Delaware |
7990 |
86-3355184 | ||
(State or other jurisdiction of incorporation or organization) |
(Primary Standard Industrial Classification Code Number) |
(IRS Employer Identification Number) |
Bradley C. Faris Owen J.D. Alexander Scott W. Westhoff Latham & Watkins LLP 330 N. Wabash Avenue, Suite 2800 Chicago, Illinois 60611 Tel: (312) 876-7700 |
Christian O. Nagler Wayne E. Williams Kirkland & Ellis LLP 601 Lexington Avenue New York, New York 10022 Tel: (212) 446-4800 |
Large accelerated filer | ☐ | Accelerated filer | ☐ | |||
☒ | Smaller reporting company | |||||
Emerging growth company |
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ii | ||||
iv | ||||
1 | ||||
9 | ||||
36 | ||||
46 | ||||
54 | ||||
61 | ||||
84 | ||||
91 | ||||
100 | ||||
111 | ||||
119 | ||||
123 | ||||
126 | ||||
126 | ||||
126 | ||||
F-1 |
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A-1 | ||||
II-1 |
• | the COVID-19 pandemic, its duration, its impact on our business, results of operations, financial condition, liquidity, use of our borrowings, business practices, operations, suppliers, third-party service providers, customers, employees, industry, ability to meet future performance obligations and ability to efficiently implement advisable safety precautions; |
• | our ability to raise financing in the future; |
• | our future financial performance; |
• | our success in retaining or recruiting, or changes required in, our officers, key employees or directors; |
• | our ability to pay dividends on our Class A Common Stock on the terms currently contemplated or at all; and |
• | other factors relating to our business, operations and financial performance, including, but not limited to: |
• | our ability to compete in the ticketing industry; |
• | our ability to maintain relationships with buyers, sellers and distribution partners; |
• | our ability to continue to improve our platform and maintain and enhance our brand; |
• | the impact of extraordinary events or adverse economic conditions on discretionary consumer and corporate spending or on the supply and demand of live events; |
• | our ability to comply with domestic regulatory regimes; |
• | our ability to successfully defend against litigation; |
• | our ability to maintain the integrity of our information systems and infrastructure, and to mitigate possible cyber security risks; |
• | our ability to generate sufficient cash flows or raise additional capital necessary to fund our operations; and |
• | other factors detailed in the section entitled “Risk Factors.” |
The Company |
We are an online ticket marketplace that utilizes our technology platform to connect fans of live events seamlessly with ticket sellers. Our mission is to empower and enable fans to Experience It Live easy-to-use, |
Corporate Contact Information |
We are headquartered in Chicago, Illinois. Our principal executive offices are located at 111 N. Canal Street, Suite 800, Chicago, Illinois 60606, and our telephone number is (312) 291-9966. We maintain a website at www.vividseats.com |
Warrants that qualify for the Offer |
As of May 23, 2022, we had outstanding an aggregate of 18,132,766 public warrants. Pursuant to the Offer, we are offering up to an aggregate of 4,351,864 shares of our Class A Common Stock in exchange for all of our outstanding public warrants. |
Under the Amended and Restated Warrant Agreement, we may call the public warrants for redemption at our option: |
• | in whole and not in part; |
• | at a price of $0.01 per warrant; |
• | upon a minimum of 30 days’ prior written notice of redemption (the “30-day redemption period”) to each warrant holder; and |
• | if, and only if, the closing price of our Class A Common Stock equals or exceeds $18.00 per share (as adjusted for share splits, share dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which we send the notice of redemption to the warrant holders, provided that there is an effective registration statement covering the shares of Class A Common Stock issuable upon exercise of the public warrants, and a current prospectus relating thereto, available throughout the 30-day redemption period. |
Market Price of Our Common Stock |
Our Class A Common Stock and public warrants are listed on Nasdaq under the symbols “SEAT” and “SEATW,” respectively. See “Market Information, Dividends and Related Stockholder Matters.” |
The Offer |
Each warrant holder who tenders public warrants for exchange pursuant to the Offer will receive 0.240 shares of our Class A Common Stock for each public warrant so exchanged. No fractional shares of Class A Common Stock will be issued pursuant to the Offer. In lieu of issuing fractional shares, any holder of public warrants who would otherwise have been entitled to receive fractional shares pursuant to the Offer will, after aggregating all such fractional shares of such holder, be paid cash (without interest) in an amount equal to such fractional part of a share multiplied by the last sale price of our Class A Common Stock on Nasdaq on the last trading day of the Offer Period. Our obligation to complete the Offer is not conditioned on the receipt of a minimum number of tendered warrants. |
Holders of the public warrants tendered for exchange will not have to pay any of the exercise price for the tendered public warrants in order to receive shares of Class A Common Stock in the exchange. |
The shares of Class A Common Stock issued in exchange for the tendered public warrants will be unrestricted and freely transferable, as long as the holder is not an affiliate of ours and was not an affiliate of ours within the three months prior to the proposed transfer of such shares. |
The Offer is being made to all public warrant holders except those holders who reside in states or other jurisdictions where an offer, solicitation or sale would be unlawful (or would require further action in order to comply with applicable securities laws). |
The Consent Solicitation |
In order to tender public warrants in the Offer and Consent Solicitation, holders are required to consent (by executing the Letters |
of Transmittal and Consent or requesting that their broker or nominee consent on their behalf) to an amendment to the Amended and Restated Warrant Agreement governing the public warrants as set forth in the Warrant Amendment attached as Annex A. If approved, the Warrant Amendment would permit the Company to require that all public warrants that are outstanding upon the closing of the Offer be converted into shares of Class A Common Stock at a ratio of 0.213 shares of Class A Common Stock per public warrant (a ratio which is 12.7% less than the exchange ratio applicable to the Offer). Upon such conversion, no public warrants will remain outstanding. |
Purpose of the Offer and Consent Solicitation |
The purpose of the Offer and Consent Solicitation is to attempt to simplify our capital structure and reduce the potential dilutive impact of the public warrants, thereby providing us with more flexibility for financing our operations in the future. See “The Offer and Consent Solicitation—Background and Purpose of the Offer and Consent Solicitation.” |
Offer Period |
The Offer and Consent Solicitation will expire on the Expiration Date, which is 11:59 p.m., Eastern Daylight Time, on June 29, 2022, or such later time and date to which we may extend. All public warrants tendered for exchange pursuant to the Offer and Consent Solicitation, and all required related paperwork, must be received by the exchange agent by the Expiration Date, as described in this Prospectus/Offer to Exchange. |
If the Offer Period is extended, we will make a public announcement of such extension by no later than 9:00 a.m., Eastern Daylight Time, on the next business day following the Expiration Date as in effect immediately prior to such extension. |
We may withdraw the Offer and Consent Solicitation only if the conditions of the Offer and Consent Solicitation are not satisfied or waived prior to the Expiration Date. Promptly upon any such withdrawal, we will return the tendered warrants (and the related consent to the Warrant Amendment will be revoked). We will announce our decision to withdraw the Offer and Consent Solicitation by disseminating notice by public announcement or otherwise as permitted by applicable law. See “The Offer and Consent Solicitation—General Terms—Offer Period.” |
Amendments to the Offer and Consent Solicitation |
We reserve the right at any time or from time to time to amend the Offer and Consent Solicitation, including by increasing or (if the conditions to the Offer are not satisfied) decreasing the exchange ratio of Class A Common Stock issued for every public warrant exchanged or by changing the terms of the Warrant Amendment. If we make a material change in the terms of the Offer and Consent Solicitation or the information concerning the Offer and Consent Solicitation, or if |
we waive a material condition of the Offer and Consent Solicitation, we will extend the Offer and Consent Solicitation to the extent required by Rules 13e-4(d)(2) and 13e-4(e)(3) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). See “The Offer and Consent Solicitation—General Terms—Amendments to the Offer and Consent Solicitation.” |
Conditions to the Offer and Consent Solicitation |
The Offer is subject to customary conditions, including the effectiveness of the registration statement of which this Prospectus/Offer to Exchange forms a part and the absence of any action or proceeding, statute, rule, regulation or order that would challenge or restrict the making or completion of the Offer. The Offer is not conditioned upon the receipt of a minimum number of tendered public warrants. However, the Consent Solicitation is conditioned upon receiving the consent of holders of at least 65% of the outstanding public warrants (which is the minimum number required to amend the Amended and Restated Warrant Agreement). We may waive some of the conditions to the Offer. See “The Offer and Consent Solicitation—General Terms—Conditions to the Offer and Consent Solicitation.” |
We will not complete the Offer and Consent Solicitation unless and until the registration statement described above is effective. If the registration statement is not effective at the Expiration Date, we may, in our discretion, extend, suspend or cancel the Offer and Consent Solicitation, and will inform public warrant holders of such event. |
Withdrawal Rights |
If you tender your public warrants for exchange and change your mind, you may withdraw your tendered public warrants (and thereby automatically revoke the related consent to the Warrant Amendment) at any time prior to the Expiration Date, as described in greater detail in the section titled “The Offer and Consent Solicitation—Withdrawal Rights.” If the Offer Period is extended, you may withdraw your tendered public warrants (and thereby automatically revoke the related consent to the Warrant Amendment) at any time until the extended Expiration Date. In addition, tendered public warrants that are not accepted by us for exchange by July 28, 2022 may thereafter be withdrawn by you until such time as the public warrants are accepted by us for exchange. |
Federal and State Regulatory Approvals |
Other than compliance with the applicable federal and state securities laws, no federal or state regulatory requirements must be complied with and no federal or state regulatory approvals must be obtained in connection with the Offer and Consent Solicitation. |
Absence of Appraisal or Dissenters’ Rights |
Holders of our public warrants do not have any appraisal or dissenters’ rights under applicable law in connection with the Offer and Consent Solicitation. |
U.S. Federal Income Tax Consequences of the Offer |
For those holders of our public warrants participating in the Offer and for any holders of our public warrants subsequently exchanged for Class A Common Stock pursuant to the terms of the Warrant Amendment, we intend, and each holder agrees pursuant to the Letter of Transmittal and Warrant Amendment, as applicable, to treat the exchange of public warrants for our Class A Common Stock as a “recapitalization” within the meaning of Section 368(a)(1)(E) of the Internal Revenue Code of 1986, as amended (the “Code”). Under such treatment, (i) you should not recognize any gain or loss on the exchange of public warrants for shares of Class A Common Stock (except to the extent of any cash payment received in lieu of a fractional share in connection with the Offer or such subsequent exchange), (ii) your aggregate tax basis in our Class A Common Stock received in the exchange should equal your aggregate tax basis in your public warrants surrendered in the exchange (except to the extent of any tax basis allocated to a fractional share for which a cash payment is received in connection with the Offer or such subsequent exchange), and (iii) your holding period for our Class A Common Stock received in the exchange should include your holding period for the surrendered public warrants. However, because there is a lack of direct legal authority regarding the U.S. federal income tax consequences of the exchange of our public warrants for our Class A Common Stock, there can be no assurance in this regard and alternative characterizations are possible by the U.S. Internal Revenue Service (“IRS”) or a court, including ones that would require U.S. Holders (as defined under “Market Information, Dividends and Related Stockholder Matters—Material U.S. Federal Income Tax Consequences—U.S. Holders”) to recognize taxable income. |
If the Warrant Amendment is approved, we intend, and each applicable holder agrees pursuant to the Warrant Amendment, to treat all public warrants not exchanged for Class A Common Stock in the Offer as having been exchanged for “new” public warrants pursuant to the Warrant Amendment and to treat such deemed exchange as a “recapitalization” within the meaning of Section 368(a)(1)(E) of the Code. Under such treatment, (i) you should not recognize any gain or loss on the deemed exchange of public warrants for “new” public warrants, (ii) your aggregate tax basis in the “new” public warrants deemed to be received in the exchange should equal your aggregate tax basis in your existing public warrants deemed surrendered in the exchange, and (iii) your holding period for the “new” public warrants deemed to be received in the exchange should include your holding period for the public warrants deemed surrendered. Because there is a lack of direct legal authority regarding the U.S. federal income tax consequences of a deemed exchange of public warrants for “new” public warrants pursuant to the Warrant Amendment, there can be no assurance in this regard and alternative characterizations by the IRS or a court are possible, including ones that would require U.S. Holders to recognize taxable income. See “Market Information, |
Dividends and Related Stockholder Matters—Material U.S. Federal Income Tax Consequences.” |
No Recommendation |
Neither we nor any of our Board of Directors, our management, the dealer manager, the exchange agent, the information agent or any other person makes any recommendation on whether you should tender or refrain from tendering all or any portion of your public warrants or consent to the Warrant Amendment, and no one has been authorized by any of them to make such a recommendation. |
Risk Factors |
For risks related to the Offer and Consent Solicitation, please read the section titled “Risk Factors” beginning on page 9 of this Prospectus/Offer to Exchange. |
Exchange Agent |
The depositary and exchange agent for the Offer and Consent Solicitation is: |
Continental Stock Transfer & Trust Company |
Dealer Manager |
The dealer manager for the Offer and Consent Solicitation is: |
Evercore Group L.L.C. |
55 East 52 nd Street, 35th Floor |
New York, New York 10055 |
Toll-Free: (888) 474-0200 |
We have other business relationships with the dealer manager, as described in “The Offer and Consent Solicitation—Dealer Manager.” |
Additional Information |
We recommend that our public warrant holders review the registration statement on Form S-4, of which this Prospectus/Offer to Exchange forms a part, including the exhibits that we have filed with the SEC in connection with the Offer and Consent Solicitation and our other materials that we have filed with the SEC, before making a decision on whether to tender for exchange in the Offer and consent to the Warrant Amendment. All reports and other documents we have filed with the SEC can be accessed electronically on the SEC’s website at www.sec.gov |
• | The COVID-19 pandemic has had, and may continue to have, a material negative impact on our business and operating results. |
• | Our business is dependent on the continued occurrence of large-scale sporting events, concerts and theater shows and on relationships with buyers, sellers and distribution partners and any change in such occurrence or relationships could adversely affect our business. |
• | Changes in Internet search engine algorithms or changes in marketplace rules could have a negative impact on traffic for our sites and ultimately, our business and results of operations. |
• | We face intense competition in the ticketing industry. |
• | If we do not continue to maintain and improve our platform or develop successful new solutions and enhancements, or improve existing ones, our business will suffer. |
• | We may be adversely affected by the occurrence of extraordinary events. |
• | We may be unsuccessful in potential future acquisitions. |
• | Due to our business’ seasonality, our financial performance in particular financial periods may not be indicative of, or comparable to, our financial performance in subsequent financial periods. |
• | The processing, storage, use and disclosure of personal data could give rise to liabilities as a result of governmental regulation, conflicting legal requirements or applications of privacy regulations. |
• | Unfavorable legislative outcomes, or outcomes in legal proceedings in which we may be involved may adversely affect our business and operating results. |
• | Risks related to information technology, cybersecurity and intellectual property. |
• | System interruption and the lack of integration and redundancy in our systems and infrastructure may have an adverse impact on our business, financial condition and results of operations. |
• | Cyber security risks, data loss or other breaches of our network security could materially harm our business and results of operations. |
• | Our payments system depends on third-party providers. |
• | The agreements governing our indebtedness impose restrictions on us that limit the discretion of management in operating our business. |
• | We depend on the cash flows of our subsidiaries in order to satisfy our obligations, and we may face liquidity constraints if we are unable to generate sufficient cash flows and we may be unable to raise the additional capital when necessary or desirable. |
• | Our Private Equity Owner controls us, and its interest may conflict with ours in the future. |
• | We are a “controlled company” within the meaning of the Nasdaq listing standards. |
• | Our Tax Receivable Agreement requires us to make cash payments to Hoya Topco. |
• | Our only material asset is our direct and indirect interests in Hoya Intermediate. |
• | We have identified a material weakness in our internal control over financial reporting. |
• | We are an emerging growth company. |
• | A significant portion of our total outstanding shares of our Class A Common Stock are restricted from resale but may be sold into the market in the future, which could cause the market price of our Class A Common Stock to drop significantly. |
• | Warrants will become exercisable for our Class A Common Stock, which may increase the number of shares eligible for resale in the market and result in dilution to our stockholders. |
• | the impact of any lingering economic downturn or recession including, without limitation, any reduction in discretionary spending or confidence for both buyers and sellers, that would result in a decline in ticket sales and attendance; |
• | a reduction in the profitability of our operations due to governmental restrictions or safety precautions and protocols voluntarily undertaken, such as venues running under capacity due to spacing and social distancing limitations, which could limit the number of tickets sold; |
• | decreased willingness or ability for artists to tour due to varying restrictions across jurisdictions, including the possibility that national or sub-national borders are closed to travel, which could reduce the demand for our services; |
• | changes to consumer preferences for consumption of live music, sporting or theater events due to fear of, or restrictions on, large gatherings; |
• | loss of ticketing sales due to the economic impact whereby certain venue operators are no longer in operation, reducing the number of events our marketplace can serve; |
• | the inability to pursue expansion opportunities or acquisitions due to capital constraints; |
• | the future availability or increased cost of insurance coverage; and |
• | the incurrence of additional expenses related to compliance, precautions and management. |
• | competitors’ offerings that may include more favorable terms or pricing; |
• | technological changes and innovations that we are unable to adopt or are late in adopting that offer more attractive alternatives; |
• | other entertainment options or ticket inventory selection and variety that we do not offer; and |
• | increased pricing in the primary ticket marketplace, which could result in reduced profits for secondary ticket sellers. |
• | using a significant portion of our available cash; |
• | issuing equity securities, which would dilute current stockholders’ percentage ownership; |
• | incurring substantial debt; |
• | incurring or assuming contingent liabilities, known or unknown; and |
• | incurring large accounting write-offs, impairments or amortization expenses. |
• | integrating the operations, financial reporting, technologies and personnel of acquired companies; |
• | scaling of operations, system and infrastructure and achieving synergies to meet the needs of the combined or acquired company; |
• | managing geographically dispersed operations; |
• | the diversion of management’s attention from other business concerns; |
• | the inherent risks in entering markets or lines of business in which we have either limited or no direct experience; |
• | the potential loss of key employees, customers and strategic partners of acquired companies; and |
• | the impact of laws and regulations at the state, federal and international levels when entering new markets or business, which could significantly affect our ability to complete acquisitions and expand our business. |
• | incur additional debt; |
• | pay dividends and make distributions; |
• | make certain investments; |
• | prepay certain indebtedness; |
• | create liens; |
• | enter into transactions with affiliates; |
• | modify the nature of our business; |
• | transfer and sell assets, including material intellectual property; |
• | amend our organizational documents; and |
• | merge or consolidate. |
• | making it more difficult for us to satisfy our obligations; |
• | increasing our vulnerability to adverse economic, regulatory and industry conditions; |
• | limiting our ability to obtain additional financing for future working capital, capital expenditures, acquisitions and other purposes; |
• | requiring us to dedicate a substantial portion of our cash flow from operations to fund payments on our debt, thereby reducing funds available for operations and other purposes; |
• | limiting our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate; |
• | making us more vulnerable to increases in interest rates; and |
• | placing us at a competitive disadvantage compared to our competitors that have less debt. |
• | general economic and capital market conditions, including as a result of the COVID-19 pandemic and rising inflation; |
• | the availability of credit from banks or other lenders; |
• | investor confidence in us; and |
• | our results of operations. |
• | develop and enhance our platform and solutions; |
• | continue to invest in our technology and marketing efforts; |
• | hire, train and retain employees; |
• | respond to competitive pressures or unanticipated working capital requirements; or |
• | pursue acquisition opportunities. |
• | existing tax basis in certain assets of Hoya Intermediate and certain of its subsidiaries, including assets that will be subject to depreciation or amortization, once placed in service; |
• | tax basis adjustments resulting from taxable exchanges of Intermediate Common Units (including any such adjustments resulting from certain payments made by us under the Tax Receivable Agreement) for Class A Common Stock acquired by us from a TRA Holder pursuant to the terms of the Second A&R LLCA; |
• | certain tax attributes of Blocker Corporations holding Intermediate Common Units that are acquired by us pursuant to a Reorganization Transaction; |
• | certain tax benefits realized by us as a result of certain U.S. federal income tax allocations of taxable income or gain away from us and to other members of Hoya Intermediate and deductions or losses to us and away from other members of Hoya Intermediate, in each case, as a result of the Business Combination; and |
• | tax deductions in respect of portions of certain payments made under the Tax Receivable Agreement. |
• | the realization of any of these risk factors; |
• | difficult global market and economic conditions; |
• | loss of investor confidence in the global financial markets and investing in general; |
• | adverse market reaction to indebtedness we may incur, securities we may grant under our 2021 Incentive Award Plan (the “2021 Plan”) or otherwise, or any other securities we may issue in the future, including shares of our Class A Common Stock; |
• | unanticipated variations in our quarterly and annual operating results or dividends; |
• | failure to meet securities analysts’ earnings estimates; |
• | publication of negative or inaccurate research reports about us or the live events or ticketing industry or the failure of securities analysts to provide adequate coverage of our Class A Common Stock in the future; |
• | changes in market valuations of similar companies; |
• | speculation in the press or investment community about our business; |
• | additional or unexpected changes or proposed changes in laws or regulations or differing interpretations thereof affecting our business or enforcement of these laws and regulations, or announcements relating to these matters; and |
• | increases in compliance or enforcement inquiries and investigations by regulatory authorities. |
• | not being required to have our independent registered public accounting firm audit our internal control over financial reporting under Section 404 of SOX; |
• | reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements; and |
• | exemptions from the requirements of holding a nonbinding advisory vote on executive compensation or golden parachute payments not previously approved. |
• | Our status as an “emerging growth company” will end as soon as any of the following occurs: |
• | the last day of the fiscal year in which we have more than $1.07 billion in annual revenue; |
• | the date we qualify as a “large accelerated filer,” with at least $700 million of equity securities held by non-affiliates; |
• | the date on which we have issued, in any three-year period, more than $1.0 billion in non-convertible debt securities; or |
• | December 31, 2026. |
• | private warrants to purchase 6,519,791 shares at an exercise price of $11.50 per share; |
• | warrants to purchase 17,000,000 shares at an exercise price of $10.00 per share; and |
• | warrants to purchase 17,000,000 shares at an exercise price of $15.00 per share. |
• | the sole ability of directors to fill a vacancy on the Board of Directors; |
• | advance notice requirements for stockholder proposals and director nominations; |
• | after we no longer qualify as a “controlled company” under applicable Nasdaq listing rules, provisions limiting stockholders’ ability to (i) call special meetings of stockholders, (ii) require extraordinary general meetings of stockholders and (iii) take action by written consent; |
• | the ability of the Board of Directors to designate the terms of and issue new series of preferred stock without stockholder approval, which could be used, among other things, to institute a rights plan that would have the effect of significantly diluting the stock ownership of a potential hostile acquirer, likely preventing acquisitions that have not been approved by our governing body; |
• | the division of the Board of Directors into three classes, with each class serving staggered three-year terms; and |
• | the lack of cumulative voting for the election of directors. |
• | the registration statement, of which this Prospectus/Offer to Exchange forms a part, shall have become effective under the Securities Act, and shall not be the subject of any stop order or proceeding seeking a stop order; |
• | no action or proceeding by any government or governmental, regulatory or administrative agency, authority or tribunal or any other person, domestic or foreign, shall have been threatened, instituted or pending before any court, authority, agency or tribunal that directly or indirectly challenges the making of the Offer, the tender of some or all of the public warrants pursuant to the Offer or otherwise relates in any manner to the Offer; |
• | there shall not have been any action threatened, instituted, pending or taken, or approval withheld, or any statute, rule, regulation, judgment, order or injunction threatened, proposed, sought, promulgated, enacted, entered, amended, enforced or deemed to be applicable to the Offer or Consent Solicitation or us, by any court or any authority, agency or tribunal that, in our reasonable judgment, would or might, directly or indirectly, (i) make the acceptance for exchange of, or exchange for, some or all of the public warrants illegal or otherwise restrict or prohibit completion of the Offer or Consent Solicitation, or (ii) delay or restrict our ability, or render us unable, to accept for exchange or exchange some or all of the public warrants; and |
• | there shall not have occurred (i) any general suspension of, or limitation on prices for, trading in securities in U.S. securities or financial markets; (ii) a declaration of a banking moratorium or any suspension of payments in respect to banks in the United States; (iii) any limitation (whether or not mandatory) by any government or governmental, regulatory or administrative authority, agency or |
instrumentality, domestic or foreign, or other event that, in our reasonable judgment, would or would be reasonably likely to affect the extension of credit by banks or other lending institutions; or (iv) a natural disaster, a significant worsening of the ongoing COVID-19 pandemic, an outbreak of a pandemic or contagious disease other than COVID-19, or a commencement or significant worsening of a war or armed hostilities or other national or international calamity, including but not limited to, catastrophic terrorist attacks against the United States or its citizens, which, in our reasonable judgment, is or may be materially adverse to us or otherwise makes it inadvisable for us to proceed with the Offer and Consent Solicitation. |
• | the tender is made by or through an Eligible Institution; |
• | the exchange agent receives by hand, mail, overnight courier, facsimile or electronic mail transmission, prior to the Expiration Date, a properly completed and duly executed Notice of Guaranteed Delivery in the form we have provided with this Prospectus/Offer to Exchange, with signatures guaranteed by an Eligible Institution; and |
• | a confirmation of a book-entry transfer into the exchange agent’s account at DTC of all public warrants delivered electronically, together with a properly completed and duly executed Letter of Transmittal and Consent with any required signature guarantees (or, in the case of a book-entry transfer, an Agent’s Message in accordance with ATOP), and any other documents required by the Letter of Transmittal and Consent, must be received by the exchange agent within two days that Nasdaq is open for trading after the date the exchange agent receives such Notice of Guaranteed Delivery. |
• | Sports. |
• | Concerts. |
• | Theater. off-Broadway plays and musicals, family entertainment events, comedy acts, and speaker series. |
• | Content Rights Holders (“CRH”) |
• | Media Partners |
• | Product and Service Partners |
• | Distribution Partners |
• | We Create Exceptional Experiences. |
• | We Raise the Bar. |
• | We Commit as a Team. |
• | We Embrace Change. |
• | We Enhance Communities. |
• | We are proud to partner with Chicago’s Lurie Children’s Hospital, one of the country’s top-ranked pediatric institutions, by bringing joy to patients and their families. Our employees have recorded bedtime stories, donated wish list gifts and hosted patients and their families at live events. |
• | Starting in 2020, the live entertainment industry was severely impacted by the global COVID-19 pandemic. This resulted in thousands of people having an uncertain future. We, and our customers, have donated millions of dollars to the Recording Academy’s charity, MusiCares, to support those in the music community and their families. |
• | availability and variety of ticket offerings; |
• | pricing, including pricing in the primary ticket market; |
• | brand recognition; and |
• | technology, including functionality and ease of use to search for offerings and complete a purchase. |
• | wide selection of listings and ticketing options; |
• | competitive pricing; |
• | Vivid Seats Rewards, the most comprehensive loyalty program among our key competitors; |
• | full-service marketplace with excellent customer service; and |
• | free-to-use |
• | privacy, |
• | data protection, |
• | intellectual property, |
• | competition, |
• | consumer protection, |
• | ticketing, |
• | payments, |
• | export taxation, and |
• | sports gaming. |
Vivid Seats Inc. (Historical) |
Transaction Accounting Adjustments |
Pro Forma Statement of Operations |
||||||||||||||||||
Revenues |
$ |
443,038 |
|
$ | — | $ | 443,038 | |||||||||||||
Cost of revenues (exclusive of depreciation and amortization shown separately below) |
90,617 | — | 90,617 | |||||||||||||||||
Marketing and selling |
181,358 | — | 181,358 | |||||||||||||||||
General and administrative |
92,170 | 2,500 | (c | ) | 94,670 | |||||||||||||||
Depreciation and amortization |
2,322 | — | 2,322 | |||||||||||||||||
|
|
|
|
|
|
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Income from operations |
76,571 | (2,500 | ) | 74,071 | ||||||||||||||||
Interest expense - net |
58,179 | (47,093 | ) | (b | ) | 11,086 | ||||||||||||||
Loss on extinguishment of debt |
35,828 | 19,903 | (b | ) | 55,731 | |||||||||||||||
Other expenses (income) |
1,389 | (5,794 | ) | (a | ) | (4,405 | ) | |||||||||||||
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|
|
|
|
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Net (loss) income before income taxes |
(18,825 | ) | 30,484 | 11,659 | ||||||||||||||||
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|
|
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Income taxes |
304 | — | (d | ) | 304 | |||||||||||||||
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|||||||||||||||
Net (loss) income |
(19,129 | ) | 30,484 | 11,355 | ||||||||||||||||
Net loss attributable to Hoya Intermediate, LLC shareholders prior to reverse recapitalization |
(12,836 | ) | 12,836 | (e | ) | — | ||||||||||||||
Net (loss) income attributable to redeemable noncontrolling interests |
(3,010 | ) | 10,656 | (e | ) | 7,646 | ||||||||||||||
|
|
|
|
|
|
|||||||||||||||
Net (loss) income attributable to Class A Common Stockholders |
$ | (3,283) | $ | 6,992 | (e | ) | $ | 3,709 | ||||||||||||
|
|
|
|
|
|
|||||||||||||||
Net (loss) income per Class A Common Stock |
Assuming No Public Warrant Exchanges |
|||||||||||||||||||
Basic |
$ | (0.04 | ) | $ | 0.05 | (f | ) | |||||||||||||
Diluted |
$ | (0.04 | ) | $ | 0.05 | (f | ) | |||||||||||||
Assuming Exchange of All Public Warrants |
||||||||||||||||||||
Basic |
$ | 0.03 | (f | ) | ||||||||||||||||
Diluted |
$ | 0.03 | (f | ) |
Vivid Seats Inc. (Historical) |
Transaction Accounting Adjustments |
Pro Forma Statement of Operations |
||||||||||||||||||
Revenues |
$ |
130,772 |
|
$ | — | $ |
130,772 |
|
||||||||||||
Cost of revenues (exclusive of depreciation and amortization shown separately below) |
32,164 | — | 32,164 | |||||||||||||||||
Marketing and selling |
54,228 | — | 54,228 | |||||||||||||||||
General and administrative |
29,275 | — | 29,275 | |||||||||||||||||
Depreciation and amortization |
1,385 | — | 1,385 | |||||||||||||||||
|
|
|
|
|
|
|||||||||||||||
Income from operations |
13,720 | — | 13,720 | |||||||||||||||||
Interest expense - net |
3,942 | (1,229 | ) | (b | ) | 2,713 | ||||||||||||||
Loss on extinguishment of debt |
4,285 | (4,285 | ) | (b | ) | — | ||||||||||||||
Other expenses |
2,279 | — | 2,279 | |||||||||||||||||
|
|
|
|
|
|
|||||||||||||||
Net income before income taxes |
3,214 | 5,514 | 8,728 | |||||||||||||||||
|
|
|
|
|
|
|||||||||||||||
Income taxes |
76 | — | (d | ) | 76 | |||||||||||||||
|
|
|
|
|
|
|||||||||||||||
Net income |
3,138 | 5,514 | 8,652 | |||||||||||||||||
Net income attributable to Hoya Intermediate, LLC shareholders prior to reverse recapitalization |
— | — | (e | ) | — | |||||||||||||||
Net income attributable to redeemable noncontrolling interests |
1,879 | 3,407 | (e | ) | 5,286 | |||||||||||||||
|
|
|
|
|
|
|||||||||||||||
Net income attributable to Class A Common Stockholders |
$ | 1,259 | $ | 2,107 | (e | ) | $ | 3,366 | ||||||||||||
|
|
|
|
|
|
|||||||||||||||
Net income per Class A Common Stock |
Assuming No Public Warrant Exchanges |
|||||||||||||||||||
Basic |
$ | 0.02 | $ | 0.04 | (f | ) | ||||||||||||||
Diluted |
$ | 0.02 | $ | 0.04 | (f | ) | ||||||||||||||
Assuming Exchange of All Public Warrants |
||||||||||||||||||||
Basic |
$ | 0.04 | (f | ) | ||||||||||||||||
Diluted |
$ | 0.04 | (f | ) |
2. |
Adjustments and Assumptions to the Unaudited Pro Forma Condensed Consolidated Statements of Operations for the Year Ended December 31, 2021 and the Three Months Ended March 31, 2022 |
Historical |
Assuming No Public Warrant Exchanges |
Assuming Exchange of All Public Warrants | ||||||||||||||||||||||
(in thousands, except share and per share data) |
Year Ended December 31, 2021 |
Three Months Ended March 31, 2022 |
Year Ended December 31, 2021 |
Three Months Ended March 31, 2022 |
Year Ended December 31, 2021 |
Three Months Ended March 31, 2022 |
||||||||||||||||||
Numerator: |
||||||||||||||||||||||||
Net income attributable to Class A Common Stockholders |
$ | (3,283 | ) | $ | 1,259 | $ | 3,709 | $ | 3,366 | $ | 3,880 | $ | 3,537 | |||||||||||
Excess fair value provided to warrant holders in public warrant exchange |
— | — | — | — | (1,580 | ) | — | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net income attributable to Class A Common Stockholders—basic |
(3,283 | ) | 1,259 | 3,709 | 3,366 | 2,300 | 3,537 | |||||||||||||||||
Net income effect of dilutive securities |
(123 | ) | 1,729 | (10 | ) | 26 | (138 | ) | 25 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net income attributable to Class A Common Stockholders—diluted |
$ | (3,406 | ) | $ | 2,988 | $ | 3,699 | $ | 3,392 | $ | 2,162 | $ | 3,562 | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Denominator: |
||||||||||||||||||||||||
Weighted average Class A Common Stock outstanding—basic |
77,498,775 | 79,151,929 | 77,060,009 | 79,151,929 | 81,411,876 | 83,503,795 | ||||||||||||||||||
Incremental Class A Common Stock attributable to dilutive securities |
— | 119,262,218 | 3,186,743 | 1,062,218 | — | 1,062,218 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Weighted average Class A Common Stock outstanding—diluted |
77,498,775 | 198,414,147 | 80,246,752 | 80,214,147 | 81,411,876 | 84,566,013 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net income per Class A Common Stock—basic |
$ | (0.04 | ) | $ | 0.02 | $ | 0.05 | $ | 0.04 | $ | 0.03 | $ | 0.04 | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net income per Class A Common Stock—diluted |
