monies held in the trust account (whether or not such waiver is enforceable) nor will it apply to any claims under our indemnity of the underwriters of our Public Offering against certain liabilities, including liabilities under the Securities Act. \n\n\n\n\nWe may not be able to complete our initial business combination within the 24 months after the closing of our Public Offering (or 27 months from the closing of our Public Offering if we have executed a letter of intent, agreement in principle or definitive agreement for a business combination within 24 months from the closing of our Public Offering), in which case we would cease all operations except for the purpose of winding up and we would redeem our public shares and liquidate, in which case our public stockholders may receive only their pro rata portion of the funds in the trust account that are available for distribution to public stockholders, and our warrants will expire worthless. \nWe may not be able to find a suitable target business and complete our initial business combination within 24 months after the closing of our Public Offering (or 27 months from the closing of our Public Offering if we have executed a letter of intent, agreement in principle or definitive agreement for a business combination within 24 months from the closing of our Public Offering). \n\n\nII. \n\nAlthough we expect to focus our search for a target business in the energy value chain, with a particular focus on opportunities aligned with energy transition and sustainability themes, we may complete a business combination with an operating company in any industry or sector. However, under our amended and restated certificate of incorporation, we are not permitted to effectuate our business combination with another blank check company or similar company with nominal operations. \nBecause we intend to seek a business combination with a target business or businesses in the energy value chain, we expect our future operations to be subject to risks associated with this industry. \nWe are focusing our search for a target business in the energy value chain, with a particular focus on opportunities aligned with energy transition and sustainability themes. Specifically, we intend to focus on opportunities across the renewable energy, energy storage, mobility, advanced fuels, and carbon mitigation sectors, as well as other adjacent services, industrials, and technologies, while remaining opportunistic across the energy value chain, including select opportunities within the traditional power generation and energy production verticals. Accordingly, we may pursue a target business in these sectors or any other sector within the energy value chain. However, risks inherent in investments in the energy value chain include, but are not limited to, the following: \n### Volatility of commodity prices; \n\nCompetitive pressures in the utility industry, primarily in wholesale markets, as a result of consumer demand, technological advances, greater availability of natural gas and other factors; \nDenial or delay of receiving requisite regulatory approvals and/or permits; \nSignificant federal, state and local regulation, taxation and regulatory approval processes as well as changes in applicable laws and regulations; \nThe speculative nature of and high degree of risk involved in investments in the energy value chain; \nAvailability of key inputs, such as strategic consumables, raw materials and necessary equipment; \nThe supply of and demand for necessary services and equipment in the UnitedStates and internationally; \nAvailable transportation, storage and other transportation capacity; \nChanges in global supply and demand and prices for commodities; \n### Impact of energy conservation efforts; \nTechnological advances affecting energy production and consumption; \nOverall domestic and global economic conditions; \nAvailability of, and potential disputes with, independent contractors; \nNatural disasters, terrorist acts and similar dislocations; and \nValue of U.S. dollar relative to the currencies of other countries. \nWe may seek acquisition opportunities in industries or sectors outside of the energy value chain (which industries may or may not be outside of our managements areas of expertise). \nAlthough we intend to focus on identifying business combination candidates in the energy value chain, with a particular focus on opportunities aligned with energy transition and sustainability themes, we will consider a business combination outside of the energy value chain if a business combination candidate is presented to us and we determine that such candidate offers an attractive acquisition opportunity for our company or we are unable to identify a suitable candidate in the energy value chain after having expended a reasonable amount of time and effort in an attempt to do so. We also cannot assure you that an investment in our units will not ultimately prove to be less favorable to investors in our Public Offering than a direct investment, if an opportunity were available, in a business combination candidate. In the event we elect to pursue an acquisition outside of the energy value chain, our managements expertise may not be directly applicable to its evaluation or operation, and the information contained in this \nAnnual Report on Form 10-K regarding the energy value chain would not be relevant to an understanding of the business that we elect to acquire. \n\n\n\n\nIf the net proceeds of our Public Offering and the sale of the private placement warrants not being held in the trust account are insufficient to allow us to operate for at least the next 24 months, or 27 months, if applicable, we may be unable to complete our initial business combination, in which case our public stockholders may only receive $10.00 per share, or less than such amount in certain circumstances, and our warrants will expire worthless. \nThe funds available to<|endoftext|>Exercise of options and warrants as well as proceeds from the divestiture of parts of our businesses, such as the recent Sale Agreement of ASEC. We had cash, cash equivalents and short-term investments representing bank deposits of $1,482,000 (of which an amount of $105,000 has been pledged as securities for certain items), excluding cash and cash equivalents held for sale, as of December 31, 2020. As a result, there is a substantial doubt about our ability to continue as a going concern. We are attempting to raise additional funds and to increase our cash. While we believe in our ability to raise additional funds and increase our cash, there can be no assurances to that we will be successful in doing so. \nIf additional financing is not available when required or is not available on acceptable terms, we may be unable to take advantage of business opportunities or respond to competitive pressures, which could have a material adverse effect on our revenue, results of operations and financial condition. To preserve our cash resources, we may be required to reorganize our operations. If we are unable to fund our operations without additional external financing and therefore cannot sustain future operations, we may be required to cease our operations and/or seek bankruptcy protection. \nWe have a history of losses, and we expect to continue to incur full-year losses in 2021 and may further incur losses in subsequent years. \nWe have incurred losses in each year since we commenced operations in 1990. We reported net losses attributable to shareholders of $5,896,000 in 2020, $5,889,000 in 2019 and $263,000 in 2018. We expect to continue to incur full-year losses in 2021 and may incur losses also in subsequent years, as we invest in the expansion of our global sales and marketing network, shift our business model away from product sales towards services and transaction fees, and enhance our research and development capabilities to develop existing and new products. \nWe face risks resulting from the outbreak of the COVID-19 pandemic, which could have a material adverse effect on our business and results of operations. \nOur operations and business could be materially adversely affected by the outbreak of COVID-19. Our revenues from Mass Transit Ticketing sales in the Polish market decreased since March 2020 compared to the year preceding the COVID-19 outbreak. Additionally, recently, as a result of COVID-19, some of our customers have delayed issuance of orders in our pipeline. In addition, the execution of sales transactions is slow due to COVID-19 and there is no assurance that we will close any of the potential transactions with customers and partners. Further, another impact of COVID-19 is on product delivery, where components procurement lead time is longer and a shortage in components has grown as the duration of the COVID-19 pandemic has continued. As long as the COVID-19 pandemic continues, the components lead time may be longer than normal and shortages in components may continue or get worse. Although we maintain a comprehensive network of world-wide suppliers to handle such delays in delivery, we may still suffer delays. Additionally, some of our employees, including management members, were in quarantine. Simultaneously, we are attempting to comply with rapidly changing restrictions, such as travel restrictions, curfews and others. Currently travel to and from work is still permitted; however, the authorities may place additional, more restrictive measures on businesses and individuals. Though we may still operate under such regulations, any additional actions taken by the Israeli government could further limit that ability, which may have a material adverse effect on our operations and financial results. A significant reduction in our workforce and our compliance with instructions imposed by Israeli authorities may harm our ability to continue operating our business and materially and adversely affect our operations and financial condition. Further, we cannot assure you that we will be designated an essential business, as defined under regulatory instructions, and moreover, we cannot foresee whether the Israeli authorities will impose further restrictive instructions, which if implemented may lead to significant changes. \nAuthorities around the world have and may continue implementing similar restrictions on business and individuals in their jurisdictions. We continue to assess our business operations and system supports and the impact COVID-19 may have on our results and financial condition. To date, we have taken action to reduce our operating expenses in the short term, but there can be no assurance that this analysis or remedial measures will enable us to avoid part or all of any impact from the spread of COVID-19 or its consequences. \nWe are a party to multiple litigation matters which consume management attention, high costs and expose us to pay significant amounts to third parties. \nWe are party to multiple litigation and arbitration processes, including with Merwell, Inc., or Merwell, where we are being sued, and SuperCom Ltd., where we are suing SuperCom, both cases that relate to activities we conducted in Tanzania. We are also party to other litigation processes, as detailed in Note 10E to the consolidated financial statements contained in Item 8. These litigation and other proceedings consume much management, require us to retain legal representation that burdens our cash position and generally might expose us to payment of damage and other compensation if we are defendants and lose the matter, as well as legal fees of the other party if we lose in the proceeding in question. \nIf the markets for our products do not grow, sales of our products may not grow and may even decline. \nThe success of our products depends on the continuing adoption of cashless payment solutions within a broad spectrum of industries including unattended retail, and fueling. Such adoption of cashless payment solutions and technologies depends on the enactment and implementation of regulations and industry standards regarding secure cashless payment. Should such industries fail to adopt cashless payment technologies or solutions or experience any economic downturn, or should regulations fail to support such solutions, the markets for our products may not grow and we may fail to achieve our business goals. \nAdditionally, potential customers, may already have installed systems that are based on technologies different from ours and therefore may be less willing to incur the capital expenditures required to install or upgrade to our products. As a result, we cannot assure that there will be sufficient market opportunities for our products. New technologies for payments different from ours might be adopted by the markets and could reduce the need for our payment solutions. \nWe depend on a small number of large customers and the loss of one or more of them would lower our revenues. \nOur revenues may continue to depend on a limited number of major customers. Another customer in Asia accounted for 14% and 6%, of our total revenues for 2020 and 2019, respectively. Another customer in Europe accounted for 12% and 13% of our total revenues for 2020 and 2019, respectively. \nWe face intense competition. If we are unable to compete successfully, our business prospects will be impaired. \nWe face intense competition from developers of contact and contactless payments products. We compete on the basis of a range of factors including price, compatibility with the products of other manufacturers, and the ability to support new industry standards and introduce new reliable technologies. Many of our competitors have greater market recognition, larger customer bases, and substantially greater financial, technical, marketing, distribution, and other resources than we possess. As a result, they may be able to introduce new products, respond to customer requirements and adapt to evolving industry standards more quickly than we can. \nFrom time to time, we or our present or future competitors may announce new or enhanced products or technologies that have the potential to replace or shorten the life cycles of our existing products. The announcement of new or enhanced products may cause customers to delay or alter their purchasing decisions in anticipation of such products, and new products developed by our competitors may render our products obsolete or achieve greater market acceptance than our products. \nIf we cannot compete successfully with our existing and future competitors, we could experience lower sales, price reductions, loss of revenues, reduced gross margins and reduced market share. \nIf we fail to develop new products or adapt our existing products for use in new markets, our revenue growth may be impeded and we may incur significant losses. \nAlthough we are devoting significant resources to develop new products and adapting our existing products for use in new markets, if we fail to develop our new products or adapt our existing products for existing or new markets, we may not recoup the expenses incurred in our efforts to do so, our revenue growth may be impeded and we may incur significant losses. \nOur revenue growth may be impaired if we are unable to maintain our current, and establish new, strategic relationships. \nThe markets for our products are usually specialized and may require us to enter into strategic relationships in order to facilitate or accelerate our market penetration. We consider a relationship to be strategic when we integrate our technology into some of the product offerings of a business partner or engage a distributor that has a significant position in a specified market. Failure of our strategic partners to perform in a satisfactory manner or to meet their undertakings in the penetration of new markets, or the termination of any of our strategic relationships or our failure to develop additional relationships in the future may limit our ability to expand the markets in which our products are deployed or to sell particular products. \nWe may desire to exit certain product lines or businesses or to restructure our operations, but may not be successful in doing so. \nOur Board of Directors, or the Board, has been identifying and assessing possible alternative strategies to maximize value for our shareholders. Such process may result in a decision to divest certain product lines and businesses or restructure our current corporate structure or current operations, including, without limitation, through the contribution of assets to joint ventures or sale of some assets to third parties. For example, in March 29, 2021, we entered into an agreement to sell our Mass Transit Ticketing operation in Poland. However, our ability to successfully exit product lines and businesses, or to close or consolidate operations, or to sell some of our assets successfully, depends on a number of factors, many of which are outside of our control. For example, if we are seeking a buyer for a particular business line, none may be available, or we may not be successful in negotiating satisfactory terms with prospective buyers or a buyer may not meet its obligations under the applicable purchase agreement. If we are unable to exit a product line or business in a properly or timely manner, or to restructure our current corporate structure or our operations in a manner we deem to be advantageous, or to enforce that a buyer meets its contractual obligations, this could have a material adverse effect on our business, financial condition and results of operations. Even if a divestment is successful, among others, we may face indemnity and other liability claims by the acquirer or other parties. \nThe terms of certain of our agreements may restrict our ability to take actions that we believe to be desirable. \nCertain agreements that we have entered into with our distributors provide exclusivity for different time periods, ranging from several months to several years, or with respect to specific regions and/or products. For example, in certain markets, we sell our products through distributors who, in certain cases, have exclusive distribution rights in that market or certain territories if specified minimum volume commitments are met. The foregoing could have a material adverse effect on our business, operating results and financial condition if these partners do not perform in a satisfactory manner. \nOur products may have long development and sales cycles and we may expend significant resources in relation to a specific project without realizing any revenues.