$ | (0.04 | ) | $ | 0.02 | $ | 0.05 | $ | 0.04 | $ | 0.03 | $ | 0.04 | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
Year Ended December 31, |
|||||||||||||||||||
2022 |
2021 |
2021 |
2020 |
2019 |
||||||||||||||||
Marketplace GOV (1) |
$ | 742,138 | $ | 116,473 | $ | 2,399,092 | $ | 347,259 | $ | 2,279,773 | ||||||||||
Total Marketplace orders (2) |
2,019 | 293 | 6,637 | 1,066 | 7,185 | |||||||||||||||
Total Resale orders (3) |
68 | 13 | 199 | 49 | 303 | |||||||||||||||
Adjusted EBITDA (4) |
$ | 21,012 | $ | 4,187 | $ | 109,869 | $ | (80,204 | ) | $ | 119,172 |
(1) | Marketplace GOV represents the total transactional amount of Marketplace segment orders placed on our platform in a period, inclusive of fees, exclusive of taxes, and net of event cancellations that occurred during that period. During the year ended December 31, 2021, Marketplace GOV was negatively impacted by event cancellations in the amount of $108.0 million, compared to $216.0 million and $22.2 million during the years ended December 31, 2020 and 2019. Marketplace GOV was negatively impacted by event cancellations in the amount of $34.8 million during the three months ended March 31, 2022 and $18.5 million during the three months ended March 31, 2021, though as a percentage of total Marketplace GOV the impact of event cancellations decreased significantly in the three months ended March 31, 2022 compared to the three months ended March 31, 2021. |
(2) | Total Marketplace orders represents the volume of Marketplace segment orders placed on our platform during a period, net of event cancellations that occurred during that period. During the year ended December 31, 2021, our Marketplace segment experienced 257,109 event cancellations, compared to 549,085 and 54,961 event cancellations during the years ended December 31, 2020 and 2019. During the three months ended March 31, 2022, our Marketplace segment experienced 91,400 event cancellations, compared to 51,775 event cancellations during the three months ended March 31, 2021, though as a percentage of Total Marketplace orders the impact of event cancellations decreased significantly in the three months ended March 31, 2022 compared to the three months ended March 31, 2021. |
(3) | Total Resale orders represents the volume of Resale segment orders sold by our Resale team in a period, net of event cancellations that occurred during that period. During the year ended December 31, 2021, our Resale segment experienced 6,165 event cancellations, compared to 20,644 and 1,517 event cancellations during the years ended December 31, 2020 and 2019. During the three months ended March 31, 2022, our Resale segment experienced 2,559 event cancellations, compared to 1,141 event cancellations during the three months ended March 31, 2021, though as a percentage of Total Resale orders the impact of event cancellations decreased significantly in the three months ended March 31, 2022 compared to the three months ended March 31, 2021. |
(4) | Adjusted EBITDA is not a measure defined under GAAP. We believe Adjusted EBITDA provides useful information to investors and others in understanding and evaluating our results of operations, as well as provides a useful measure for period-to-period |
Three Months Ended March 31, |
Year Ended December 31, |
|||||||||||||||||||
2022 |
2021 |
2021 |
2020 |
2019 |
||||||||||||||||
Net loss |
$ | 3,138 | $ | (20,251 | ) | $ | (19,129 | ) | $ | (774,185 | ) | $ | (53,848 | ) | ||||||
Income tax expense |
76 | — | 304 | — | — | |||||||||||||||
Interest expense |
3,942 | 16,319 | 58,179 | 57,482 | 41,497 | |||||||||||||||
Depreciation and amortization |
1,385 | 295 | 2,322 | 48,247 | 93,078 | |||||||||||||||
Sales tax liability (1) |
922 | 2,261 | 8,956 | 6,772 | 10,045 | |||||||||||||||
Transaction costs (2) |
1,402 | 3,546 | 12,852 | 359 | 8,857 | |||||||||||||||
Equity-based compensation (3) |
3,597 | 1,091 | 6,047 | 4,287 | 5,174 | |||||||||||||||
Senior management transition costs (4) |
— | — | — | — | 2,706 | |||||||||||||||
Loss on extinguishment of debt (5) |
4,285 | — | 35,828 | 685 | 2,414 | |||||||||||||||
Litigation, settlements and related costs (6) |
(14 | ) | 641 | 2,835 | 1,347 | 2,256 | ||||||||||||||
Change to annual bonus program (7) |
— | — | — | — | 2,810 | |||||||||||||||
Customer loyalty program stand-up costs(8) |
— | — | — | — | 3,223 | |||||||||||||||
Impairment charges (9) |
— | — | — | 573,838 | — | |||||||||||||||
Loss on asset disposals (10) |
— | — | — | 169 | 960 | |||||||||||||||
Severance related to COVID-19 (11) |
— | 285 | 286 | 795 | — | |||||||||||||||
Change in value of warrants (12) |
2,279 | — | 1,389 | — | — | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Adjusted EBITDA |
$ |
21,012 |
$ |
4,187 |
$ |
109,869 |
$ |
(80,204 |
) |
$ |
119,172 |
|||||||||
|
|
|
|
|
|
|
|
|
|
(1) | We have historically incurred sales tax expense in jurisdictions where we expected to remit sales tax payments but were not yet collecting from customers. During the second half of 2021, we began collecting sales tax from customers in all required states. The sales tax liability presented herein represents the exposure for sales tax prior to the date we began collecting sales tax from customers reduced by abatements received, inclusive of any penalties and interest assessed by the jurisdictions. Discussions with jurisdictions regarding our liability for uncollected sales taxes continued into 2022. |
(2) | Transaction costs consist of legal; accounting; tax and other professional fees; as well as personnel-related costs, which consist of severance and retention bonuses; and integration costs. Transaction costs recognized in 2022 were related to the merger transaction with Horizon Acquisition Corporation, the acquisition of Betcha Sports, Inc. (“Betcha”), and refinancing of the remaining June 2017 First Lien Loan (as defined herein) with a new February 2022 First Lien Loan (as defined herein). Transaction costs recognized in 2021 were related to the Business Combination, to the extent they were not eligible for capitalization, and the acquisition of Betcha. Transaction costs recognized in 2020 were related to the acquisition of Fanxchange Ltd. in 2019. In 2019, we completed the acquisition of Fanxchange Ltd. and attempted to pursue an acquisition that was ultimately abandoned. These acquisition-related costs are not representative of normal, recurring, cash operating expenses. |
(3) | We incur equity-based compensation expenses for profit interests issued prior to the Business Combination and equity granted according to the 2021 Plan, which we do not consider to be indicative of our core operating performance. The 2021 Plan was approved and adopted in order to facilitate the grant of equity incentive awards to our employees and directors. The 2021 Plan became effective on October 18, 2021. |
(4) | In 2019, we incurred costs associated with the transition to our current senior management team, including our Chief Executive Officer. These costs include recruiting costs and costs to compensate our Chief Executive Officer for benefits forfeited at his previous employer. |
(5) | Losses incurred resulted from the extinguishment of the June 2017 First Lien Loan in February 2022, the retirement of the May 2020 First Lien Loan (as defined herein) and fees paid related to the early payment of a portion of the principal of the June 2017 First Lien Loan in October 2021, the retirement of the revolving credit facility in May 2020, and the repayment of the $40.0 million second lien term loan in 2019. |
(6) | These expenses relate to external legal costs and settlement costs, which were unrelated to our core business operations. |
(7) | We restructured our employee incentive compensation plan during 2019. |
(8) | During August 2019, we initiated the Vivid Seats Rewards customer loyalty program. We incurred $3.2 million of initial stand-up costs related to the commencement of the program. These stand-up costs consist primarily of customer incentives and marketing costs, which are not expected to reoccur. |
(9) | We incurred impairment charges triggered by the effects of the COVID-19 pandemic during the year ended December 31, 2020. The impairment charges resulted in a reduction in the carrying values of our goodwill, indefinite-lived trademark, definite-lived intangible assets, and other long-lived assets. See our audited financial statements included elsewhere in this Prospectus/Offer to Exchange for additional information. |
(10) | We incurred losses on asset disposals, which are not considered indicative of our core operating performance. |
(11) | These charges relate to severance costs resulting from significant reductions in employee headcount due to the effects of the COVID-19 pandemic. |
(12) | These expenses relate to the modification of the terms of the Vivid Seats Public IPO Warrants in connection with the Business Combination and revaluation of Hoya Intermediate Warrants following the Business Combination. |
• | sports teams performance, the number of playoff games in a series and teams involved; |
• | the timing of tours of top grossing acts; |
• | tour and game cancellations due to weather, illness or other factors; and |
• | popularity and demand for certain performers and events. |
Three Months Ended March 31, |
||||||||||||||||
2022 |
2021 |
Change |
% Change |
|||||||||||||
Revenues |
$ | 130,772 | $ | 24,114 | $ | 106,658 | 442 | % | ||||||||
Costs and expenses: |
||||||||||||||||
Cost of revenues (exclusive of depreciation and amortization shown separately below) |
32,164 | 3,925 | 28,239 | 719 | % | |||||||||||
Marketing and selling |
54,228 | 7,955 | 46,273 | 582 | % | |||||||||||
General and administrative |
29,275 | 15,871 | 13,404 | 84 | % | |||||||||||
Depreciation and amortization |
1,385 | 295 | 1,090 | 369 | % | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Income (loss) from operations |
13,720 |
(3,932 |
) |
17,652 |
449 |
% | ||||||||||
Other expenses: |
||||||||||||||||
Interest expense – net |
3,942 | 16,319 | (12,377 | ) | (76 | )% | ||||||||||
Loss on extinguishment of debt |
4,285 | — | 4,285 | 100 | % | |||||||||||
Other expenses |
2,279 | — | 2,279 | 100 | % | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Income (loss) before income taxes |
3,214 |
(20,251 |
) |
23,465 |
116 |
% | ||||||||||
Income tax expense |
76 | — | 76 | 100 | % | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net income (loss) |
3,138 |
(20,251 |
) |
23,389 |
115 |
% | ||||||||||
Net loss attributable to Hoya Intermediate, LLC shareholders prior to reverse recapitalization |
— | (20,251 | ) | 20,251 | 100 | % | ||||||||||
Net income attributable to redeemable noncontrolling interests |
1,879 | — | 1,879 | 100 | % | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net income (loss) attributable to Class A Common Stockholders |
$ |
1,259 |
$ |
— |
$ |
1,259 |
100 |
% | ||||||||
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
||||||||||||||||
2022 |
2021 |
Change |
% Change |
|||||||||||||
Revenues: |
||||||||||||||||
Marketplace |
$ | 110,516 | $ | 21,993 | $ | 88,523 | 403 | % | ||||||||
Resale |
20,256 | 2,121 | 18,135 | 855 | % | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total revenues |
$ |
130,772 |
$ |
24,114 |
$ |
106,658 |
442 |
% | ||||||||
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
||||||||||||||||
2022 |
2021 |
Change |
% Change |
|||||||||||||
Revenues: |
||||||||||||||||
Concerts |
$ | 58,673 | $ | 7,014 | $ | 51,659 | 737 | % | ||||||||
Sports |
38,915 | 14,138 | 24,777 | 175 | % | |||||||||||
Theater |
12,615 | 783 | 11,832 | 1,511 | % | |||||||||||
Other |
313 | 58 | 255 | 440 | % | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total Marketplace revenues |
$ |
110,516 |
$ |
21,993 |
$ |
88,523 |
403 |
% | ||||||||
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
||||||||||||||||
2022 |
2021 |
Change |
% Change |
|||||||||||||
Revenues: |
||||||||||||||||
Owned Properties |
$ | 83,666 | $ | 18,196 | $ | 65,470 | 360 | % | ||||||||
Private Label |
26,850 | 3,797 | 23,053 | 607 | % | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total Marketplace revenues |
$ |
110,516 |
$ |
21,993 |
$ |
88,523 |
403 |
% | ||||||||
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
||||||||||||||||
2022 |
2021 |
Change |
% Change |
|||||||||||||
Cost of revenues: |
||||||||||||||||
Marketplace |
$ | 16,409 | $ | 2,700 | $ | 13,709 | 508 | % | ||||||||
Resale |
15,755 | 1,225 | 14,530 | 1,186 | % | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total cost of revenues |
$ |
32,164 |
$ |
3,925 |
$ |
28,239 |
719 |
% | ||||||||
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
||||||||||||||||
2022 |
2021 |
Change |
% Change |
|||||||||||||
Marketing and selling: |
||||||||||||||||
Online |
$ | 49,850 | $ | 7,789 | $ | 42,061 | 540 | % | ||||||||
Offline |
4,378 | 166 | 4,212 | 2,537 | % | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total marketing and selling |
$ |
54,228 |
$ |
7,955 |
$ |
46,273 |
582 |
% | ||||||||
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
||||||||||||||||
2022 |
2021 |
Change |
% Change |
|||||||||||||
General and administrative: |
||||||||||||||||
Personnel expenses |
$ | 19,737 | $ | 6,671 | $ | 13,066 | 196 | % | ||||||||
Non-income tax expenses |
1,239 | 2,362 | (1,123 | ) | (48 | )% | ||||||||||
Other |
8,299 | 6,838 | 1,461 | 21 | % | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total general and administrative |
$ |
29,275 |
$ |
15,871 |
$ |
13,404 |
84 |
% | ||||||||
|
|
|
|
|
|
|
|
2021 |
2020 |
Change |
% Change |
|||||||||||||
Revenues |
$ | 443,038 | $ | 35,077 | $ | 407,961 | 1163 | % | ||||||||
Costs and expenses: |
||||||||||||||||
Cost of revenues (exclusive of depreciation and amortization shown separately below) |
90,617 | 24,690 | 65,927 | 267 | % | |||||||||||
Marketing and selling |
181,358 | 38,121 | 143,237 | 376 | % | |||||||||||
General and administrative |
92,170 | 66,199 | 25,971 | 39 | % | |||||||||||
Depreciation and amortization |
2,322 | 48,247 | (45,925 | ) | (95 | )% | ||||||||||
Impairment charges |
— | 573,838 | (573,838 | ) | (100 | )% | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Income (loss) from operations |
76,571 | (716,018 | ) | 792,589 | 111 | % | ||||||||||
Other expenses: |
||||||||||||||||
Interest expense – net |
58,179 | 57,482 | 697 | 1 | % | |||||||||||
Loss on extinguishment of debt |
35,828 | 685 | 35,143 | 5,130 | % | |||||||||||
Other expenses |
1,389 | — | 1,389 | 100 | % | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Loss before income taxes |
(18,825 | ) | (774,185 | ) | 755,360 | 98 | % | |||||||||
Income tax expense |
304 | — | 304 | 100 | % | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net loss |
(19,129 | ) | (774,185 | ) | 755,056 | 98 | % | |||||||||
Net loss attributable to Hoya Intermediate, LLC shareholders prior to reverse recapitalization |
(12,836 | ) | (774,185 | ) | 761,349 | 98 | % | |||||||||
Net loss attributable to redeemable noncontrolling interests |
(3,010 | ) | — | (3,010 | ) | 100 | % | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Net loss attributable to Class A Common Stockholders |
$ |
(3,283 |
) | $ |
— |
$ |
(3,283 |
) | 100 |
% | ||||||
|
|
|
|
|
|
|
|
2021 |
2020 |
Change |
% Change |
|||||||||||||
Revenues: |
||||||||||||||||
Marketplace |
$ | 389,668 | $ | 23,281 | $ | 366,387 | 1,574 | % | ||||||||
Resale |
53,370 | 11,796 | 41,574 | 352 | % | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total revenues |
$ |
443,038 |
$ |
35,077 |
$ |
407,961 |
1,163 |
% | ||||||||
|
|
|
|
|
|
|
|
2021 |
2020 |
Change |
% Change |
|||||||||||||
Revenues: |
||||||||||||||||
Concerts |
$ | 171,149 | $ | 15,775 | $ | 155,374 | 985 | % | ||||||||
Sports |
175,471 | 3,484 | 171,987 | 4,936 | % | |||||||||||
Theater |
41,745 | 3,759 | 37,986 | 1,011 | % | |||||||||||
Other |
1,303 | 263 | 1,040 | 395 | % | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total Marketplace revenues |
$ |
389,668 |
$ |
23,281 |
$ |
366,387 |
1,574 |
% | ||||||||
|
|
|
|
|
|
|
|
2021 |
2020 |
Change |
% Change |
|||||||||||||
Revenues: |
||||||||||||||||
Owned Properties |
$ | 308,226 | $ | 24,188 | $ | 284,038 | 1,174 | % | ||||||||
Private Label |
81,442 | (907 | ) | 82,349 | 9,079 | % | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total Marketplace revenues |
$ |
389,668 |
$ |
23,281 |
$ |
366,387 |
1,574 |
% | ||||||||
|
|
|
|
|
|
|
|
2021 |
2020 |
Change |
% Change |
|||||||||||||
Cost of revenues: |
||||||||||||||||
Marketplace |
$ | 51,702 | $ | 13,741 | $ | 37,961 | 276 | % | ||||||||
Resale |
38,915 | 10,949 | 27,966 | 255 | % | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total cost of revenues |
$ |
90,617 |
$ |
24,690 |
$ |
65,927 |
267 |
% | ||||||||
|
|
|
|
|
|
|
|
2021 |
2020 |
Change |
% Change |
|||||||||||||
Marketing and selling: |
||||||||||||||||
Online |
$ | 160,420 | $ | 34,213 | $ | 126,207 | 369 | % | ||||||||
Offline |
20,938 | 3,908 | 17,030 | 436 | % | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total marketing and selling |
$ |
181,358 |
$ |
38,121 |
$ |
143,237 |
376 |
% | ||||||||
|
|
|
|
|
|
|
|
2021 |
2020 |
Change |
% Change |
|||||||||||||
General and administrative: |
||||||||||||||||
Personnel expenses |
$ | 47,546 | $ | 37,696 | $ | 9,850 | 26 | % | ||||||||
Non-income tax expenses |
10,016 | 7,060 | 2,956 | 42 | % | |||||||||||
Other |
34,608 | 21,443 | 13,165 | 61 | % | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total general and administrative |
$ |
92,170 |
$ |
66,199 |
$ |
25,971 |
39 |
% | ||||||||
|
|
|
|
|
|
|
|
2021 |
2020 |
Change |
% Change |
|||||||||||||
Other expenses |
||||||||||||||||
Interest expense - net |
$ | 58,179 | $ | 57,482 | $ | 697 | 1 | % | ||||||||
Loss on extinguishment of debt |
35,828 | 685 | 35,143 | 5,130 | % | |||||||||||
Other expenses |
1,389 | — | 1,389 | 100 | % | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total other expenses |
$ |
95,396 |
$ |
58,167 |
$ |
37,229 |
64 |
% | ||||||||
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
Year Ended December 31, |
|||||||||||||||||||
2022 |
2021 |
2021 |
2020 |
2019 |
||||||||||||||||
Net cash provided by (used in) operating activities |
$ | 23,534 | $ | 30,761 | $ | 219,931 | $ | (33,892 | ) | $ | 76,478 | |||||||||
Net cash used in investing activities |
(3,441 | ) | (1,726 | ) | (9,345 | ) | (7,605 | ) | (40,155 | ) | ||||||||||
Net cash (used in) provided by financing activities |
(195,568 | ) | (1,603 | ) | (6,113 | ) | 245,545 | (55,462 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net increase (decrease) in cash and cash equivalents |
$ |
(175,475 |
) |
$ |
27,432 |
$ |
204,473 |
$ |
204,048 |
$ |
(19,139 |
) | ||||||||
|
|
|
|
|
|
|
|
|
|
Name |
Age |
Position | ||
Stanley Chia |
40 | Chief Executive Officer and Director | ||
Lawrence Fey |
41 | Chief Financial Officer | ||
Jon Wagner |
49 | Chief Technology Officer | ||
Riva Bakal |
38 | Chief Product and Strategy Officer | ||
David Morris |
47 | General Counsel | ||
Todd Boehly |
48 | Director | ||
Jane DeFlorio |
51 | Director | ||
Craig Dixon |
46 | Director | ||
Julie Masino |
51 | Director | ||
Martin Taylor |
52 | Director | ||
Mark Anderson |
46 | Director | ||
David Donnini |
56 | Director | ||
Tom Ehrhart |
35 | Director |
• | The Class I directors are Jane DeFlorio, David Donnini and Stanley Chia; |
• | The Class II directors are Tom Ehrhart, Craig Dixon and Martin Taylor; and |
• | The Class III directors are Julie Masino, Mark Anderson and Todd Boehly. |
• | overseeing our accounting and financial reporting process; |
• | appointing, compensating, retaining and overseeing the work of our registered independent public accounting firm and any other registered public accounting firm engaged for the purpose of preparing or issuing an audit report or related work or performing other audit, review or attest services for us; |
• | discussing with our registered independent public accounting firm any audit problems or difficulties and management’s response; |
• | pre-approving all audit and non-audit services provided to us by our registered independent public accounting firm (other than those provided pursuant to appropriate preapproval policies established by the audit committee or exempt from such requirement under the rules of the SEC); |
• | reviewing and discussing our annual and quarterly financial statements with management and our registered independent public accounting firm; |
• | discussing our risk management policies; |
• | reviewing and approving or ratifying any related person transactions; |
• | establishing procedures for the receipt, retention and treatment of complaints received by us regarding accounting, internal accounting controls or auditing matters, and for the confidential and anonymous submission by our employees of concerns regarding questionable accounting or auditing matters; and |
• | preparing the audit committee report required by SEC rules. |
• | reviewing and approving corporate goals and objectives with respect to the compensation of our Chief Executive Officer, evaluating our Chief Executive Officer’s performance in light of these goals and objectives and setting our Chief Executive Officer’s compensation; |
• | reviewing and setting or making recommendations to our Board of Directors regarding the compensation of our other executive officers; |
• | reviewing and making recommendations to our Board of Directors regarding director compensation; |
• | reviewing and approving or making recommendations to our Board of Directors regarding our incentive compensation and equity-based plans and arrangements; |
• | appointing and overseeing any compensation consultants; |
• | reviewing and discussing annually with management our “Compensation Discussion and Analysis,” to the extent required; and |
• | preparing the annual compensation committee report required by SEC rules, to the extent required. |
• | identifying individuals qualified to become members of our Board of Directors and ensure the Board of Directors has the requisite expertise and consists of persons with sufficiently diverse and independent backgrounds; |
• | recommending to our Board of Directors the persons to be nominated for election as directors and to each committee of the Board of Directors; |
• | developing and recommending to our Board of Directors corporate governance guidelines, and reviewing and recommending to our Board of Directors proposed changes to our corporate governance guidelines from time to time; and |
• | overseeing the annual evaluations of our Board of Directors, its committees and management. |
• | Stanley Chia, Chief Executive Officer; |
• | Lawrence Fey, Chief Financial Officer; and |
• | Jon Wagner, Chief Technology Officer. |
Name and Principal Position |
Year |
Salary ($) |
Stock Awards ($) (1) |
Option Awards ($) (2) |
Non-equity Incentive Plan Compensation ($) (3) |
All Other Compensation ($) (4) |
Total ($) |
|||||||||||||||||||||
Stanley Chia, Chief Executive Officer |
2021 | 600,000 | 2,500,000 | 4,303,791 | 900,000 | 20,417 | 8,324,208 | |||||||||||||||||||||
2020 | 551,539 | 1,042,105 | — | 275,769 | 26,906 | 1,896,319 | ||||||||||||||||||||||
Lawrence Fey, Chief Financial Officer |
2021 | 300,000 | 2,000,000 | 3,443,033 | 225,000 | 11,400 | 5,979,433 | |||||||||||||||||||||
2020 | 192,692 | 483,973 | — | 48,173 | 6,877 | 731,715 | ||||||||||||||||||||||
Jon Wagner, Chief Technology Officer |
2021 | 360,231 | 1,000,000 | 1,721,516 | 270,173 | 11,400 | 3,363,320 | |||||||||||||||||||||
2020 | 350,000 | 303,354 | — | 87,500 | 9,205 | 750,059 |
(1) | The amounts shown in this column represent restricted stock units granted under our 2021 Incentive Award Plan. The amounts represent the aggregate grant date fair value computed in accordance with FASB ASC Topic 718. For a detailed description of the assumptions used for purposes of determining grant date fair value, see Item 8 “Financial Statements and Supplementary Data–Note 20 to our Consolidated Financial Statements” and Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations–Critical Accounting Policies and Estimates–Equity-Based Compensation” in our Annual Report on Form 10-K filed with the SEC on March 15, 2022. |
(2) | The amounts shown in this column represent stock options granted under our 2021 Incentive Award Plan. The amounts represent the aggregate grant date fair value computed in accordance with FASB ASC Topic 718. For a detailed description of the assumptions used for purposes of determining grant date fair value, see Item 8 “Financial Statements and Supplementary Data–Note 20 to our Consolidated Financial Statements” and Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations–Critical Accounting Policies and Estimates–Equity-Based Compensation” in our Annual Report on Form 10-K filed with the SEC on March 15, 2022. |
(3) | The amounts shown in this column represent cash incentive awards earned for 2021 and paid in the first quarter of 2022 under our Annual Incentive Plan. See “2021 Annual Incentive Plan Awards” below. |
(4) | The amount for Mr. Chia reflects (a) Young Presidents’ Organization international membership in the amount of $9,017, and (b) employer matching contribution under our 401(k) in the amount of $11,400. The amounts for Mr. Fey and Mr. Wagner reflect employer matching contributions under our 401(k). |
Actual Revenue /Adjusted EBITDA Performance as % of Operating Plan Target |
Payout | |||
Threshold |
85% | 40% | ||
90% | 60% | |||
95% | 80% | |||
Target |
100% | 100% | ||
105% | 120% | |||
110% | 135% | |||
Maximum |
115% | 150% |
• | medical, dental and vision benefits; |
• | medical and dependent care flexible spending accounts; |
• | short-term and long-term disability insurance; and |
• | life insurance. |
Annual Base Salary |
COBRA Health Insurance Premiums | |||
Mr. Chia |
12 months | 12 months | ||
Mr. Fey |
12 months | 12 months | ||
Mr. Wagner |
9 months | 9 months |
Position |
Reporting Structure |
Primary Location | ||||
Mr. Chia |
sole CEO, most senior officer, and member of Board of Directors | Our Board of Directors | Headquarters in Chicago | |||
Mr. Fey |
CFO | CEO or Board of Directors | Austin-Round Rock-San | |||
Mr. Wagner |
CTO | CEO | Philadelphia-Camden-Wilmington metropolitan area or Chicago-Naperville-Elgin metropolitan area |
Name |
Type of Equity |
Grant Date |
Number of Securities Underlying Unexercised Options (#) Unexercisable |
Number of Securities Underlying Unexercised Options (#) Unexercisable (1) |
Option Exercise Price ($) |
Option Expiration Date |
Number of Shares or Units of Stock That Have Not Vested (#) (2) |
Market Value of Shares or Units of Stock That Have Not Vested ($) |
||||||||||||||||||||||
Stanley Chia |
Profit interests |
11/5/2018 | — | 200,306 | (1) |
874,262 | (8) | |||||||||||||||||||||||
Phantom equity |
9/1/2020 | — | 360,000 | (2) |
2,674,172 | (8) | ||||||||||||||||||||||||
Profit interests |
9/1/2020 | — | 360,000 | (2) |
14,760,865 | (8) | ||||||||||||||||||||||||
Stock Options |
10/19/2021 | — | 938,812 | (3) |
12.86 | (4) |
10/19/2031 | |||||||||||||||||||||||
Stock Options |
10/19/2021 | — | 275,682 | (3) |
15.00 | 10/19/2031 | ||||||||||||||||||||||||
Restricted Stock Units |
10/19/2021 | — | 250,000 | (5) |
2,720,000 | (9) | ||||||||||||||||||||||||
Lawrence Fey |
Phantom equity |
9/1/2020 | — | 88,000 | (6) |
653,686 | (8) | |||||||||||||||||||||||
Profit interests |
9/1/2020 | — | 88,000 | (6) |
3,608,212 | (8) | ||||||||||||||||||||||||
Profit interests |
9/1/2020 | — | 352,000 | (6) |
1,310,901 | (8) | ||||||||||||||||||||||||
Stock Options |
10/19/2021 | — | 751,050 | (3) |
12.86 | (4) |
10/19/2031 | |||||||||||||||||||||||
Stock Options |
10/19/2021 | — | 220,546 | (3) |
15.00 | 10/19/2031 | ||||||||||||||||||||||||
Restricted Stock Units |
10/19/2021 | — | 200,000 | (5) |
2,176,000 | (9) | ||||||||||||||||||||||||
Jon Wagner |
Profit interests |
12/17/2018 | — | 36,000 | (7) |
0 | (8) | |||||||||||||||||||||||
Phantom equity |
9/1/2020 | — | 61,600 | (6) |
457,580 | (8) | ||||||||||||||||||||||||
Profit interests |
9/1/2020 | — | 61,600 | (6) |
2,525,748 | (8) | ||||||||||||||||||||||||
Profit interests |
9/1/2020 | — | 192,000 | (6) |
715,037 | (8) | ||||||||||||||||||||||||
Stock Options |
10/19/2021 | — | 375,525 | (3) |
12.86 | (4) |
10/19/2031 | |||||||||||||||||||||||
Stock Options |
10/19/2021 | — | 110,273 | (3) |
15.00 | 10/19/2031 | ||||||||||||||||||||||||
Restricted Stock Units |
10/19/2021 | — | 100,000 | (5) |
1,088,000 | (9) |
(1) | Vesting occurs in 20% equal installments on each anniversary of November 5, 2018, subject to Mr. Chia’s continued employment through each vesting date. Upon certain qualifying terminations, (a) an additional 10% of unvested profits interests will accelerate and vest in connection with Mr. Chia’s termination and (b) if a sale of Hoya Topco is consummated in the six-month period following Mr. Chia’s termination, all of the unvested units will accelerate and vest. |
(2) | Vesting occurs in 20% equal installments on each anniversary of June 30, 2020, subject to Mr. Chia’s continued employment through each vesting date. Upon certain qualifying terminations, (a) an additional 10% of unvested profits interests will accelerate and vest in connection with Mr. Chia’s termination and (b) if a sale of Hoya Topco is consummated in the six-month period following Mr. Chia’s termination, all of the unvested units will accelerate and vest. |
(3) | The stock options vest in 16 equal quarterly installments beginning on January 19, 2022. |
(4) | The options were awarded with an original exercise price of $13.09 per share on the date of grant. On the grant date, we anticipated that we would pay an extraordinary dividend of $0.23 per share in the near term. When the dividend was paid on November 2, 2021, the exercise price of the options was reduced by $0.23 per share, which resulted in an exercise price of $12.86 per share. |
(5) | The restricted stock units vest in 16 equal quarterly installments beginning on January 19, 2022. |
(6) | Vesting occurs in 20% equal installments on each anniversary of June 30, 2020, subject to the named executive officer’s continued employment through each vesting date. |
(7) | Vesting occurs in 20% equal installments on each anniversary of December 12, 2018, subject to the named executive officer’s continued employment through each vesting date. |
(8) | There is no public market for the profits interests. For purposes of this disclosure, we have valued the profits interests primarily based on the Class A share price as of December 31, 2021. The amount reported above under the heading “Market Value of Shares or Units of Stock That Have Not Vested” reflects the intrinsic value of the profits interests as of December 31, 2021, based upon the terms of each individual’s profits interests. |
(9) | Represents the fair market value per share of our common stock of $10.88, as of December 31, 2021. |
Name |
Fees Earned or Paid in Cash ($) |
Stock Awards ($) (1) (2) |
All Other Compensation ($) |
Total ($) |
||||||||||||
Mark Anderson |
9,680.71 | 320,000 | — | 329,681 | ||||||||||||
Todd Boehly |
9,680.71 | 320,000 | — | 329,681 | ||||||||||||
Jane DeFlorio |
10,190.22 | 320,000 | — | 330,190 | ||||||||||||
Craig Dixon |
10,190.22 | 320,000 | — | 330,190 | ||||||||||||
David Donnini |
10,699.73 | 320,000 | — | 330,700 | ||||||||||||
Tom Ehrhart |
9,171.20 | 320,000 | — | 329,171 | ||||||||||||
Julie Masino |
11,209.24 | 320,000 | — | 331,209 | ||||||||||||
Martin Taylor |
— | — | — | — |
(1) | The amounts shown in this column for 2021 represent awards granted under our 2021 Incentive Award Plan. The amounts listed are equal to the aggregate grant date fair value computed in accordance with FASB ASC Topic 718. For a detailed description of the assumptions used for purposes of determining grant date fair value, see Item 8 “Financial Statements and Supplementary Data–Note 20 to our Consolidated Financial Statements” and Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations–Critical Accounting Policies and Estimates–Equity-Based Compensation” in our Annual Report on Form 10-K filed with the SEC on March 15, 2022. |
(2) | The restricted stock units vest in five equal annual installments on the first five anniversaries of the date of grant, subject to the non-employee director’s continued service through each vesting date. |
• | Restricted stock units having an aggregate grant date fair value of $320,000 on the date of his or her initial election or appointment to our Board of Directors, which will vest in five equal installments on the first five anniversaries of the date of grant, and |
• | Restricted stock units having an aggregate grant date fair value of $160,000 on an annual basis on the date of our annual meeting of shareholders; provided, however, that the value of this award will be paid pro rata based on the number of days that have elapsed during the Board of Directors term. Each annual award will vest on the earlier of the day before the date of the first annual meeting of shareholders after the date of grant and the first anniversary of the date of grant. |
• | general economic and business conditions; |
• | our strategic plans and prospects; |
• | our business and investment opportunities; |
• | our financial condition and operating results, including our cash position, net income and realizations on investments made by its investment funds; |
• | working capital requirements and anticipated cash needs; |
• | contractual restrictions and obligations, including payment obligations pursuant to the Tax Receivable Agreement and restrictions pursuant to any credit facility; and |
• | legal, tax and regulatory restrictions. |
• | U.S. expatriates and former citizens or long-term residents of the United States; |
• | persons subject to the alternative minimum tax; |
• | persons holding our public warrants or Class A Common Stock as part of a hedge, straddle or other risk reduction strategy or as part of a conversion transaction or other integrated investment; |
• | banks, insurance companies, and other financial institutions; |
• | real estate investment trusts or regulated investment companies; |
• | brokers, dealers or traders in securities; |
• | “controlled foreign corporations,” “passive foreign investment companies,” and corporations that accumulate earnings to avoid U.S. federal income tax; |
• | S corporations, partnerships or other entities or arrangements treated as partnerships for U.S. federal income tax purposes (and investors therein); |
• | tax-exempt organizations or governmental organizations; |
• | persons deemed to sell our public warrants or Class A Common Stock under the constructive sale provisions of the Code; |
• | persons who hold or receive our public warrants or Class A Common Stock pursuant to the exercise of any employee stock option, in connection with the performance of services, or otherwise as compensation; and |
• | persons subject to special tax accounting rules as a result of any item of gross income with respect to the public warrants or Class A Common Stock being taken into account in an applicable financial statement. |
• | an individual who is a citizen or resident of the United States; |
• | a corporation created or organized under the laws of the United States, any state thereof, or the District of Columbia; |
• | an estate, the income of which is subject to U.S. federal income tax regardless of its source; or |
• | a trust that (1) is subject to the primary supervision of a U.S. court and the control of one or more “United States persons” (within the meaning of Section 7701(a)(30) of the Code), or (2) has a valid election in effect to be treated as a United States person for U.S. federal income tax purposes. |
• | the holder fails to furnish the holder’s taxpayer identification number, which for an individual is ordinarily his or her social security number; |
• | the holder furnishes an incorrect taxpayer identification number; |
• | the applicable withholding agent is notified by the IRS that the holder previously failed to properly report payments of interest or dividends; or |
• | the holder fails to certify under penalties of perjury that the holder has furnished a correct taxpayer identification number and that the IRS has not notified the holder that the holder is subject to backup withholding. |
• | the Non-U.S. Holder is an individual that was present in the U.S. for 183 days or more during the taxable year of such disposition and certain other requirements are met, in which case any gain realized will generally be subject to a flat 30% U.S. federal income tax; |
• | the gain is effectively connected with a trade or business of such Non-U.S. Holder in the United States (and if required by an applicable income tax treaty, is attributable to a U.S. permanent establishment or fixed base maintained by such Non-U.S. Holder), in which case such gain will be subject to U.S. federal income tax on a net basis at the same graduated individual or corporate rates applicable to U.S. Holders, and, if the Non-U.S. Holder is a corporation, an additional “branch profits tax” may also apply; or |
• | we are or have been a “United States real property holding corporation” (“USRPHC”) for U.S. federal income tax purposes at any time during the shorter of the five-year period preceding such disposition and such Non-U.S. Holder’s holding period. |
• | in whole and not in part; |
• | at a price of $0.01 per warrant; |
• | upon a minimum of 30 days’ prior written notice of redemption to each warrant holder; and |
• | if, and only if, the closing price of the shares of Class A Common Stock equals or exceeds $18.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a public warrant as described under the heading “—Vivid Seats Public Warrants—Anti-Dilution Adjustments”) for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which we send the notice of redemption to the warrant holders. |
• | The Form of New Warrant Agreement excludes references to ownership through The Depository Trust Company; |
• | The Form of New Warrant Agreement reflects the fact that the Vivid Seats $10.00 Exercise Warrants and Vivid Seats $15.00 Exercise Warrants were not issued as part of a unit; |
• | The Form of New Warrant Agreement does not distinguish between “private” and “public” warrants; |
• | The Vivid Seats $10.00 Exercise Warrants and the Vivid Seats $15.00 Exercise Warrants terminate on the date that is ten years after the date of completion of the Business Combination; |
• | The Form of New Warrant Agreement does not provide for the redemption of the Vivid Seats $10.00 Exercise Warrants or the Vivid Seats $15.00 Exercise Warrants; |
• | The underlying value for purposes of warrant exercise makes reference to the last reported sale price; and |
• | The Form of New Warrant Agreement excludes provisions contingent upon the consummation of the Business Combination. |
• | Action by Written Consent; Special Meetings of Stockholders |
• | Advance Notice Procedures |
• | Authorized but Unissued Shares |
• | Business Combinations with Interested Stockholders |
• | Director Designees; Classes of Directors |
• | No Cumulative Voting for Directors |
• | Restriction on Issuance of Class B Common Stock |
• | existing tax basis in certain assets of Hoya Intermediate and certain of its direct or indirect subsidiaries, including assets that will eventually be subject to depreciation or amortization, once placed in service; |
• | tax basis adjustments resulting from taxable exchanges of Intermediate Common Units (including any such adjustments resulting from certain payments made by us under the Tax Receivable Agreement) acquired by us from a TRA Holder pursuant to the terms of the Second A&R LLCA; |
• | certain tax attributes of Blocker Corporations holding Intermediate Common Units that are acquired directly or indirectly by us pursuant to a Reorganization Transaction; |
• | certain tax benefits realized by us as a result of certain U.S. federal income tax allocations of taxable income or gain away from us and to other members of Hoya Intermediate and deductions or losses to us and away from other members of Hoya Intermediate, in each case, as a result of the Business Combination; and |
• | tax deductions in respect of portions of certain payments made under the Tax Receivable Agreement. |
• | any person who is, or at any time during the applicable period was, one of our executive officers or one of our directors; |
• | any person who is known by us to be the beneficial owner of more than 5% of our voting shares; |
• | any immediate family member of any of the foregoing persons, which means any child, stepchild, parent, stepparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law sister-in-law |