<|endoftext|>### Class B Ordinary Shares \nThe Company is authorized to issue 50,000,000 Class B ordinary shares, with a par value of $0.0001 per share. Holders of the Class B ordinary shares are entitled to one vote for each share. At December 31, 2020, there were 20,700,000 Class B ordinary shares issued and outstanding. \nHolders of Class A ordinary shares and Class B ordinary shares will vote together as a single class on all matters submitted to a vote of shareholders, except as required by law. \nThe Class B ordinary shares will automatically convert into Class A ordinary shares at the time of a Business Combination or earlier at the option of the holder, on a one-for-one basis, subject to adjustment for share splits, share dividends, rights issuances, subdivisions, reorganizations, recapitalizations and the like. In the case that additional Class A ordinary shares, or equity-linked securities, are issued or deemed issued in excess of the amounts issued in the Initial Public Offering and related to the closing of a Business Combination, the ratio at which the Class B ordinary shares will convert into Class A ordinary shares will be adjusted (unless the holders of a majority of the issued and outstanding Class B ordinary shares agree to waive such anti-dilution adjustment with respect to any such issuance or deemed issuance) so that the number of Class A ordinary shares issuable upon conversion of all Class B ordinary shares will equal, in the aggregate, on an as-converted basis, 20% of the sum of all ordinary shares issued and outstanding upon the completion of the Initial Public Offering plus all Class A ordinary shares and equity-linked securities issued or deemed issued in connection with a Business Combination, excluding any shares or equity-linked securities issued, or to be issued, to any seller in a Business Combination. \n### NOTE 9WARRANT LIABILITIES \nThe Public Warrants will become exercisable on the later of (a) 30 days after the completion of a Business Combination and (b) 12 months from the closing of the Initial Public Offering. The Public Warrants will expire five years from the completion of a Business Combination or earlier upon redemption or liquidation. \nThe Company will not be obligated to deliver any Class A ordinary shares pursuant to the exercise of a warrant and will have no obligation to settle such warrant exercise unless a registration statement under the Securities Act covering the issuance of the Class A ordinary shares issuable upon the exercise of the warrants is then effective and a current prospectus relating thereto is current, subject to the Company satisfying its obligations with respect to registration, or a valid exemption from registration is available. No warrant will be exercisable and the Company will not be obligated to issue any shares to holders seeking to exercise their warrants, unless the issuance of the shares upon such exercise is registered or qualified under the securities laws of the state of the exercising holder, or an exemption is available. \nThe Company has agreed that as soon as practicable, but in no event later than 15 business days, after the closing of a Business Combination, it will use its commercially reasonable efforts to file with the SEC a registration statement covering the issuance, under the Securities Act, of the Class A ordinary shares issuable upon exercise of the warrants, and the Company will use its commercially reasonable efforts to cause the same to become effective within 60 business days after the closing of the Business Combination, and to maintain the effectiveness of such registration statement, and a current prospectus relating thereto, until the expiration of the warrants in accordance with the provisions of the warrant agreement. Notwithstanding the above, if the Class A ordinary shares are, at the time of any exercise of a warrant, not listed on a national securities exchange such that they satisfy the definition of a covered security under Section 18(b)(1) of the Securities Act, the Company may, at its option, require holders of Public Warrants who exercise their warrants to do so on a cashless basis in accordance with Section 3(a)(9) of the Securities Act and, in the event the Company so elects, the Company will not be required to file or maintain in effect a registration statement, but will use its commercially reasonable efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available. \nCOHN ROBBINS HOLDINGS CORP. \n\n### DECEMBER 31, 2020 \n(As Restated) \n\nOnce the warrants become exercisable, the Company may redeem the outstanding warrants (except as described with respect to the Private Placement Warrants): in whole and not in part; upon a minimum of 30 days prior written notice of redemption to each warrant holder; and if, and only if, the Reference Value equals or exceeds $18.00 per share (as adjusted); and \n\n\nat $0.10 per warrant upon a minimum of 30 days prior written notice of redemption provided that holders will be able to exercise their warrants on a cashless basis prior to redemption and receive that number of shares determined based on the redemption date and the fair market value of the Class A ordinary shares; if, and only if, the Reference Value equals or exceeds $10.00 per share (as adjusted); and if the Reference Value is less than $18.00 per share (as adjusted) the Private Placement Warrants must also be concurrently called for redemption on the same terms as the outstanding Public Warrants. \n\n\nCOHN ROBBINS HOLDINGS CORP. \n\n### DECEMBER 31, 2020 \n(As Restated) \n\n### NOTE 10FAIR VALUE MEASUREMENTS \n\nLevel1: \n\n### Level2: \nObservable inputs other than Level1 inputs. \nLevel3: \nUnobservable inputs based on the assessment of the assumptions that market participants would use in pricing the asset or liability. \n\nAt December 31, 2020, assets held in the Trust Account were comprised of $925 in cash and $828,233,839 in U.S. Treasury Bills. During the period from July 13, 2020 (inception) through December 31, 2020, the Company did not withdraw any interest income from the trust account to pay its taxes. \nThe following table presents information about the Companys assets that are measured at fair value on a recurring basis at December 31, 2020 and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value. The gross holding gains and fair value of held-to-maturity securities at December31, 2020 are as follows: \nThe following table presents information about the Companys liabilities that are measured at fair value on a recurring basis at December31, 2020 and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value. \nCOHN ROBBINS HOLDINGS CORP. \n\n### DECEMBER 31, 2020 \n(As Restated) \nThe Warrants were accounted for as liabilities in accordance with ASC 815-40 and are presented within warrant liabilities in the accompanying balance sheet. The warrant liabilities are measured at fair value at inception and on a recurring basis, with changes in fair value presented within loss on warrant liabilities in the statement of operations. \nThe Private Placement Warrants were valued using a Modified Black Scholes Option Pricing Model, which is considered to be a Level 3 fair value measurement. Inherent in a Black-Scholes model are assumptions related to expected stock-price volatility, expected life, risk-free interest rate and dividend yield. The Modified Black Scholes models primary unobservable input utilized in determining the fair value of the Private Placement Warrants is the expected volatility of the ordinary shares. The expected volatility as of subsequent valuation dates was implied from the Companys own Public Warrant pricing. \nA Modified Monte Carlo simulation methodology was used in estimating the fair value of the Public Warrants for periods where no observable traded price was available, using the same expected volatility as was used in measuring the fair value of the Private Placement Warrants. For periods subsequent to the detachment of the Public Warrants from the Units, the close price of the Public Warrant price was used as the fair value as of each relevant date. \nThe following table presents the quantitative information regarding Level 3 fair value measurements of the warrant liabilities: \n\nThe estimated fair value of the Public Warrants transferred from a Level 3 measurement to a Level 1 fair value measurement during the period from July 13, 2020 (inception) through December 31, 2020 was $18,492,000. \n### NOTE 11SUBSEQUENT EVENTS \n\nItem 9. \nNone. \nItem 9.A. Controls and Procedures. \n\n\nDisclosure controls and procedures are controls and other procedures that are designed with the objective of ensuring that information required to be disclosed in our reports filed or submitted under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the SECs rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed with the objective of ensuring that information required to be disclosed in company reports filed or submitted under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure. \nBased upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, solely due to the events that led to the Companys restatement of its financial statements to reclassify the Companys Warrants as described in the Explanatory Note to this Amendment, as of December 31, 2020, our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) were not effective. \nManagement has concluded the Company has identified material weaknesses in internal controls (1) due to a lack of controls to identify and record expenses that require accrual to ensure liabilities in the financial statements are reported completely and accurately and (2) due solely to the events that led to our restatement of our financial statements related to the accounting for warrants issued in connection with our Initial Public Offering, as described in Note 2 to the Notes to Financial Statements entitled Restatement of Previously Issued Financial Statements. \nIn light of these material weaknesses, we performed additional analysis as deemed necessary to ensure that our financial statements were prepared in accordance with U.S. Accordingly, management believes that our financial statements and related financial information included in this Annual Report fairly present, in all material respects, our balance sheets, statements of operations, comprehensive loss and cash flows as of and for the periods presented. \n\nOn July 2, 2021, we revised our prior position on accounting for our outstanding warrants and concluded that our previously issued financial statements as of and for the period from July 13, 2020 (inception) through December 31, 2020 should not be relied on because of a misapplication in the guidance on warrant accounting. \n\n\n\nThis Annual Report on Form 10-K/A does not include a report of managements assessment regarding internal control over financial reporting or an attestation report of our registered public accounting firm due to a transition period established by rules of the SEC for newly public companies. \n\nItem 9.B. Other Information. \nNone. \n### PART III. \nItem 10. \nOur current directors and officers are as follows: \nClifton S. Robbins has been a director since July 2020 and our Co-Chairman since August 2020. Mr. Robbins founded Blue Harbour Group, L.P. (Blue Harbour) in 2004 and served as its Chief Executive Officer until 2020, when the firm closed its operations. Mr. Robbins has more than 40 years of experience in the investment management business. Prior to forming Blue Harbour, Mr. Robbins had been a Managing Member of General Atlantic Partners, LLC (General Atlantic Partners), a global private equity firm from 2000 through August 2004. Prior to that, Mr. Robbins had been a General Partner of Kohlberg Kravis Roberts & Co. (KKR) where he worked from 1987 until 2000. At KKR, he played a significant role in many of the firms leveraged buyout transactions and financings and was also intimately involved with the firms capital markets activities. Mr. Robbins began his career in the Mergers and Acquisitions department of Morgan Stanley & Co. He graduated with an A.B. from Harvard College and received his M.B.A. Mr. Robbins has<|endoftext|>"},"task":{"kind":"string","value":"{\"file\": \"/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz\"}"}}}],"truncated":false,"partial":true},"paginationData":{"pageIndex":0,"numItemsPerPage":100,"numTotalItems":33464,"offset":0,"length":100}},"jwt":"eyJhbGciOiJFZERTQSIsImtpZCI6IjVHZDBvd0g5MTM2eDZjc1FvbE1zcktNWUZoRVFoUm5PVVVybEpjOUhaUEEifQ.eyJyZWFkIjp0cnVlLCJwZXJtaXNzaW9ucyI6eyJyZXBvLmNvbnRlbnQucmVhZCI6dHJ1ZX0sImlhdCI6MTc4NTQ4MzQ0NCwianRpIjoiNDlhZmE2ZGQtYzRlNy00Mjk0LWEzZDItYTllMzFkMDc1ODYyIiwic3ViIjoiL2RhdGFzZXRzL01WQmFja3VwL3N5bnRoZXRpY19iYWNrdXAzIiwiZXhwIjoxNzg1NDg3MDQ0LCJpc3MiOiJodHRwczovL2h1Z2dpbmdmYWNlLmNvIn0.zuyNT3OC5eek7TIFiy9iacKaBFWN_PLD8WFoCmTvJHEbJBnfcIYRKiFuW7Mwduy_ErwJd6GvXFtj-mJhCPWtCA","displayUrls":true,"splitSizeSummaries":[{"config":"default","split":"train","numRows":33464,"numBytesParquet":2647477094}]},"discussionsStats":{"closed":0,"open":1,"total":1},"fullWidth":true,"hasGatedAccess":true,"hasFullAccess":true,"isEmbedded":false,"savedQueries":{"community":[],"user":[]}}">
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<|endoftext|>Item 15.
3.
Exhibits filed as part of this Form 10-K:
SIGNATURE
THE NATIONAL SECURITY GROUP, INC.
Date: March23, 2021<|endoftext|>This Amendment No. No other changes have been made to the Form 10-K, as originally filed on September 7, 2021.
### PART IV
Item 15.<|endoftext|>ADOMANI, INC.
Page
### P... | {"file": "/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz"} |
<|endoftext|>This Amendment No.1 on Form10-K/A (this Amendment) amends our Annual Report on Form10-K for the fiscalyear ended September30, 2020, originally filed with the Securities and Exchange Commission (the SEC) on November18, 2020 (the Original Filing). We are filing this Amendment to include the information requi... | {"file": "/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz"} |
<|endoftext|>A definitive agreement for a proposed business combination and on a requirement that such initial business combination is approved by a majority of our board and a majority of the independent directors of our board.
The forward purchase agreements provide that each forward purchase party is entitled to c... | {"file": "/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz"} |
<|endoftext|>1, 2019
10.49*
Exchange Agreement, dated as of March 9, 2020, by and between Basic Energy Services, Inc. and Ascribe III Investments LLC (Incorporated by reference to Exhibit 10.1 to Form 8-K (SEC File No.
10.50*
First Amendment to Exchange Agreement, dated November 5, 2020, by and between Basic Energy... | {"file": "/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz"} |
<|endoftext|>Information about the Companys assets and liabilities that are measured at fair value on a recurring basis at December 31, 2020 and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value. The gross holding loss and fair value of held-to-maturity securit... | {"file": "/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz"} |
<|endoftext|>Audit committee prior to the completion of the audit).
ITEM15.
### EXHIBITS, AND FINANCIAL STATEMENT SCHEDULES
(a)
10-K/A:
Financial Statements: The financial statements listed in Index to the Financial Statements at Item 8. Financial Statements and Supplementary Data are filed as part of this Form
... | {"file": "/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz"} |
<|endoftext|>Advisor shall not be subject to forfeiture in the event the over-allotmentoption is not exercised. On October29, 2020, in connection with the partial exercise of the over-allotmentoption by the underwriters, 937,662 founder shares were forfeited by certain initial shareholders and cancelled by us. As a res... | {"file": "/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz"} |
<|endoftext|>Compensation matters, including deliberations regarding our Chief Executive Officers performance and compensation.