• | any firm, corporation or other entity in which any of the foregoing persons is a partner or principal, or in a similar position, or in which such person has a 10% or greater beneficial ownership interest. |
• | each person who is known to be the beneficial owner of more than 5% of our voting shares; |
• | each of our named executive officers and directors; and |
• | all our executive officers and directors as a group. |
Class A Common Stock |
Class B Common Stock |
Combined Voting Power (%) (1) |
||||||||||||||||||
Name and Address of Beneficial Owner |
Number |
% |
Number |
% |
||||||||||||||||
Five Percent Holders: |
— | — | ||||||||||||||||||
Hoya Topco, LLC (2) |
— | — | 124,200,000 | 100 | 61.07 | |||||||||||||||
Eldridge Industries, LLC (3)(5) |
100,243,630 | 80.29 | — | — | 41.24 | |||||||||||||||
The Vanguard Group (4) |
4,108,645 | 5.19 | — | — | 2.08 | |||||||||||||||
Delaware Life Holdings Parent II, LLC (6) |
5,000,000 | 6.32 | — | — | 2.53 | |||||||||||||||
Named Executive Officers: |
||||||||||||||||||||
Stanley Chia (3) |
183,061 | — | — | * | ||||||||||||||||
Lawrence Fey (3) |
146,449 | * | — | — | * | |||||||||||||||
Jon Wagner (3) |
71,085 | * | — | — | * | |||||||||||||||
Non-Employee Directors: |
||||||||||||||||||||
Todd Boehly (3)(5) |
100,243,630 | 80 | .29 | — | — | 41 | .24 | |||||||||||||
Jane DeFlorio (3) |
— | * | — | — | * | |||||||||||||||
Craig Dixon (3) |
— | * | — | — | * | |||||||||||||||
Julie Masino (3) |
— | * | — | — | * | |||||||||||||||
Martin Taylor (3) |
— | * | — | — | * | |||||||||||||||
Mark Anderson (2)(3) |
— | * | 124,200,000 | 100 | 61 | .07 | ||||||||||||||
David Donnini (2)(3) |
— | * | 124,200,000 | 100 | 61 | .07 | ||||||||||||||
Tom Ehrhart (3) |
— | * | — | — | * | |||||||||||||||
All directors and executive officers, as a group (13 individuals) |
100,705,080 | 80.38 | 124,200,000 | 100 | 90 | .15 |
(1) | Percentage of combined voting power represents voting power with respect to all shares of Class A Common Stock and Class B Common Stock, voting together as a single class. Each holder of Class A Common Stock and Class B Common Stock is entitled to one vote per share. |
(2) | GTCR Fund XI/B LP (“GTCR Fund XI/B”), GTCR Fund XI/C LP (“GTCR Fund XI/C”) and certain other entities affiliated with GTCR LLC (“GTCR”) have the right to appoint a majority of the members of the Board of Managers of Hoya Topco, LLC. GTCR Partners XI/B LP (“GTCR Partners XI/B”) is the general partner of GTCR Fund XI/B. GTCR Partners XI/A&C LP (“GTCR Partners XI/A&C”) is the general partner of GTCR Fund XI/C LP. GTCR Investment XI LLC (“GTCR Investment XI”) is the general partner of each of GTCR Partners XI/B and GTCR Partners XI/A&C. GTCR Investment XI is managed by a Board of Managers which includes Mark M. Anderson and David A. Donnini, and no single person has voting or dispositive authority over the securities reported herein. As such, each of the foregoing entities and individuals may be deemed to share beneficial ownership of the securities reported herein. Each of them disclaims any such beneficial ownership. The address for each of the entities and individuals is 300 North LaSalle Street, Suite 5600, Chicago, Illinois, 60654. This amount includes shares of Class B common stock issuable in connection with 6,000,000 Vivid Seats Class B Warrants. The following table sets forth our directors’ and named executive officers’ direct and indirect beneficial ownership interests in Hoya Topco, LLC excluding, in the case of directors, any shares indirectly owned by such individuals as a result of his or her partnership interest in GTCR or its affiliates. |
Name of Beneficial Owner |
Class B Units |
Class B-l Incentive Units |
Class C Units (a) |
Percentage of Class C Units Beneficially Owned |
Class D Units |
Class E Units |
||||||||||||||||||
Stanley Chia (b) |
— | 450,000 | — | — | — | 500,765 | ||||||||||||||||||
Lawrence Fey (c) |
— | 110,000 | — | — | 440,000 | — | ||||||||||||||||||
Jon Wagner (d) |
— | 77,000 | — | — | 330,000 | — |
(a) | The Class C Units are the voting securities of Hoya Topco, LLC. |
(b) | Includes vested and unvested interests. Excludes 450,000 phantom units of Hoya Topco. The Class E Units are profit interests of Hoya Topco. |
(c) | Includes vested and unvested interests. Excludes 110,000 phantom units of Hoya Topco. The Class D Units are profit interests of Hoya Topco. |
(d) | Includes vested and unvested interests. Excludes 77,000 phantom units of Hoya Topco. The Class D Units are profit interests of Hoya Topco. |
(3) | The following table sets forth our named executive officers’, directors’, and executive officers and directors as a group’s shares of common stock subject to options that are exercisable within 60 days of April 12, 2022. |
Name of Beneficial Owner |
Number of Shares subject to Options |
|||
Executive Officers |
||||
Stanley Chia |
151,811 | |||
Lawrence Fey |
121,449 | |||
Jon Wagner |
60,724 | |||
Non-Employee Directors |
||||
Mark Anderson |
— | |||
Todd Boehly |
— | |||
Jane DeFlorio |
— | |||
Craig Dixon |
— | |||
David Donnini |
— | |||
Tom Ehrhart |
— | |||
Julie Masino |
— | |||
Martin Taylor |
— | |||
All executive officers and directors as a group (13 individuals) |
386,014 |
(4) | The number of shares of Class A common stock held by The Vanguard Group (“Vanguard”) is based on a Schedule 13G filed with the SEC on February 10, 2022 by Vanguard. Vanguard reported that it has sole voting power with respect to 0 shares, shared voting power with respect to 3,710 shares, sole dispositive power with respect to 4,097,467 shares and shared dispositive power with respect to 11,178 shares. The address of Vanguard is 100 Vanguard Blvd. Malvern, PA 19355. |
(5) | Interests shown consist of shares of Class A common stock held by Eldridge Industries, LLC (“Eldridge”), Horizon Sponsor, LLC (“Horizon”) and Post Portfolio Trust, LLC (“PPT”). Interests shown include (i) 52,057,173 shares of Class A common stock and (ii) 45,686,457 shares of Class A common stock subject to warrants that are exercisable within 60 days of February 28, 2022. Eldridge is a private investment firm specializing in providing both equity and debt capital. Todd L. Boehly is the Chairman, Chief Executive Officer and indirect controlling member of Eldridge and in such capacity may be deemed to have voting and dispositive power with respect to the shares held by Horizon and PPT. DraftKings has appointed Mr. Boehly as its true and lawful proxy and attorney-in-fact, |
(6) | Based on a Schedule 13G filed with the SEC on March 4, 2022 on behalf of Vivid Public Holdings, LLC (“VPH”), DLHPII Public Investments, LLC (“Public Investment”), DLHPII Investment Holdings, LLC (“Investment Holdings”), Delaware Life Holdings Parent II, LLC (“Parent”), Delaware Life Holdings Manager, LLC (“Manager”) and Mark R. Walter (“Mr. Walter”) (together, VPH, Public Investment, Investment Holdings, Parent, Manager, and Mr. Walter are the “Reporting Persons”). Consists of 5,000,000 shares of Class A Common Stock (the “Class A Shares”) held directly by VPH. VPH is a wholly-owned subsidiary of Public Investments. Public Investments is a wholly-owned subsidiary of Investment Holdings. Investment Holdings is a wholly-owned subsidiary of Parent. Each of VPH, Public Investments, Investment Holdings and Parent is managed by Manager and each of Parent and Manager is controlled by Mr. Walter. Each of the Reporting Persons have shared voting and dispositive power over the securities reported. Each of Public Investments, Investment Holdings, Parent, Manager and Mr. Walter disclaim beneficial ownership of such securities except to the extent of their respective pecuniary interest therein. The principal business address of each of VPH, Public Investments, Investment Holdings, Parent, Manager and Mr. Walter is 227 West Monroe, Suite 5000 Chicago, IL 60606. |
Page |
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F-2 |
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F-3 |
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F-4 |
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F-5 |
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F-6 |
||||
F-8 |
||||
F-9 |
F-44 |
||||
F-45 |
||||
F-46 |
||||
F-47 |
||||
F-48 |
||||
F-49 |
December 31, 2021 |
December 31, 2020 |
|||||||
Assets |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ |
$ |
||||||
Restricted cash |
||||||||
Accounts receivable – net |
||||||||
Inventory – net |
||||||||
Prepaid expenses and other current assets |
||||||||
|
|
|
|
|||||
Total current assets |
||||||||
Property and equipment – net |
||||||||
Intangible assets – net |
||||||||
Goodwill |
||||||||
Other non-current assets |
||||||||
|
|
|
|
|||||
Total assets |
$ |
$ |
||||||
|
|
|
|
|||||
Liabilities and equity (deficit) |
||||||||
Current liabilities: |
||||||||
Accounts payable |
$ |
$ |
||||||
Accrued expenses and other current liabilities |
||||||||
Deferred revenue |
||||||||
Current maturities of long-term debt |
||||||||
|
|
|
|
|||||
Total current liabilities |
||||||||
Long-term debt – net |
||||||||
Other liabilities |
||||||||
|
|
|
|
|||||
Total long-term liabilities |
||||||||
Commitments and contingencies (Note 15) |
||||||||
Redeemable Preferred Units and noncontrolling interests |
||||||||
Redeemable Senior Preferred Units —$ units authorized, issued, and outstanding at December 31, 2021 and 2020, respectively (aggregate involuntary liquidation preference of $ and $ at December 31, 2021 and 2020, respectively) |
||||||||
Redeemable Preferred Units —$ units authorized, issued, and outstanding at December 31, 2021 and 2020, respectively |
||||||||
Redeemable noncontrolling interests |
||||||||
Shareholders’ deficit |
||||||||
Class A common stock, $ par value; shares authorized, shares authorized, issued, and outstanding at December 31, 2020 |
||||||||
Class B common stock, $ par value; shares authorized, shares authorized, issued, and outstanding at December 31, 2020 |
||||||||
Additional paid-in capital |
||||||||
Accumulated deficit |
( |
) |
( |
) | ||||
Accumulated other comprehensive loss |
( |
) | ||||||
|
|
|
|
|||||
Total Shareholders’ deficit |
( |
) |
( |
) | ||||
|
|
|
|
|||||
Total liabilities, Redeemable Preferred Units and noncontrolling interests, and Shareholders’ deficit |
$ |
$ |
||||||
|
|
|
|
Years Ended December 31, |
||||||||||||
2021 |
2020 |
2019 |
||||||||||
Revenues |
$ | $ | $ | |||||||||
Costs and expenses: |
||||||||||||
Cost of revenues (exclusive of depreciation and amortization shown separately below) |
||||||||||||
Marketing and selling |
||||||||||||
General and administrative |
||||||||||||
Depreciation and amortization |
||||||||||||
Impairment charges |
— | — | ||||||||||
Income (loss) from operations |
( |
) |
( |
) | ||||||||
Other expenses: |
||||||||||||
Interest expense – net |
||||||||||||
Loss on extinguishment of debt |
||||||||||||
Other expenses |
— | — | ||||||||||
Loss before income taxes |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) | |||
Income tax expense |
— | — | ||||||||||
Net loss |
( |
) |
( |
) |
( |
) | ||||||
Net loss attributable to Hoya Intermediate, LLC shareholders prior to reverse recapitalization |
( |
) | ( |
) | ( |
) | ||||||
Net loss attributable to redeemable noncontrolling interests |
( |
) | — | — | ||||||||
Net loss attributable to Class A Common Stockholders |
$ |
( |
) |
$ |
— |
$ |
— |
|||||
Loss per Class A Common Stock(1) : |
||||||||||||
Basic |
$ | ( |
) | |||||||||
Diluted |
$ | ( |
) | |||||||||
Weighted average Class A Common Stock outstanding(1) : |
||||||||||||
Basic |
||||||||||||
Diluted |
(1) | Represents loss per common share and weighted-average common shares outstanding for the period following the Merger Transaction and PIPE Financing as defined in Note 1, Background, Description of Business and Basis of Presentation |
Years Ended December 31, |
||||||||||||
2021 |
2020 |
2019 |
||||||||||
Net loss |
$ | ( |
) | $ | ( |
) | $ | ( |
) | |||
Other comprehensive income (loss): |
||||||||||||
Unrealized gain (loss) on derivative instruments |
( |
) | ||||||||||
Comprehensive loss, net of taxes |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) | |||
Comprehensive loss attributable to Hoya Intermediate, LLC shareholders prior to reverse recapitalization |
( |
) | ( |
) | ( |
) | ||||||
Comprehensive loss attributable to redeemable noncontrolling interests |
( |
) | — | — | ||||||||
Comprehensive loss attributable to Class A Common Stockholders |
$ |
( |
) |
$ |
— |
$ |
— |
|||||
Redeemable senior preferred units |
Redeemable preferred units |
Redeemable noncontrolling interests |
Common units |
Class A Common Shares |
Class B Common Shares |
Additional paid-in capital |
Accumulated deficit |
Accumulated other comprehensive (income) loss |
Total shareholders’ deficit |
|||||||||||||||||||||||||||||||||||||||||||||||||||
Units |
Amount |
Units |
Amount |
Units |
Amount |
Shares |
Amount |
Shares |
Amount |
|||||||||||||||||||||||||||||||||||||||||||||||||||
Balances at January 1, 2019 |
$ |
$ |
$ |
— |
$ |
— |
— |
$ |
— |
— |
$ |
— |
$ |
$ |
( |
) |
$ |
$ |
||||||||||||||||||||||||||||||||||||||||||
Net loss |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
( |
) |
— |
( |
) | |||||||||||||||||||||||||||||||||||||||||||
Unrealized loss on derivative instruments |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
( |
) |
( |
) | |||||||||||||||||||||||||||||||||||||||||||
Deemed contribution from former parent |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
|||||||||||||||||||||||||||||||||||||||||||||||
Accretion of senior preferred |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
( |
) |
— |
— |
( |
) | ||||||||||||||||||||||||||||||||||||||||||||
Distributions to former parent |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
( |
) |
— |
— |
( |
) | |||||||||||||||||||||||||||||||||||||||||||
Balances at December 31, 2019 |
$ |
$ |
$ |
— |
$ |
— |
— |
$ |
— |
— |
$ |
— |
$ |
$ |
( |
) |
$ |
( |
) |
$ |
||||||||||||||||||||||||||||||||||||||||
Net loss |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
( |
) |
— |
( |
) | |||||||||||||||||||||||||||||||||||||||||||
Unrealized gain on derivative instruments |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
|||||||||||||||||||||||||||||||||||||||||||||||
Loss reclassified from accumulated other comprehensive loss to earnings |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
|||||||||||||||||||||||||||||||||||||||||||||||
Deemed contribution from former parent |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
|||||||||||||||||||||||||||||||||||||||||||||||
Accretion of senior preferred |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
( |
) |
— |
— |
( |
) | ||||||||||||||||||||||||||||||||||||||||||||
Distributions to former parent |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
( |
) |
— |
— |
( |
) | |||||||||||||||||||||||||||||||||||||||||||
Balances at December 31, 2020 |
$ |
$ |
$ |
— |
$ |
— |
— |
$ |
— |
— |
$ |
— |
$ |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) | ||||||||||||||||||||||||||||||||||||||
Net loss prior to reverse recapitalization |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
( |
) |
— |
( |
) | |||||||||||||||||||||||||||||||||||||||||||
Loss reclassified from accumulated other comprehensive loss to earnings to reverse recapitalization |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
|||||||||||||||||||||||||||||||||||||||||||||||
Deemed contribution from former parent prior to reverse recapitalization |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
Redeemable senior preferred units |
Redeemable preferred units |
Redeemable noncontrolling interests |
Common units |
Class A Common Shares |
Class B Common Shares |
Additional paid-in capital |
Accumulated deficit |
Accumulated other comprehensive (income) loss |
Total shareholders’ deficit |
|||||||||||||||||||||||||||||||||||||||||||||||||||
Units |
Amount |
Units |
Amount |
Units |
Amount |
Shares |
Amount |
Shares |
Amount |
|||||||||||||||||||||||||||||||||||||||||||||||||||
Accretion of senior preferred units prior to reverse recapitalization |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
( |
) |
— |
— |
( |
) | ||||||||||||||||||||||||||||||||||||||||||||
Reverse recapitalization, net |
( |
) |
( |
) |
( |
) |
( |
) |
( |
) |
— |
— |
||||||||||||||||||||||||||||||||||||||||||||||||
Net loss after reverse recapitalization |
— |
— |
— |
— |
( |
) |
— |
— |
— |
— |
— |
— |
— |
( |
) |
— |
( |
) | ||||||||||||||||||||||||||||||||||||||||||
Deemed contribution from former parent after reverse recapitalization |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
||||||||||||||||||||||||||||||||||||||||||||||||
Equity-based compensation after reverse recapitalization |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
|||||||||||||||||||||||||||||||||||||||||||||||
Change in fair value of warrants |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
|||||||||||||||||||||||||||||||||||||||||||||||
Issuance of shares related to Betcha acquisition |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
||||||||||||||||||||||||||||||||||||||||||||||||
Dividends paid to Class A Common Shareholders |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
( |
) |
— |
— |
( |
) | |||||||||||||||||||||||||||||||||||||||||||
Subsequent remeasurement of Redeemable noncontrolling interests |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
( |
) |
— |
— |
( |
) | ||||||||||||||||||||||||||||||||||||||||||||
Balances at December 31, 2021 |
— |
$ |
— |
— |
$ |
— |
$ |
— |
$ |
— |
$ |
$ |
$ |
$ |
( |
) |
$ |
— |
$ |
( |
) | |||||||||||||||||||||||||||||||||||||||
Years Ended December 31, |
||||||||||||
2021 |
2020 |
2019 |
||||||||||
Cash flows from operating activities |
||||||||||||
Net loss |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) | |||
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: |
||||||||||||
Depreciation and amortization |
||||||||||||
Amortization of deferred financing costs and interest rate cap |
||||||||||||
Loss on disposal of long-lived assets |
— |
|||||||||||
Equity-based compensation expense |
||||||||||||
Loss on extinguishment of debt |
||||||||||||
Interest expense paid-in-kind |
— |
|||||||||||
Change in fair value of warrants |
— |
— |
||||||||||
Impairment charges |
— |
— |
||||||||||
Changes in operating assets and liabilities, net of impact of acquisitions: |
||||||||||||
Accounts receivable |
( |
) |
( |
) |
||||||||
Inventory |
( |
) |
( |
) | ||||||||
Prepaid expenses and other current assets |
( |
) |
||||||||||
Accounts payable |
( |
) |
||||||||||
Accrued expenses and other current liabilities |
||||||||||||
Deferred revenue |
||||||||||||
Other assets and liabilities |
( |
) |
( |
) | ||||||||
|
|
|
|
|
|
|||||||
Net cash provided by (used in) operating activities |
( |
) |
||||||||||
Cash flows from investing activities |
||||||||||||
Cash acquired (paid) in acquisition |
— |
( |
) | |||||||||
Purchases of property and equipment |
( |
) |
( |
) |
( |
) | ||||||
Proceeds from the sale of personal seat licenses |
— |
— |
||||||||||
Purchases of personal seat licenses |
( |
) |
— |
— |
||||||||
Investments in developed technology |
( |
) |
( |
) |
( |
) | ||||||
|
|
|
|
|
|
|||||||
Net cash used in investing activities |
( |
) |
( |
) |
( |
) | ||||||
Cash flows from financing activities |
||||||||||||
Proceeds from PIPE Financing |
— |
— |
||||||||||
Proceeds from the Merger Transaction |
— |
— |
||||||||||
Redemption of Redeemable Senior Preferred Units |
( |
) |
— |
— |
||||||||
Payments of May 2020 First Lien Loan |
( |
) |
— |
— |
||||||||
Payments of June 2017 First Lien Loan |
( |
) |
( |
) |
( |
) | ||||||
Payments of June 2017 Second Lien Loan |
— |
— |
( |
) | ||||||||
Prepayment penalty on extinguishment of debt |
( |
) |
— |
— |
||||||||
Proceeds from May 2020 First Lien Loan |
— |
— |
||||||||||
Proceeds from Revolving Facility |
— |
— |
||||||||||
Payments of Revolving Facility |
— |
( |
) |
— |
||||||||
Payments of deferred financing costs and other debt-related costs |
— |
( |
) |
( |
) | |||||||
Distributions |
— |
( |
) |
( |
) | |||||||
Payment of reverse recapitalization costs |
( |
) |
— |
— |
||||||||
Dividends paid to Class A Common Stock Shareholders |
( |
) |
— |
— |
||||||||
|
|
|
|
|
|
|||||||
Net cash (used in) provided by financing activities |
( |
) |
( |
) | ||||||||
|
|
|
|
|
|
|||||||
Net increase (decrease) in cash, cash equivalents, and restricted cash |
( |
) | ||||||||||
|
|
|
|
|
|
|||||||
Cash and cash equivalents – beginning of period |
||||||||||||
|
|
|
|
|
|
|||||||
Cash, cash equivalents, and restricted cash – end of period |
$ |
$ |
$ |
|||||||||
|
|
|
|
|
|
|||||||
Supplemental disclosure of cash flow information: |
||||||||||||
Paid-in-kind |
$ |
$ |
$ |
— |
||||||||
Cash paid for interest |
$ |
$ |
$ |
|||||||||
Betcha acquisition non-cash consideration |
$ |
$ |
— |
$ |
— |
|||||||
|
|
|
|
|
|
• | Issued We su bs e quentlypaid an additional $ in transaction costs incurred by Horizon using the cash sh eq ui valents tha t became availab le to Vivid Seats Inc.; |
• | Issued |
• | Received $ |
• | Used proceeds from Horizon and the PIPE Financing to pay (i) $ |
• | Issued to Horizon Sponsor, LLC (i) warrants to purchase |
common stock at an exercise of $ |
• | Issued private warrants to purchase |
Asset Class |
Useful Life |
|||
Computer Equipment |
|
| ||
Purchased Software |
|
| ||
Furniture and Fixtures |
|
|
Asset Class |
Useful Life |
|||
Non-competition agreements |
|
| ||
Supplier relationships |
|
| ||
Developed technology |
|
| ||
Customer relationships |
|
|
Cash |
$ | |||
Restricted cash |
||||
Prepaid expenses and other current assets |
||||
Intangible assets |
||||
Goodwill |
||||
Accounts payable |
( |
) | ||
Accrued expenses and other current liabilities |
( |
) | ||
Net assets acquired |
$ |
|||
Fair value of common stock |
$ | |||
Cash consideration |
||||
Fair value of milestone payments |
||||
Fair value of earnouts |
||||
Total purchase consideration |
$ |
|||
Cost |
Estimated Useful Life |
|||||||
Customer relationships |
||||||||
Developed technology |
||||||||
Total acquired intangible assets |
$ |
|||||||
2021 |
2020 |
2019 |
||||||||||
Marketplace revenues: |
||||||||||||
Owned Properties |
$ | $ | $ | |||||||||
Private Label |
( |
) | ||||||||||
Total Marketplace revenues |
$ |
$ |
$ |
|||||||||
2021 |
2020 |
2019 |
||||||||||
Marketplace revenues: |
||||||||||||
Concerts |
$ | $ | $ | |||||||||
Sports |
||||||||||||
Theater |
||||||||||||
Other |
||||||||||||
Total Marketplace revenues |
$ |
$ |
$ |
|||||||||
Goodwill |
$ | |||
Indefinite-lived trademark |
||||
Definite-lived intangible assets |
||||
Property and equipment |
||||
Personal seat licenses |
||||
Total impairment charges |
$ |
|||
2021 |
||||
Computer equipment |
$ | |||
Construction in progress |
||||
Total property and equipment |
||||
Less: accumulated depreciation |
||||
Total property and equipment – net |
$ |
|||
Definite-lived Intangible Assets |
Trademark |
Goodwill |
||||||||||
Balance at January 1, 2020 |
$ |
$ |
$ |
|||||||||
Capitalized development costs |
— | — | ||||||||||
Impairment |
( |
) | ( |
) | ( |
) | ||||||
Disposals |
( |
) | — | — | ||||||||
Amortization |
( |
) | — | — | ||||||||
Balance at December 31, 2020 |
||||||||||||
Acquisition of Betcha |
— | |||||||||||
Capitalized development costs |
— | — | ||||||||||
Amortization |
( |
) | — | — | ||||||||
Balance at December 31, 2021 |
$ |
$ |
$ |
|||||||||
2022 |
$ | |||
2023 |
$ | |||
2024 |
$ | |||
2025 |
$ | |||
2026 |
$ | |||
Total |
$ |
2021 |
2020 |
|||||||
Recovery of future customer compensation |
$ |
$ |
||||||
Insurance recovery asset |
||||||||
Prepaid expenses |
||||||||
Other current assets |
||||||||
Total prepaid expenses and other current assets |
$ |
$ |
||||||
2021 |
2020 |
|||||||
Accrued marketing expense |
$ |
$ |
||||||
Accrued taxes |
||||||||
Accrued customer credits |
||||||||
Accrued future customer compensation |
||||||||
Accrued contingencies |
||||||||
Other current liabilities |
||||||||
Total accrued expenses and other current liabilities |
$ |
$ |
||||||
2021 |
2020 |
|||||||
June 2017 First Lien Loan |
$ |
$ |
||||||
May 2020 First Lien Loan |
||||||||
Total long-term debt, gross |
||||||||
Less: unamortized debt issuance costs |
( |
) | ( |
) | ||||
Total long-term debt, net of issuance costs |
||||||||
Less: current portion |
( |
) | ||||||
Total long-term debt, net |
$ |
$ |
||||||
2022 |
$ | |||
2023 |
||||
2024 |
||||
2025 |
||||
2026 |
||||
|
|
|||
Total |
$ |
|||
|
|
Interest rate cap |
||||
Beginning accumulated derivative loss in AOCL |
$ | ( |
) | |
Amount of gain (loss) recognized in AOCL |
— | |||
Less: Amount of loss reclassified from AOCL to income |
( |
) | ||
|
|
|||
Ending accumulated derivative loss in AOCL |
$ |
|||
|
|
Interest rate swaps |
Interest rate cap |
Total |
||||||||||
Beginning accumulated derivative loss in AOCL |
$ | ( |
) | $ | ( |
) | $ | ( |
) | |||
Amount of gain recognized in AOCL |
— | |||||||||||
Less: Amount of loss reclassified from AOCL to income |
— | ( |
) | ( |
) | |||||||
|
|
|
|
|
|
|||||||
Ending accumulated derivative loss in AOCL |
$ |
$ |
( |
) | $ |
( |
) | |||||
|
|
|
|
|
|
2021 |
2020 |
2019 |
||||||||||
United States |
$ | ( |
) | $ | ( |
) | $ | ( |
) | |||
Foreign |
( |
) | ( |
) | ( |
) | ||||||
|
|
|
|
|
|
|||||||
Total loss before income taxes |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) | |||
|
|
|
|
|
|
2021 |
||||
Current |
||||
U.S. Federal |
$ | |||
State & Local |
||||
Foreign |
||||
Total current income tax expense (benefit) |
||||
Deferred |
||||
U.S. Federal |
||||
State & Local |
||||
Foreign |
||||
Total deferred income tax expense (benefit) |
||||
Total income tax expense (benefit) |
$ |
|||
2021 |
||||
At U.S. statutory tax rate |
% | |||
State income taxes |
( |
)% | ||
Foreign rate differential |
% | |||
Pass-through loss / (income) |
( |
)% | ||
Noncontrolling interest |
( |
)% | ||
Change in valuation allowance |
( |
)% | ||
Warrants remeasurement |
( |
)% | ||
Other |
% | |||
Total income tax expense (benefit) |
( |
)% | ||
2021 |
||||
Deferred Tax Assets |
||||
Net operating loss |
$ | |||
Interest carryforward |
||||
Investment in partnerships |
||||
Other |
||||
Total deferred tax assets |
||||
Valuation allowance |
( |
) | ||
Total deferred tax assets net of valuation allowance |
||||
Deferred Tax Liabilities |
||||
Other |
||||
Total Deferred Tax Liabilities |
||||
Net Deferred Tax Asset / Liabilities |
$ |
|||
2021 |
||||
Balance of beginning of period |
$ | |||
Charged to costs and expenses |
||||
(Credited) charged to other accounts |
||||
Deductions |
||||
Ending balance |
$ |
|||
Significant Unobservable Inputs |
Range (Weighted Average) |
|||
Discount rate |
|
| ||
Long-term growth rate |
|
|
Goodwill |
Trademark |
|||||||
50 basis point increase in discount rate |
$ | ( |
) | $ | ( |
) | ||
50 basis point decrease in long-term growth rate |
( |
) | ( |
) |
2022 |
2023 |
2024 |
2025 |
2026 |
Thereafter |
Total |
||||||||||||||||||||||
Operating leases |
$ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||
Purchase obligations |
||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
|||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marketplace |
Resale |
Consolidated |
||||||||||
Revenues |
$ | $ | $ | |||||||||
Cost of revenues (exclusive of depreciation and amortization shown separately below) |
||||||||||||
Marketing and selling |
||||||||||||
|
|
|
|
|
|
|||||||
Contribution margin |
$ |
$ |
||||||||||
General and administrative |
||||||||||||
Depreciation and amortization |
||||||||||||
|
|
|||||||||||
Income from operations |
||||||||||||
Interest expense – net |
||||||||||||
Loss on extinguishment of debt |
||||||||||||
Other expenses |
||||||||||||
|
|
|||||||||||
Loss before income taxes |
$ |
( |
) | |||||||||
|
|
Marketplace |
Resale |
Consolidated |
||||||||||
Revenues |
$ | $ | $ | |||||||||
Cost of revenues (exclusive of depreciation and amortization shown separately below) |
||||||||||||
Marketing and selling |
||||||||||||
|
|
|
|
|
|
|||||||
Contribution margin |
$ |
( |
) |
$ |
( |
) | ||||||
General and administrative |
||||||||||||
Depreciation and amortization |
||||||||||||
Impairment charges |
||||||||||||
|
|
|||||||||||
Loss from operations |
( |
) | ||||||||||
Interest expense – net |
||||||||||||
Loss on extinguishment of debt |
||||||||||||
|
|
|||||||||||
Net loss |
$ |
( |
) | |||||||||
|
|
Marketplace |
Resale |
Consolidated |
||||||||||
Revenues |
$ | $ | $ | |||||||||
Cost of revenues (exclusive of depreciation and amortization shown separately below) |
||||||||||||
Marketing and selling |
||||||||||||
|
|
|
|
|
|
|||||||
Contribution margin |
$ |
$ |
||||||||||
General and administrative |
||||||||||||
Depreciation and amortization |
||||||||||||
|
|
|||||||||||
Loss from operations |
( |
) | ||||||||||
Interest expense—net |
||||||||||||
Loss on extinguishment of debt |
||||||||||||
|
|
|||||||||||
Net loss |
$ |
( |
) | |||||||||
|
|
12/31/2021 |
10/18/2021 |
|||||||
Estimated volatility |
% |
% | ||||||
Expected term (years) |
||||||||
Risk-free rate |
% |
% | ||||||
Expected dividend yield |
% |
% |
Shares |
Weighted-Average Grant Date Fair Value Per Share |
|||||||
Unvested at December 31, 2020 |
$ | |||||||
Granted |
||||||||
Forfeited |
( |
) | ||||||
Vested |
||||||||
|
|
|
|
|||||
Unvested at December 31, 2021 |
$ |
|||||||
|
|
|
|
2021 |
||||
Estimated volatility |
% | |||
Expected term (years) |
||||
Risk-free rate |
% | |||
Expected dividend yield |
% |
Class B-1 Units |
Class D Units |
Class E Units |
||||||||||||||||||||||
Number of Incentive Units |
Weighted Average Grant Date Fair Value |
Number of Incentive Units |
Weighted Average Grant Date Fair Value |
Number of Incentive Units |
Weighted Average Grant Date Fair Value |
|||||||||||||||||||
Balances at January 1, 2019 |
— |
$ |
— |
$ |
$ |
|||||||||||||||||||
Units Granted |
— | — | — | — | ||||||||||||||||||||
Units Repurchased |
— | — | ( |
) | — | — | ||||||||||||||||||
Units Forfeited |
— | — | ( |
) | — | — | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balances at December 31, 2019 |
— |
— |
$ |
$ |
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Units granted |
— | — | ||||||||||||||||||||||
Units repurchased |
— | — | ( |
) | — | — | ||||||||||||||||||
Units forfeited |
( |
) | ( |
) | — | — | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balances at December 31, 2020 |
$ |
$ |
$ |
|||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Units granted |
— | — | — | — | — | — | ||||||||||||||||||
Units repurchased |
— | — | — | — | — | — | ||||||||||||||||||
Units forfeited |
( |
) | ( |
) | — | — | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balances at December 31, 2021 |
$ |
$ |
$ |
|||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
2020 |
2019 |
|||||||
Estimated volatility |
% - |
% | % - |
% | ||||
Expected term (years) |
- |
- |
||||||
Risk-free rate |
% - |
% | % - |
% | ||||
Expected dividend yield |
% | % |
October 18, 2021 through December 31, 2021 |
||||
Numerator—basic: |
||||
Net loss |
$ | ( |
) | |
Less: Loss attributable to redeemable noncontrolling interests |
||||
Net loss attributable to Class A Common Stockholders—basic |
( |
) | ||
Denominator—basic: |
||||
Weighted average Class A common stock outstanding—basic |
||||
Net loss per Class A common stock—basic |
$ |
( |
) | |
Numerator—diluted: |
||||
Net loss attributable to Class A Common Stockholders—basic |
$ | ( |
) | |
Net loss effect of dilutive securities: |
||||
Effect of dilutive Hoya Intermediate Warrants |
( |
) | ||
Net loss attributable to Class A Common Stockholders—diluted |
( |
) | ||
Denominator—diluted: |
||||
Weighted average Class A common stock outstanding—basic |
||||
Weighted average effect of dilutive securities: |
||||
Effect of dilutive Hoya Intermediate Warrants |
||||
Weighted average Class A common stock outstanding—diluted |
||||
Net loss per Class A common stock—diluted |
$ |
( |
) | |
For the Year Ended December 31, |
||||
2021 |
||||
RSUs |
||||
Stock options |
||||
Class A Warrants |
||||
Exercise Warrants |
||||
Hoya Intermediate Warrants |
||||
Shares of Class B common stock |
March 31, 2022 |
December 31, 2022 |
|||||||
Assets |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | $ | ||||||
Restricted cash |
||||||||
Accounts receivable – net |
||||||||
Inventory – net |
||||||||
Prepaid expenses and other current assets |
||||||||
Total current assets |
||||||||
Property and equipment – net |
||||||||
Right-of-use |
||||||||
Intangible assets – net |
||||||||
Goodwill |
||||||||
Other non-current assets |
||||||||
Total assets |
$ |
$ |
||||||
Liabilities and shareholders’ deficit |
||||||||
Current liabilities: |
||||||||
Accounts payable |
$ | $ | ||||||
Accrued expenses and other current liabilities |
||||||||
Deferred revenue |
||||||||
Current maturities of long-term debt – net |
||||||||
Total current liabilities |
||||||||
Long-term debt – net |
||||||||
Long-term lease liabilities |
||||||||
Other liabilities |
||||||||
Total long-term liabilities |
||||||||
Commitments and contingencies (Note 11) |
||||||||
Redeemable noncontrolling interests |
||||||||
Shareholders’ deficit |
||||||||
Class A common stock, $ |
||||||||
Class B common stock, $ |
||||||||
Additional paid-in capital |
||||||||
Accumulated deficit |
( |
) | ( |
) | ||||
Total Shareholders’ deficit |
( |
) | ( |
) | ||||
Total liabilities, Redeemable noncontrolling interests, and Shareholders’ deficit |
$ |
$ |
||||||
Three Months Ended March 31, |
||||||||
2022 |
2021 |
|||||||
Revenues |
$ | $ | ||||||
Costs and expenses: |
||||||||
Cost of revenues (exclusive of depreciation and amortization shown separately below) |
||||||||
Marketing and selling |
||||||||
General and administrative |
||||||||
Depreciation and amortization |
||||||||
Income (loss) from operations |
( |
) | ||||||
Other expenses: |
||||||||
Interest expense – net |
||||||||
Loss on extinguishment of debt |
— | |||||||
Other expenses |
— | |||||||
Income (loss) before income taxes |
( |
) | ||||||
Income tax expense |
— | |||||||
Net income (loss) |
( |
) | ||||||
Net loss attributable to Hoya Intermediate, LLC shareholders prior to reverse recapitalization |
— | ( |
) | |||||
Net income (loss) attributable to redeemable noncontrolling interests |
— | |||||||
Net income (loss) attributable to Class A Common Stockholders |
$ |
$ |
— |
|||||
Income per Class A Common Stock (1) : |
||||||||
Basic |
$ | |||||||
Diluted |
$ | |||||||
Weighted average Class A Common Stock outstanding (1) : |
||||||||
Basic |
||||||||
Diluted |
(1) | There were |
Three Months Ended March 31, |
||||||||
2022 |
2021 |
|||||||
Net income (loss) |
$ |
$ |
( |
) | ||||
Other comprehensive income (loss): |
||||||||
Unrealized gain on derivative instruments |
||||||||
Comprehensive income (loss), net of taxes |
$ | $ | ( |
) | ||||
Comprehensive loss attributable to Hoya Intermediate, LLC shareholders prior to reverse recapitalization |
( |
) | ||||||
Comprehensive income (loss) attributable to redeemable noncontrolling interests |
||||||||
Comprehensive income (loss) attributable to Class A Common Stockholders |
$ |
$ |
||||||
Redeemable Senior preferred units |
Redeemable Preferred units |
Common units |
||||||||||||||||||||||||||||||||||||||
Units |
Amount |
Units |
Amount |
Units |
Amount |
Additional paid-in capital |
Accumulated deficit |
Accumulated other comprehensive income (loss) |
Total members’ deficit |
|||||||||||||||||||||||||||||||
Balances at January 1, 2021 |
$ | $ | $ | — | $ | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||||||||||||||||||||||||
Net loss |
— | — | — | — | — | — | — | ( |
) | — | ( |
) | ||||||||||||||||||||||||||||
Unrealized gain on derivative instruments |
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Deemed contribution from former parent |
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Accretion of senior preferred units |
— | — | — | — | — | ( |
) | — | — | ( |
) | |||||||||||||||||||||||||||||
Balances at March 31, 2021 |
$ |
$ |
$ |
— |
$ |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) | ||||||||||||||||||||||||||
Class A Common Shares |
Class B Common Shares |
|||||||||||||||||||||||||||||||
Redeemable noncontrolling interests |
Shares |
Amount |
Shares |
Amount |
Additional paid-in capital |
Accumulated deficit |
Total shareholders’ deficit |
|||||||||||||||||||||||||
Balances at January 1, 2022 |
$ | $ | $ | $ | $ | ( |
) | $ | ( |
) | ||||||||||||||||||||||
Net income |
— | — | — | — | — | |||||||||||||||||||||||||||
Issuance of shares |
— | — | — | — | — | — | — | |||||||||||||||||||||||||
Deemed contribution from former parent |
— | — | — | — | — | |||||||||||||||||||||||||||
Equity-based compensation |
— | — | — | — | — | — | ||||||||||||||||||||||||||
Subsequent remeasurement of Redeemable noncontrolling interests |
— | — | — | — | ( |
) | — | ( |
) | |||||||||||||||||||||||
Balances at March 31, 2022 |
$ |
$ |
$ |
$ |
$ |
( |
) |
$ |
( |
) | ||||||||||||||||||||||
Three Months Ended March 31, |
||||||||
2022 |
2021 |
|||||||
Cash flows from operating activities |
||||||||
Net income (loss) |
$ | $ | ( |
) | ||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: |
||||||||
Depreciation and amortization |
||||||||
Amortization of deferred financing costs and interest rate cap |
||||||||
Equity-based compensation expense |
||||||||
Loss on extinguishment of debt |
||||||||
Change in fair value of warrants |
||||||||
Interest expense paid-in-kind |
||||||||
Amortization of leases |
||||||||
Change in assets and liabilities: |
||||||||
Accounts receivable |
( |
) | ( |
) | ||||
Inventory |
( |
) | ( |
) | ||||
Prepaid expenses and other current assets |
( |
) | ( |
) | ||||
Accounts payable |
||||||||
Accrued expenses and other current liabilities |
( |
) | ||||||
Deferred revenue |
||||||||
Other assets and liabilities |
( |
) | ||||||
Net cash provided by operating activities |
||||||||
Cash flows from investing activities |
||||||||
Purchases of property and equipment |
( |
) | ||||||
Investments in developed technology |
( |
) | ( |
) | ||||
Net cash used in investing activities |
( |
) |
( |
) | ||||
Cash flows from financing activities |
||||||||
Payments of June 2017 First Lien Loan |
( |
) | ( |
) | ||||
Proceeds from February 2022 First Lien Loan |
||||||||
Payments of deferred financing costs and other debt-related costs |
( |
) | ||||||
Net cash used in financing activities |
( |
) |
( |
) | ||||
Net increase (decrease) in cash, cash equivalents, and restricted cash |
( |
) |
||||||
Cash, cash equivalents, and restricted cash – beginning of period |
||||||||
Cash, cash equivalents, and restricted cash – end of period |
$ |
$ |
||||||
Supplemental disclosure of cash flow information: |
||||||||
Paid-in-kind |
$ | $ | ||||||
Cash paid for interest |
$ | $ | ||||||
Right-of-use |
$ | $ | ||||||
Three Months Ended March 31, |
||||||||
2022 |
2021 |
|||||||
Marketplace revenues: |
||||||||
Owned Properties |
$ | $ | ||||||
Private Label |
||||||||
Total Marketplace revenues |
$ |
$ |
||||||
Three Months Ended March 31, |
||||||||
2022 |
2021 |
|||||||
Marketplace revenues: |
||||||||
Concerts |
$ | $ | ||||||
Sports |
||||||||
Theater |
||||||||
Other |
||||||||
Total Marketplace revenues |
$ |
$ |
||||||
Three Months Ended March 31, 2022 |
||||||||||||
Marketplace |
Resale |
Consolidated |
||||||||||
Revenues |
$ | $ | $ | |||||||||
Cost of revenues (exclusive of depreciation and amortization shown separately below) |
||||||||||||
Marketing and selling |
||||||||||||
Contribution margin |
$ |
$ |
$ |
|||||||||
General and administrative |
||||||||||||
Depreciation and amortization |
||||||||||||
Income from operations |
||||||||||||
Interest expense – net |
||||||||||||
Loss on extinguishment of debt |
||||||||||||
Other expenses |
||||||||||||
Income before income taxes |
$ |
|||||||||||
Three Months Ended March 31, 2021 |
||||||||||||
Marketplace |
Resale |
Consolidated |
||||||||||
Revenues |
$ | $ | $ | |||||||||
Cost of revenues (exclusive of depreciation and amortization shown separately below) |
||||||||||||
Marketing and selling |
||||||||||||
Contribution margin |
$ |
$ |
$ |
|||||||||
General and administrative |
||||||||||||
Depreciation and amortization |
||||||||||||
Loss from operations |
( |
) | ||||||||||
Interest expense – net |
||||||||||||
Loss before income taxes |
$ |
( |
) | |||||||||
Operating Leases |
||||
Remainder of 2022 |
$ | |||
2023 |
||||
2024 |
||||
2025 |
$ | |||
2026 |
||||
2027 |
||||
Thereafter |
||||
Total remaining lease payments |
||||
Less: Imputed interest |
||||
Less: expected tenant improvement allowance |
||||
Present value of lease liabilities |
$ |
|||
Operating Leases |
||||
2022 |
$ | |||
2023 |
||||
2024 |
||||
2025 |
$ | |||
2026 |
||||
Thereafter |
||||
Total remaining lease payments |
||||
Definite-lived Intangible Assets |
Trademark |
Goodwill |
||||||||||
Balance at January 1, 2022 |
$ | $ | $ | |||||||||
Capitalized development costs |
||||||||||||
Amortization |
( |
) | ||||||||||
Balance at March 31, 2022 |
$ |
$ |
$ |
|||||||||
Definite-lived Intangible Assets |
Trademark |
Goodwill |
||||||||||
Balance at January 1, 2021 |
$ | $ | $ | |||||||||
Capitalized development costs |
||||||||||||
Amortization |
( |
) | ||||||||||
Balance at March 31, 2021 |
$ |
$ |
$ |
|||||||||
March 31, 2022 |
December 31, 2021 |
|||||||
Recovery of future customer compensation |
$ | $ | ||||||
Insurance recovery asset |
||||||||
Prepaid expenses |
||||||||
Other current assets |
||||||||
Total prepaid expenses and other current assets |
$ |
$ |
||||||
March 31, 2022 |
December 31, 2021 |
|||||||
Accrued marketing expense |
$ | $ | ||||||
Accrued taxes |
||||||||
Accrued customer credits |
||||||||
Accrued future customer compensation |
||||||||
Accrued contingencies |
||||||||
Other current liabilities |
||||||||
Total accrued expenses and other current liabilities |
$ |
$ |
||||||
March 31, 2022 |
December 31, 2021 |
|||||||
June 2017 First Lien Loan |
$ | — | $ | |||||
February 2022 First Lien Loan |
— | |||||||
Total long-term debt, gross |
March 31, 2022 |
December 31, 2021 |
|||||||
Less: unamortized debt issuance costs |
( |
) | ( |
) | ||||
Total long-term debt, net of issuance costs |
||||||||
Less: current portion |
( |
) | — | |||||
Total long-term debt, net |
$ | $ | ||||||
March 31, 2022 |
December 31, 2021 |
|||||||
Estimated volatility |
% | % | ||||||
Expected term (years) |
||||||||
Risk-free rate |
% | % | ||||||
Expected dividend yield |
% | % |
Volatility |
% | |||
Expected term (years) |
||||
Interest rate |
% | |||
Dividend yield |
% |
Numerator—basic: |
||||
Net income |
$ | |||
Less: Income attributable to redeemable noncontrolling interests |
||||
Net income attributable to Class A Common Stockholders—basic |
||||
Denominator—basic: |
||||
Weighted average Class A common stock outstanding—basic |
||||
Net income per Class A common stock—basic |
$ |
|||
Numerator—diluted: |
||||
Net income attributable to Class A Common Stockholders—basic |
$ | |||
Net income effect of dilutive securities: |
||||
Noncontrolling interests |
||||
Effect of Exercise Warrants |
||||
Effect of RSUs |
— | |||
Net income attributable to Class A Common Stockholders—diluted |
||||
Denominator—diluted: |
||||
Weighted average Class A common stock outstanding—basic |
||||
Weighted average effect of dilutive securities: |
||||
Noncontrolling interests |
||||
Effect of Exercise Warrants |
||||
Effect of RSUs |
||||
Weighted average Class A common stock outstanding—diluted |
||||
Net income per Class A common stock—diluted |
$ |
|||
RSUs |
||||
Stock options |
||||
Class A Warrants |
||||
Exercise Warrants |
||||
Hoya Intermediate Warrants |
(a) | the new Section 6A thereto: |
1 |
This will be the last sale price of the Class A Common Stock on The Nasdaq Global Select Market on the last trading day of the Offer Period (as defined in the Registration Statement on Form S-4 filed with the SEC on May 26, 2022). |
2. | Miscellaneous Provisions . |
VIVID SEATS INC. | ||
By: | | |
Name: | ||
Title: | ||
CONTINENTAL STOCK TRANSFER & TRUST COMPANY | ||
By: | | |
Name: | ||
Title: |
** | Filed herewith. |
† | Certain of the exhibits and schedules to this exhibit have been omitted in accordance with Regulation S-K Item 601(a)(5). The Registrant agrees to furnish a copy of all omitted exhibits and schedules to the SEC upon its request. |
(1) | To file, during any period during which offers or sales are being made, a post-effective amendment to this registration statement: |
(i) | to include any prospectus required by section 10(a)(3) of the Securities Act; |
(ii) | to reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the SEC pursuant to Rule 424(b) (§ 230.424(b) of this chapter) if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and |
(iii) | to include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement. |
(2) | That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
(3) | To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. |
(4) | That, for the purpose of determining liability under the Securities Act to any purchaser, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the |
date it is first used after effectiveness; provided, however |
(5) | That, for the purpose of determining liability of the registrant under the Securities Act to any purchaser in the initial distribution of the securities, the undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser: |
(i) | Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424; |
(ii) | Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant; |
(iii) | The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and |
(iv) | Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser. |
(6) | That prior to any public reoffering of the securities registered hereunder through use of a prospectus which is a part of this registration statement, by any person or party who is deemed to be an underwriter within the meaning of Rule 145(c), the issuer undertakes that such reoffering prospectus will contain the information called for by the applicable registration form with respect to reofferings by persons who may be deemed underwriters, in addition to the information called for by the other items of the applicable form. |
(7) | That every prospectus: (i) that is filed pursuant to paragraph (1) immediately preceding, or (ii) that purports to meet the requirements of Section 10(a)(3) of the Securities Act and is used in connection with an offering of securities subject to Rule 415, will be filed as a part of an amendment to the registration statement and will not be used until such amendment is effective, and that, for purposes of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
(8) | Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. |
(9) | To respond to requests for information that is incorporated by reference into the prospectus pursuant to Item 4, 10(b), 11, or 13 of this form, within one business day of receipt of such |
request, and to send the incorporated documents by first class mail or other equally prompt means. This includes information contained in documents filed subsequent to the effective date of the registration statement through the date of responding to the request. |
(10) | To supply by means of a post-effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in the registration statement when it became effective. |
VIVID SEATS INC. | ||
By: | /s/ Stanley Chia | |
Name: | Stanley Chia | |
Title: | Chief Executive Officer |
Signature |
Title |
Date | ||
/s/ Stanley Chia |
Chief Executive Officer and Director | May 26, 2022 | ||
Stanley Chia | (principal executive officer) | | ||
/s/ Lawrence Fey |
Chief Financial Officer | May 26, 2022 | ||
Lawrence Fey | (principal financial officer) | | ||
/s/ Edward Pickus |
Chief Accounting Officer | May 26, 2022 | ||
Edward Pickus | (principal accounting officer) | | ||
/s/ Mark Anderson |
Director | May 26, 2022 | ||
Mark Anderson | |
| ||
/s/ Todd Boehly |
Director | May 26, 2022 | ||
Todd Boehly | |
| ||
/s/ Jane DeFlorio |
Director | May 26, 2022 | ||
Jane DeFlorio | |
| ||
/s/ Craig Dixon |
Director | May 26, 2022 | ||
Craig Dixon | |
|
Signature |
Title |
Date | ||
/s/ David Donnini |
Director | May 26, 2022 | ||
David Donnini | |
| ||
/s/ Tom Ehrhart |
Director | May 26, 2022 | ||
Tom Ehrhart | |
| ||
/s/ Julie Masino |
Director | May 26, 2022 | ||
Julie Masino | |
| ||
/s/ Martin Taylor |
Director | May 26, 2022 | ||
Martin Taylor | |
|
Exhibit 5.1
330 North Wabash Avenue Suite 2800 Chicago, Illinois 60611 Tel: +1.312.876.7700 Fax: +1.312.993.9767 www.lw.com
FIRM / AFFILIATE OFFICES | ||||
Austin | Moscow | |||
Beijing | Munich | |||
Boston | New York | |||
Brussels | Orange County | |||
Century City | Paris | |||
Chicago | Riyadh | |||
May 26, 2022 | Dubai | San Diego | ||
Düsseldorf | San Francisco | |||
Vivid Seats Inc. | Frankfurt | Seoul | ||
111 N. Canal Street, Suite 800 | Hamburg | Shanghai | ||
Chicago, Illinois 60606 | Hong Kong | Silicon Valley | ||
Houston | Singapore | |||
London | Tel Aviv | |||
Los Angeles | Tokyo | |||
Madrid | Washington, D.C. | |||
Milan |
Re: Vivid Seats Inc.
To the addressee set forth above:
We have acted as special counsel to Vivid Seats Inc., a Delaware corporation (the Company), in connection with (i) the Companys offer to exchange (the Exchange Offer) any and all of the Companys outstanding publicly traded warrants (the Warrants) to purchase shares of Class A common stock, par value $0.0001 per share (Class A Common Stock), of the Company for 0.240 shares of Class A Common Stock per Warrant and (ii) the solicitation of consents from the holders of all outstanding Warrants to amend (the Warrant Amendment) the Warrant Agreement, dated as of October 14, 2021, by and between Horizon Acquisition Corporation, the Companys predecessor, and Continental Stock Transfer & Trust Company, as warrant agent (the Warrant Agreement), which governs all of the Warrants, to permit the Company to require that each Warrant that is outstanding upon the closing of the Exchange Offer be converted into 0.213 shares of Class A Common Stock. The shares of Class A Common Stock issuable upon exchange of the Warrants pursuant to the Exchange Offer and the Warrant Amendment are referred to herein as the Shares.
The Shares are included in a registration statement on Form S4 under the Securities Act of 1933, as amended (the Act), to be filed with the Securities and Exchange Commission (the Commission) on or about that date hereof (as amended, the Registration Statement). This opinion is being furnished in connection with the requirements of Item 601(b)(5) of Regulation S-K under the Act, and no opinion is expressed herein as to any matter pertaining to the contents of the Registration Statement or related Prospectus, other than as expressly stated herein with respect to the issue of the Shares.
As such counsel, we have examined such matters of fact and questions of law as we have considered appropriate for purposes of this letter. With your consent, we have relied upon certificates and other assurances of officers of the Company and others as to factual matters without having independently verified such factual matters. We are opining herein as to General Corporation Law of the State of Delaware (the DGCL), and we express no opinion with respect to any other laws.
May 26, 2022
Page 2
Subject to the foregoing and the other matters set forth herein, it is our opinion that, as of the date hereof, when the Shares shall have been issued in accordance with the terms of the Exchange Offer and the Warrant Amendment by the Company, the issuance of the Shares will have been duly authorized by all necessary corporate action of the Company, and the Shares will be validly issued, fully paid and nonassessable. In rendering the foregoing opinion, we have assumed that the Company will comply with all applicable notice requirements regarding uncertificated shares provided in the DGCL.
This opinion is for your benefit in connection with the Registration Statement and may be relied upon by you and by persons entitled to rely upon it pursuant to the applicable provisions of the Act. We consent to your filing this opinion as an exhibit to the Registration Statement and to the reference to our firm in the Prospectus under the heading Legal Matters. In giving such consent, we do not thereby admit that we are in the category of persons whose consent is required under Section 7 of the Act or the rules and regulations of the Commission thereunder.
Sincerely,
/s/ Latham & Watkins LLP
Exhibit 8.1
330 North Wabash Avenue | ||||
Suite 2800 | ||||
Chicago, Illinois 60611 | ||||
Tel: +1.312.876.7700 Fax: +1.312.993.9767 | ||||
www.lw.com | ||||
FIRM / AFFILIATE OFFICES | ||||
Austin | Moscow | |||
Beijing | Munich | |||
Boston | New York | |||
Brussels | Orange County | |||
May 26, 2022
Vivid Seats Inc. 111 N. Canal Street, Suite 800 Chicago, Illinois 60606 |
Century City | Paris | ||
Chicago | Riyadh | |||
Dubai | San Diego | |||
Düsseldorf | San Francisco | |||
Frankfurt | Seoul | |||
Hamburg | Shanghai | |||
Hong Kong | Silicon Valley | |||
Houston | Singapore | |||
London | Tel Aviv | |||
Los Angeles | Tokyo | |||
Madrid | Washington, D.C. | |||
Milan |
Re: | Vivid Seats Inc. Registration Statement on Form S-4 |
To the addressee set forth above:
We have acted as special tax counsel to Vivid Seats Inc., a Delaware corporation (the Company), in connection with (i) the Companys offer to exchange (the Exchange Offer) any and all of the Companys outstanding publicly traded warrants (the Warrants) to purchase shares of Class A common stock, par value $0.0001 per share (Class A Common Stock), of the Company for 0.240 shares of Class A Common Stock per Warrant and (ii) the solicitation of consents (the Consent Solicitation) from the holders of all outstanding Warrants to amend the Warrant Agreement, dated as of October 14, 2021, by and between Horizon Acquisition Corporation, the Companys predecessor, and Continental Stock Transfer & Trust Company, as warrant agent, which governs all of the Warrants, to permit the Company to require that each Warrant that is outstanding upon the closing of the Exchange Offer be converted into 0.213 shares of Class A Common Stock. The Exchange Offer and Consent Solicitation are being made pursuant to a registration statement on Form S-4 under the Securities Act of 1933, as amended (the Act), filed with the Securities and Exchange Commission (the Commission) on May 26, 2022 (the Registration Statement). References in this opinion to the Registration Statement include the preliminary prospectus/offer to exchange forming a part of the Registration Statement (the Preliminary Prospectus).
The facts, as we understand them, and upon which with your permission we rely in rendering the opinion herein, are set forth in the Preliminary Prospectus. In addition, in our capacity as special tax counsel, we have made such legal and factual examinations and inquiries as we have deemed necessary or appropriate. In our examination, we have assumed the accuracy of all information provided to us.
Based on such facts and subject to the qualifications, assumptions and limitations set forth herein and in the Preliminary Prospectus, we hereby confirm that the statements in the Preliminary Prospectus under the caption Market Information, Dividends and Related Stockholder MattersMaterial U.S. Federal Income Tax Consequences, insofar as such statements purport to constitute summaries of United States federal income tax law and regulations or legal conclusions with respect thereto, constitute accurate summaries of the matters described therein in all material respects.
May 26, 2022
Page 2
No opinion is expressed as to any matter not discussed herein.
We are opining herein as to the effect on the subject transaction only of the federal income tax laws of the United States, and we express no opinion with respect to the applicability thereto, or the effect thereon, of other federal laws, the laws of any state or any other jurisdiction, or as to any matters of municipal law or the laws of any local agencies within any state.
This opinion is rendered to you as of the date of this letter, and we undertake no obligation to update this opinion subsequent to the date hereof. This opinion is based on current provisions of the Internal Revenue Code of 1986, as amended, regulations promulgated thereunder and interpretations thereof by the Internal Revenue Service and the courts having jurisdiction over such matters. Our opinion is not binding upon the Internal Revenue Service or the courts, and there can be no assurance that the Internal Revenue Service will not assert a contrary position. Furthermore, no assurance can be given that future legislative, judicial or administrative changes, on either a prospective or retroactive basis, would not affect the conclusions stated in this opinion. Any variation or difference in the facts from those set forth in the Preliminary Prospectus or any other documents we reviewed or information we received in connection with the transactions referenced in the first paragraph may affect the conclusions stated herein.
This opinion is for your benefit in connection with the Registration Statement and may be relied upon by you and by persons entitled to rely upon it pursuant to the applicable provisions of the Act. We consent to your filing this opinion as an exhibit to the Registration Statement and to the reference to our firm in the Preliminary Prospectus under the heading Legal Matters. In giving such consent, we do not thereby admit that we are in the category of persons whose consent is required under Section 7 of the Act or the rules and regulations of the Commission thereunder.
Sincerely,
/s/ Latham & Watkins LLP
Exhibit 10.38
Vivid Seats Inc.
Dealer Manager and Solicitation Agent Agreement
New York, New York
May 26, 2022
Evercore Group L.L.C.,
as Dealer Manager
c/o Evercore Group L.L.C.
55 East 52nd Street
New York, New York 10055
Ladies and Gentlemen:
Vivid Seats Inc., a Delaware corporation (the Company or we), plans to make an offer (such offer as described in the Prospectus (as defined below), together with the related Consent Solicitation (as defined below), the Exchange Offer), for any and all of its outstanding public warrants (as set forth in the Prospectus) (the Warrants) in exchange for consideration consisting of 0.240 shares of the Companys Class A Common Stock (the Shares) for each Warrant tendered, on the terms and subject to the conditions set forth in the Offering Documents (as defined below). Certain terms used herein are defined in Section 21 hereof.
Concurrently with making the offer to exchange described in the preceding paragraph, the Company plans to solicit consents (the Consents) from the holders of Warrants (as described in the Offering Documents, the Consent Solicitation) to certain amendments to the terms of the Warrants. Subject to the terms and conditions set forth in the Offering Documents, if Consents are received from the holders of at least 65% of the Warrants, the proposed amendment to the warrant agreement set forth in the Offering Documents (the Warrant Amendment) shall be adopted.
1. Appointment as Dealer Manager and Solicitation Agent.
(a) Evercore Group L.L.C. will act as the exclusive dealer manager and solicitation agent for the Exchange Offer and the Consent Solicitation (the Dealer Manager or you) in accordance with your customary practices, including without limitation to use commercially reasonable efforts to solicit tenders pursuant to the Exchange Offer, the solicitation of Consents pursuant to the Consent Solicitation and assisting in the distribution of the Offering Documents and to perform such services as are customarily performed by investment banking firms acting as dealer managers and solicitation agents of an exchange offer of like nature.
(b) You agree that all actions taken by you as Dealer Manager have complied and will comply in all material respects with all applicable laws, regulations and rules of the United States, including, without limitation, the applicable rules and regulations of the registered national securities exchanges of which you are a member and of the Financial Industry Regulatory Authority, Inc. (FINRA).
1
(c) The Dealer Manager, in its sole discretion, may continue to own or dispose of, in any manner it may elect, any Warrants it may beneficially own at the date hereof or hereafter acquire, in any such case, subject to applicable law. The Dealer Manager has no obligation to the Company, pursuant to this Agreement or otherwise, to tender or refrain from tendering Warrants beneficially owned by it in any Exchange Offer (or to deliver Consents in any related Consent Solicitation). The Dealer Manager acknowledges and agrees that if any Exchange Offer is not consummated for any reason, the Company shall have no obligation, pursuant to this Agreement or otherwise, to acquire any Warrants from the Dealer Manager or otherwise to hold the Dealer Manager harmless with respect to any losses it may incur in connection with the resale to any third parties of any Warrants.
(d) The Company agrees that it will not file, use or publish any material in connection with the Exchange Offer, use the name Evercore or Evercore Group L.L.C. or refer to you or your relationship with the Company, without your prior written consent to the form of such use or reference. There shall be no fee for any such permitted use or reference other than as set forth herein.
2. Compensation. The Company shall pay to you in respect of your services as Dealer Manager the fee set forth in the attached Schedule A (the Fee). The Company shall also promptly reimburse you, without regard to consummation of the Exchange Offer, for (i) your reasonable and documented out-of-pocket expenses in preparing for and performing your functions as Dealer Manager, not to exceed $50,000, provided that the Dealer Manager obtains the prior written approval of the Company for any such expenses that exceed $10,000 in the aggregate; and (ii) the reasonable and documented fees, costs and out-of-pocket expenses of your counsel for their representation of you incurred in connection with the Exchange Offer, with such fees, costs and out-of-pocket expenses counsel not to exceed $200,000.
3. Representations and Warranties. The Company represents and warrants to and agrees with you as set forth below in this Section 3:
(a) Form S-4. The Company has prepared and filed with the Commission the Pre-Effective Registration Statement on Form S-4, including a related Preliminary Prospectus, for registration under the Securities Act of the Shares in connection with the Exchange Offer. The Pre-Effective Registration Statement will have been declared effective by the Commission prior to the Expiration Date and any request on the part of the Commission or any other federal, state or local or other governmental or regulatory agency, authority or instrumentality or court or arbitrator for the amending or supplementing of the Offering Documents or for additional information has been complied with. The Company meets the conditions for the use of Form S-4 with respect to the Pre-Effective Registration Statement and the Registration Statement in connection with the Exchange Offer as contemplated by this Agreement.
2
(b) Pre-Effective Registration Statement, Registration Statement, Preliminary Prospectus and Prospectus. (i) The Pre-Effective Registration Statement and any amendment thereto, as of the Commencement Date, the Registration Statement, as of the Effective Date, the Expiration Date and the Exchange Date, and the Preliminary Prospectus and any amendments and supplements thereto, as of its date, the Commencement Date and the Exchange Date, comply, and will comply, in all material respects with the Securities Act and the Exchange Act and the rules and regulations of the Commission thereunder (including Rule 13e-4 and Rule 14e under the Exchange Act), (ii) the Prospectus (together with any supplement and amendment thereto), as of the date it is first filed in accordance with Rule 424(b) under the Securities Act (if it is so filed) and the Exchange Date, will comply, in all material respects with the Securities Act and the Exchange Act and the rules and regulations of the Commission thereunder (including Rule 13e-4 and Rule 14e under the Exchange Act), (iii) the Pre-Effective Registration Statement and any amendment thereto as of the Commencement Date, and the Registration Statement, as of the Effective Date, the Expiration Date and the Exchange Date, did not contain, and will not contain, any untrue statement of a material fact and did not omit, and will not omit, to state a material fact required to be stated therein or necessary to make the statements therein not misleading, (iv) the Preliminary Prospectus as of its date did not contain any untrue statement of a material fact and did not omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading and (v) the Prospectus (together with any supplement or amendment thereto), as of the date it is first filed in accordance with Rule 424(b) (if required), the Expiration Date and the Exchange Date, will not contain any untrue statement of a material fact and will not omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that the Company makes no representations or warranties as to the information contained in or omitted from the Pre-Effective Registration Statement, the Registration Statement, any Preliminary Prospectus or the Prospectus (or any supplement or amendment thereto) in reliance upon and in conformity with information furnished to the Company in writing by or on behalf of the Dealer Manager expressly for inclusion therein (the Dealer Manager Information), it being understood that the Dealer Manager Information shall include only the name and the contact information of the Dealer Manager.
(c) Documents Incorporated by Reference. The documents incorporated by reference in the Schedule TO, when they became effective or were filed with the Commission, as the case may be, conformed in all material respects to the requirements of the Securities Act or the Exchange Act, as applicable, and the rules and regulations of the Commission thereunder, and none of such documents contained an untrue statement of a material fact or omitted to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading provided, however, that this representation and warranty shall not apply to any statements or omissions made in reliance upon and in conformity with the Dealer Manager Information.
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(d) Schedule TO. (i) on the Commencement Date, the Company will duly file with the Commission the Schedule TO pursuant to Rule 13e-4 promulgated by the Commission under the Exchange Act, a copy of which Schedule TO (including the documents required by Item 12 thereof to be filed as exhibits thereto) in the form in which it is to be so filed has been or will be furnished to the Dealer Manager; (ii) any amendments to the Schedule TO and the final form of all such documents filed with the Commission or published, sent, or given to holders of Warrants will be furnished to you prior to any such amendment, filing, publication, or distribution; (iii) the Schedule TO as so filed and as amended or supplemented from time to time will comply in all material respects with the provisions of the Exchange Act and the rules and regulations thereunder; and (iv) the Schedule TO as filed or as amended or supplemented from time to time will not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made therein, in light of the circumstances under which they are made, not misleading, except that the Company makes no representation or warranty with respect to any statement contained in, or any matter omitted from, the Schedule TO and in conformity with the Dealer Manager Information.
(e) Rule 165 Material. The Rule 165 Material when filed with the Commission complied or will comply in all material respects with the applicable requirements of the Securities Act; and no Rule 165 Material, at the time of first use, when taken together with each Preliminary Prospectus and the Prospectus, as then amended or supplemented, contained or will contain any untrue statement of a material fact or omitted or will omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that this representation and warranty shall not apply to any statements or omissions in the Rule 165 Material made in reliance upon and in conformity with the Dealer Manager Information.
(f) No Stop Orders. No stop order suspending the effectiveness of the Registration Statement is in effect, and no proceedings for such purpose or pursuant to Section 8A under the Securities Act are pending before or, to the knowledge of the Company, threatened by the Commission.
(g) Emerging Growth Company. From the time of initial filing of the Registration Statement to the Commission through the date hereof, the Company has been and is an emerging growth company, as defined in Section 2(a) of the Securities Act (an Emerging Growth Company).
(h) Testing-the-Waters Materials. The Company (i) has not alone engaged in any Testing-the-Waters Communication with any person other than Testing-the-Waters Communications with the consent of the Dealer Manager with entities that are reasonably believed to be qualified institutional buyers within the meaning of Rule 144A under the Securities Act or institutions that are reasonably believed to be accredited investors within the meaning of Rule 501 under the Securities Act and (ii) has not authorized anyone other than the Dealer Manager to engage in Testing-the-Waters Communications. The Company has not distributed or approved for distribution any Testing-the-Waters Communication that is a written communication within the meaning of Rule 405 under the Securities Act. Testing-the-Waters Communication means any communication with potential investors undertaken in reliance on Section 5(d) or Rule 163B of the Securities Act.
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(i) Financial Statements. The financial statements included in each of the Pre-Effective Registration Statement, the Registration Statement, the Preliminary Prospectus and the Prospectus, together with the related schedules and notes thereto, comply as to form in all material respects with the applicable accounting requirements of the Securities Act and the Exchange Act, as applicable, and present fairly in all material respects the consolidated financial position of the Company and its subsidiaries as of the dates shown and its results of operations and cash flows for the periods shown, and such financial statements have been prepared in conformity with generally accepted accounting principles in the United States (U.S. GAAP) applied on a consistent basis throughout the periods covered thereby except for any normal year-end adjustments in the Companys quarterly financial statements. The other financial information included in each of the Pre-Effective Registration Statement, the Registration Statement, the Preliminary Prospectus and the Prospectus has been derived from the accounting records of the Company and its consolidated subsidiaries and presents fairly in all material respects the information shown thereby. The pro forma financial statements and the related notes thereto included in each of the Pre-Effective Registration Statement, the Registration Statement, the Preliminary Prospectus and the Prospectus present fairly the information shown therein, have been prepared in accordance with the Commissions rules and guidelines with respect to pro forma financial statements and have been properly compiled on the bases described therein, and the assumptions used in the preparation thereof are reasonable and the adjustments used therein are appropriate to give effect to the transactions and circumstances referred to therein. The statistical, industry-related and market-related data included in each of the Pre-Effective Registration Statement, the Registration Statement, the Preliminary Prospectus and the Prospectus are based on or derived from sources which the Company reasonably and in good faith believes are reliable and accurate and such data is consistent with the sources from which they are derived, in each case in all material respects.
(j) No Material Adverse Change. There has not occurred any Material Adverse Change, or any development involving a prospective Material Adverse Change, in the condition, financial or otherwise, or in the earnings, business or operations of the Company and its subsidiaries, taken as a whole, since the date of the latest audited financial statements included within the SEC Reports, except as disclosed in the Pre-Effective Registration Statement, the Registration Statement, the Preliminary Prospectus and the Prospectus.
(k) Organization and Good Standing. The Company has been duly incorporated, is validly existing as a corporation in good standing under the laws of the jurisdiction of its incorporation, has the corporate power and authority to own or lease its property and to conduct its business as described in each of the Pre-Effective Registration Statement, the Registration Statement, the Preliminary Prospectus and the Prospectus and is duly qualified to transact business and is in good standing in each jurisdiction in which the conduct of its business or its ownership or leasing of property requires such qualification, except to the extent that the failure to be so qualified or be in good standing would not, singly or in the aggregate, have a Material Adverse Effect on the Company and its subsidiaries, taken as a whole.
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(l) Significant Subsidiaries. Each significant subsidiary (as such term is defined in Rule 1-02 of Regulation S-X) of the Company (the Significant Subsidiaries) has been duly incorporated, organized or formed, is validly existing as a corporation or other business entity in good standing under the laws of the jurisdiction of its incorporation, organization or formation (to the extent the concept of good standing or any functional equivalent is applicable in such jurisdiction), has the corporate or other business entity power and authority to own or lease its property and to conduct its business as described in each of the Pre-Effective Registration Statement, the Registration Statement, the Preliminary Prospectus and the Prospectus and is duly qualified to transact business and is in good standing in each jurisdiction in which the conduct of its business or its ownership or leasing of property requires such qualification, except to the extent that the failure to be so qualified or be in good standing would not, singly or in the aggregate, have a Material Adverse Effect on the Company and its subsidiaries, taken as a whole.
(m) Capitalization. All the outstanding shares of capital stock of the Company have been duly and validly authorized and issued and are fully paid and non-assessable and are not subject to any pre-emptive or similar rights; except as described in or expressly contemplated by the Preliminary Prospectus and the Prospectus, there are no outstanding rights (including, without limitation, pre-emptive rights), warrants or options to acquire, or instruments convertible into or exchangeable for, any shares of capital stock or other equity interest in the Company or any of its subsidiaries, or any contract, commitment, agreement, understanding or arrangement of any kind relating to the issuance of any shares of capital stock of the Company or any such subsidiary, any such convertible or exchangeable securities or any such rights, warrants or options; the share capital of the Company conforms in all material respects to the description thereof contained in the Pre-Effective Registration Statement, the Registration Statement, the Preliminary Prospectus and the Prospectus under the heading Description of Capital Stock; and all the outstanding shares or other equity interests of each subsidiary owned, directly or indirectly, by the Company have been duly and validly authorized and issued, are fully paid and non-assessable (except, in the case of any foreign subsidiary, for directors qualifying shares) and are owned directly or indirectly by the Company, free and clear of any lien, charge, encumbrance, security interest, restriction on voting or transfer or any other claim of any third party other than as described in the Pre-Effective Registration Statement, the Registration Statement, the Preliminary Prospectus and the Prospectus, except for such liens, encumbrances, equities or claims that would not be, singly or in the aggregate, material to the Company and its subsidiaries, taken as a whole. The Shares to be issued in exchange for the Warrants as contemplated by the Offering Documents have been duly authorized for issuance and sale by the Company, and, when issued and delivered as contemplated therein, will be duly and validly issued, fully paid and nonassessable; neither the filing of the Registration Statement nor the issuance of the Shares as contemplated by the Offering Documents will give rise to any preemptive or similar rights, other than those which have been waived or satisfied.
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(n) Required Filings. The Company has filed with the Commission pursuant to Rule 13e-4(c)(1) under the Exchange Act (or Rule 425 under the Securities Act) or otherwise all written communications made by the Company or any affiliate of the Company in connection with or relating to the Exchange Offer or the Consent Solicitation that are required to be filed with the Commission, in each case on the date of their first use.
(o) Compliance. The Company has complied in all material respects with the Securities Act and the Exchange Act and the rules and regulations of the Commission thereunder in connection with the Exchange Offer, the Consent Solicitation, the Offering Documents and the transactions contemplated hereby and thereby. The Company is subject to and in full compliance with the reporting requirements of Section 13 or Section 15(d) of the Exchange Act. The Company has not received from the Commission any written comments, questions or requests for modification of disclosure in respect of any reports filed with the Commission pursuant to the Exchange Act, except for comments, questions or requests (i) that have been satisfied by the provision of supplemental information to the staff of the Commission, or (ii) in respect of which the Company has agreed with the staff of the Commission to make a prospective change in future reports filed by it with the Commission pursuant to the Exchange Act, of which agreement the Dealer Manager and its counsel have been made aware.
(p) Stock Options. Except as described in the Pre-Effective Registration Statement, the Registration Statement, the Preliminary Prospectus and the Prospectus, the Company has not sold, issued or distributed any shares of common stock during the six-month period preceding the date hereof, including any sales pursuant to Rule 144A under, or Regulation D or S of, the Securities Act, other than shares issued pursuant to employee benefit plans, qualified stock option plans or other employee compensation plans or pursuant to outstanding options, rights or warrants.
(q) Due Authorization. The Company has full right, power and authority to execute and deliver this Agreement and to perform its obligations hereunder; and all action required to be taken for the due and proper authorization, execution and delivery by it of this Agreement and the consummation by it of the transactions contemplated hereby has been duly and validly taken.
(r) Dealer Manager and Solicitation Agent Agreement. This Agreement has been duly authorized, executed and delivered by the Company.
(s) No Violation or Default. Neither the Company nor any of its subsidiaries: (i) is in default under or in violation of (and no event has occurred that has not been waived that, with notice or lapse of time or both, would result in a default by the Company or any of its subsidiaries under), nor has the Company or any of its subsidiaries received notice of a claim that it is in default under or that it is in violation of, any indenture, loan or credit agreement or any other agreement or instrument to
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which it is a party or by which it or any of its properties is bound (whether or not such default or violation has been waived), (ii) is in violation of any judgment, decree or order of any court, arbitrator or other governmental authority or (iii) is or has been in violation of any statute, rule, ordinance or regulation of any governmental authority, including without limitation all foreign, federal, state and local laws relating to taxes, environmental protection, occupational health and safety, product quality and safety and employment and labor matters, except in each case as could not reasonably be expected to result in a Material Adverse Effect.