Based upon this review, our Board has determined that the following members of the Board are independent directors as defined by the Nasdaq Stock Market: Mses. Tan and Wagner, Drs. Kolchinsky... | {"file": "/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz"} |
<|endoftext|>Shareholder), to the designee of Sovryn and (ii) 1,000 shares of series E convertible preferred stock, par value $0.001 per share of Sovryn (Series E Preferred Stock, and together with Series B Preferred Stock, the Preferred Exchange Shares, and the foregoing exchange of Sovryn Common Shares for Preferred ... | {"file": "/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz"} |
<|endoftext|>Buffington (Incorporated by reference to Exhibit 10.23 to the Registrants Form 8-K, filed with the SEC on June 4, 2020).
10.25
Amendment to the Restricted Stock Unit Agreement (Time) dated as of May 29, 2020 by and between Hycroft Mining Corporation and Randy Buffington (Incorporated by reference to Exhi... | {"file": "/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz"} |
<|endoftext|>That provide similar indemnification rights.
### Item12.
The following table summarizes compensation plans under which our securities are authorized for issuance as of December 31, 2020.
(1)
Reflects the number of outstanding performance shares (assuming achievement of target performance), phantom un... | {"file": "/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz"} |
<|endoftext|>Letter, including our company entering into discussions regarding a transaction that would, if consummated, be reasonably likely to result in a Change of Control (unless Mr.Maffei has been released from such restrictions to the extent reasonably necessary for him to fully participate in any discussions (in... | {"file": "/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz"} |
<|endoftext|>Our manufacturing facilities.
### Competition
The markets into which we sell our products are highly competitive, and we expect the intensity of competition to continue or increase. We compete with many companies engaged in developing and selling tools for life science research. Many of our competitors h... | {"file": "/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz"} |
<|endoftext|>Transfer restrictions and the other restrictions contained in the letter agreements.
### Registration Rights
The holders of the founder shares, private placement warrants and any warrants that may be issued on conversion of working capital loans (and any ordinary shares issuable upon the exercise of the ... | {"file": "/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz"} |
<|endoftext|>The Initial Public Offering.
As of December31, 2020 and 2019, we had no compensation plans (including individual compensation arrangements) under which equity securities of the registrant were authorized for issuance.
Item 13.
In August2020, we issued an aggregate of 8,625,000 founder shares to our sp... | {"file": "/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz"} |
<|endoftext|>Collectively referred to herein as the Reporting Persons, to file initial statements of beneficial ownership of securities and statements of changes in beneficial ownership of securities with respect to the Companys equity securities with the SEC. Based solely on our review of the copies of such reports an... | {"file": "/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz"} |
<|endoftext|>Been reversed, suspended, or vacated;
(e) Being found by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any federal commodities law, and the judgment in such civil action or finding by the Commodity Futures Trading Commission has not bee... | {"file": "/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz"} |
<|endoftext|>This Amendment No.1 on Form10-K/A to the Annual Report of First United Corporation on Form10-K for the year ended December31, 2020, which was initially filed with the Securities and Exchange Commission (the SEC) on March25, 2021 (the Original Report), is being filed to amend Item 5 of PartII of the Origina... | {"file": "/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz"} |
<|endoftext|>### Explanatory Note
Procyon Corporation (the "Company") is filing this Amendment No. 1 (the "Amendment") to its Annual Report on Form 10-K for the fiscal year ended June 30, 2021 (the "Fiscal 2021 Form 10-K"), as filed with the Securities and Exchange Commission on October 8, 2021 solely to make certain ... | {"file": "/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz"} |
<|endoftext|>011-35299)
April 28, 2021
10.10 *
License and Collaboration Agreement, dated November 27, 2017, by and between Alkermes Pharma Ireland Limited and Biogen Swiss Manufacturing GmbH.
Exhibit10.10 of the Alkermes plc Annual Report on Form 10-K (File No. 011-35299)
February 16, 2018
10.10.1 *
First Amend... | {"file": "/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz"} |
<|endoftext|>Share weighted-average exercise price of $16.02. Also includes 21,057 restricted stock units and 12,229 performance-based restricted stock units with no exercise price.
(3)
Includes 59,435 shares of common stock available for purchase under the ESPP as of March 31, 2021.
(4)
Includes the Inducement Awa... | {"file": "/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz"} |
<|endoftext|>44,104,541 shares of Class A Common Stock issued and outstanding as of April 1, 2021.
(5)
The percentage is based upon 34,443,898 shares of Class B Common Stock issued and outstanding as of April 1, 2021.
(6)
462,369 shares are held in the name of Azure Energy, LLC (Azure). Mr. Lodzinski disclaims bene... | {"file": "/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz"} |
<|endoftext|>The company or one of its subsidiaries to satisfy the tax withholding obligations related to any award under the stock plan, shall not be available for subsequent awards under the stock plan.
Under the stock plan, on a change in the number of shares of common stock as a result of a dividend on shares of c... | {"file": "/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz"} |
<|endoftext|>Shares for the payment of Series D Preferred Stock dividends accrued. As of December 31, 2020, the Company had accrued dividends of $14,306.
### Series E Convertible Preferred Stock
During year ended December 31, 2020, the Company entered into a Purchase Agreement with the Series E Investors (the Series ... | {"file": "/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz"} |
<|endoftext|>Are $20
Manager elects to have holding period measured for purposes of profit allocation for Company B
### For purposes of calculating profit allocation:
An entitys adjusted net assets will be equal to, as of any date, the sum of (i) such entitys consolidated total assets (as determined in accordance wi... | {"file": "/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz"} |
<|endoftext|>The maximum number of shares that can be owned by the note holder as a result of the conversions to common stock to 4.99% of the Companys issued and outstanding shares.
ONE WORLD PHARMA, INC.
### NOTES TO
The Company recorded interest expense pursuant to the stated interest rates on the convertible note... | {"file": "/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz"} |
<|endoftext|>Consultants), and the option exercise price must be at least equal to 100% of the fair market value of a share of common stock on the date the option is granted (110% in the case of an individual who is a 10% owner of the Company). An ISO may not be exercised later than 10 years after the date of grant (fi... | {"file": "/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz"} |
<|endoftext|>The repricing date in accordance with ACS topic 718.
(2)
Amount reflects fees paid for consulting services provided by Mr. Nigro in 2020.
The table below shows the aggregate numbers of option awards (exercisable and unexercisable) and unvested stock awards held as of December 31, 2020 by each non-emplo... | {"file": "/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz"} |
<|endoftext|>Stock), equal in value to (i) $1,303,000,000, divided by (ii) the number of such issued and outstanding shares of ATI, and (b) the contingent right to receive a certain number of shares of Company Class A Stock that may be issued pursuant to an earnout payable to Wilco Acquisition, LP (the sole holder of c... | {"file": "/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz"} |
<|endoftext|>Of financing to fund its business needs, including convertible notes and warrants and other instruments not indexed to our stock. The Company is required to record its derivative instruments at their fair value. Changes in the fair value of derivatives are recognized in earnings in accordance with ASC 815.... | {"file": "/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz"} |
<|endoftext|>Redemption rights against a proposed business combination as a means to force us or our management to purchase their shares at a significant premium to the then- current market price or on other undesirable terms.