(t) No Conflicts. The execution, delivery and performance by the Company of this Agreement, the conduct and consummation of the Exchange Offer and the consummation by the Company of any other transactions contemplated by this Agreement or the Preliminary Prospectus and the Prospectus will not (i) conflict with or violate any provision of the Companys certificate of incorporation or bylaws, (ii) conflict with or violate any provision of any of the Companys subsidiaries certificates or articles of incorporation, bylaws or other organizational or charter documents, (iii) conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, result in the creation of any lien upon any of the properties or assets of the Company or any of its subsidiaries, or give to others any rights of termination, amendment, anti-dilution or similar adjustments, acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing a Company or subsidiary debt or otherwise) or other understanding to which the Company or any of its subsidiaries is a party or by which any property or asset of the Company or any of its subsidiaries is bound or affected, or (iv) conflict with or result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority to which the Company or any of its subsidiaries is subject (including federal and state securities laws and regulations), or by which any property or asset of the Company or any of its subsidiaries is bound or affected; except in the case of each of clauses (ii), (iii) and (iv), such as could not reasonably be expected to result in a Material Adverse Effect.
(u) No Consents Required. The execution and delivery by the Company of, and the performance by the Company of its obligations under this Agreement will not contravene any provision of applicable law or the certificate of incorporation or by-laws of the Company or any agreement or other instrument binding upon the Company or any of its subsidiaries that is material to the Company and its subsidiaries, taken as a whole, or any judgment, order or decree of any governmental body, agency or court having jurisdiction over the Company or any subsidiary, and no consent, approval, authorization or order of, or qualification with, any governmental body, agency or court is required for the performance by the Company of its obligations under this Agreement, except such as may be required by the securities or Blue Sky laws of the various states or the rules and regulations of FINRA in connection with the issuance of the Shares.
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(v) No Legal Proceedings. There are no legal or governmental proceedings pending or, to the knowledge of the Company, threatened to which the Company or any of its subsidiaries is a party or to which any of the properties of the Company or any of its subsidiaries is subject (i) other than proceedings accurately described in all material respects in each of the Pre-Effective Registration Statement, the Registration Statement, the Preliminary Prospectus and the Prospectus and proceedings that would not, singly or in the aggregate, reasonably be expected to have a Material Adverse Effect on the Company and its subsidiaries, taken as a whole, or on the power or ability of the Company to perform its obligations under this Agreement or to consummate the transactions contemplated by each of the Pre-Effective Registration Statement, the Registration Statement, the Preliminary Prospectus and the Prospectus or (ii) that are required to be described in the Pre-Effective Registration Statement, the Registration Statement, the Preliminary Prospectus and the Prospectus and are not so described; and there are no statutes, regulations, contracts or other documents that are required to be described in the Pre-Effective Registration Statement, the Registration Statement, the Preliminary Prospectus and the Prospectus or to be filed as exhibits to the Registration Statement that are not described in all material respects or filed as required.
(w) Independent Accountants. Deloitte & Touche LLP, who have certified certain financial statements of the Company and its subsidiaries and delivered its report with respect to the audited consolidated financial statements and schedules filed with the Commission as part of the Registration Statement and included in each of the Pre-Effective Registration Statement, the Registration Statement, the Preliminary Prospectus and the Prospectus, is an independent registered public accounting firm with respect to the Company within the meaning of the Securities Act and the applicable rules and regulations thereunder adopted by the Commission and the Public Company Accounting Oversight Board (United States).
(x) Title to Real and Personal Property. The Company and each of its subsidiaries have good and marketable title in fee simple to all real property and good and marketable title to all personal property owned by them which is material to the business of the Company and its subsidiaries, except to the extent that the failure to have good and marketable title to any real or personal property would not reasonably be expected to have a Material Adverse Effect on the Company and its subsidiaries taken as a whole, in each case free and clear of all liens, encumbrances and defects except such liens, encumbrances and defects would not reasonably be expected to have a Material Adverse Effect on the Company and its subsidiaries taken as a whole; and any real property and buildings held under lease by the Company and its subsidiaries are held by them under valid, subsisting and enforceable leases with such exceptions as are not material and do not interfere with the use made and proposed to be made of such property and buildings by the Company and its subsidiaries.
(y) Intellectual Property. Except as would not, singly or in the aggregate, have a Material Adverse Effect on the Company and its subsidiaries taken as a whole, (i) the Company and its subsidiaries own or have a valid license to all patents, inventions, copyrights, know how (including trade secrets and other unpatented and/or unpatentable proprietary or confidential information, systems or procedures), trademarks, service marks and trade names and all other worldwide intellectual property and proprietary rights (including all registrations and applications for registration of, and all goodwill associated with, any of the foregoing) (collectively, Intellectual Property Rights) used
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or held for use in any material respect, or reasonably necessary to the conduct of their respective businesses as now conducted by them, and as proposed to be conducted in the Pre-Effective Registration Statement, the Registration Statement, the Preliminary Prospectus or the Prospectus; (ii) the Intellectual Property Rights owned by the Company and its subsidiaries and, to the Companys knowledge, the Intellectual Property Rights licensed to the Company and its subsidiaries, are valid, subsisting and enforceable, and there is no pending or, to the Companys knowledge, threatened action, suit, proceeding or claim by others challenging the validity, scope or enforceability of, or any rights of the Company or any of its subsidiaries in, any such Intellectual Property Rights; (iii) neither the Company nor any of its subsidiaries has received any notice alleging any infringement, misappropriation or other violation of Intellectual Property Rights; (iv) to the Companys knowledge, no Person is infringing, misappropriating or otherwise violating, or has infringed, misappropriated or otherwise violated, any Intellectual Property Rights owned or controlled by the Company or any of its subsidiaries; (v) to the Companys knowledge, neither the Company nor any of its subsidiaries infringes, misappropriates or otherwise violates, or has infringed, misappropriated or otherwise violated, any Intellectual Property Rights of any Person, and the conduct of each of the respective businesses of the Company and its subsidiaries as described in Pre-Effective Registration Statement, the Registration Statement, the Preliminary Prospectus and the Prospectus does not infringe, misappropriate, or otherwise violate any Intellectual Property Rights of any Person; (vi) all employees or contractors engaged in the development of any Intellectual Property Rights on behalf of the Company or any of its subsidiaries have executed an invention assignment agreement whereby such employees or contractors presently assign all of their right, title and interest in and to such Intellectual Property Rights to the Company or its applicable subsidiary, and to the Companys knowledge no such agreement has been breached or violated; and (vii) the Company and its subsidiaries use, and have used, commercially reasonable efforts in accordance with customary industry practice to appropriately maintain the confidentiality of all Intellectual Property Rights owned by them, including maintenance and protection of all information intended to be maintained as a trade secret.
(z) Data Privacy. (i) The Company and each of its subsidiaries have complied and are presently in compliance, in all material respects, with all internal and external privacy policies, contractual obligations, industry standards, applicable laws, statutes, judgments, orders, rules and regulations of any court or arbitrator or other governmental or regulatory authority and any other legal obligations, in each case, relating to the collection, use, transfer, import, export, storage, protection, disposal and disclosure by the Company or any of its subsidiaries of personal, personally identifiable, household, sensitive, confidential or regulated data or information (Data Security Obligations, and such data and information, Personal Data); (ii) the Company and its subsidiaries have not received any notification of or complaint regarding and are unaware of any other facts that, individually or in the aggregate, would reasonably indicate non-compliance in any material respect with any Data Security Obligation by the Company or any of its subsidiaries; and (iii) there is no action, suit or proceeding by or before any court or governmental agency, authority or body pending or to the knowledge of the Company or its subsidiaries threatened alleging non-compliance with any Data Security Obligation by the Company or any of its subsidiaries.
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(aa) No Undisclosed Relationships. No relationship, direct or indirect, exists between or among the Company or any of its subsidiaries, on the one hand, and the directors, officers, shareholders or other affiliates of the Company or any of its subsidiaries, on the other, that is required by the Securities Act to be described in each of the Pre-Effective Registration Statement, the Registration Statement, the Preliminary Prospectus and the Prospectus and that is not so described in such documents.
(bb) Investment Company Act. The Company is not, and after giving effect to the consummation of the Exchange Offer or the Consent Solicitation will not be, required to register as an investment company or an entity controlled by an investment company within the meaning of the Investment Company Act of 1940, as amended, and the rules and regulations of the Commission thereunder (collectively, the Investment Company Act).
(cc) Taxes. The Company and each of its subsidiaries have filed all federal, state, local and foreign tax returns required to be filed through the date of this Agreement or have requested extensions thereof (except where the failure to file would not, singly or in the aggregate, have a Material Adverse Effect on the Company and its subsidiaries, taken as a whole) and have paid all taxes required to be paid thereon (except for cases in which the failure to file or pay would not, singly or in the aggregate, have a Material Adverse Effect on the Company and its subsidiaries, taken as a whole, or, except as currently being contested in good faith and for which reserves required by U.S. GAAP have been created in the financial statements of the Company), and no tax deficiency has been determined adversely to the Company or any of its subsidiaries which, singly or in the aggregate, has had (nor does the Company nor any of its subsidiaries have any notice or knowledge of any tax deficiency which could reasonably be expected to be determined adversely to the Company or its subsidiaries and which could reasonably be expected to have) a Material Adverse Effect on the Company and its subsidiaries, taken as a whole.
(dd) Licenses and Permits. The Company and each of its subsidiaries possess all certificates, authorizations and permits issued by the appropriate federal, state or foreign regulatory authorities necessary to conduct their respective businesses, except to the extent that the failure to possess such certificates, authorizations, licenses, consents, approvals or permits would not be material to the Company and its subsidiaries, taken as a whole, and neither the Company nor any of its subsidiaries has received any notice of proceedings relating to the revocation or modification of any such certificate, authorization or permit which, singly or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would have a Material Adverse Effect on the Company and its subsidiaries, taken as a whole.
(ee) No Labor Disputes. No material labor dispute with the employees of the Company or any of its subsidiaries exists, or, to the knowledge of the Company, is imminent; and the Company is not aware of any existing, threatened or imminent labor disturbance by the employees of any of its principal suppliers, manufacturers or contractors that could, singly or in the aggregate, have a Material Adverse Effect on the Company and its subsidiaries, taken as a whole.
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(ff) Certain Environmental Matters. The Company and each of its subsidiaries (A) are in compliance with any and all applicable foreign, federal, state and local laws and regulations relating to the protection of human health and safety, the environment or hazardous or toxic substances or wastes, pollutants or contaminants (Environmental Laws), (B) have received all permits, licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses and (C) are in compliance with all terms and conditions of any such permit, license or approval, except where such noncompliance with Environmental Laws, failure to receive required permits, licenses or other approvals or failure to comply with the terms and conditions of such permits, licenses or approvals would not, singly or in the aggregate, reasonably be expected to have a Material Adverse Effect on the Company and its subsidiaries, taken as a whole.
(gg) Compliance with ERISA. (i) Each employee benefit plan, within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (ERISA), for which the Company or any member of its Controlled Group (defined as any entity, whether or not incorporated, that is under common control with the Company within the meaning of Section 4001(a)(14) of ERISA or any entity that would be regarded as a single employer with the Company under Section 414(b),(c),(m) or (o) of the Internal Revenue Code of 1986, as amended (the Code)) would have any liability (each, a Plan) has been maintained in compliance with its terms and the requirements of any applicable statutes, orders, rules and regulations, including but not limited to ERISA and the Code; (ii) no prohibited transaction, within the meaning of Section 406 of ERISA or Section 4975 of the Code, has occurred with respect to any Plan, excluding transactions effected pursuant to a statutory or administrative exemption; (iii) for each Plan that is subject to the funding rules of Section 412 of the Code or Section 302 of ERISA, no Plan has failed (whether or not waived), or is reasonably expected to fail, to satisfy the minimum funding standards (within the meaning of Section 302 of ERISA or Section 412 of the Code) applicable to such Plan; (iv) no Plan is, or is reasonably expected to be, in at risk status (within the meaning of Section 303(i) of ERISA) and no Plan that is a multiemployer plan within the meaning of Section 4001(a)(3) of ERISA is in endangered status or critical status (within the meaning of Sections 304 and 305 of ERISA); (v) the fair market value of the assets of each Plan exceeds the present value of all benefits accrued under such Plan (determined based on those assumptions used to fund such Plan); (vi) no reportable event (within the meaning of Section 4043(c) of ERISA and the regulations promulgated thereunder) has occurred or is reasonably expected to occur; (vii) each Plan that is intended to be qualified under Section 401(a) of the Code is subject to a favorable determination letter or advisory opinion, as applicable, from the Internal Revenue Service, and nothing has occurred, whether by action or by failure to act, that, to the best knowledge of the Company, is reasonably likely to result in the revocation of any such determination or opinion, as applicable; and (viii) none of the following events has occurred or is reasonably likely to occur: (A) a material increase in the aggregate amount of
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contributions required to be made to all Plans by the Company or its Controlled Group affiliates in the current fiscal year of the Company and its Controlled Group affiliates compared to the amount of such contributions made in the Companys and its Controlled Group affiliates most recently completed fiscal year; or (B) a material increase in the Company and its subsidiaries accumulated post-retirement benefit obligations (within the meaning of Accounting Standards Codification Topic 715-60) compared to the amount of such obligations in the Company and its subsidiaries most recently completed fiscal year, except in each case with respect to the events or conditions set forth in (i) through (viii) hereof, as would not, individually or in the aggregate, have a Material Adverse Effect.
(hh) Sarbanes-Oxley; Internal Accounting Controls. Except as disclosed in the Preliminary Prospectus and Prospectus (A) the Company is in compliance with any and all applicable requirements of the Sarbanes-Oxley Act of 2002 that are effective as of the date hereof, and any and all applicable rules and regulations promulgated by the Commission thereunder that are effective as of the date hereof, as of the Commencement Date and as of the Exchange Date; (B) the Company maintains a system of internal accounting controls sufficient to provide reasonable assurance that: (i) transactions are executed in accordance with managements general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability, (iii) access to assets is permitted only in accordance with managements general or specific authorization, and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences; and (C) the Company has established disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and designed such disclosure controls and procedures to ensure that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commissions rules and forms. The Companys certifying officers have evaluated the effectiveness of the disclosure controls and procedures of the Company as of the end of the period covered by the most recently filed periodic report under the Exchange Act (such date, the Evaluation Date). The Company presented in its most recently filed periodic report under the Exchange Act the conclusions of the certifying officers about the effectiveness of the disclosure controls and procedures based on their evaluations as of the Evaluation Date. Except as disclosed in the Preliminary Prospectus and the Prospectus, since the Evaluation Date, there have been (i) no material weakness in the Companys internal control over financial reporting (whether or not remediated) and (ii) no change in the Companys internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Companys internal control over financial reporting.
(ii) Insurance. The Company and each of its subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are prudent and customary in the businesses in which they are engaged; neither the Company nor any of its subsidiaries has been refused any insurance coverage sought or applied for; and neither the Company nor any of its subsidiaries has any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that would not, singly or in the aggregate, have a Material Adverse Effect on the Company and its subsidiaries, taken as a whole.
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(jj) No Unlawful Payments. (i) None of the Company or any of its subsidiaries or affiliates, or any director or officer thereof, or, to the Companys knowledge, any employee, agent or representative of the Company or of any of its subsidiaries or affiliates, has taken or will take any action in furtherance of an offer, payment, promise to pay, or authorization or approval of the payment, giving or receipt of money, property, gifts or anything else of value, directly or indirectly, to any government official (including any officer or employee of a government or government-owned or controlled entity or of a public international organization, or any person acting in an official capacity for or on behalf of any of the foregoing, or any political party or party official or candidate for political office) (Government Official) in order to influence official action, or to any person in violation of any applicable anti-corruption laws; (ii) the Company and each of its subsidiaries and affiliates have conducted their businesses in compliance with applicable anti-corruption laws and have instituted and maintained and will continue to maintain policies and procedures reasonably designed to promote and achieve compliance with such laws and with the representations and warranties contained herein; and (iii) neither the Company nor any of its subsidiaries will use, directly or indirectly, the proceeds of the offering in furtherance of an offer, payment, promise to pay, or authorization of the payment or giving of money, or anything else of value, to any person in violation of any applicable anti-corruption laws.
(kk) Compliance with Anti-Money Laundering Laws. The operations of the Company and each of its subsidiaries are and have been conducted at all times in material compliance with all applicable financial recordkeeping and reporting requirements, including those of the Bank Secrecy Act, as amended by Title III of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (USA PATRIOT Act), and the applicable anti-money laundering statutes of jurisdictions where the Company and each of its subsidiaries conduct business, the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any governmental agency (collectively, the Anti-Money Laundering Laws), and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or any of its subsidiaries with respect to the Anti-Money Laundering Laws is pending or, to the best knowledge of the Company, threatened.
(ll) No Conflicts with Sanctions Laws. (i) None of the Company, any of its subsidiaries, or any director, officer, or employee thereof, or, to the Companys knowledge, any agent, affiliate or representative of the Company or any of its subsidiaries, is an individual or entity (Person) that is, or is owned or controlled by one or more Persons that are:
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(A) the subject of any sanctions administered or enforced by the U.S. Department of the Treasurys Office of Foreign Assets Control or other relevant sanctions authority (collectively, Sanctions), or
(B) located, organized or resident in a country or territory that is the subject of Sanctions (including, without limitation, Belarus, Crimea, Cuba, Iran, North Korea, Russia and Syria).
(mm) [Reserved].
(nn) The Company and each of its subsidiaries have not knowingly engaged in, are not now knowingly engaged in, and will not engage in, any dealings or transactions with any Person, or in any country or territory, that at the time of the dealing or transaction is or was the subject of Sanctions.
(oo) No Solicitation. The Company has not paid or agreed to pay to any person any compensation for (i) soliciting another to purchase any of its securities or (ii) soliciting tenders or Consents by holders of Warrants pursuant to the Exchange Offer (except as contemplated in this Agreement).
(pp) No Registration Rights. Except as described in the Pre-Effective Registration Statement, the Registration Statement, the Preliminary Prospectus and the Prospectus, no person has the right to require the Company or any of its subsidiaries to register any securities for sale under the Securities Act by reason of the filing of the Pre-Effective Registration Statement or the Registration Statement with the Commission.
(qq) No Stabilization. The Company has not taken, directly or indirectly, any action designed to or that could reasonably be expected to cause or result in any stabilization or manipulation of the price of any security of the Company to facilitate the Exchange Offer.
(rr) Forward-Looking Statements. No forward-looking statement (within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act) included in any of the Pre-Effective Registration Statement, the Registration Statement, the Preliminary Prospectus or the Prospectus has been made or reaffirmed without a reasonable basis or has been disclosed other than in good faith.
(ss) Sarbanes-Oxley Act. There is and has been no failure on the part of the Company or any of the Companys directors or officers, in their capacities as such, to comply with any provision of the Sarbanes-Oxley Act of 2002, as amended and the rules and regulations promulgated in connection therewith, including Section 402 related to loans and Sections 302 and 906 related to certifications.
(tt) Registration Fees. The Company has paid the registration fee for Registration Statement pursuant to Rule 456(a) under the Securities Act or will pay such fee within the time period required by such rule and in any event prior to the Exchange Date.
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(uu) No Ratings. There are (and prior to the Exchange Date, will be) no debt securities or preferred stock issued or guaranteed by the Company or any of its subsidiaries that are rated by a nationally recognized statistical rating organization, as such term is defined under Section 3(a)(62) under the Exchange Act.
Any certificate signed by any officer of the Company and delivered to the Dealer Manager or counsel for the Dealer Manager in connection with the Exchange Offer shall be deemed a representation and warranty by the Company as to matters covered thereby to the Dealer Manager.
4. Representations, Warranties and Agreements of the Dealer Manager. The Dealer Manager hereby represents, warrants and agrees that the Dealer Manager will not (1) cause to be disseminated to holders, dealers or the public any written material for or in connection with the Exchange Offer or Consent Solicitation other than one or more of the Offering Documents, or (2) make any public oral communications relating to the Exchange Offer or the Consent Solicitation that have not been previously approved by the Company except as contemplated in the penultimate sentence of Section 6 of this Agreement.
5. Agreements. The Company agrees with the Dealer Manager that:
(a) The Company will furnish to the Dealer Manager and to counsel for the Dealer Manager, without charge, during the period beginning on the Commencement Date and continuing to and including the Exchange Date, copies of the Offering Documents and any amendments and supplements thereto in such quantities as the Dealer Manager may reasonably request.
(b) Prior to the termination of the Exchange Offer and the Consent Solicitation, the Company will not file any amendment to the Pre-Effective Registration Statement or the Registration Statement or supplement to the Preliminary Prospectus or the Prospectus unless the Company has furnished the Dealer Manager a copy of such proposed amendment or supplement, as applicable, for its review prior to filing and will not file any such proposed amendment or supplement to which the Dealer Manager reasonably objects. Subject to the foregoing sentence, if the Registration Statement has become or becomes effective, or filing of the Preliminary Prospectus or the Prospectus is otherwise required under the Securities Act or the Exchange Act and the rules and regulations of the Commission thereunder, the Company will cause the Preliminary Prospectus or the Prospectus, properly completed, and any supplement thereto to be filed with the Commission pursuant to the applicable paragraph of Rule 424(b) or in an amendment to the Registration Statement, whichever is applicable, within the time period prescribed. The Company will promptly advise the Dealer Manager (i) when the Registration Statement, and any amendment thereto, shall have become effective, (ii) when the Preliminary Prospectus or the Prospectus, and any supplement thereto, shall have been filed (if required) with the Commission, (iii) when, prior to termination of the Exchange Offer and the Consent Solicitation, any amendment to the Registration Statement shall have been filed or become effective, (iv) of any request by the Commission or its staff for any amendment of the Pre-Effective Registration Statement or the Registration Statement or supplement to the Preliminary Prospectus or the Prospectus
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or for any additional information, (v) the issuance by the Commission of any stop order or of any order preventing or suspending the use of the Preliminary Prospectus or the Prospectus, or the initiation or threatening of any proceeding for any such purpose, and (vi) of the receipt by the Company of any notification with respect to the suspension of the qualification of the Shares for sale in any jurisdiction within the United States or the initiation or threatening of any proceeding for such purpose. In the event of the issuance of any such stop order or of any such order preventing or suspending the use of the Preliminary Prospectus or the Prospectus, the Company will use its reasonable best efforts to obtain its withdrawal. The Company agrees to use its reasonable best efforts to cause the Registration Statement to become effective as soon as practicable and as much in advance of the Expiration Date as practicable.
(c) The Company will comply with the Securities Act and the Exchange Act and the rules and regulations of the Commission thereunder so as to permit the completion of the distribution of the Shares issued in the Exchange Offer and Consent Solicitation, as contemplated by this Agreement, the Registration Statement and the Prospectus. If, at any time when a prospectus relating to the Exchange Offer or Consent Solicitation is required to be delivered under the Securities Act or the Exchange Act and the rules and regulations of the Commission thereunder, any event occurs as a result of which the Offering Documents, as then amended or supplemented, would include any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, or if it should be necessary to amend or supplement the Offering Documents to comply with applicable law, the Company will promptly: (i) notify the Dealer Manager of any such event or non-compliance at which time the Dealer Manager shall be entitled to cease soliciting tenders until such time as the Company has complied with clause (iii) of this sentence; (ii) subject to the requirements of the first sentence of the above paragraph (b), prepare an amendment or supplement that will correct such statement or omission or effect such compliance; and (iii) supply any such amendment or supplement to the Dealer Manager and counsel for the Dealer Manager without charge in such quantities as the Dealer Manager may reasonably request. The Company will also promptly inform the Dealer Manager of any litigation or administrative action with respect to the Exchange Offer.
(d) The Company agrees to advise the Dealer Manager promptly of (i) any proposal by the Company to withdraw, rescind or modify the Offering Documents or to withdraw, rescind or terminate the Exchange Offer or the Consent Solicitation or the exercise by the Company of any right not to exchange the Warrants pursuant to the Exchange Offer or the Consent Solicitation, (ii) its awareness of the issuance of a stop order suspending the effectiveness of the Registration Statement or of any notice objecting to its use by the Commission or any other regulatory authority, or the institution or threatening of any proceedings for that purpose (and will promptly furnish the Dealer Manager with a copy of any such order), (iii) its awareness of the occurrence of any development that could reasonably be expected to result in a Material Adverse Change relating to or affecting the Exchange Offer or the Consent Solicitation and (iv) any other non-privileged information relating to the Exchange Offer, the Consent Solicitation, the Offering Documents or this Agreement which the Dealer Manager may from time to time reasonably request.
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(e) The Company will make generally available to its security holders and the Dealer Manager as soon as practicable an earning statement that satisfies the provisions of Section 11(a) of the Securities Act and Rule 158 of the Commission promulgated thereunder covering a period of at least twelve months beginning with the first fiscal quarter of the Company occurring after the effective date (as defined in Rule 158) of the Registration Statement.
(f) The Company will arrange, if necessary, for the qualification of the Shares for offer or sale in connection with the Exchange Offer under the laws of such jurisdictions as the Dealer Manager may designate and will maintain such qualifications in effect so long as required for such offer or sale; provided that in no event shall the Company be obligated to qualify to do business in any jurisdiction in which it is not now so qualified or to take any action that would subject it to service of process in suits, other than those arising out of the offering or sale of the Shares in connection with the Exchange Offer, in any jurisdiction in which it is not now so subject. The Company will promptly advise the Dealer Manager of the receipt by the Company of any notification with respect to the suspension of the qualification of the Shares for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose.
(g) Prior to the termination of the Exchange Offer, the Company will not, and will not permit any of its Affiliates to, resell any Shares that have been acquired by them. The Company will cause all Warrants accepted in the Exchange Offer to be cancelled.
(h) The Company will cooperate with the Dealer Manager to permit the Shares to be eligible for clearance and settlement through The Depository Trust Company.
(i) The Company agrees not to exchange any Warrants during the period beginning on the Commencement Date and ending on the Exchange Date except pursuant to and in accordance with the Exchange Offer, the Consent Solicitation or as otherwise agreed to in writing by the parties hereto and permitted under applicable laws and regulations.
(j) None of the Company, its Affiliates or any person acting on its or their behalf will take, directly or indirectly, any action that is designed to cause or result, or which might reasonably be expected to cause or result, under the Exchange Act or otherwise, in stabilization or manipulation of the price of any security of the Company to facilitate the sale of the Shares or the tender of Warrants in the Exchange Offer.
(k) The Company has arranged for D.F. King & Co., Inc. to serve as Information Agent and for Continental Stock Transfer & Trust Company to serve as Exchange Agent and authorizes the Dealer Manager to communicate with each of the Information Agent and the Exchange Agent to facilitate the Exchange Offer and the Consent Solicitation.
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(l) The Company will comply in all material respects with the Securities Act and the Exchange Act and the rules and regulations of the Commission thereunder, including Rule 13e-4 and Rule 14e-1 under the Exchange Act (including taking the actions necessary to ensure that the procedural requirements of Rule 14e-1 are satisfied), in connection with the Exchange Offer, the Consent Solicitation, the Offering Documents and the transactions contemplated hereby and thereby. The Company will file with the Commission pursuant to Rule 13e-4(c)(1) under the Exchange Act (or Rule 425 under the Securities Act) or otherwise all written communications made by the Company or any affiliate of the Company in connection with or relating to the Exchange Offer or the Consent Solicitation that are required to be filed with the Commission, in each case on the date of their first use.
(m) The Company agrees to pay the costs and expenses relating to the transactions contemplated hereunder, including without limitation the following: (i) the preparation of this Agreement, the issuance of the Shares and the fees of the Information Agent and any exchange agent; (ii) the preparation, printing or reproduction of the Offering Documents and each amendment or supplement thereto; (iii) the printing (or reproduction) and delivery (including postage, air freight charges and charges for counting and packaging) of such copies of the Offering Documents (and all amendments or supplements thereto) as may, in each case, be reasonably requested for use in connection with the Exchange Offer; (iv) the preparation, printing, authentication, issuance and delivery of certificates for the Shares, including any stamp or transfer taxes in connection with the original issuance and sale of the Shares; (v) the printing (or reproduction) and delivery of this Agreement, any blue sky memorandum and all other agreements or documents printed (or reproduced) and delivered in connection with the Exchange Offer; (vi) any registration or qualification of the Shares for offer and sale under the blue sky laws of the several states or any non-U.S. jurisdiction; (vii) transportation and other expenses incurred by or on behalf of Company representatives in connection with presentations to prospective participants in the Exchange Offer; (viii) the fees and expenses of the Companys accountants and the fees and expenses of counsel (including local and special counsel) for the Company; (ix) fees and expenses incurred in connection with listing the Shares on the Nasdaq Stock Market LLC (the Nasdaq); and (x) all other costs and expenses incident to the performance by the Company of its obligations hereunder and in connection with the Exchange Offer.
(n) The Company will promptly notify the Dealer Manager if the Company ceases to be an Emerging Growth Company at any time prior to the Exchange Date.
6. Conditions to the Obligations of the Dealer Manager. The obligations of the Dealer Manager under this Agreement shall be subject to the accuracy of the representations and warranties on the part of the Company contained herein at the Commencement Date, any date on which Offering Documents are distributed to holders of the Warrants, the Effective Date, the Expiration Date and the Exchange Date, to the accuracy of the statements of the Company made in any certificates pursuant to the provisions hereof, to the performance by the Company of its obligations hereunder and to the following additional conditions:
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(a) The Registration Statement shall have become effective on or prior to the Expiration Date.
(b) As of the Exchange Date, no stop order suspending the effectiveness of the Registration Statement or any notice objecting to its use shall have been issued and no proceedings for that purpose shall have been instituted or, to the knowledge of the Company, threatened by the Commission; and the Prospectus shall have been timely filed with the Commission under the Securities Act; and all requests by the Commission for additional information shall have been complied with to the reasonable satisfaction of the Dealer Manager.
(c) At the Commencement Date and the Exchange Date, the Company shall have requested and caused an opinion and negative assurance letter of Latham & Watkins LLP, counsel to the Company, dated the Commencement Date or Exchange Date, as applicable, in form and substance reasonably satisfactory to the Dealer Manager to have been delivered to the Dealer Manager, in each case addressed to, and in form and substance satisfactory to, the Dealer Manager.
(d) At the Commencement Date and the Exchange Date, the Dealer Manager shall have received from Kirkland & Ellis LLP, counsel for the Dealer Manager, such opinion and negative assurance letter, in each case addressed to the Dealer Manager with respect to the Exchange Offer, as the Dealer Manager may reasonably require, and the Company shall have furnished to such counsel such documents as they request for the purposes of enabling them to pass upon such matters.
(e) At the Exchange Date, the Company shall have furnished to the Dealer Manager a certificate of the Company, signed by the Chairman of the Board or the President and the principal financial or accounting officer of the Company, dated as of the Exchange Date, to the effect that the signers of such certificate have carefully examined the Offering Documents, any amendment or supplement to the Offering Documents and this Agreement and that:
(i) the representations and warranties of the Company in this Agreement are true and correct as of the Exchange Date with the same effect as if made on the Exchange Date, and the Company has complied with all the agreements and satisfied all the conditions on its part to be performed or satisfied hereunder at or prior to the Exchange Date;
(ii) no stop order suspending the effectiveness of the Registration Statement has been issued and no proceedings for that purpose have been instituted or threatened by the Commission; and
(iii) since the date of the most recent financial statements included or incorporated by reference in the Offering Documents (exclusive of any amendment or supplement thereto), there has been no Material Adverse Change, except as set forth in or contemplated in the Offering Documents (exclusive of any amendment or supplement thereto).
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(f) At each of the Commencement Date and the Exchange Date, the Company shall have requested and caused Deloitte & Touche LLP to furnish to the Dealer Manager letters, dated respectively as of the Commencement Date and the Exchange Date, in form and substance reasonably satisfactory to the Dealer Manager. At each of the Commencement Date and the Exchange Date, the Company shall have furnished to the Dealer Manager a certificate, dated respectively as of the Commencement Date and the Exchange Date, and addressed to the Dealer Manager, of its chief financial officer with respect to certain financial data contained in the Preliminary Prospectus and the Prospectus, providing management comfort with respect to such information, in form and substance reasonably satisfactory to the Dealer Manager.
(g) Subsequent to the Commencement Date or, if earlier, the dates as of which information is given in the Offering Documents (exclusive of any amendment or supplement thereto), there shall not have been (i) any change or decrease specified in the letters referred to in paragraph (f) of this Section 6 or (ii) any change, or any development involving a prospective change, in or affecting the condition (financial or otherwise), prospects, earnings, business or properties the Company and its subsidiaries, taken as a whole, whether or not arising from transactions in the ordinary course of business, except as set forth in or contemplated in the Offering Documents (exclusive of any amendment or supplement thereto), the effect of which, in any case referred to in clause (i) or (ii) above, is, in the reasonable judgment of the Dealer Manager, so material and adverse as to make it impractical or inadvisable to market or deliver the Shares or solicit tenders of Warrants as contemplated by the Offering Documents (exclusive of any amendment or supplement thereto).
(i) Prior to the Exchange Date, the Company shall have obtained all consents, approvals, authorizations and orders of, and shall have duly made all registrations, qualifications and filing with, any court or regulatory authority or other governmental agency or instrumentality required in connection with the making and consummation of the Exchange Offer and the execution, delivery and performance of this Agreement.
(j) Prior to the Exchange Date, the Company shall have delivered to the Dealer Manager and its counsel such further information, certificates and documents as they may reasonably request.
(k) Prior to the Exchange Date, the Shares shall have been approved for listing, subject to notice of issuance, on the Nasdaq.
If (i) any of the conditions specified in this Section 6 shall not have been fulfilled when and as provided in this Agreement, or (ii) any of the opinions and certificates mentioned above or elsewhere in this Agreement shall not be reasonably satisfactory in form and substance to the Dealer Manager and its counsel, this Agreement and all obligations of the Dealer Manager hereunder may be cancelled by the Dealer Manager at, or at any time prior to, the Exchange
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Date. In such event, the Dealer Managers shall be entitled to publicly disclose the cancellation of its participation in the Exchange Offer via press release, subject to prior notification of the Company. Notice of such cancellation shall be given to the Company in writing or by telephone or facsimile confirmed in writing.
7. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless the Dealer Manager, the directors, officers, employees and agents of the Dealer Manager and each person who controls the Dealer Manager within the meaning of either the Securities Act or the Exchange Act against any and all losses, claims, damages or liabilities, joint or several, to which the Dealer Manager may become subject under the Securities Act, the Exchange Act or other federal, state or foreign statutory law or regulation, at common law or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) relate to, arise out of, or are based upon (1) any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement (or any amendment or supplement thereto), or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary in order to make the statements therein not misleading, (2) any untrue statement or alleged untrue statement of a material fact contained in the Preliminary Prospectus, the Prospectus, the accompanying letter of transmittal and consent, the Schedule TO, the Rule 165 Material, the notice of guaranteed delivery, and all other documents filed or to be filed with any federal, state or local government or regulatory agency or authority in connection with the Exchange Offer or the Consent Solicitation, each as prepared or approved by the Company, or the omission or alleged omission therefrom of a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, (3) the Companys failure to make or consummate the Exchange Offer or the withdrawal, rescission, termination, amendment or extension of the Exchange Offer or any failure on the Companys part to comply with the terms and conditions contained in the Offering Documents, (4) any action or failure to act by the Company or its respective directors, officers, agents or employees or by any indemnified party at the request or with the consent of the Company, or (5) otherwise related to or arising out of the Dealer Managers engagement hereunder or any transaction or conduct in connection therewith, except that clauses (3), (4) and (5) shall not apply with respect to the portion of any losses that are finally judicially determined by a court of competent jurisdiction to have resulted primarily from the bad faith, gross negligence or willful misconduct of such indemnified party, and in the case of clause (1), (2), (3) or (4) of this sentence, the Company agrees to reimburse each such indemnified party, as incurred, for any legal or other expenses reasonably incurred by it in connection with investigating or defending any such loss, claim, damage, liability or action; provided, however, that the Company will not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon any such untrue statement or alleged untrue statement or omission or alleged omission made in the Offering Documents, or in any amendment thereof or supplement thereto, in reliance upon and in conformity with the Dealer Manager Information. This indemnity agreement will be in addition to any liability that the Company may otherwise have.
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(b) The Dealer Manager agrees to indemnify and hold harmless the Company, each of its directors, officers, employees and agents and each person who controls the Company within the meaning of the Securities Act or the Exchange Act to the same extent as the foregoing indemnity from the Company to the Dealer Manager, but only with reference to the Dealer Manager Information. This indemnity agreement will be in addition to any liability that the Dealer Manager may otherwise have.
(c) Promptly after receipt by an indemnified party under this Section 7 of notice of the commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against the indemnifying party under this Section 7, notify the indemnifying party in writing of the commencement thereof; but the failure so to notify the indemnifying party (i) will not relieve it from liability under paragraph (a) or (b) above unless and to the extent it did not otherwise learn of such action and such failure results in the forfeiture by the indemnifying party of substantial rights and defenses and (ii) will not, in any event, relieve the indemnifying party from any obligations to any indemnified party other than the indemnification obligation provided in paragraph (a) or (b) above. The indemnifying party shall be entitled to appoint counsel (including local counsel) of the indemnifying partys choice at the indemnifying partys expense to represent the indemnified party in any action for which indemnification is sought (in which case the indemnifying party shall not thereafter be responsible for the fees and expenses of any separate counsel, other than local counsel if not appointed by the indemnifying party, retained by the indemnified party or parties except as set forth below); provided, however, that such counsel shall be reasonably satisfactory to the indemnified party. Notwithstanding the indemnifying partys election to appoint counsel (including local counsel) to represent the indemnified party in an action, the indemnified party shall have the right to employ separate counsel (including local counsel), and the indemnifying party shall bear the reasonable fees, costs and expenses of such separate counsel if (i) the use of counsel chosen by the indemnifying party to represent the indemnified party would present such counsel with a conflict of interest; (ii) the actual or potential defendants in, or targets of, any such action include both the indemnified party and the indemnifying party and the indemnified party shall have reasonably concluded that there may be legal defenses available to it and/or other indemnified parties that are different from or additional to those available to the indemnifying party; (iii) the indemnifying party shall not have employed counsel satisfactory to the indemnified party to represent the indemnified party within a reasonable time after notice of the institution of such action; or (iv) the indemnifying party shall authorize the indemnified party to employ separate counsel at the expense of the indemnifying party. An indemnifying party will not, without the prior written consent of the indemnified parties, settle or compromise or consent to the entry of any judgment with respect to any pending or threatened claim, action, suit or proceeding in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified parties are actual or potential parties to such claim or action) unless such settlement, compromise or consent includes an unconditional release of each indemnified party from all liability arising out of such claim, action, suit or proceeding.
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(d) In the event that the indemnity provided in paragraph (a) or (b) of this Section 7 is unavailable to or insufficient to hold harmless an indemnified party for any reason, the Company and the Dealer Manager agree to contribute to the aggregate losses, claims, damages and liabilities (including legal or other expenses reasonably incurred in connection with investigating or defending same) (collectively, the Losses) to which the Company and the Dealer Manager may be subject in such proportion as is appropriate to reflect the relative benefits received by the Dealer Manager on the one hand and the Company on the other from the Exchange Offer. If the allocation provided by the immediately preceding sentence is unavailable for any reason, the Company and the Dealer Manager shall contribute in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of the Company on the one hand and of the Dealer Manager on the other in connection with the statements, omissions, actions or failure to act that resulted in such Losses, as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and the Dealer Manager on the other shall be deemed to be in the same proportion as the total value paid or proposed to be paid to holders of Warrants pursuant to the Exchange Offer and the Consent Solicitation (whether or not consummated) bears to the fees actually received by the Dealer Manager pursuant to Section 2 hereof (exclusive of amounts paid for reimbursement of expenses or paid under this Agreement). For purposes of the preceding sentence, the total value paid or proposed to be paid to holders of Warrants pursuant to the Exchange Offer and the Consent Solicitation shall equal (i) if the Exchange Offer or the Consent Solicitation is consummated, the total market value of the Shares (as of the Expiration Date) issued, and the cash consideration paid, in the Exchange Offer and the Consent Solicitation, or (ii) if the Exchange Offer and the Consent Solicitation is not consummated, the total market value (as of the date when the Exchange Offer is terminated or otherwise withdrawn by the Company) of the Shares issuable, and the cash consideration payable, in the Exchange Offer and the Consent Solicitation, based on the maximum number of Warrants that could be exchanged in the Exchange Offer and the Consent Solicitation as described in the Preliminary Prospectus Supplement or Prospectus immediately before the termination or withdrawal of the Exchange Offer and the Consent Solicitation. Relative fault shall be determined by reference to, among other things, whether any untrue or any alleged untrue statement of a material fact or the omission or alleged omission to state a material fact or any other alleged conduct relates to information provided by the Company or other conduct by the Company on the one hand or the Dealer Manager on the other, the intent of the parties and their relative knowledge, access to information and opportunity to correct or prevent such untrue statement or omission. The Company and the Dealer Manager agree that it would not be just and equitable if contribution were determined by pro rata allocation or any other method of allocation that does not take account of the equitable considerations referred to above. Notwithstanding anything to the contrary above (other than with respect to uncovered losses), in no event shall Evercore Group L.L.C. be responsible under this paragraph for any amounts in excess of the amount of the compensation actually paid by the Company to Evercore Group L.L.C. in connection with the engagement (exclusive of amounts paid for reimbursement of expenses under the Agreement, including this Section 7, and amounts paid under this Section 7). Notwithstanding the provisions of this paragraph (d), no person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent
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misrepresentation. For purposes of this Section 7, each person who controls the Dealer Manager within the meaning of either the Securities Act or the Exchange Act and each director, officer, employee and agent of the Dealer Manager shall have the same rights to contribution as such Dealer Manager, and each person who controls the Company within the meaning of either the Securities Act or the Exchange Act and each officer and director of the Company shall have the same rights to contribution as the Company, subject in each case to the applicable terms and conditions of this paragraph (d).
8. [Reserved].
9. Certain Acknowledgments. The Company understands that you and your affiliates (together, the Group) are engaged in a wide range of financial services and businesses (including investment management, financing, securities trading, corporate and investment banking and research). Members of the Group and businesses within the Group generally act independently of each other, both for their own account and for the account of clients. Accordingly, there may be situations where parts of the Group and/or their clients either now have or may in the future have interests, or take actions, that may conflict with our interests. For example, the Group may, in the ordinary course of business, engage in trading in financial products or undertake other investment businesses for their own account or on behalf of other clients, including, but not limited to, trading in or holding long, short or derivative positions in securities, loans or other financial products of the Company or other entities connected with the Exchange Offer.
In recognition of the foregoing, the Company agrees that the Group is not required to restrict its activities as a result of this engagement, and that the Group may undertake any business activity without further consultation with or notification to the Company. Neither this Agreement, the receipt by the Group of confidential information nor any other matter shall give rise to any fiduciary, equitable or contractual duties (including without limitation any duty of trust or confidence) that would prevent or restrict the Group from acting on behalf of other customers or for its own account. Furthermore, the Company agrees that neither the Group nor any member or business of the Group is under a duty to disclose to the Company or use on behalf of the Company any information whatsoever about or derived from those activities or to account for any revenue or profits obtained in connection with such activities. However, consistent with the Groups long-standing policy to hold in confidence the affairs of its customers, the Group will not use confidential information obtained from the Company except in connection with its services to, and its relationship with the Company.
The Company hereby acknowledges that you are acting as principal and not as a fiduciary of the Company and the Companys engagement of you in connection with the transactions contemplated herein is as an independent contractor, on an arms-length basis under this Agreement with duties solely to the Company, and not in any other capacity including as a fiduciary. Neither this Agreement, your performance hereunder nor any previous or existing relationship between the Company and any member of or business within the Group will be deemed to create any fiduciary relationship. Neither this engagement, nor the delivery of any
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advice in connection with this engagement, is intended to confer rights upon any persons not a party hereto (including security holders, employees or creditors of the Company) as against the Group or their respective directors, officers, agents and employees. Furthermore, the Company agrees that it is solely responsible for making its own judgments in connection with the transactions contemplated herein (irrespective of whether any member of or business within the Group has advised or is currently advising the Company on related or other matters).
10. Termination; Representations, Acknowledgments and Indemnities to Survive.
(a) Subject to clause (c) below, this Agreement may be terminated by the Company, at any time upon notice to the Dealer Manager, if (i) at any time prior to the Exchange Date, the Exchange Offer and the Consent Solicitation is terminated or withdrawn by the Company for any reason, or (ii) the Dealer Manager does not comply with all of its covenants under this Agreement.
(b) Subject to clause (c) below, this Agreement may be terminated by the Dealer Manager, at any time upon notice to the Company, if (i) at any time prior to the Exchange Date, the Exchange Offer and the Consent Solicitation is terminated or withdrawn by the Company for any reason, (ii) the Company does not comply in all material respects with any covenant specified in Section 1, (iii) the Company shall publish, send or otherwise distribute any amendment or supplement to the Offering Documents to which the Dealer Manager shall reasonably object or which shall be reasonably disapproved by the counsel to the Dealer Manager or (iv) the Dealer Manager cancels the Agreement pursuant to Section 6.
(c) The respective agreements, representations, warranties, acknowledgments, indemnities and other statements of the Company or its officers and of the Dealer Manager set forth in or made pursuant to this Agreement will remain in full force and effect, regardless of any investigation made by or on behalf of the Dealer Manager or the Company or any of the officers, directors or controlling person of the Company, and will survive delivery of and payment for the Shares. The provisions of Section 2, Section 5(m), Section 7, and Section 17 hereof, and this Section 10(c), shall survive the termination or cancellation of this Agreement.
11. Compliance with USA Patriot Act. In accordance with the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)), the Dealer Manager is required to obtain, verify and record information that identifies its clients, including the Company, which information may include the name and address of its clients, as well as other information that will allow the Dealer Manager to properly identify its clients.
12. Notices. All communications hereunder will be in writing and effective only on receipt, and, if sent to the Dealer Manager, will be mailed or delivered to Evercore Group L.L.C. at 55 East 52nd Street, New York, New York 10055, with a copy to (which shall not constitute notice) Kirkland & Ellis LLP, 601 Lexington Avenue, New York, New York 10022, Attention: Christian O. Nagler; or, if sent to the Company, will be mailed or delivered to 111 N. Canal Street, Suite 800, Chicago, Illinois 60606, Attention: General Counsel, with a copy to (which shall not constitute notice) Latham & Watkins LLP, 330 N. Wabash Avenue, Suite 2800, Chicago, Illinois 60611, Attention: Bradley C. Faris.
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13. Successors. This Agreement will inure to the benefit of and be binding upon the parties hereto and their respective successors and the officers and directors and controlling persons referred to in Section 7 hereof, and, except as expressly set forth in Section 5(h) hereof, no other person will have any right or obligation hereunder.
14. Submission to Jurisdiction. The Company hereby submits to the jurisdiction of the U.S. federal and New York state courts in the Borough of Manhattan in The City of New York in any suit or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby. The Company waives any objection which it may now or hereafter have to the laying of venue of any such suit or proceeding in such courts. The Company agrees that final judgment in any such suit, action or proceeding brought in such court shall be conclusive and binding upon the Company and may be enforced in any court to the jurisdiction of which the Company is subject by a suit upon such judgment. The Company hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to the Company at the address in effect for notices to it under this Agreement and agrees that such service shall be deemed in every respect effective service of process upon the Company in any such suit or proceeding.
15. Applicable Law. This Agreement will be governed by and construed in accordance with the laws of the State of New York applicable to contracts made and to be performed within the State of New York.
16. Waiver of Jury Trial. Each of the parties hereto hereby waives any right to trial by jury in any suit or proceeding arising out of or relating to this Agreement.
17. Counterparts. This Agreement may be signed in two or more counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. Counterparts may be delivered via facsimile, electronic mail (including any electronic signature covered by the U.S. federal ESIGN Act of 2000, Uniform Electronic Transactions Act, the Electronic Signatures and Records Act or other applicable law, e.g., www.docusign.com) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes..
18. Headings. The headings of the sections of this Agreement have been inserted for convenience of reference only and shall not be deemed a part of this Agreement.
19. Definitions. The following terms, when used in this Agreement, shall have the meanings indicated.
Affiliate shall have the meaning specified in Rule 501(b) of Regulation D.
Class A Common Stock means the Class A common stock of the Company, par value $0.0001 per share, and any other class of securities into which such securities may hereafter be reclassified or changed.
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Commencement Date shall mean the date of commencement (as defined in Rule 13e-4 under the Exchange Act) of the Exchange Offer.
Commission shall mean the U.S. Securities and Exchange Commission.
Effective Date shall mean the time the Registration Statement is declared effective under the Securities Act.
Exchange Act shall mean the U.S. Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission promulgated thereunder.
Exchange Date shall mean the date on which the Company issues the Shares in exchange for the Warrants pursuant to the Exchange Offer.
Expiration Date shall mean 11:59 p.m., Eastern Daylight Time on June 29, 2022, as may be extended by the Company in its sole discretion.
Information Agent shall mean D.F. King & Co., Inc.
Material Adverse Change shall mean, with respect to the Company, any change that is materially adverse to the condition (financial or otherwise), prospects, earnings, business or properties of the Company and its subsidiaries, taken as a whole, whether or not arising from transactions in the ordinary course of business.
Material Adverse Effect means (i) a material adverse effect on the legality, validity or enforceability of any Transaction Document, (ii) a material adverse effect on the results of operations, assets, business or condition (financial or otherwise) of the Company and its subsidiaries, taken as a whole or (iii) a material adverse effect on the Companys ability to perform in any material respect on a timely basis its obligations under any Transaction Document.
Offering Documents shall mean the Pre-Effective Registration Statement, the Registration Statement, the Preliminary Prospectus, the Prospectus, the accompanying letter of transmittal and consent, the Schedule TO, the Rule 165 Material, the notice of guaranteed delivery, and all other documents filed or to be filed with any federal, state or local government or regulatory agency or authority in connection with the Exchange Offer or the Consent Solicitation, each as prepared or approved by the Company.
Pre-Effective Registration Statement shall mean the registration statement, filed by the Company with the Commission registering the Exchange Offer under the Securities Act, including exhibits thereto and any documents deemed part of such registration statement pursuant to Rule 430C under the Securities Act, in the form in which it is initially filed with the Commission.
Preliminary Prospectus shall mean the preliminary prospectus that is used prior to the filing of the Prospectus, as amended or supplemented from time to time.
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proceeding means an action, claim, suit, investigation or proceeding (including, without limitation, an informal investigation or partial proceeding, such as a deposition), whether commenced or threatened.
Prospectus shall mean the final prospectus included in the Registration Statement, except that if the final prospectus furnished to the Dealer Manager for use in connection with the Exchange Offer differs from the prospectus set forth in the Registration Statement (whether or not such prospectus is required to be filed pursuant to Rule 424(b) under the Securities Act), the term Prospectus shall refer to the final prospectus furnished to the Dealer Manager for such use.
Registration Statement shall mean the registration statement filed by the Company with the Commission registering the Exchange Offer under the Securities Act, including exhibits thereto and any documents deemed part of such registration statement pursuant to Rule 430C under the Securities Act, in the form in which it becomes effective and, in the event of any amendment or supplement thereto or the filing of any abbreviated registration statement pursuant to Rule 462(b) under the Securities Act relating thereto after the effective date of such registration statement, shall also mean such registration statement as so amended or supplemented, together with any such abbreviated registration statement.
Rule 165 Material shall mean any written communication made in connection with or relating to the Exchange Offer in reliance on Rule 165 of the Securities Act, and filed by the Company with the Commission pursuant to Rule 425 under the Securities Act.
Schedule TO shall mean the tender offer statement filed with the Commission on Schedule TO, including any documents incorporated by reference therein, with respect to the Exchange Offer, including any amendment or supplement thereto.
Securities Act shall mean the U.S. Securities Act of 1933, as amended, and the rules and regulations of the Commission promulgated thereunder.
Trading Day means a day on which the principal Trading Market is open for trading.
Trading Market means any of the following markets or exchanges on which the Class A Common Stock is listed or quoted for trading on the date in question: the Nasdaq (or any successors to any of the foregoing).
Transaction Documents means this Agreement and any other documents or agreements executed in connection with the transactions contemplated hereunder.
U.S. or the United States shall mean the United States of America.
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If the foregoing is in accordance with your understanding of our agreement, please sign and return to us the enclosed duplicate hereof, whereupon this Agreement and your acceptance shall represent a binding agreement between the Company and the Dealer Manager.
Very truly yours, | ||
VIVID SEATS INC. | ||
By |
| |
Name: | ||
Title: |
The foregoing Agreement is hereby confirmed and accepted as of the date first above written: | ||
EVERCORE GROUP L.L.C. | ||
By |
| |
Name: | ||
Title: |
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Schedule A
Dealer Manager Fee
Exhibit 10.39
TENDER AND SUPPORT AGREEMENT
This Tender and Support Agreement (this Agreement), dated as of May 26, 2022, is entered into by and among Vivid Seats Inc., a Delaware corporation (the Company), and each of the persons listed on Schedule A hereto (collectively, the Public Warrant Holders, and each a Public Warrant Holder).
WHEREAS, as of the date hereof, each Public Warrant Holder is the beneficial owner of warrants to purchase the Companys Class A Common Stock which, in connection with the Companys business combination with Horizon Acquisition Corporation, the Companys predecessor (Horizon), were exchanged for warrants to purchase Horizon common stock that were sold as part of the units in the initial public offering (the IPO) (whether they were purchased in the IPO or thereafter in the open market) of Horizon (the Public Warrants);
WHEREAS, as of the date hereof, the Public Warrants are listed on The Nasdaq Capital Market under the symbol SEATW and there are a total of 18,132,766 Public Warrants outstanding;
WHEREAS, on October 18, 2021, the Company completed its business combination with Horizon and, in connection therewith, Horizon merged with and into the Company, upon which the separate corporate existence of Horizon ceased and the Company became the surviving corporation;
WHEREAS, each Public Warrant entitles its holder to purchase one share of Class A common stock, par value $0.0001 per share (the Class A Common Stock), of the Company, for a purchase price of $11.50, subject to certain adjustments;
WHEREAS, the Company is initiating an exchange offer (the Exchange Offer) pursuant to a registration statement on Form S-4 to be filed with the Securities and Exchange Commission (as may be amended and supplemented, the Registration Statement), to offer all Public Warrant holders the opportunity to exchange their Public Warrants for shares of Class A Common Stock, based on an exchange ratio of 0.240 shares of Class A Common Stock per Public Warrant and subject to other terms and conditions to be set forth in the Registration Statement;
WHEREAS, concurrent with the Exchange Offer and as part of the Registration Statement, the Company is initiating a consent solicitation (the Solicitation) to solicit the consent of the holders of the Public Warrants to amend (the Warrant Amendment), effective upon the completion of the Exchange Offer, the terms of the Amended and Restated Warrant Agreement, dated October 14, 2021, by and between Horizon and Continental Stock Transfer & Trust Company, as warrant agent (the Amended and Restated Warrant Agreement), which governs all of the Public Warrants, to permit the Company to require that each Public Warrant that is outstanding upon the closing of the Exchange Offer be converted into 0.213 shares of Class A Common Stock, which is a ratio of 12.7% less than the exchange ratio applicable to the Exchange Offer, subject to the terms and conditions to be set forth in the Registration Statement; and
WHEREAS, as an inducement to the Companys willingness to initiate the Exchange Offer and the Solicitation, each Public Warrant Holder has agreed to enter into this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the respective representations, warranties, covenants and agreements set forth herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, do hereby agree as follows:
Section 1.01 Agreement to Tender. Each Public Warrant Holder shall validly tender or cause to be tendered to the Company all Public Warrants beneficially owned by such Public Warrant Holder as of the date hereof, free and clear of any liens, options, rights or any other encumbrances, limitations or restrictions whatsoever (other than those restrictions imposed by applicable securities laws, this Agreement and the Amended and Restated Warrant Agreement), pursuant to and in accordance with the terms of the Exchange Offer as described in the Registration Statement no later than the scheduled or extended expiration time of the Exchange Offer at a ratio of 0.240 shares of Class A Common Stock per Public Warrant. For the avoidance of doubt, nothing in this Agreement shall restrict the Public Warrant Holder from acquiring additional Public Warrants subsequent to the date hereof and such additional Public Warrants shall not be subject to the terms of this Agreement.
Section 1.02 Agreement to Consent. Each Public Warrant Holder shall deliver to the Company its timely consent with respect to the Solicitation with respect to all of such Public Warrant Holders Public Warrants in accordance with the terms and conditions of the Solicitation as described in the Registration Statement; provided, however, that, unless such Public Warrant Holder consents otherwise in writing, such consent shall be withdrawn automatically if this Agreement is terminated pursuant to Section 1.06.
Section 1.03 Ownership of Public Warrants. Each Public Warrant Holder represents and warrants to the Company, as of the date hereof and as of the date of tender of such Public Warrant Holders Public Warrants in accordance with this Agreement, that such Public Warrant Holder is the sole beneficial owner of the number of Public Warrants set forth opposite such Public Warrant Holders name on Schedule A, and has good and marketable title to such Public Warrants, free and clear of any liens, options, rights or any other encumbrances, limitations or restrictions whatsoever (other than liens imposed under typical prime brokerage agreements and those restrictions imposed by applicable securities laws, this Agreement and the Amended and Restated Warrant Agreement). Each Public Warrant Holder shall not transfer any Public Warrants owned by such Public Warrant Holder as of the date hereof to any person (other than the Company in connection with the Exchange Offer) unless such person acquiring such Public Warrants signs a joinder to this Agreement agreeing to be bound by all terms and conditions of this Agreement.
Section 1.04 Company Covenants. The Company agrees that it shall take all steps reasonably necessary or desirable to commence the Exchange Offer and Solicitation as soon as practicable consistent with this Agreement and agrees to take all steps necessary to update the Registration Statement as required by applicable laws and regulation, and that the Registration Statement, when declared effective, will comply with all applicable Securities and Exchange Commission requirements.
Section 1.05 Specific Performance. The parties hereto agree that irreparable damage would occur if any provision of this Agreement were not performed in accordance with the terms hereof and that the parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement or to enforce specifically the performance of the terms and provisions hereof, in addition to any other remedy to which they are entitled at law or in equity.
Section 1.06 Termination. This Agreement shall terminate as to all Public Warrant Holders upon written notice to all the Public Warrant Holders by the Company, or (a) upon the earlier of (i) the date the Companys board of directors or a committee thereof determines to no longer pursue the Exchange Offer and the Solicitation and (ii) July 25, 2022 and (b) if the Company fails to commence the Exchange Offer and Solicitation by June 9, 2022.
Section 1.07 Public Warrant Holder Obligations Several and Not Joint. The obligations of each Public Warrant Holder hereunder shall be several and not joint, and no Public Warrant Holder shall be liable for any breach of the terms of this Agreement by any other Public Warrant Holder.
Section 1.08 Governing Law. The validity, interpretation and performance of this Agreement and of the Public Warrants shall be governed in all respects by the laws of the State of New York, without giving effect to conflicts of law principles that would result in the application of the substantive laws of another jurisdiction. The Company hereby agrees that any action, proceeding or claim against it arising out of or relating in any way to this Agreement shall be brought and enforced in the courts of the State of New York or the United States District Court for the Southern District of New York, and irrevocably submits to such jurisdiction, which jurisdiction shall be exclusive. The Company hereby waives any objection to such exclusive jurisdiction and that such courts represent an inconvenient forum.
Section 1.09 Counterparts. This Agreement may be signed in counterparts (which may include counterparts delivered by any standard form of telecommunication), each of which shall be an original and all of which together shall constitute one and the same instrument. The words execution, signed, signature and words of like import in this Agreement or in any other certificate, agreement or document related to this Agreement, if any, shall include images of manually executed signatures transmitted by facsimile or other electronic format (including, without limitation, pdf, tif or jpg) and other electronic signatures (including, without limitation, DocuSign and AdobeSign). The use of electronic signatures and electronic records (including, without limitation, any contract or other record created, generated, sent, communicated, received or stored by electronic means) shall be of the same legal effect, validity and enforceability as a manually executed signature or use of a paper-based record-keeping system to the fullest extent permitted by applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act and any other applicable law, including, without limitation, any state law based on the Uniform Electronic Transactions Act or the Uniform Commercial Code.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first above written.
COMPANY: | ||
VIVID SEATS INC. | ||
By: | /s/ Lawrence Fey | |
Name: Lawrence Fey | ||
Title: Chief Financial Officer |
[Signature Page Tender and Support Agreement]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first above written.
HOLDER: | ||
HORIZON SPONSOR, LLC | ||
By: | /s/ Todd L. Boehly | |
Name: Todd L. Boehly | ||
Title: CEO |
[Signature Page Tender and Support Agreement]
Schedule A
Name of Public Warrant Holder |
Number of Public Warrants |
|||
Horizon Sponsor, LLC |
5,166,667 |
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Exhibit 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the use in this Registration Statement on Form S-4 of our report dated March 15, 2022 relating to the financial statements of Vivid Seats Inc. We also consent to the reference to us under the heading Experts in such Registration Statement.
/s/ Deloitte & Touche LLP |
Chicago, Illinois |
May 26, 2022 |
Exhibit 99.1
LETTER OF TRANSMITTAL AND CONSENT
Offer To Exchange Warrants to Acquire Shares of Class A Common Stock
of
Vivid Seats Inc.
for
Shares of Class A Common Stock
of
Vivid Seats Inc.
and
Consent Solicitation
THE OFFER AND CONSENT SOLICITATION (AS DEFINED HEREIN) AND WITHDRAWAL RIGHTS WILL EXPIRE AT 11:59 P.M., EASTERN DAYLIGHT TIME, ON JUNE 29, 2022, OR SUCH LATER TIME AND DATE TO WHICH WE MAY EXTEND THE OFFER. PUBLIC WARRANTS (AS DEFINED HEREIN) TENDERED PURSUANT TO THE OFFER AND CONSENT SOLICITATION MAY BE WITHDRAWN PRIOR TO THE EXPIRATION DATE (AS DEFINED HEREIN). CONSENTS MAY BE REVOKED ONLY BY WITHDRAWING THE TENDER OF THE RELATED PUBLIC WARRANTS, AND THE WITHDRAWAL OF ANY PUBLIC WARRANTS WILL AUTOMATICALLY CONSTITUTE A REVOCATION OF THE RELATED CONSENTS. |
The Exchange Agent for the Offer and Consent Solicitation is:
CONTINENTAL STOCK TRANSFER & TRUST COMPANY
By First Class Mail: One State Street, 30th Floor New York, NY 10004 Attn: Corporate Actions Department |
By Overnight or Hand Delivery: One State Street, 30th Floor New York, NY 10004 Attn: Corporate Actions Department |
THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL AND CONSENT, THE PUBLIC WARRANTS AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH BOOK-ENTRY TRANSFER, IS AT THE OPTION AND RISK OF THE TENDERING PUBLIC WARRANT HOLDER, AND EXCEPT AS OTHERWISE PROVIDED IN THE INSTRUCTIONS BELOW, THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE EXCHANGE AGENT. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. THE PUBLIC WARRANT HOLDER HAS THE RESPONSIBILITY TO CAUSE THIS LETTER OF TRANSMITTAL AND CONSENT, THE TENDERED PUBLIC WARRANTS AND ANY OTHER DOCUMENTS TO BE TIMELY DELIVERED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY. PLEASE READ THIS ENTIRE LETTER OF TRANSMITTAL AND CONSENT, INCLUDING THE INSTRUCTIONS, CAREFULLY BEFORE COMPLETING THIS LETTER OF TRANSMITTAL AND CONSENT.
Vivid Seats Inc., a Delaware corporation (the Company, we, our and us), has delivered to the undersigned a copy of the Prospectus/Offer to Exchange dated May 26, 2022 (the Prospectus/Offer to Exchange) of the Company and this letter transmittal and consent (as it may be supplemented and amended from time to time, this Letter of Transmittal and Consent), which together set forth the offer of the Company to each holder of the Companys public warrants to purchase shares of the Companys Class A common stock, par value $0.0001 per share (the Class A Common Stock), to receive 0.240 shares of Class A Common Stock in exchange for each public warrant tendered by the holder and exchanged pursuant to the offer (the Offer).
The Offer is being made to all holders of the public warrants to purchase the Companys Class A Common Stock issued and outstanding pursuant to the Amended and Restated Warrant Agreement (defined herein) (the public warrants). Each public warrant entitles the holder to purchase one share of the Companys Class A Common Stock at a price of $11.50 per share, subject to adjustment. The public warrants are quoted on The Nasdaq Capital Market under the symbol SEATW. As of May 23, 2022, 18,132,766 public warrants were outstanding. Pursuant to the Offer, the Company is offering up to an aggregate of 4,351,864 shares of Class A Common Stock in exchange for the public warrants.
Concurrently with the Offer, the Company is also soliciting consents (the Consent Solicitation) from holders of the public warrants to amend (the Warrant Amendment) the Amended and Restated Warrant Agreement, dated as of October 14, 2021, by and between Horizon Acquisition Corporation, the Companys predecessor, and Continental Stock Transfer & Trust Company (the Warrant Agreement), to permit the Company to require that each public warrant that is outstanding upon the closing of the Offer be converted into 0.213 shares of Class A Common Stock, which is a ratio 12.7% less than the exchange ratio applicable to the Offer.
Pursuant to the terms of the Warrant Agreement, the proposed Warrant Amendment requires the vote or written consent of holders of at least 65% of the outstanding public warrants.
As of the date of this Letter of Transmittal and Consent, a registration statement covering the resale of the underlying shares of Class A Common Stock has not been declared effective by the SEC. Accordingly, the adoption of the Warrant Amendment will require the consent of holders of at least 65% of the outstanding public warrants. Eldridge Industries, LLC, which holds approximately 28.5% of our outstanding public warrants, has agreed to tender its public warrants in the Offer and to consent to the Warrant Amendment in the Consent Solicitation, pursuant to a tender and support agreement. Accordingly, if holders of an additional approximately 36.5% of the outstanding public warrants consent to the Warrant Amendment in the Consent Solicitation, and the other conditions described herein are satisfied or waived, then the Warrant Amendment will be adopted.
Holders of public warrants may not consent to the Warrant Amendment without tendering public warrants in the Offer and holders may not tender such public warrants without consenting to the Warrant Amendment. The consent to the Warrant Amendment is a part of this Letter of Transmittal and Consent relating to the public warrants, and therefore by tendering public warrants for exchange, holders will be delivering to us their consent to the Warrant Amendment. Public warrant holders may revoke consent at any time prior to the Expiration Date by withdrawing the public warrants holders have tendered in the Offer.
Public warrants not exchanged for shares of our Class A Common Stock pursuant to the Offer will remain outstanding subject to their current terms, or amended terms if the Warrant Amendment is approved. If the Warrant Amendment is approved, we intend to require the conversion of all outstanding public warrants to shares of Class A Common Stock as provided in the Warrant Amendment.
The Offer and Consent Solicitation is made solely upon the terms and conditions in the Prospectus/Offer to Exchange and this Letter of Transmittal and Consent. The Offer and Consent Solicitation will be open until 11:59 p.m., Eastern Daylight Time, on June 29, 2022, or such later time and date to which we may extend (the period during which the Offer and Consent Solicitation is open, giving effect to any withdrawal or extension, is referred to as the Offer Period, and the date and time at which the Offer Period ends is referred to as the Expiration Date).
Each holder whose public warrants are exchanged pursuant to the Offer and Consent Solicitation will receive 0.240 shares of Class A Common Stock for each public warrant tendered by such holder and exchanged. Any public warrant holder that participates in the Offer and Consent Solicitation may tender less than all of its public warrants for exchange.
No fractional shares will be issued pursuant to the Offer. In lieu of issuing fractional shares, any holder of public warrants who would otherwise have been entitled to receive fractional shares pursuant to the Offer will,
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after aggregating all such fractional shares of such holder, be paid cash (without interest) in an amount equal to such fractional part of a share multiplied by the last sale price of the Class A Common Stock on The Nasdaq Global Select Market (Nasdaq) on the last trading day of the Offer Period, less any applicable withholding taxes. The Companys obligation to complete the Offer is not conditioned on the receipt of a minimum number of tendered public warrants.
We may withdraw the Offer and Consent Solicitation only if the conditions to the Offer and Consent Solicitation are not satisfied or waived prior to the Expiration Date. Promptly upon any such withdrawal, we will return the tendered public warrants to the holders (and the related consent to the Warrant Amendment will be revoked).
This Letter of Transmittal and Consent is to be used to accept the Offer and Consent Solicitation if the applicable public warrants are to be tendered by effecting a book-entry transfer into the Exchange Agents account at the Depository Trust Company (DTC) and instructions are not being transmitted through DTCs Automated Tender Offer Program (ATOP). Except in instances where a holder intends to tender public warrants through ATOP, the holder should complete, execute and deliver this Letter of Transmittal and Consent to indicate the action it desires to take with respect to the Offer and Consent Solicitation.
Holders of public warrants tendering public warrants by book-entry transfer to the Exchange Agents account at DTC may execute the tender through ATOP, and in that case need not complete, execute and deliver this Letter of Transmittal and Consent. DTC participants accepting the Offer and Consent Solicitation may transmit their acceptance to DTC, which will verify the acceptance and execute a book-entry delivery to the Exchange Agents account at DTC. DTC will then send an Agents Message to the Exchange Agent for its acceptance. Delivery of the Agents Message by DTC will satisfy the terms of the Offer and Consent Solicitation as to execution and delivery of a Letter of Transmittal and Consent by the DTC participant identified in the Agents Message.
As used in this Letter of Transmittal and Consent with respect to the tender procedures set forth herein, the term registered holder means any person in whose name public warrants are registered on the books of the Company or who is listed as a participant in a clearing agencys security position listing with respect to the public warrants.
THE OFFER AND CONSENT SOLICITATION IS NOT MADE TO THOSE HOLDERS WHO RESIDE IN STATES OR OTHER JURISDICTIONS WHERE AN OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL.
PLEASE SEE THE INSTRUCTIONS TO THIS LETTER OF TRANSMITTAL AND CONSENT BEGINNING ON PAGE 10 FOR THE PROPER USE AND DELIVERY OF THIS LETTER OF TRANSMITTAL AND CONSENT.
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DESCRIPTION OF PUBLIC WARRANTS TENDERED
List below the public warrants to which this Letter of Transmittal and Consent relates. If the space below is inadequate, list the registered public warrant certificate numbers on a separate signed schedule and affix the list to this Letter of Transmittal and Consent.
Name(s) and Address(es) of Registered Holder(s) of |
|
Number of Public Warrants Tendered | ||
|
| |||
Total: |
☐ | CHECK HERE IF THE PUBLIC WARRANTS LISTED ABOVE ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER MADE TO THE ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH DTC AND COMPLETE THE FOLLOWING (FOR USE BY ELIGIBLE INSTITUTIONS ONLY): |
Name of Tendering Institution: |
||
Account Number: |
||
Transaction Code Number: |
By crediting the public warrants to the Exchange Agents account at DTC using ATOP and by complying with applicable ATOP procedures with respect to the Offer and Consent Solicitation, including, if applicable, transmitting to the Exchange Agent an Agents Message in which the holder of the public warrants acknowledges and agrees to be bound by the terms of, and makes the representations and warranties contained in, this Letter of Transmittal and Consent, the participant in DTC confirms on behalf of itself and the beneficial owner(s) of such public warrants all provisions of this Letter of Transmittal and Consent (including consent to the Warrant Amendment, if applicable, and all representations and warranties) applicable to it and such beneficial owner(s) as fully as if it had completed the required information and executed and transmitted this Letter of Transmittal and Consent to the Exchange Agent.
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NOTE: SIGNATURES MUST BE PROVIDED BELOW.
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.
Vivid Seats Inc.
c/o Continental Stock Transfer & Trust Company, as Exchange Agent
One State Street, 30th Floor
New York, NY 10004
Attn: Corporate Actions Department
Upon and subject to the terms and conditions set forth in the Prospectus/Offer to Exchange and in this Letter of Transmittal and Consent, receipt of which is hereby acknowledged, the undersigned hereby:
(i) | tenders to the Company for exchange pursuant to the Offer and Consent Solicitation the number of public warrants indicated above under Description of Public Warrants TenderedNumber of Public Warrants Tendered; |
(ii) | subscribes for the Class A Common Stock issuable upon the exchange of such tendered public warrants pursuant to the Offer and Consent Solicitation, being 0.240 shares of Class A Common Stock for each public warrant so tendered for exchange; and |
(iii) | consents to the Warrant Amendment. |
Except as stated in the Prospectus/Offer to Exchange, the tender made hereby is irrevocable. The undersigned understands that this tender will remain in full force and effect unless and until such tender is withdrawn and revoked in accordance with the procedures set forth in the Prospectus/Offer to Exchange and this Letter of Transmittal and Consent. The undersigned understands that this tender may not be withdrawn after the Expiration Date, and that a notice of withdrawal will be effective only if delivered to the Exchange Agent in accordance with the specific withdrawal procedures set forth in the Prospectus/Offer to Exchange.
If the undersigned holds public warrants for beneficial owners, the undersigned represents that it has received from each beneficial owner thereof a duly completed and executed form of Instructions Form in the form attached to the Letter to Clients of Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees which was sent to the undersigned by the Company with this Letter of Transmittal and Consent, instructing the undersigned to take the action described in this Letter of Transmittal and Consent.
If the undersigned is not the registered holder of the public warrants indicated under Description of Public Warrants Tendered above or such holders legal representative or attorney-in-fact (or, in the case of public warrants held through DTC, the DTC participant for whose account such public warrants are held), then the undersigned has obtained a properly completed irrevocable proxy that authorizes the undersigned (or the undersigneds legal representative or attorney-in fact) to deliver a consent in respect of such public warrants on behalf of the holder thereof, and such proxy is being delivered to the Exchange Agent with this Letter of Transmittal and Consent.
The undersigned understands that, upon and subject to the terms and conditions set forth in the Prospectus/Offer to Exchange and this Letter of Transmittal and Consent, any public warrants properly tendered and not withdrawn which are accepted for exchange will be exchanged for Class A Common Stock. The undersigned understands that, under certain circumstances, the Company may not be required to accept any of the public warrants tendered (including any public warrants tendered after the Expiration Date). If any public warrants are not accepted for exchange for any reason, or if tendered public warrants are withdrawn, such unexchanged or withdrawn public warrants will be returned without expense to the tendering holder, if applicable, and the related consent to the Warrant Amendment will be revoked.
The undersigned understands that, upon and subject to the terms and conditions set forth in the Prospectus/Offer to Exchange and this Letter of Transmittal and Consent, any public warrants properly tendered and not
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validly withdrawn which are accepted for exchange constitute the holders validly delivered consent to the Warrant Amendment. A holder of public warrants may not consent to the Warrant Amendment without tendering his or her public warrants in the Offer, and a holder of public warrants may not tender his or her public warrants without consenting to the Warrant Amendment. A holder may revoke his or her consent to the Warrant Amendment at any time prior to the Expiration Date by withdrawing the public warrants he or she has tendered.