If our initial proposed business combination is not completed, we may continue to try... | {"file": "/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz"} |
<|endoftext|>A document disclosing the risks of penny stocks and to obtain a manually signed and dated written receipt of the document at least two business days before effecting any transaction in a penny stock for the investors account. This procedure requires the broker-dealer to: (i) obtain from the investor inform... | {"file": "/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz"} |
<|endoftext|>A Common Stock is currently listed on the NYSE. However, we cannot assure you that shares of our Class A Common Stock will continue to be listed on the NYSE in the future. In order to continue listing our Class A Common Stock on the NYSE, we must maintain certain financial, share price and distribution lev... | {"file": "/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz"} |
<|endoftext|>Will be required to make monthly payments of principal and interest commencing at the end of the interest-only period.
The Company is obligated to pay the Lenders (i) a non-refundable facility fee in the amount of 1.00% of each term loan that is funded (the Facility Fee), and (ii) a final fee equal to 4.7... | {"file": "/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz"} |
<|endoftext|>An implied interest rate was calculated as 12.36% based on the timing of the initial repayment of $132,200 and subsequent 42 monthly instalments of $15,571. The promissory note was secured by the crusher.
13.
### CONVERTIBLE DEBENTURES
The maturity date of the convertible debentures are as follows:
PET... | {"file": "/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz"} |
<|endoftext|>Due to failure to vest, with the maximum number of shares to be added to the 2020 Plan pursuant to this clause (ii) equal to 2,461,923 shares. The number of shares of common stock available for issuance under the 2020 Plan will automatically increase on the first day of each fiscal year beginning with our ... | {"file": "/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz"} |
<|endoftext|>Basis or if holders elect to do so when there is no effective registration statement, the number of shares of our Class A common stock received by a holder upon exercise will be fewer than it would have been had such holder exercised his or her warrant for cash.
In certain situations, including if we are... | {"file": "/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz"} |
<|endoftext|>The purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account including interest earned on the funds held in the trust acc... | {"file": "/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz"} |
<|endoftext|>Pursuant to a written agreement with us, that they will not propose any amendment to our second amended and restated certificate of incorporation that would affect (i)the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial business combination within ... | {"file": "/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz"} |
<|endoftext|>Trust account only upon the earlier to occur of: (i) our completion of an initial business combination, and then only in connection with those Class A ordinary shares that such shareholder properly elected to redeem, subject to the limitations described herein, (ii) the redemption of any public shares prop... | {"file": "/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz"} |
<|endoftext|>### EXPLANATORY NOTE
National Holdings Corporation (National or the Company) is filing this Amendment No.1 to Annual Report on Form 10-K/A (the Amendment) to amend its Annual Report on Form 10-K for the fiscal year ended September 30, 2020 as filed by the Company with the Securities and Exchange Commissio... | {"file": "/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz"} |
<|endoftext|>As a result of operating as a public company in the United States.
As a public company in the United States, we have incurredand will continue to incur significant legal, accounting, insurance and other expenses, including costs associated with U.S. public company reporting requirements. We will also incu... | {"file": "/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz"} |
<|endoftext|>Business combination, without interest, or, at holders discretion, up to $1,500,000 of the notes may be converted into warrants at a price of $1.00 per warrant.
If third parties bring claims against us, the proceeds held in trust could be reduced and the per-share redemption price received by stockholders... | {"file": "/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz"} |
<|endoftext|>To purchase shares of the Companys Common Stock to an investor in connection with the sale of Common Stock. The options have a nine-month term from the date of grant and was exercisable at an exercise price of $0.50 per share. The fair value of the options granted amounted to $0.92 per option or $688,674. ... | {"file": "/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz"} |
<|endoftext|>Issued audited balance sheet dated as of October22, 2020 (the Restatement). See
Generally, we must maintain a minimum amount in stockholders equity ($2,500,000) and a minimum number of holders of our securities (300 public holders).
For instance, our stock price would generally be required to be at l... | {"file": "/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz"} |
<|endoftext|>In the ordinary course of business, or (iii) in regard to transactions with unaffiliated third parties, not in excess of $50,000; or repay any affiliate (as defined in Rule 144) of our company in connection with any indebtedness or accrued amounts owed to any such party.
Principal Factors Affecting Our Fi... | {"file": "/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz"} |
<|endoftext|>Extracted from the property, a production royalty equal to 8% of the gross sales revenue received by TMC from the sale of such Bitumen Product. "Bitumen Product" is defined to mean naturally occurring oil in the oil sands that is sold in whatever form, including run-of-mine, screened, processed, or after t... | {"file": "/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz"} |
<|endoftext|>From the proceeds of our initial public offering and the sale of the private warrants, with which to pay any such potential claims (including costs and expenses incurred in connection with our liquidation, currently estimated to be no more than approximately $100,000). In the event that our offering expens... | {"file": "/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz"} |
<|endoftext|>With a stockholder meeting called to approve the business combination; Except as required by applicable law or stock exchange rules, the decision as to whether we will seek stockholder approval of a proposed business combination or conduct a tender offer will be made by us, solely in our discretion, and wi... | {"file": "/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz"} |
<|endoftext|>Within 24months from the closing of the Initial Public Offering, subject to applicable law and as further described herein. Public shareholders who redeem their ClassA ordinary shares in connection with a shareholder vote described in clause(ii) in the preceding sentence shall not be entitled to funds from... | {"file": "/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz"} |
<|endoftext|>2020, the 2010 Plan terminated and no further awards will be granted thereunder. All outstanding awards will continue to be governed by their existing terms.
QuantumScape 2020 Equity Incentive Plan
On November25, 2020, our 2020 Equity Incentive Plan (the 2020 Plan) became effective. The 2020 Plan was app... | {"file": "/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz"} |
<|endoftext|>Account, or (2) as to any claims for indemnification by the underwriters of our initial public offering against certain liabilities, including liabilities under the Securities Act.
We anticipate notifying the trustee of the trust account to begin liquidating such assets promptly after November 1, 2022 and... | {"file": "/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz"} |
<|endoftext|>And restated certificate of incorporation provides that we have until August20, 2022 to complete our initial business combination. If we are unable to complete our business combination by such date, we will: (i)cease all operations except for the purpose of winding up; (ii)as promptly as reasonably possibl... | {"file": "/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz"} |
<|endoftext|>Matters on which the holders of Common Stock have the right to vote or act and the holders of the shares of Class B Series I shall be entitled to notice of any stockholders meeting or action as to such matters on the same basis as the holders of Common Stock, and the holders of Common Stock and shares of C... | {"file": "/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz"} |
<|endoftext|>Or maintain in effect a registration statement, but we will use our commercially reasonable efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available.