Subject to, and effective upon, the Companys acceptance of the undersigneds tender of public warrants for exchange pursuant to the Offer and Consent Solicitation as indicated under Description of Public Warrants TenderedNumber of Public Warrants Tendered above, the undersigned hereby:
(i) | assigns and transfers to, or upon the order of, the Company, all right, title and interest in and to, and any and all claims in respect of or arising or having arisen as a result of the undersigneds status as a holder of, such public warrants; |
(ii) | waives any and all rights with respect to such public warrants; |
(iii) | releases and discharges the Company from any and all claims the undersigned may have now, or may have in the future, arising out of or related to such public warrants; |
(iv) | acknowledges that the Offer may be extended, modified, suspended or terminated by the Company as provided in the Prospectus/Offer to Exchange; and |
(v) | acknowledges the future value of the public warrants is unknown and cannot be predicted with certainty. |
The undersigned understands that tenders of public warrants pursuant to any of the procedures described in the Prospectus/Offer to Exchange and in the instructions in this Letter of Transmittal and Consent, if and when accepted by the Company, will constitute a binding agreement between the undersigned and the Company upon the terms and subject to the conditions of the Offer and Consent Solicitation.
Effective upon acceptance for exchange, the undersigned hereby irrevocably constitutes and appoints the Exchange Agent, acting as agent for the Company, as the true and lawful agent and attorney-in-fact of the undersigned with respect to the public warrants tendered hereby, with full power of substitution (such power of attorney being deemed to be an irrevocable power coupled with an interest) to:
(i) | transfer ownership of such public warrants on the account books maintained by DTC together with all accompanying evidences of transfer and authenticity to or upon the order of the Company; |
(ii) | present such public warrants for transfer of ownership on the books of the Company; |
(iii) | cause ownership of such public warrants to be transferred to, or upon the order of, the Company on the books of the Company or its agent and deliver all accompanying evidences of transfer and authenticity to, or upon the order of, the Company; and |
(iv) | receive all benefits and otherwise exercise all rights of beneficial ownership of such public warrants; |
all in accordance with the terms of the Offer and Consent Solicitation, as described in the Prospectus/Offer to Exchange and this Letter of Transmittal and Consent.
The undersigned hereby represents, warrants and agrees that:
(i) | the undersigned has full power and authority to tender the public warrants tendered hereby and to sell, exchange, assign and transfer all right, title and interest in and to such public warrants; |
(ii) | the undersigned has full power and authority to subscribe for all of the Class A Common Stock issuable pursuant to the Offer and Consent Solicitation in exchange for the public warrants tendered hereby; |
(iii) | the undersigned has good, marketable and unencumbered title to the public warrants tendered hereby, and upon acceptance of such public warrants by the Company for exchange pursuant to the Offer and |
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Consent Solicitation, the Company will acquire good, marketable and unencumbered title to such public warrants, in each case free and clear of any security interests, liens, restrictions, charges, encumbrances, conditional sales agreements or other obligations of any kind, and not subject to any adverse claim; |
(iv) | the undersigned has full power and authority to consent to the Warrant Amendment; |
(v) | the undersigned will, upon request, execute and deliver any additional documents deemed by the Company or the Exchange Agent to be necessary or desirable to complete and give effect to the transactions contemplated hereby; |
(vi) | the undersigned has received and reviewed the Prospectus/Offer to Exchange, this Letter of Transmittal and Consent and the Warrant Amendment; |
(vii) | the undersigned acknowledges that none of the Company, the information agent, the Exchange Agent, the dealer manager or any person acting on behalf of any of the foregoing has made any statement, representation or warranty, express or implied, to the undersigned with respect to the Company, the Offer and Consent Solicitation, the public warrants, or the Class A Common Stock, other than the information included in the Prospectus/Offer to Exchange (as amended or supplemented prior to the Expiration Date); |
(viii) | the terms and conditions of the Prospectus/Offer to Exchange shall be deemed to be incorporated in, and form a part of, this Letter of Transmittal and Consent, which shall be read and construed accordingly; |
(ix) | the undersigned understands that tenders of public warrants pursuant to the Offer and Consent Solicitation and in the instructions hereto constitute the undersigneds acceptance of the terms and conditions of the Offer and Consent Solicitation; |
(x) | the undersigned is voluntarily participating in the Offer |
(xi) | the undersigned agrees to treat its exchange of public warrants for shares of Class A Common Stock as a recapitalization pursuant to Section 368(a)(1)(E) of the Internal Revenue Code of 1986, as amended, for United States federal income tax purposes (and applicable state and local income tax purposes), and shall report the transactions consistent therewith on its tax returns and any other filings with the Internal Revenue Service (and applicable state and local income tax authorities); and |
(xii) | the undersigned agrees to all of the terms of the Offer and Consent Solicitation. |
Unless otherwise indicated under Special Issuance Instructions below, the Company will issue in the name(s) of the undersigned as indicated under Description of Public Warrants Tendered above, the Class A Common Stock to which the undersigned is entitled pursuant to the terms of the Offer and Consent Solicitation in respect of the public warrants tendered and exchanged pursuant to this Letter of Transmittal and Consent. If the Special Issuance Instructions below are completed, the Company will issue such Class A Common Stock in the name of (and pay cash in lieu of any fractional shares to) the person or account indicated under Special Issuance Instructions.
The undersigned agrees that the Company has no obligation under the Special Issuance Instructions provision of this Letter of Transmittal and Consent to effect the transfer of any public warrants from the holder(s) thereof if the Company does not accept for exchange any of the public warrants tendered pursuant to this Letter of Transmittal and Consent.
The acknowledgments, representations, warranties and agreements of the undersigned in this Letter of Transmittal and Consent will be deemed to be automatically repeated and reconfirmed on and as of each of the Expiration Date and completion of the Offer and Consent Solicitation. The authority conferred or agreed to be conferred in this Letter of Transmittal and Consent shall not be affected by, and shall survive, the death or
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incapacity of the undersigned, and every obligation of the undersigned under this Letter of Transmittal and Consent shall be binding upon the heirs, executors, administrators, trustees in bankruptcy, personal and legal representatives, successors and assigns of the undersigned.
The undersigned acknowledges that the undersigned has been advised to consult with its own legal counsel and other advisors (including tax advisors) as to the consequences of participating or not participating in the Offer and Consent Solicitation.
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SPECIAL ISSUANCE INSTRUCTIONS (SEE INSTRUCTIONS, INCLUDING INSTRUCTIONS 3, 4 AND 5)
To be completed ONLY if the Class A Common Stock issued pursuant to the Offer and Consent Solicitation in exchange for public warrants tendered hereby and any public warrants delivered to the Exchange Agent herewith but not tendered and exchanged pursuant to the Offer and Consent Solicitation, are to be issued in the name of someone other than the undersigned. Issue all such Class A Common Stock and untendered public warrants to:
Name: |
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Address: |
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(PLEASE PRINT OR TYPE) (INCLUDE ZIP CODE) (TAX IDENTIFICATION OR SOCIAL SECURITY NUMBER) |
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IMPORTANT: PLEASE SIGN HERE
(SEE INSTRUCTIONS AND ALSO COMPLETE ACCOMPANYING IRS FORM W-9 OR
APPROPRIATE IRS FORM W-8)
By completing, executing and delivering this Letter of Transmittal and Consent, the undersigned hereby tenders the public warrants indicated in the table above entitled Description of Public Warrants Tendered.
SIGNATURES REQUIRED Signature(s) of Registered Holder(s) of Public Warrants
Name: |
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Address: |
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Date: |
(The above lines must be signed by the registered holder(s) of public warrants as the name(s) appear(s) on the public warrants or on a security position listing, or by person(s) authorized to become registered holder(s) by a properly completed assignment from the registered holder(s), a copy of which must be transmitted with this Letter of Transmittal and Consent. If public warrants to which this Letter of Transmittal and Consent relates are held of record by two or more joint holders, then all such holders must sign this Letter of Transmittal and Consent. If signature is by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation, or other person acting in a fiduciary or representative capacity, then such person must set forth his or her full title below and, unless waived by the Company, submit evidence satisfactory to the Company of such persons authority so to act. See Instruction 3 regarding the completion and execution of this Letter of Transmittal and Consent.)
Name: |
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Capacity: |
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Address: |
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Area Code and Telephone Number: |
(PLEASE PRINT OR TYPE)
(INCLUDE ZIP CODE)
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GUARANTEE OF SIGNATURE(S) (IF REQUIRED) (SEE INSTRUCTIONS, INCLUDING INSTRUCTION 4)
Certain signatures must be guaranteed by Eligible Institution.
Signature(s) guaranteed by an Eligible Institution:
Authorized Signature |
Title |
Name of Firm |
Address, Including Zip Code |
Area Code and Telephone Number
Date: |
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INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER AND
CONSENT SOLICITATION
1. Delivery of Letter of Transmittal and Consent and Public Warrants. This Letter of Transmittal and Consent is to be used only if tenders of public warrants are to be made by book-entry transfer to the Exchange Agents account at DTC and instructions are not being transmitted through ATOP with respect to such tenders.
Public warrants may be validly tendered pursuant to the procedures for book-entry transfer as described in the Prospectus/Offer to Exchange. In order for public warrants to be validly tendered by book-entry transfer, the Exchange Agent must receive the following prior to the Expiration Date, except as otherwise permitted by use of the procedures for guaranteed delivery as described below:
(i) | timely confirmation of the transfer of such public warrants to the Exchange Agents account at DTC (a Book-Entry Confirmation); |
(ii) | either a properly completed and duly executed Letter of Transmittal and Consent, or a properly transmitted Agents Message if the tendering public warrant holder has not delivered a Letter of Transmittal and Consent; and |
(iii) | any other documents required by this Letter of Transmittal and Consent. |
The term Agents Message means a message, transmitted by DTC to, and received by, the Exchange Agent and forming a part of a Book-Entry Confirmation, which states that DTC has received an express acknowledgment from the participant in DTC exchanging the public warrants that such participant has received and agrees to be bound by the terms of the Letter of Transmittal and Consent and that the Company may enforce such agreement against the participant. If you are tendering by book-entry transfer, you must expressly acknowledge that you have received and agree to be bound by the Letter of Transmittal and Consent and that the Letter of Transmittal and Consent may be enforced against you.
Delivery of a Letter of Transmittal and Consent to the Company or DTC will not constitute valid delivery to the Exchange Agent. No Letter of Transmittal and Consent should be sent to the Company or DTC.
THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL AND CONSENT, TENDERED PUBLIC WARRANTS AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH DTC AND ANY ACCEPTANCE OR AGENTS MESSAGE DELIVERED THROUGH ATOP, IS AT THE OPTION AND RISK OF THE TENDERING PUBLIC WARRANT HOLDER, AND EXCEPT AS OTHERWISE PROVIDED IN THESE INSTRUCTIONS, THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE EXCHANGE AGENT. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. THE PUBLIC WARRANT HOLDER HAS THE RESPONSIBILITY TO CAUSE THIS LETTER OF TRANSMITTAL AND CONSENT, THE TENDERED PUBLIC WARRANTS AND ANY OTHER DOCUMENTS TO BE TIMELY DELIVERED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
Neither the Company nor the Exchange Agent is under any obligation to notify any tendering holder of the Companys acceptance of tendered public warrants.
2. Guaranteed Delivery. Public warrant holders desiring to tender public warrants pursuant to the Offer but whose public warrants cannot otherwise be delivered with all other required documents to the Exchange Agent prior to the Expiration Date may nevertheless tender public warrants, as long as all of the following conditions are satisfied:
(i) | the tender must be made by or through an Eligible Institution (as defined in Instruction 4); |
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(ii) | properly completed and duly executed Notice of Guaranteed Delivery in the form provided by the Company to the undersigned with this Letter of Transmittal and Consent (with any required signature guarantees) must be received by the Exchange Agent, at its address set forth in this Letter of Transmittal and Consent, prior to the Expiration Date; and |
(iii) | a confirmation of a book-entry transfer into the Exchange Agents account at DTC of all public warrants delivered electronically, in each case together with a properly completed and duly executed Letter of Transmittal and Consent with any required signature guarantees (or, in the case of a book-entry transfer without delivery of a Letter of Transmittal and Consent, an Agents Message), and any other documents required by this Letter of Transmittal and Consent, must be received by the Exchange Agent within two days that the Nasdaq is open for trading after the date the exchange agent receives such Notice of Guaranteed Delivery, all as provided in the Prospectus/Offer to Exchange. |
A public warrant holder may deliver the Notice of Guaranteed Delivery by facsimile transmission or mail to the Exchange Agent.
Except as specifically permitted by the Prospectus/Offer to Exchange, no alternative or contingent exchanges will be accepted.
3. Signatures on Letter of Transmittal and Consent and other Documents. For purposes of the tender and consent procedures set forth in this Letter of Transmittal and Consent, the term registered holder means any person in whose name public warrants are registered on the books of the Company or who is listed as a participant in a clearing agencys security position listing with respect to the public warrants.
If this Letter of Transmittal and Consent is signed by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation or others acting in a fiduciary or representative capacity, such person must so indicate when signing and, unless waived by the Company, must submit to the Exchange Agent proper evidence satisfactory to the Company of the authority so to act.
4. Guarantee of Signatures. No signature guarantee is required if:
(i) | this Letter of Transmittal and Consent is signed by the registered holder of the public warrants and such holder has not completed the box entitled Special Issuance Instructions; or |
(ii) | such public warrants are tendered for the account of an Eligible Institution. An Eligible Institution is a bank, broker dealer, credit union, savings association or other entity that is a member in good standing of the Securities Transfer Agents Medallion Program or a bank, broker, dealer, credit union, savings association or other entity which is an eligible guarantor institution, as that term is defined in Rule 17Ad-15 promulgated under the Securities Exchange Act of 1934, as amended. |
IN ALL OTHER CASES, AN ELIGIBLE INSTITUTION MUST GUARANTEE ALL SIGNATURES ON THIS LETTER OF TRANSMITTAL AND CONSENT BY COMPLETING AND SIGNING THE TABLE ENTITLED GUARANTEE OF SIGNATURE(S) ABOVE.
5. Public Warrants Tendered. Any public warrant holder who chooses to participate in the Offer and Consent Solicitation may exchange some or all of such holders public warrants pursuant to the terms of the Offer and Consent Solicitation.
6. Inadequate Space. If the space provided under Description of Public Warrants Tendered is inadequate, the name(s) and address(es) of the registered holder(s), number of public warrants being delivered herewith and number of such public warrants tendered hereby should be listed on a separate, signed schedule and attached to this Letter of Transmittal and Consent.
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7. Transfer Taxes. The Company will pay all transfer taxes, if any, applicable to the transfer of public warrants to the Company in the Offer and Consent Solicitation. If transfer taxes are imposed for any other reason, the amount of those transfer taxes, whether imposed on the registered holder or any other persons, will be payable by the tendering holder. Other reasons transfer taxes could be imposed include:
(i) | If Class A Common Stock is to be registered or issued in the name of any person other than the person signing this Letter of Transmittal and Consent; or |
(ii) | if tendered public warrants are registered in the name of any person other than the person signing this Letter of Transmittal and Consent. |
If satisfactory evidence of payment of or exemption from those transfer taxes is not submitted with this Letter of Transmittal and Consent, the amount of those transfer taxes will be billed directly to the tendering holder and/or withheld from any payment due with respect to the public warrants tendered by such holder.
8. Validity of Tenders. All questions as to the number of public warrants to be accepted, and the validity, form, eligibility (including time of receipt) and acceptance of any tender of public warrants will be determined by the Company in its reasonable discretion, which determinations shall be final and binding on all parties. The Company reserves the absolute right to reject any or all tenders of public warrants it determines not to be in proper form or to reject those public warrants, the acceptance of which may, in the opinion of the Companys counsel, be unlawful. The Company also reserves the absolute right to waive any defect or irregularity in the tender of any particular public warrants, whether or not similar defects or irregularities are waived in the case of other tendered public warrants. The Companys interpretation of the terms and conditions of the Offer and Consent Solicitation (including this Letter of Transmittal and Consent and the instructions hereto) will be final and binding on all parties. Unless waived, any defects or irregularities in connection with tenders of public warrants must be cured within such time as the Company shall determine. None of the Company, the Exchange Agent, the information agent, the dealer manager or any other person is or will be obligated to give notice of any defects or irregularities in tenders of public warrants, and none of them will incur any liability for failure to give any such notice. Tenders of public warrants will not be deemed to have been validly made until all defects and irregularities have been cured or waived. Any public warrants received by the Exchange Agent that are not validly tendered and as to which the defects or irregularities have not been cured or waived will be returned by the Exchange Agent to the holders, unless otherwise provided in this Letter of Transmittal and Consent, as soon as practicable following the Expiration Date. Public warrant holders who have any questions about the procedure for tendering public warrants in the Offer and Consent Solicitation should contact the information agent at the address and telephone number indicated herein. Public warrants properly tendered and not validly withdrawn that are accepted for exchange constitute the holders validly delivered consent to the Warrant Amendment.
9. Waiver of Conditions. The Company reserves the absolute right to waive any condition, other than as described in the section of the Prospectus/Offer to Exchange entitled The Offer and Consent SolicitationGeneral TermsConditions to the Offer and Consent Solicitation.
10. Withdrawal. Tenders of public warrants may be withdrawn only pursuant to the procedures and subject to the terms set forth in the section of the Prospectus/Offer to Exchange entitled The Offer and Consent SolicitationWithdrawal Rights. Public warrant holders can withdraw tendered public warrants at any time prior to the Expiration Date, and public warrants that the Company has not accepted for exchange by July 28, 2022 may thereafter be withdrawn at any time after such date until such public warrants are accepted by the Company for exchange pursuant to the Offer and Consent Solicitation. Except as otherwise provided in the Prospectus/Offer to Exchange, in order for the withdrawal of public warrants to be effective, a written notice of withdrawal satisfying the applicable requirements for withdrawal set forth in the section of the Prospectus/Offer to Exchange entitled The Offer and Consent SolicitationWithdrawal Rights must be timely received from the holder by the exchange agent at its address stated herein, together with any other information required as described in such section of the Prospectus/Offer to Exchange. All questions as to the form and validity (including time of receipt) of any notice of withdrawal will be determined by the Company, in its reasonable
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discretion, and its determination shall be final and binding. None of the Company, the Exchange Agent, the information agent, the dealer manager or any other person is under any duty to give notification of any defect or irregularity in any notice of withdrawal or will incur any liability for failure to give any such notification. Any public warrants properly withdrawn will be deemed not to have been validly tendered for purposes of the Offer and Consent Solicitation. However, at any time prior to the Expiration Date, a public warrant holder may re-tender withdrawn public warrants by following the applicable procedures discussed in the Prospectus/Offer to Exchange and this Letter of Transmittal and Consent. Consents may be revoked only by withdrawing the related public warrants, and the withdrawal of any public warrants will automatically constitute a revocation of the related consents.
11. IRS Form W-9 or IRS Form W-8. Failure to provide a properly completed and signed IRS Form W-9 or applicable IRS Form W-8 may result in U.S. federal backup withholding with respect to any cash paid in lieu of fractional shares and may result in a penalty imposed by the U.S. Internal Revenue Service. If the tendering public warrant holder is a U.S. person, complete and sign the accompanying IRS Form W-9 to certify (i) such holders tax identification number, generally the holders social security or employer identification number and (ii) that such holder is not subject to U.S. federal backup withholding. If the tendering holder is not a U.S. person, complete and sign an applicable IRS Form W-8 to certify such holders non-U.S. status. The applicable IRS Form W-8 and instructions for completing such form may be obtained at www.irs.gov. Tendering public warrant holders should consult their tax advisors regarding the completion of IRS Form W-9 or an applicable IRS Form W-8 and the application of the backup withholding rules.
12. Questions and Requests for Assistance and Additional Copies. Please direct questions or requests for assistance, or additional copies of the Prospectus/Offer to Exchange, Letter of Transmittal and Consent or other materials, in writing to the information agent for the Offer and Consent Solicitation at:
The Information Agent for the Offer and Consent Solicitation is: D.F. King & Co., Inc. 48 Wall Street, 22nd Floor New York, New York 10005 Banks and Brokers call: (212) 269-5550 Call Toll Free: (800) 549-6864 Email: vivid@dfking.com |
IMPORTANT: THIS LETTER OF TRANSMITTAL AND CONSENT, OR THE AGENTS MESSAGE (IF TENDERING PURSUANT TO THE PROCEDURES FOR BOOK-ENTRY TRANSFER WITHOUT EXECUTION AND DELIVERY OF A LETTER OF TRANSMITTAL AND CONSENT), TOGETHER WITH THE TENDERED PUBLIC WARRANTS AND ALL OTHER REQUIRED DOCUMENTS, MUST BE RECEIVED BY THE EXCHANGE AGENT ON OR PRIOR TO 11:59 P.M., EASTERN DAYLIGHT TIME, ON THE EXPIRATION DATE, UNLESS A NOTICE OF GUARANTEED DELIVERY IS RECEIVED BY THE EXCHANGE AGENT BY SUCH DATE.
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Form W-9 (Rev. October 2018) Department of the Treasury Internal Revenue Service |
Request for Taxpayer Identification Number and Certification u Go to www.irs.gov/FormW9 for instructions and the latest information. |
Give Form to the requester. Do not send to the IRS. |
Print or type See Specific Instructions on page 2.
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1 Name (as shown on your income tax return). Name is required on this line; do not leave this line blank.
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2 Business name/disregarded entity name, if different from above
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3 Check appropriate box for federal
tax classification of the person whose name is entered on line 1. Check only |
4 Exemptions (codes apply only to
Exempt payee code (if any)
Exemption from FATCA reporting
(Applies to accounts maintained
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☐ | lndividual/sole proprietor or single-member LLC |
☐ | C Corporation | ☐ | S Corporation | ☐ | Partnership | ☐ | Trust/estate | |||||||||||||||||||
☐ Limited liability company. Enter the tax classification (C=C corporation, S=S corporation, P=partnership) u
Note. Check the appropriate box in the line above for the tax classification
of the single-member owner. Do not
☐ Other (see instructions) u
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5 Address (number, street, and apt. or suite no.) See instructions
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Requesters name and address (optional)
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6 City, state, and ZIP code
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7 List account number(s) here (optional)
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Part I | Taxpayer Identification Number (TIN) |
Enter your TIN in the appropriate box. The TIN provided must match the name given on line 1 to avoid backup withholding. For individuals, this is generally your social security number (SSN). However, for a resident alien, sole proprietor, or disregarded entity, see the instructions for Part I, later. For other entities, it is your employer identification number (EIN). If you do not have a number, see How to get a TIN, later.
Note: If the account is in more than one name, see the instructions for line 1. Also see What Name and Number To Give the Requester for guidelines on whose number to enter.
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Part II | Certification |
Under penalties of perjury, I certify that:
1. | The number shown on this form is my correct taxpayer identification number (or I am waiting for a number to be issued to me); and |
2. | I am not subject to backup withholding because: (a) I am exempt from backup withholding, or (b) I have not been notified by the Internal Revenue Service (IRS) that I am subject to backup withholding as a result of a failure to report all interest or dividends, or (c) the IRS has notified me that I am no longer subject to backup withholding; and |
3. | I am a U.S. citizen or other U.S. person (defined below); and |
4. | The FATCA code(s) entered on this form (if any) indicating that I am exempt from FATCA reporting is correct. |
Certification instructions. You must cross out item 2 above if you have been notified by the IRS that you are currently subject to backup withholding because you have failed to report all interest and dividends on your tax return. For real estate transactions, item 2 does not apply. For mortgage interest paid, acquisition or abandonment of secured property, cancellation of debt, contributions to an individual retirement arrangement (IRA), and generally, payments other than interest and dividends, you are not required to sign the certification, but you must provide your correct TIN. See the instructions for Part II, later.
Sign Here |
Signature of U.S. person u |
Date u |
General Instructions
Section references are to the Internal Revenue Code unless otherwise noted.
Future developments. For the latest information about developments related to Form W-9 and its instructions, such as legislation enacted after they were published, go to www.irs.gov/FormW9.
Purpose of Form
An individual or entity (Form W-9 requester) who is required to file an information return with the IRS must obtain your correct taxpayer identification number (TIN) which may be your social security number (SSN), individual taxpayer identification number (ITIN), adoption taxpayer identification number (ATIN), or employer identification number (EIN), to report on an information return the amount paid to you, or other amount reportable on an information return. Examples of information returns include, but are not limited to, the following.
Form 1099-INT (interest earned or paid)
Form 1099-DIV (dividends, including those from stocks or mutual funds)
Form 1099-MISC (various types of income, prizes, awards, or gross proceeds)
Form 1099-B (stock or mutual fund sales and certain other transactions by brokers)
Form 1099-S (proceeds from real estate transactions)
Form 1099-K (merchant card and third party network transactions)
Form 1098 (home mortgage interest), 1098-E (student loan interest), 1098-T (tuition)
Form 1099-C (canceled debt)
Form 1099-A (acquisition or abandonment of secured property)
Use Form W-9 only if you are a U.S. person (including a resident alien), to provide your correct TIN.
If you do not return Form W-9 to the requester with a TIN, you might be subject to backup withholding. See What is backup withholding, later.
Cat. No. 10231X | Form W-9 (Rev. 10-2018) |
Form W-9 (Rev. 10-2018) |
Page 2 |
By signing the filled-out form, you:
1. Certify that the TIN you are giving is correct (or you are waiting for a number to be issued),
2. Certify that you are not subject to backup withholding, or
3. Claim exemption from backup withholding if you are a U.S. exempt payee. If applicable, you are also certifying that as a U.S. person, your allocable share of any partnership income from a U.S. trade or business is not subject to the withholding tax on foreign partners share of effectively connected income, and
4. Certify that FATCA code(s) entered on this form (if any) indicating that you are exempt from the FATCA reporting, is correct. See What is FATCA reporting, later, for further information.
Note: If you are a U.S. person and a requester gives you a form other than Form W-9 to request your TIN, you must use the requesters form if it is substantially similar to this Form W-9.
Definition of a U.S. person. For federal tax purposes, you are considered a U.S. person if you are:
| An individual who is a U.S. citizen or U.S. resident alien; |
| A partnership, corporation, company, or association created or organized in the United States or under the laws of the United States; |
| An estate (other than a foreign estate); or |
| A domestic trust (as defined in Regulations section 301.7701-7). |
Special rules for partnerships. Partnerships that conduct a trade or business in the United States are generally required to pay a withholding tax under section 1446 on any foreign partners share of effectively connected taxable income from such business. Further, in certain cases where a Form W-9 has not been received, the rules under section 1446 require a partnership to presume that a partner is a foreign person, and pay the section 1446 withholding tax. Therefore, if you are a U.S. person that is a partner in a partnership conducting a trade or business in the United States, provide Form W-9 to the partnership to establish your U.S. status and avoid section 1446 withholding on your share of partnership income.
In the cases below, the following person must give Form W-9 to the partnership for purposes of establishing its U.S. status and avoiding withholding on its allocable share of net income from the partnership conducting a trade or business in the United States.
| In the case of a disregarded entity with a U.S. owner, the U.S. owner of the disregarded entity and not the entity; |
| In the case of a grantor trust with a U.S. grantor or other U.S. owner, generally, the U.S. grantor or other U.S. owner of the grantor trust and not the trust; and |
| In the case of a U.S. trust (other than a grantor trust), the U.S. trust (other than a grantor trust) and not the beneficiaries of the trust. |
Foreign person. If you are a foreign person or the U.S. branch of a foreign bank that has elected to be treated as a U.S. person, do not use Form W-9. Instead, use the appropriate Form W-8 or Form 8233 (see Pub. 515, Withholding of Tax on Nonresident Aliens and Foreign Entities).
Nonresident alien who becomes a resident alien. Generally, only a nonresident alien individual may use the terms of a tax treaty to reduce or eliminate U.S. tax on certain types of income. However, most tax treaties contain a provision known as a saving clause. Exceptions specified in the saving clause may permit an exemption from tax to continue for certain types of income even after the payee has otherwise become a U.S. resident alien for tax purposes.
If you are a U.S. resident alien who is relying on an exception contained in the saving clause of a tax treaty to claim an exemption from U.S. tax on certain types of income, you must attach a statement to Form W-9 that specifies the following five items.
1. The treaty country. Generally, this must be the same treaty under which you claimed exemption from tax as a nonresident alien.
2. The treaty article addressing the income.
3. The article number (or location) in the tax treaty that contains the saving clause and its exceptions.
4. The type and amount of income that qualifies for the exemption from tax.
5. Sufficient facts to justify the exemption from tax under the terms of the treaty article.
Example. Article 20 of the U.S.-China income tax treaty allows an exemption from tax for scholarship income received by a Chinese student temporarily present in the United States. Under U.S. law, this student will become a resident alien for tax purposes if his or her stay in the United States exceeds 5 calendar years. However, paragraph 2 of the first Protocol to the U.S.-China treaty (dated April 30, 1984) allows the provisions of Article 20 to continue to apply even after the Chinese student becomes a resident alien of the United States. A Chinese student who qualifies for this exception (under paragraph 2 of the first protocol) and is relying on this exception to claim an exemption from tax on his or her scholarship or fellowship income would attach to Form W-9 a statement that includes the information described above to support that exemption.
If you are a nonresident alien or a foreign entity, give the requester the appropriate completed Form W-8 or Form 8233.
Backup Withholding
What is backup withholding? Persons making certain payments to you must under certain conditions withhold and pay to the IRS 24% of such payments. This is called backup withholding. Payments that may be subject to backup withholding include interest, tax-exempt interest, dividends, broker and barter exchange transactions, rents, royalties, nonemployee pay, payments made in settlement of payment card and third party network transactions, and certain payments from fishing boat operators. Real estate transactions are not subject to backup withholding.
You will not be subject to backup withholding on payments you receive if you give the requester your correct TIN, make the proper certifications, and report all your taxable interest and dividends on your tax return.
Payments you receive will be subject to backup withholding if:
1. You do not furnish your TIN to the requester,
2. You do not certify your TIN when required (see the instructions for Part II for details),
3. The IRS tells the requester that you furnished an incorrect TIN,
4. The IRS tells you that you are subject to backup withholding because you did not report all your interest and dividends on your tax return (for reportable interest and dividends only), or
5. You do not certify to the requester that you are not subject to backup withholding under 4 above (for reportable interest and dividend accounts opened after 1983 only).
Certain payees and payments are exempt from backup withholding. See Exempt payee code, later, and the separate Instructions for the Requester of Form W-9 for more information.
Also see Special rules for partnerships, earlier.
Form W-9 (Rev. 10-2018) |
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What is FATCA Reporting?
The Foreign Account Tax Compliance Act (FATCA) requires a participating foreign financial institution to report all United States account holders that are specified United States persons. Certain payees are exempt from FATCA reporting. See Exemption from FATCA reporting code, later, and the Instructions for the Requester of Form W-9 for more information.
Updating Your Information
You must provide updated information to any person to whom you claimed to be an exempt payee if you are no longer an exempt payee and anticipate receiving reportable payments in the future from this person. For example, you may need to provide updated information if you are a C corporation that elects to be an S corporation, or if you no longer are tax exempt. In addition, you must furnish a new Form W-9 if the name or TIN changes for the account; for example, if the grantor of a grantor trust dies.
Penalties
Failure to furnish TIN. If you fail to furnish your correct TIN to a requester, you are subject to a penalty of $50 for each such failure unless your failure is due to reasonable cause and not to willful neglect.
Civil penalty for false information with respect to withholding. If you make a false statement with no reasonable basis that results in no backup withholding, you are subject to a $500 penalty.
Criminal penalty for falsifying information. Willfully falsifying certifications or affirmations may subject you to criminal penalties including fines and/or imprisonment.
Misuse of TINs. If the requester discloses or uses TINs in violation of federal law, the requester may be subject to civil and criminal penalties.
Specific Instructions
Line 1
You must enter one of the following on this line; do not leave this line blank. The name should match the name on your tax return.
If this Form W-9 is for a joint account (other than an account maintained by a foreign financial institution (FFI)), list first, and then circle, the name of the person or entity whose number you entered in Part I of Form W-9. If you are providing Form W-9 to an FFI to document a joint account, each holder of the account that is a U.S. person must provide a Form W-9.
a. Individual. Generally, enter the name shown on your tax return. If you have changed your last name without informing the Social Security Administration (SSA) of the name change, enter your first name, the last name as shown on your social security card, and your new last name.
Note: ITIN applicant: Enter your individual name as it was entered on your Form W-7 application, line 1a. This should also be the same as the name you entered on the Form 1040/1040A/1040EZ you filed with your application.
b. Sole proprietor or single-member LLC. Enter your individual name as shown on your 1040/1040A/1040EZ on line 1. You may enter your business, trade, or doing business as (DBA) name on line 2.
c. Partnership, LLC that is not a single-member LLC, C corporation, or S corporation. Enter the entitys name as shown on the entitys tax return on line 1 and any business, trade, or DBA name on line 2.
d. Other entities. Enter your name as shown on required U.S. federal tax documents on line 1. This name should match the name
shown on the charter or other legal document creating the entity. You may enter any business, trade, or DBA name on line 2.
e. Disregarded entity. For U.S. federal tax purposes, an entity that is disregarded as an entity separate from its owner is treated as a disregarded entity. See Regulations section 301.7701-2(c)(2)(iii). Enter the owners name on line 1. The name of the entity entered on line 1 should never be a disregarded entity. The name on line 1 should be the name shown on the income tax return on which the income should be reported. For example, if a foreign LLC that is treated as a disregarded entity for U.S. federal tax purposes has a single owner that is a U.S. person, the U.S. owners name is required to be provided on line 1. If the direct owner of the entity is also a disregarded entity, enter the first owner that is not disregarded for federal tax purposes. Enter the disregarded entitys name on line 2, Business name/disregarded entity name. If the owner of the disregarded entity is a foreign person, the owner must complete an appropriate Form W-8 instead of a Form W-9. This is the case even if the foreign person has a U.S. TIN.
Line 2
If you have a business name, trade name, DBA name, or disregarded entity name, you may enter it on line 2.
Line 3
Check the appropriate box on line 3 for the U.S. federal tax classification of the person whose name is entered on line 1. Check only one box on line 3.
IF the entity/person on line 1 is a(n) . . . | THEN check the box for . . . | |
Corporation | Corporation | |
Individual Sole proprietorship, or Single-member limited liability company (LLC) owned by an individual and disregarded for U.S. federal tax purposes. |
Individual/sole proprietor or single- member LLC | |
LLC treated as a partnership for U.S. federal tax purposes, LLC that has filed Form 8832 or 2553 to be taxed as a corporation, or LLC that is disregarded as an entity separate from its owner but the owner is another LLC that is not disregarded for U.S. federal tax purposes. |
Limited liability company and enter the appropriate tax classification. (P= Partnership; C= C corporation; or S= S corporation) | |
Partnership | Partnership | |
Trust/estate | Trust/estate |
Line 4, Exemptions
If you are exempt from backup withholding and/or FATCA reporting, enter in the appropriate space on line 4 any code(s) that may apply to you.
Exempt payee code.
Generally, individuals (including sole proprietors) are not exempt from backup withholding.
Except as provided below, corporations are exempt from backup withholding for certain payments, including interest and dividends.
Corporations are not exempt from backup withholding for payments made in settlement of payment card or third party network transactions.
Corporations are not exempt from backup withholding with respect to attorneys fees or gross proceeds paid to attorneys, and
Form W-9 (Rev. 10-2018) |
Page 4 |
corporations that provide medical or health care services are not exempt with respect to payments reportable on Form 1099-MISC.
The following codes identify payees that are exempt from backup withholding. Enter the appropriate code in the space in line 4.
1An organization exempt from tax under section 501(a), any IRA, or a custodial account under section 403(b)(7) if the account satisfies the requirements of section 401(f)(2)
2The United States or any of its agencies or instrumentalities
3A state, the District of Columbia, a U.S. commonwealth or possession, or any of their political subdivisions or instrumentalities
4A foreign government or any of its political subdivisions, agencies, or instrumentalities
5A corporation
6A dealer in securities or commodities required to register in the United States, the District of Columbia, or a U.S. commonwealth or possession
7A futures commission merchant registered with the Commodity Futures Trading Commission
8A real estate investment trust
9An entity registered at all times during the tax year under the Investment Company Act of 1940
10A common trust fund operated by a bank under section 584(a)
11A financial institution
12A middleman known in the investment community as a nominee or custodian
13A trust exempt from tax under section 664 or described in section 4947
The following chart shows types of payments that may be exempt from backup withholding. The chart applies to the exempt payees listed above, 1 through 13.
IF the payment is for . . . | THEN the payment is exempt for . . . | |
Interest and dividend payments | All exempt payees except for 7 | |
Broker transactions | Exempt payees 1 through 4 and 6 through 11 and all C corporations. S corporations must not enter an exempt payee code because they are exempt only for sales of noncovered securities acquired prior to 2012. | |
Barter exchange transactions and patronage dividends | Exempt payees 1 through 4 | |
Payments over $600 required to be reported and direct sales over $5,0001 | Generally, exempt payees 1 through 52 | |
Payments made in settlement of payment card or third party network transactions | Exempt payees 1 through 4 |
1 See Form 1099-MISC, Miscellaneous Income, and its instructions.
2 However, the following payments made to a corporation and reportable on Form 1099-MISC are not exempt from backup withholding: medical and health care payments, attorneys fees, gross proceeds paid to an attorney reportable under section 6045(f), and payments for services paid by a federal executive agency.
Exemption from FATCA reporting code. The following codes identify payees that are exempt from reporting under FATCA. These codes apply to persons submitting this form for accounts maintained outside of the United States by certain foreign financial institutions. Therefore, if you are only submitting this form for an account you hold in the United States, you may leave this field
blank. Consult with the person requesting this form if you are uncertain if the financial institution is subject to these requirements. A requester may indicate that a code is not required by providing you with a Form W-9 with Not Applicable (or any similar indication) written or printed on the line for a FATCA exemption code.