### Index
The warrants may become exercisable and redeemable for a security other than the shar... | {"file": "/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz"} |
<|endoftext|>Arising out of, any negotiations, contracts or agreements with us and will not seek recourse against the trust account for any reason. Upon redemption of our public shares, if we are unable to complete our initial business combination within the prescribed timeframe, or upon the exercise of a redemption ri... | {"file": "/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz"} |
<|endoftext|>Including certain NEOs. If such individual ceases to be our employee or independent contractor, as the case may be, she or he is permitted, by assuming responsibility for all future premium payments, to replace our Company as one of the beneficiary under such policy. These policies allow each such individu... | {"file": "/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz"} |
<|endoftext|>Pay our taxes, if any (less up to $100,000 of the interest to pay dissolution expenses), will be used to fund the redemption of our public shares, as further described herein. If we are required to wind-up, liquidate the trust account and distribute such amount therein, prorata, to our public stockholders,... | {"file": "/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz"} |
<|endoftext|>Reason within twenty-four months of a change of control, or a corporate transaction where equivalent awards have not been substituted. RSUs issued to our non-employee Directors provide for acceleration immediately upon a change of control.
Except as described above, no other NEOs currently have employment... | {"file": "/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz"} |
<|endoftext|>Preferred Stock into common stock, if upon such conversion, the holder would beneficially own greater than 9.99% of our outstanding common stock.
### Dividend Policy
We have not declared or paid cash dividends or made distributions in the past. We do not anticipate that we will pay cash dividends or make... | {"file": "/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz"} |
<|endoftext|>Reports with the SEC.
Prior to the date of this Report, we filed a Registration Statement on Form
As an exempted company, we applied for and received a tax exemption undertaking from the Cayman Islands government that, in accordance with Section6 of the Tax Concessions Act (2018 Revision) of the Cayma... | {"file": "/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz"} |
<|endoftext|>Of credit, factoring and revolving credit facilities with banks and finance companies to provide us working capital.
In July 2016, we entered into a Factoring and Security Agreement (the FASA) with Action Capital Corporation (Action) to establish a sale of accounts receivable credit facility, whereby we m... | {"file": "/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz"} |
<|endoftext|>Debt Obligations) (see NOTE 8 for further details), with an aggregate of $3,933,767 principal and interest outstanding, were converted into an aggregate of 524,505 Units.
### Warrants to Purchase Common Stock
We use the Black-Sholes-Morton option model (the Black-Scholes Model) to determine the fair valu... | {"file": "/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz"} |
<|endoftext|>III in the Business Combination occurring within the five-year period following BRELF IIIs REIT conversion on January 1, 2019. In other words, if during the five-year period beginning on January 1, 2019, we recognize gain on the disposition of any asset BRELF III owned on January 1, 2019, then, to the exte... | {"file": "/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz"} |
<|endoftext|>U.S. The COVID-19outbreak has and a significant outbreak of other infectious diseases could result in a widespread health crisis that could adversely affect the economies and financial markets worldwide, and the business of any potential target business with which we consummate a Business Combination could... | {"file": "/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz"} |
<|endoftext|>And may reduce the cash available for distributions to our shareholders. See Item 1
BusinessOur ManagerOur Manager as a Service ProviderManagement Fee for more information about the terms and calculation of the management fee.
The amount of profit allocation to be paid to our manager could be substantial... | {"file": "/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz"} |
<|endoftext|>Complete an initial business combination by the Extension Date (although they will be entitled to liquidating distributions from the Trust Account with respect to any public shares they hold if we fail to complete an initial business combination by such date); (3)the Founder Shares are automatically conver... | {"file": "/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz"} |
<|endoftext|>Growth and a public listing.
General
We intend to effectuate our initial business combination using cash from the proceeds of the IPO and the private placement of the private warrants, our shares, new debt, or a combination of these, as the consideration to be paid in our initial business combination. W... | {"file": "/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz"} |
<|endoftext|>Regarding the parcel. BBC, PE1, and PE2 attempted to resolve the matter amicably with UPCDHS and the ultimate acquirer of the parcel, which gained the benefit of the development costs expended by BBC, PE1, and PE2 in improving the value of the parcel as well as the conditional use permit tied to the real e... | {"file": "/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz"} |
<|endoftext|>Providers are unavailable to negotiate and complete a transaction in a timely manner. The extent to which
COVID-19 impacts our search for a target business will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the seve... | {"file": "/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz"} |
<|endoftext|>The Compensation Committee, the Board of Directors approved an annual stock option grant of 25,000 shares to each of its non-employee members for ongoing service as members of the Board of Directors.
Expense Reimbursement
All directors are reimbursed for expenses incurred in connection with attending mee... | {"file": "/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz"} |
<|endoftext|>Alussa Energy Acquisition Corp. 1 on Form 10-K/A (the Amendment) to amend and restate certain items in its Annual Report on Form 10-K as of December 31, 2020 and 2019 and for the year ended December 31, 2020 and the period from June 13, 2019 (inception) through December 31, 2019, originally filed with the ... | {"file": "/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz"} |
<|endoftext|>Plan was 30,486 shares valued at $1,128,592.
Below is a summary of employment and other arrangements with our NEOs. Change in Control, Cause, and Good Reason for each individual are defined below. Other capitalized terms not defined below have the meaning assigned to them in such individuals agreement. F... | {"file": "/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz"} |
<|endoftext|>Cantor, BGC Partners or any member of the Cantor group or affiliated entity, or to engage in any competing business (as defined below) or hires, employs, engages (including as a consultant or partner) or otherwise enters into a competing business with any such person;
(2) solicits any of the customers of ... | {"file": "/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz"} |
<|endoftext|>### EXPLANATORY NOTE
This Form 10-K/A (Amendment No. 1) amends the annual report on Form 10-K of Repay Holdings Corporation for the fiscal year ended December 31, 2020, filed with the Securities and Exchange Commission (the SEC) on March 1, 2021 (the 2020 Form 10-K). The primary purpose of Amendment No. 1... | {"file": "/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz"} |
<|endoftext|>Initial business combination. Our initial stockholders will count toward this quorum and pursuant to the letter agreement, our sponsor, officers and directors have agreed to vote any founder shares and placement shares held by them and any public shares acquired during or after our initial public offering ... | {"file": "/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz"} |
<|endoftext|>Provide copies of these documents without charge upon request from us in writing at 660 Madison Avenue, 12 th
### ITEM 1A. RISK FACTORS.
You should consider carefully all of the risks described below, together with the other information contained in this Annual Report on Form 10-K, the prospectus associ... | {"file": "/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz"} |
<|endoftext|>Years, reporting directly to the then Secretary of Health and Human Services. Ms. Mahon is also a director nominee of TPG Pace Beneficial II Corp.
### Ms. Mahon graduated from Yale University with a
Bachelors degree, magna cum laude with a distinction in History, and holds a J.D. from the NYU School of L... | {"file": "/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz"} |
<|endoftext|>Filed as Exhibit 99.2 to the Companys Annual Report on Form 10-K for the year ended March 31, 2013, filed with the Commission on June 28, 2013.
### Director Nominations Process
As described above, the Nominating and Governance Committee will consider qualified director candidates recommended in good fait... | {"file": "/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz"} |
<|endoftext|>Against us and our directors, officers or employees. Alternatively, if a court were to find the choice of forum provision contained in our certificate of incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdiction... | {"file": "/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz"} |
<|endoftext|>And conditions relating to each award; adopt rules and regulations relating to the Equity Incentive Plan; and interpret the Equity Incentive Plan. The Equity Incentive Plan also permits the Compensation Committee to delegate all or any portion of its responsibilities and powers.
On April7, 2017, stock opt... | {"file": "/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz"} |
<|endoftext|>On Form 5, with the SEC.Such executive officers, directors and greater than ten percent shareholders are required by SEC rules to furnish Omnitek with copies of all such forms that they have filed.
Based solely on its review of the copies of such forms filed with the SEC electronically, received by Omnite... | {"file": "/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz"} |
<|endoftext|>To receive funds from the trust account only (i)in the event of the redemption of our public shares if we do not complete our initial business combination within 24 months from the closing of our initial public offering, (ii)in connection with a shareholder vote to amend our amended and restated memorandum... | {"file": "/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz"} |
<|endoftext|>Date, the sum of (i) consolidated total assets (as determined in accordance with U.S. generally accepted accounting principles, or GAAP) of our company as of such calculation date, plus (ii) the absolute amount of consolidated accumulated amortization of intangibles (as determined in accordance with GAAP) ... | {"file": "/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz"} |
<|endoftext|>Determined, or recommended to our board of directors for determination, by a compensation committee comprised solely of independent directors; and the requirement for an annual performance evaluation of the nominating/corporate governance and compensation committees.
We currently rely on these exemptions.... | {"file": "/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz"} |
<|endoftext|>These provisions provide for, among other things: the ability of New Quantum-Sis board of directors to issue one or more series of preferred stock; stockholder action by written consent only until the first time when Dr.Rothberg ceases to beneficially own a majority of the voting power of the capital stock... | {"file": "/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz"} |
<|endoftext|>With the Company anywhere in the world, including (among other things) serving each customer, dealing with each vendor and treating each other with integrity and respect, and behaving honestly, ethically and professionally with each customer, each vendor, each other and the Company. Article II of the Ethic... | {"file": "/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz"} |
<|endoftext|>Incorporation (A)to modify the substance or timing of our obligation to redeem 100% of our Public Shares if we do not complete our initial business combination within 18 months from the closing of the Initial Public Offering or (B)with respect to any other provision relating to stockholders rights or pre-i... | {"file": "/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz"} |
<|endoftext|>To vest in three equal annual installments commencing on the first anniversary of the date of grant. Mr. Abrams award was subject to a one-year vesting period, which differed from the vesting period of our other executive officers to correspond with the remaining one-year term of his employment agreement a... | {"file": "/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz"} |
<|endoftext|>Agreements was
2.94%
Borrowing availability under the US Facility and the Multicurrency Facility is equal to the lesser of (i)the aggregate Revolver Commitments and (ii) the Line Cap. At December 31, 2020, the Line Cap was $2.4billion and the Borrowers had $1.1billion of available borrowing capacity und... | {"file": "/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz"} |
<|endoftext|>Agreement between us and our sponsor, our sponsor has agreed that it will be liable to us if and to the extent any claims by a third party (excluding our independent registered public accounting firm) for services rendered or products sold to us, or a prospective partner business with which we have discuss... | {"file": "/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz"} |
<|endoftext|>Strong and Stable Financial Position with Flexibility.
With funds in the trust account of $57.5 million as of March 31, 2021 available to use for a business combination, we offer a target business a variety of options such as providing the owners of a target business with shares in a public company and a ... | {"file": "/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz"} |
<|endoftext|>For Mr. Keller.
### Executive Employment Agreement with Curtis Smith
Pre-Merger Smith Employment Agreement
Pursuant to his employment agreement, effective March 8, 2018, and to subsequent actions by AYRO Operatings board of directors, Curtis E. Smith was entitled to a base salary of $200,000 and a targe... | {"file": "/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz"} |
<|endoftext|>Significant number of shares from stockholders who elect redemption in connection with our initial business combination or the terms of negotiated transactions to purchase shares in connection with our initial business combination, we may be required to seek additional financing or to abandon the proposed ... | {"file": "/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz"} |
<|endoftext|>1 of the fair value hierarchy, as the primary component of the price is obtained from quoted market prices in an active market. The carrying amounts of the Companys cash and cash equivalents approximate their fair values due to the short maturities and highly liquid nature of these accounts.
Contingent Co... | {"file": "/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz"} |
<|endoftext|>Initial business combination by December 28, 2022 is not considered a liquidating distribution under Delaware law and such redemption distribution is deemed to be unlawful (potentially due to the imposition of legal proceedings that a party may bring or due to other circumstances that are currently unknown... | {"file": "/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz"} |
<|endoftext|>Period should be restated because of a misapplication in the guidance around accounting for certain of our outstanding warrants to purchase common stock (the Warrants) and should no longer be relied upon.
We reassessed our accounting for Warrants issued in our initial public offering, in light of the SEC ... | {"file": "/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz"} |
<|endoftext|>The Group evaluates each uncertain tax position (including the potential application of interest and penalties) based on the technical merits, and measure the unrecognized benefits associated with the tax positions. As of March 31, 2021, and 2020, the Group did not have any significant unrecognized uncerta... | {"file": "/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz"} |
<|endoftext|>Stockholders to redeem their shares for cash may make our financial condition unattractive to potential business combination targets, which may make it difficult for us to enter into our initial business combination with a target.
We may enter into a transaction agreement with a prospective target that re... | {"file": "/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz"} |
<|endoftext|>SEC.
Cohen, Jones and Pontonio. Mr.Pontonio serves as chair of the nominating and corporate governance committee.
### Code of Ethics
We have filed a copy of our form of Code of Ethics applicable to our directors, officers and employees, our audit committee charter, our compensation committee charter ... | {"file": "/scratch/project_2017850/datasets/ontocord/MixtureVitae-v1/data/business/business-0.jsonl.gz"} |
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