AAn organization exempt from tax under section 501(a) or any individual retirement plan as defined in section 7701(a)(37)
BThe United States or any of its agencies or instrumentalities
CA state, the District of Columbia, a U.S. commonwealth or possession, or any of their political subdivisions or instrumentalities
DA corporation the stock of which is regularly traded on one or more established securities markets, as described in Regulations section 1.1472-1(c)(1)(i)
EA corporation that is a member of the same expanded affiliated group as a corporation described in Regulations section 1.1472-1(c)(1)(i)
FA dealer in securities, commodities, or derivative financial instruments (including notional principal contracts, futures, forwards, and options) that is registered as such under the laws of the United States or any state
GA real estate investment trust
HA regulated investment company as defined in section 851 or an entity registered at all times during the tax year under the Investment Company Act of 1940
IA common trust fund as defined in section 584(a)
JA bank as defined in section 581
KA broker
LA trust exempt from tax under section 664 or described in section 4947(a)(1)
MA tax exempt trust under a section 403(b) plan or section 457(g) plan
Note: You may wish to consult with the financial institution requesting this form to determine whether the FATCA code and/or exempt payee code should be completed.
Line 5
Enter your address (number, street, and apartment or suite number). This is where the requester of this Form W-9 will mail your information returns. If this address differs from the one the requester already has on file, write NEW at the top. If a new address is provided, there is still a chance the old address will be used until the payor changes your address in their records.
Line 6
Enter your city, state, and ZIP code.
Part I. Taxpayer Identification Number (TIN)
Enter your TIN in the appropriate box. If you are a resident alien and you do not have and are not eligible to get an SSN, your TIN is your IRS individual taxpayer identification number (ITIN). Enter it in the social security number box. If you do not have an ITIN, see How to get a TIN below.
If you are a sole proprietor and you have an EIN, you may enter either your SSN or EIN.
If you are a single-member LLC that is disregarded as an entity separate from its owner, enter the owners SSN (or EIN, if the owner has one). Do not enter the disregarded entitys EIN. If the LLC is classified as a corporation or partnership, enter the entitys EIN.
Note: See What Name and Number To Give the Requester, later, for further clarification of name and TIN combinations.
Form W-9 (Rev. 10-2018) |
Page 5 |
How to get a TIN. If you do not have a TIN, apply for one immediately. To apply for an SSN, get Form SS-5, Application for a Social Security Card, from your local SSA office or get this form online at www.SSA.gov. You may also get this form by calling 1-800-772-1213. Use Form W-7, Application for IRS Individual Taxpayer Identification Number, to apply for an ITIN, or Form SS-4, Application for Employer Identification Number, to apply for an EIN. You can apply for an EIN online by accessing the IRS website at www.irs.gov/Businesses and clicking on Employer Identification Number (EIN) under Starting a Business. Go to www.irs.gov/Forms to view, download, or print Form W-7 and/or Form SS-4. Or, you can go to www.irs.gov/OrderForms to place an order and have Form W-7 and/or SS-4 mailed to you within 10 business days.
If you are asked to complete Form W-9 but do not have a TIN, apply for a TIN and write Applied For in the space for the TIN, sign and date the form, and give it to the requester. For interest and dividend payments, and certain payments made with respect to readily tradable instruments, generally you will have 60 days to get a TIN and give it to the requester before you are subject to backup withholding on payments. The 60-day rule does not apply to other types of payments. You will be subject to backup withholding on all such payments until you provide your TIN to the requester.
Note: Entering Applied For means that you have already applied for a TIN or that you intend to apply for one soon.
Caution: A disregarded U.S. entity that has a foreign owner must use the appropriate Form W-8.
Part II. Certification
To establish to the withholding agent that you are a U.S. person, or resident alien, sign Form W-9. You may be requested to sign by the withholding agent even if item 1, 4, or 5 below indicates otherwise.
For a joint account, only the person whose TIN is shown in Part I should sign (when required). In the case of a disregarded entity, the person identified on line 1 must sign. Exempt payees, see Exempt payee code, earlier.
Signature requirements. Complete the certification as indicated in items 1 through 5 below.
1. Interest, dividend, and barter exchange accounts opened before 1984 and broker accounts considered active during 1983. You must give your correct TIN, but you do not have to sign the certification.
2. Interest, dividend, broker, and barter exchange accounts opened after 1983 and broker accounts considered inactive during 1983. You must sign the certification or backup withholding will apply. If you are subject to backup withholding and you are merely providing your correct TIN to the requester, you must cross out item 2 in the certification before signing the form.
3. Real estate transactions. You must sign the certification. You may cross out item 2 of the certification. Agriculture in the name of a public entity (such as a state or local government, school district, or prison) that receives agricultural program payments 1041 Filing Method or the Optional Form 1099 Filing Method 2 (see Regulations section 1.671-4(b)(2)(i)(B))
4. Other payments. You must give your correct TIN, but you do not have to sign the certification unless you have been notified that you have previously given an incorrect TIN. Other payments include payments made in the course of the requesters trade or business for rents, royalties, goods (other than bills for merchandise), medical and health care services (including payments to corporations), payments to a nonemployee for services, payments made in settlement of payment card and third
party network transactions, payments to certain fishing boat crew members and fishermen, and gross proceeds paid to attorneys (including payments to corporations).
5. Mortgage interest paid by you, acquisition or abandonment of secured property, cancellation of debt, qualified tuition program payments (under section 529), ABLE accounts (under section 529A), IRA, Coverdell ESA, Archer MSA or HSA contributions or distributions, and pension distributions. You must give your correct TIN, but you do not have to sign the certification.
What Name and Number To Give the Requester
For this type of account: | Give name and SSN of: | |
1. Individual |
The individual | |
2. Two or more individuals (Joint account) other than an account maintained by an FFI |
The actual owner of the account or, if combined funds, the first individual on the account1 | |
3. Two or more U.S. persons (joint account maintained by an FFI) |
Each holder of the account | |
4. Custodian account of a minor (Uniform Gift to Minors Act) |
The minor2 | |
5. a. The usual revocable savings trust (grantor is also trustee) b. So-called trust account that is not a legal or valid trust under state law |
The grantor-trustee1 The actual owner1 | |
6. Sole proprietorship or disregarded entity owned by an individual |
The owner3 | |
7. Grantor trust filing under Optional Form 1099 Filing Method 1 (see Regulations section 1.671-4(b)(2)(i)(A)) |
The grantor* | |
For this type of account: | Give name and EIN of:
| |
8. Disregarded entity not owned by an individual |
The owner | |
9. A valid trust, estate, or pension trust |
Legal entity4 | |
10. Corporation or LLC electing corporate status on Form 8832 or Form 2553 |
The corporation | |
11. Association, club, religious, charitable, educational, or other taxexempt organization |
The organization | |
12. Partnership or multi-member LLC |
The partnership | |
13. A broker or registered nominee |
The broker or nominee | |
14. Account with the Department of Agriculture in the name of a public entity (such as a state or local government, school district, or prison) that receives agricultural program payments |
The public entity | |
15. Grantor trust filing under the Form 1041 Filing Method or the Optional Form 1099 Filing Method 2 (see Regulations section 1.671-4(b)(2)(i)(B)) |
The trust |
1 List first and circle the name of the person whose number you furnish. If only one person on a joint account has an SSN, that persons number must be furnished.
2 Circle the minors name and furnish the minors SSN.
3 You must show your individual name and you may also enter your business or DBA name on the Business name/disregarded
Form W-9 (Rev. 10-2018) |
Page 6 |
entity name line. You may use either your SSN or EIN (if you have one), but the IRS encourages you to use your SSN.
4 List first and circle the name of the trust, estate, or pension trust. (Do not furnish the TIN of the personal representative or trustee unless the legal entity itself is not designated in the account title.) Also see Special rules for partnerships, earlier.
*Note: The grantor also must provide a Form W-9 to trustee of trust.
Note: If no name is circled when more than one name is listed, the number will be considered to be that of the first name listed.
Secure Your Tax Records From Identity Theft
Identity theft occurs when someone uses your personal information such as your name, SSN, or other identifying information, without your permission, to commit fraud or other crimes. An identity thief may use your SSN to get a job or may file a tax return using your SSN to receive a refund.
To reduce your risk:
Protect your SSN,
Ensure your employer is protecting your SSN, and
Be careful when choosing a tax preparer.
If your tax records are affected by identity theft and you receive a notice from the IRS, respond right away to the name and phone number printed on the IRS notice or letter.
If your tax records are not currently affected by identity theft but you think you are at risk due to a lost or stolen purse or wallet, questionable credit card activity or credit report, contact the IRS Identity Theft Hotline at 1-800-908-4490 or submit Form 14039.
For more information, see Pub. 5027, Identity Theft Information for Taxpayers.
Victims of identity theft who are experiencing economic harm or a systemic problem, or are seeking help in resolving tax problems that have not been resolved through normal channels, may be eligible for Taxpayer Advocate Service (TAS) assistance. You can reach TAS by calling the TAS toll-free case intake line at 1-877-777-4778 or TTY/TDD 1-800-829-4059.
Protect yourself from suspicious emails or phishing schemes. Phishing is the creation and use of email and websites designed to mimic legitimate business emails and websites. The most common act is sending an email to a user falsely claiming to be an established legitimate enterprise in an attempt to scam the user into surrendering private information that will be used for identity theft.
The IRS does not initiate contacts with taxpayers via emails. Also, the IRS does not request personal detailed information through email or ask taxpayers for the PIN numbers, passwords, or similar secret access information for their credit card, bank, or other financial accounts.
If you receive an unsolicited email claiming to be from the IRS, forward this message to phishing@irs.gov. You may also report misuse of the IRS name, logo, or other IRS property to the Treasury Inspector General for Tax Administration (TIGTA) at 1-800-366-4484. You can forward suspicious emails to the Federal Trade Commission at spam@uce.gov or report them at www.ftc.gov/complaint. You can contact the FTC at www.ftc.gov/idtheft or 877-IDTHEFT (877-438-4338). If you have been the victim of identity theft, see www.IdentityTheft.gov and Pub. 5027.
Visit www.irs.gov/IdentityTheft to learn more about identity theft and how to reduce your risk.
Privacy Act Notice
Section 6109 of the Internal Revenue Code requires you to provide your correct TIN to persons (including federal agencies) who are required to file information returns with the IRS to report interest, dividends, or certain other income paid to you; mortgage interest you paid; the acquisition or abandonment of secured property; the cancellation of debt; or contributions you made to an IRA, Archer MSA, or HSA. The person collecting this form uses the information on the form to file information returns with the IRS, reporting the above information. Routine uses of this information include giving it to the Department of Justice for civil and criminal litigation and to cities, states, the District of Columbia, and U.S. commonwealths and possessions for use in administering their laws. The information also may be disclosed to other countries under a treaty, to federal and state agencies to enforce civil and criminal laws, or to federal law enforcement and intelligence agencies to combat terrorism. You must provide your TIN whether or not you are required to file a tax return. Under section 3406, payers must generally withhold a percentage of taxable interest, dividend, and certain other payments to a payee who does not give a TIN to the payer. Certain penalties may also apply for providing false or fraudulent information.
The Exchange Agent for the Offer and Consent Solicitation is:
Continental Stock Transfer & Trust Company
One State Street, 30th Floor
New York, NY 10004
Attention: Corporate Actions Department
Questions or requests for assistance may be directed to the information agent at the address and telephone number listed below. Additional copies of the Prospectus/Offer to Exchange, this Letter of Transmittal and Consent and the Notice of Guaranteed Delivery may also be obtained from the information agent. Any public warrant holder may also contact its broker, dealer, commercial bank or trust company for assistance concerning the Offer and Consent Solicitation.
The Information Agent for the Offer and Consent Solicitation is:
D.F. King & Co., Inc.
48 Wall Street, 22nd Floor
New York, New York 10005
Banks and Brokers call: (212) 269-5550
Call Toll Free: (800) 549-6864
Email: vivid@dfking.com
22
Exhibit 99.2
NOTICE OF GUARANTEED DELIVERY OF
PUBLIC WARRANTS OF
VIVID SEATS INC.
Pursuant to the Prospectus/Offer to Exchange dated May 26, 2022
Instructions for Use
Unless defined herein, terms used in this Notice of Guaranteed Delivery shall have the definitions set forth in the Prospectus/Offer to Exchange dated May 26, 2022 (the Prospectus/Offer to Exchange).
This Notice of Guaranteed Delivery, or one substantially in the form hereof, may be used to accept the Offer if:
| the procedure for book-entry transfer cannot be completed on a timely basis; or |
| time will not permit all required documents, including a properly completed and duly executed Letter of Transmittal and Consent and any other required documents, to reach Continental Stock Transfer & Trust Company (the Exchange Agent) prior to the Expiration Date. |
This Notice of Guaranteed Delivery, properly completed and duly executed, must be delivered by hand, mail, overnight courier or facsimile transmission to the Exchange Agent, as described in the section of the Prospectus/Offer to Exchange entitled The Offer and Consent SolicitationProcedure for Tendering Warrants for Exchange and Consenting to the Warrant Amendment The method of delivery of all required documents is at the holders option and risk.
For this Notice of Guaranteed Delivery to be validly delivered, it must be received by the Exchange Agent at the address below before the Expiration Date. Delivery of this notice to another address will not constitute a valid delivery. Delivery to the Company, the information agent or the book-entry transfer facility will not be forwarded to the Exchange Agent and will not constitute a valid delivery.
The holders signature on this Notice of Guaranteed Delivery must be guaranteed by an Eligible Institution, and the Eligible Institution must also execute the Guarantee of Delivery attached hereto. An Eligible Institution is a bank, broker, dealer, credit union, savings association or other entity that is a member in good standing of the Securities Transfer Agents Medallion Program or a bank, broker, dealer, credit union, savings association or other entity which is an eligible guarantor institution, as that term is defined in Rule 17Ad-15 promulgated under the Securities Exchange Act of 1934, as amended.
In addition, if the instructions to the Letter of Transmittal and Consent require a signature on a Letter of Transmittal and Consent to be guaranteed by an Eligible Institution, such signature guarantee must appear in the applicable space provided in the signature box on the Letter of Transmittal and Consent.
NOTICE OF GUARANTEED DELIVERY OF
PUBLIC WARRANTS OF
VIVID SEATS INC.
Pursuant to the Prospectus/Offer to Exchange dated May 26, 2022
TO: CONTINENTAL STOCK TRANSFER & TRUST COMPANY
One State Street Plaza, 30th Floor |
New York, NY 10004 |
Attention: Corporate Actions Department |
The undersigned acknowledges receipt of the Prospectus/Offer to Exchange, dated May 26, 2022 (the Prospectus/Offer to Exchange), and the related Letter of Transmittal and Consent (the Letter of Transmittal and Consent).
By signing this Notice of Guaranteed Delivery, the holder tenders for exchange, upon the terms and subject to the conditions described in the Prospectus/Offer to Exchange and in the Letter of Transmittal and Consent, the number of public warrants specified below, as well as provides consent to the Warrant Amendment (as defined in the Prospectus/Offer to Exchange), pursuant to the guaranteed delivery procedures described in the section of the Prospectus/Offer to Exchange entitled The Offer and Consent SolicitationProcedure for Tendering Warrants for Exchange and Consenting to the Warrant Amendment.
DESCRIPTION OF PUBLIC WARRANTS TENDERED
List below the public warrants to which this Notice of Guaranteed Delivery relates.
Name(s) and Address(es) of Registered Holder(s) of Public Warrants |
Number of Public Warrants Tendered | |
Total: |
(1) | Unless otherwise indicated above, it will be assumed that all public warrants listed above are being tendered pursuant to this Notice of Guaranteed Delivery. |
☒ | CHECK HERE IF THE PUBLIC WARRANTS LISTED ABOVE WILL BE DELIVERED BY BOOK-ENTRY TRANSFER MADE TO THE ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH THE DEPOSITORY TRUST COMPANY (DTC) AND COMPLETE THE FOLLOWING (FOR USE BY ELIGIBLE INSTITUTIONS ONLY): |
Name of Tendering Institution:
Account Number:
2
SIGNATURES
Signature(s) of Public Warrant Holder(s) | ||
Name(s) of Public Warrant Holder(s) (Please Print) | ||
Address | ||
City, State, Zip Code | ||
Telephone Number | ||
Date |
GUARANTEE OF SIGNATURES
Authorized Signature | ||
Name (Please Print) | ||
Title | ||
Name of Firm (must be an Eligible Institution as defined in this Notice of Guaranteed Delivery) | ||
Address | ||
City, State, Zip Code | ||
Telephone Number | ||
Date |
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GUARANTEE OF DELIVERY
(Not to be used for Signature Guarantee)
The undersigned, a bank, broker, dealer, credit union, savings association or other entity that is a member in good standing of the Securities Transfer Agents Medallion Program or a bank, broker, dealer, credit union, savings association or other entity which is an eligible guarantor institution, as that term is defined in Rule 17Ad-15 promulgated under the Securities Exchange Act of 1934, as amended (each of the foregoing constituting an Eligible Institution), guarantees delivery to the Exchange Agent of the public warrants tendered and consents given, in proper form for transfer, or a confirmation that the public warrants tendered have been delivered pursuant to the procedure for book-entry transfer described in the Prospectus/Offer to Exchange and the Letter of Transmittal and Consent into the Exchange Agents account at the book-entry transfer facility, in each case together with a properly completed and duly executed Letter(s) of Transmittal and Consent, or an Agents Message in the case of a book-entry transfer, and any other required documents, all within two (2) trading days on the Nasdaq Stock Market LLC after the date of receipt by the Exchange Agent of this Notice of Guaranteed Delivery.
The Eligible Institution that completes this form must communicate the guarantee to the Exchange Agent and must deliver the Letter of Transmittal and Consent to the Exchange Agent, or confirmation of receipt of the public warrants pursuant to the procedure for book-entry transfer and an Agents Message, within the time set forth above. Failure to do so could result in a financial loss to such Eligible Institution.
Authorized Signature Name (Please Print) | ||
Title | ||
Name of Firm | ||
Address | ||
City, State, Zip Code | ||
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Date |
4
Exhibit 99.3
LETTER TO BROKERS, DEALERS,
COMMERCIAL BANKS, TRUST COMPANIES AND OTHER NOMINEES
Offer To Exchange Warrants to Acquire Shares of Class A Common Stock
of
Vivid Seats Inc.
for
Shares of Class A Common Stock
of
Vivid Seats Inc.
and
Consent Solicitation
THE OFFER AND CONSENT SOLICITATION (AS DEFINED BELOW) AND WITHDRAWAL RIGHTS WILL EXPIRE AT 11:59 P.M., EASTERN DAYLIGHT TIME, ON JUNE 29, 2022, OR SUCH LATER TIME AND DATE TO WHICH THE COMPANY MAY EXTEND THE OFFER. PUBLIC WARRANTS (AS DEFINED HEREIN) TENDERED PURSUANT TO THE OFFER AND CONSENT SOLICITATION MAY BE WITHDRAWN PRIOR TO THE EXPIRATION DATE (AS DEFINED HEREIN). CONSENTS MAY BE REVOKED ONLY BY WITHDRAWING THE TENDER OF THE RELATED PUBLIC WARRANTS AND THE WITHDRAWAL OF ANY PUBLIC WARRANTS WILL AUTOMATICALLY CONSTITUTE A REVOCATION OF THE RELATED CONSENTS. |
May 26, 2022
To Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees:
Enclosed are the Prospectus/Offer to Exchange dated May 26, 2022 (the Prospectus/Offer to Exchange), and the related Letter of Transmittal and Consent (the Letter of Transmittal and Consent), which together set forth the offer of Vivid Seats Inc., Delaware corporation (the Company), to each holder of the Companys public warrants to purchase shares of the Companys Class A common stock, par value $0.0001 per share (Class A Common Stock), to receive 0.240 shares of Class A Common Stock in exchange for each public warrant tendered by the holder and exchanged pursuant to the offer (the Offer). The Offer is made solely upon the terms and conditions in the Prospectus/Offer to Exchange and in the Letter of Transmittal and Consent. The Offer will be open until 11:59 p.m., Eastern Daylight Time, on June 29, 2022, or such later time and date to which the Company may extend the Offer. The period during which the Offer is open, giving effect to any withdrawal or extension, is referred to as the Offer Period. The date and time at which the Offer Period ends is referred to as the Expiration Date.
The Offer is being made to all holders of the public warrants to purchase the Companys Class A Common Stock issued and outstanding pursuant to the Amended and Restated Warrant Agreement (defined herein) (the public warrants). Each public warrant entitles the holder to purchase one share of the Companys Class A Common Stock at a price of $11.50 per share, subject to adjustment. The public warrants are quoted on The Nasdaq Capital Market under the symbol SEATW. As of May 23, 2022, 18,132,766 public warrants were outstanding. Pursuant to the Offer, the Company is offering up to an aggregate of 4,351,864 shares of Class A Common Stock in exchange for the public warrants.
Each holder whose public warrants are exchanged pursuant to the Offer will receive 0.240 shares of Class A Common Stock for each public warrant tendered by such holder and exchanged. Any public warrant holder that participates in the Offer may tender less than all of its public warrants for exchange.
No fractional shares will be issued pursuant to the Offer. In lieu of issuing fractional shares, any holder of public warrants who would otherwise have been entitled to receive fractional shares pursuant to the Offer will,
after aggregating all such fractional shares of such holder, be paid cash (without interest) in an amount equal to such fractional part of a share multiplied by the last sale price of Class A Common Stock on The Nasdaq Global Select Market on the last trading day of the Offer Period, less any applicable withholding taxes. The Companys obligation to complete the offer is not conditioned on the receipt of a minimum number of tendered public warrants.
Concurrently with the Offer, the Company is also soliciting consents (the Consent Solicitation) from holders of the public warrants to amend (the Warrant Amendment) the Amended and Restated Warrant Agreement, dated as of October 14, 2021, by and between Horizon Acquisition Corporation, the Companys predecessor, and Continental Stock Transfer & Trust Company (the Amended and Restated Warrant Agreement), to permit the Company to require that each public warrant that is outstanding upon the closing of the Offer be converted into 0.213 shares of Class A Common Stock, which is a ratio 12.7% less than the exchange ratio applicable to the Offer.
Pursuant to the terms of the Amended and Restated Warrant Agreement, the adoption of the Warrant Amendment will require the consent of holders of at least 65% of the outstanding public warrants. Eldridge Industries, LLC, which holds approximately 28.5% of our outstanding public warrants, has agreed to tender its public warrants in the Offer and to consent to the Warrant Amendment in the Consent Solicitation, pursuant to a tender and support agreement. Accordingly, if holders of an additional approximately 36.5% of the outstanding public warrants consent to the Warrant Amendment in the Consent Solicitation, and the other conditions described herein are satisfied or waived, then the Warrant Amendment will be adopted.
Holders of public warrants may not consent to the Warrant Amendment without tendering public warrants in the Offer and holders may not tender such public warrants without consenting to the Warrant Amendment. The consent to the Warrant Amendment is a part of the Letter of Transmittal and Consent relating to the public warrants, and therefore by tendering public warrants for exchange holders will be delivering to us their consent to the Warrant Amendment. Holders may revoke consent at any time prior to the Expiration Date by withdrawing the public warrants holders have tendered in the Offer.
If at least 65% of the holders of the outstanding public warrants do not provide consent to the Warrant Amendment, public warrants not exchanged for shares of Class A Common Stock pursuant to the Offer will remain outstanding subject to their current terms.
THE OFFER AND CONSENT SOLICITATION IS NOT MADE TO THOSE HOLDERS WHO RESIDE IN STATES OR OTHER JURISDICTIONS WHERE AN OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL.
Enclosed with this letter are copies of the following documents:
(1) | The Prospectus/Offer to Exchange; |
(2) | The Letter of Transmittal and Consent, for your use in accepting the Offer, providing your consent to the Warrant Amendment and tendering public warrants for exchange and for the information of your clients for whose accounts you hold public warrants registered in your name or in the name of your nominee. Manually signed copies of the Letter of Transmittal and Consent may be used to tender public warrants and provide consent; |
(3) | The Notice of Guaranteed Delivery to be used to accept the Offer in the event (i) the procedure for book-entry transfer cannot be completed on a timely basis or (ii) time will not permit all required documents to reach Continental Stock Transfer & Trust Company (the Exchange Agent) prior to the Expiration Date; |
(4) | A form of letter which may be sent by you to your clients for whose accounts you hold public warrants registered in your name or in the name of your nominee, including an Instructions Form provided for obtaining each such clients instructions with regard to the Offer; and |
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(5) | A return envelope addressed to Continental Stock Transfer & Trust Company. |
Certain conditions to the Offer are described in the section of the Prospectus/Offer to Exchange entitled The Offer and Consent Solicitation General TermsConditions to the Offer and Consent Solicitation.
We urge you to contact your clients promptly. Please note that the Offer and withdrawal rights will expire at 11:59 p.m., Eastern Daylight Time, on June 29, 2022, or such later time and date to which the Company may extend the Offer.
The Company will not pay any fees or commissions to any broker, dealer or other person (other than the Exchange Agent, the information agent, dealer manager and certain other persons, as described in the section of the Prospectus/Offer to Exchange entitled Market Information, Dividends and Related Stockholder MattersFees and Expenses) for soliciting tenders of public warrants pursuant to the Offer. However, the Company will, on request, reimburse you for customary clerical and mailing expenses incurred by you in forwarding copies of the enclosed materials to your clients for whose accounts you hold public warrants.
Any questions you have regarding the Offer should be directed to, and additional copies of the enclosed materials may be obtained from, the information agent in the Offer:
The Information Agent for the Offer and Consent Solicitation is:
D.F. King & Co., Inc. |
48 Wall Street, 22nd Floor |
New York, New York 10005 |
Banks and Brokers call: (212) 269-5550 |
Call Toll Free: (800) 549-6864 |
Email: vivid@dfking.com |
Very truly yours,
Vivid Seats Inc.
Nothing contained in this letter or in the enclosed documents shall constitute you or any other person the agent of the Company, the Exchange Agent, the dealer manager, the information agent or any affiliate of any of them, or authorize you or any other person to give any information or use any document or make any statement on behalf of any of them in connection with the Offer and Consent Solicitation other than the enclosed documents and the statements contained therein.
3
Exhibit 99.4
LETTER TO CLIENTS OF BROKERS, DEALERS, COMMERCIAL BANKS, TRUST
COMPANIES AND OTHER NOMINEES
Offer To Exchange Warrants to Acquire Shares of Class A Common Stock
of
Vivid Seats Inc.
for
Shares of Class A Common Stock
of
Vivid Seats Inc.
and
Consent Solicitation
THE OFFER AND CONSENT SOLICITATION (AS DEFINED BELOW) AND WITHDRAWAL RIGHTS WILL EXPIRE AT 11:59 P.M., EASTERN DAYLIGHT TIME, ON JUNE 29, 2022, OR SUCH LATER TIME AND DATE TO WHICH THE COMPANY MAY EXTEND THE OFFER. PUBLIC WARRANTS (AS DEFINED HEREIN) TENDERED PURSUANT TO THE OFFER AND CONSENT SOLICITATION MAY BE WITHDRAWN PRIOR TO THE EXPIRATION DATE (AS DEFINED HEREIN). CONSENTS MAY BE REVOKED ONLY BY WITHDRAWING THE TENDER OF THE RELATED PUBLIC WARRANTS AND THE WITHDRAWAL OF ANY PUBLIC WARRANTS WILL AUTOMATICALLY CONSTITUTE A REVOCATION OF THE RELATED CONSENTS.
May 26, 2022
To Our Clients:
Enclosed are the Prospectus/Offer to Exchange dated May 26, 2022 (the Prospectus/Offer to Exchange), and the related Letter of Transmittal and Consent (the Letter of Transmittal and Consent), which together set forth the offer of Vivid Seats Inc., a Delaware corporation (the Company), to each holder of the Companys public warrants to purchase shares of the Companys Class A common stock, par value $0.0001 per share (Class A Common Stock), to receive 0.240 shares of Class A Common Stock in exchange for each public warrant tendered by the holder and exchanged pursuant to the offer (the Offer). The Offer is made solely upon the terms and conditions in the Prospectus/Offer to Exchange and in the Letter of Transmittal and Consent. The Offer will be open until 11:59 p.m., Eastern Daylight Time, on June 29, 2022, or such later time and date to which the Company may extend the Offer. The period during which the Offer is open, giving effect to any withdrawal or extension, is referred to as the Offer Period. The date and time at which the Offer Period ends is referred to as the Expiration Date.
The Offer is being made to all holders of the public warrants to purchase the Companys Class A Common Stock issued and outstanding pursuant to the Amended and Restated Warrant Agreement (defined herein) (the public warrants). Each public warrant entitles the holder to purchase one share of the Companys Class A Common Stock at a price of $11.50 per share, subject to adjustment. The public warrants are quoted on The Nasdaq Capital Market under the symbol SEATW. As of May 23, 2022, 18,132,766 public warrants were outstanding. Pursuant to the Offer, the Company is offering up to an aggregate of 4,351,864 shares of Class A Common Stock in exchange for the public warrants.
Each holder whose public warrants are exchanged pursuant to the Offer will receive 0.240 shares of Class A Common Stock for each public warrant tendered by such holder and exchanged. Any public warrant holder that participates in the Offer may tender less than all of its public warrants for exchange.
No fractional shares will be issued pursuant to the Offer. In lieu of issuing fractional shares, any holder of public warrants who would otherwise have been entitled to receive fractional shares pursuant to the Offer will,
after aggregating all such fractional shares of such holder, be paid cash (without interest) in an amount equal to such fractional part of a share multiplied by the last sale price of the Class A Common Stock on The Nasdaq Global Select Market on the last trading day of the Offer Period, less any applicable withholding taxes. The Companys obligation to complete the offer is not conditioned on the receipt of a minimum number of tendered public warrants.
Concurrently with the Offer, the Company is also soliciting consents (the Consent Solicitation) from holders of the public warrants to amend (the Warrant Amendment) the Amended and Restated Warrant Agreement, dated as of October 14, 2021, by and between Horizon Acquisition Corporation, the Companys predecessor, and Continental Stock Transfer & Trust Company (the Amended and Restated Warrant Agreement), to permit the Company to require that each public warrant that is outstanding upon the closing of the Offer be converted into 0.213 shares of Class A Common Stock, which is a ratio 12.7% less than the exchange ratio applicable to the Offer.
Pursuant to the terms of the Amended and Restated Warrant Agreement, the adoption of the Warrant Amendment will require the consent of holders of at least 65% of the outstanding public warrants. Eldridge Industries, LLC, which holds approximately 28.5% of our outstanding public warrants, has agreed to tender its public warrants in the Offer and to consent to the Warrant Amendment in the Consent Solicitation, pursuant to a tender and support agreement. Accordingly, if holders of an additional approximately 36.5% of the outstanding public warrants consent to the Warrant Amendment in the Consent Solicitation, and the other conditions described herein are satisfied or waived, then the Public warrant Amendment will be adopted.
Holders of public warrants may not consent to the Warrant Amendment without tendering public warrants in the Offer and holders may not tender such public warrants without consenting to the Warrant Amendment. The consent to the Warrant Amendment is a part of the Letter of Transmittal and Consent relating to the public warrants, and therefore by tendering public warrants for exchange holders will be delivering to us their consent to the Warrant Amendment. Holders may revoke consent at any time prior to the Expiration Date by withdrawing the public warrants holders have tendered in the Offer.
If at least 65% of the holders of the outstanding public warrants do not provide consent to the Warrant Amendment, public warrants not exchanged for shares of Class A Common Stock pursuant to the Offer will remain outstanding subject to their current terms.
THE OFFER AND CONSENT SOLICITATION IS NOT MADE TO THOSE HOLDERS WHO RESIDE IN STATES OR OTHER JURISDICTIONS WHERE AN OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL.
Please follow the instructions in this document and the related documents, including the accompanying Letter of Transmittal and Consent, to cause your public warrants to be tendered for exchange pursuant to the Offer and provide consent to the Warrant Amendment.
On the terms and subject to the conditions of the Offer, the Company will allow the exchange of all public warrants properly tendered before the Expiration Date and not properly withdrawn, at an exchange rate of 0.240 shares of Class A Common Stock for each public warrant so tendered.
We are the owner of record of public warrants held for your account. As such, only we can exchange and tender your public warrants, and then only pursuant to your instructions. We are sending you the Letter of Transmittal and Consent for your information only; you cannot use it to exchange and tender public warrants we hold for your account, nor to provide consent to the Warrant Amendment.
Please instruct us as to whether you wish us to tender for exchange any or all of the public warrants we hold for your account, on the terms and subject to the conditions of the Offer.
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Please note the following:
(1) | Your public warrants may be exchanged at the exchange rate of 0.240 shares of Class A Common Stock for every one of your public warrants properly tendered for exchange. |
(2) | The Offer is made solely upon the terms and conditions set forth in the Prospectus/Offer to Exchange and in the Letter of Transmittal and Consent. In particular, please see The Offer and Consent SolicitationGeneral TermsConditions to the Offer and Consent Solicitation in the Prospectus/Offer to Exchange. |
(3) | By tendering your public warrants for exchange, you are concurrently consenting to the Warrant Amendment. You may not consent to the Warrant Amendment without tendering your public warrants in the Offer and you may not tender your public warrants without consenting to the Warrant Amendment. |
(4) | The Offer and withdrawal rights will expire at 11:59 p.m., Eastern Daylight Time, on June 29, 2022, or such later time and date to which the Company may extend the Offer. |
If you wish to have us tender any or all of your public warrants for exchange pursuant to the Offer and Consent Solicitation, please so instruct us by completing, executing, detaching and returning to us the attached Instructions Form. If you authorize us to tender your public warrants, we will tender for exchange all of your public warrants unless you specify otherwise on the attached Instruction Form.
Your prompt action is requested. Your Instruction Form should be forwarded to us in ample time to permit us to submit a tender on your behalf before the Expiration Date. Please note that the Offer and withdrawal rights will expire at 11:59 p.m., Eastern Daylight Time, on June 29, 2022, or such later time and date to which the Company may extend the Offer.
The board of directors of the Company has approved the Offer and Consent Solicitation. However, neither the Company nor any of its management, its board of directors, the dealer manager, the information agent, or the exchange agent for the Offer is making any recommendation as to whether holders of public warrants should tender public warrants for exchange in the Offer and Consent Solicitation. The Company has not authorized any person to make any recommendation. You should carefully evaluate all information in the Prospectus/Offer to Exchange and in the Letter of Transmittal and Consent, and should consult your own investment and tax advisors. You must decide whether to have your public warrants exchanged and, if so, how many public warrants to have exchanged. In doing so, you should read carefully the information in the Prospectus/Offer to Exchange and in the Letter of Transmittal and Consent.
3
Instructions Form
Offer To Exchange Warrants to Acquire Shares of Class A Common Stock
of
Vivid Seats Inc.
for
Shares of Class A Common Stock
of
Vivid Seats Inc.
and
Consent Solicitation
The undersigned acknowledges receipt of your letter and the enclosed Prospectus/Offer to Exchange dated May 26, 2022 (the Prospectus/Offer to Exchange), and the related Letter of Transmittal and Consent (the Letter of Transmittal and Consent), which together set forth the offer of Vivid Seats Inc., a Delaware corporation (the Company), to each holder of the Companys public warrants to purchase the Companys Class A common stock, par value $0.0001 per share (Class A Common Stock).
The undersigned hereby instructs you to tender for exchange the number of public warrants indicated below or, if no number is indicated, all public warrants you hold for the account of the undersigned, on the terms and subject to the conditions set forth in the Prospectus/Offer to Exchange and in the Letter of Transmittal and Consent.
By participating in the Offer, the undersigned acknowledges that: (i) the Offer and Consent Solicitation are made solely only upon the terms and conditions in the Prospectus/Offer to Exchange and in the Letter of Transmittal and Consent; (ii) upon and subject to the terms and conditions set forth in the Prospectus/Offer to Exchange and the Letter of Transmittal and Consent, public warrants properly tendered and accepted and not validly withdrawn constitutes the undersigneds validly delivered consent to the Warrant Amendment; (iii) the Offer will be open until 11:59 p.m., Eastern Daylight Time, on June 29, 2022, or such later time and date to which the Company may extend the Offer (the period during which the Offer is open, giving effect to any withdrawal or extension, is referred to as the Offer Period); (iv) the Offer is established voluntarily by the Company, it is discretionary in nature and it may be extended, modified, suspended or terminated by the Company as provided in the Prospectus/Offer to Exchange; (v) the undersigned is voluntarily participating in the Offer and is aware of the conditions of the Offer; (vi) the future value of the Class A Common Stock is unknown and cannot be predicted with certainty; (vii) the undersigned has received and read the Prospectus/Offer to Exchange and the Letter of Transmittal and Consent; and (viii) regardless of any action that the Company takes with respect to any or all income/capital gains tax, social security or insurance, transfer tax or other tax-related items (Tax Items) related to the Offer and the disposition of public warrants, the undersigned acknowledges that the ultimate liability for all Tax Items is and remains the responsibility solely of the undersigned. In that regard, the undersigned authorizes the Company to withhold all applicable Tax Items legally payable by the undersigned.
Number of public warrants to be exchanged by you for the account of the undersigned:
* | No fractional shares will be issued pursuant to the Offer. In lieu of issuing fractional shares, any holder of public warrants who would otherwise have been entitled to receive fractional shares pursuant to the Offer will, after aggregating all such fractional shares of such holder, be paid cash (without interest) in an amount equal to such fractional part of a share multiplied by the last sale price of the Class A Common Stock on The Nasdaq Global Select Market on the last trading day of the Offer Period. The Companys obligation to complete the offer is not conditioned on the receipt of a minimum number of tendered public warrants. |
** | Unless otherwise indicated it will be assumed that all public warrants held by us for your account are to be exchanged. |
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**
Signature(s): |
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Name(s): |
(Please Print) | ||||
Taxpayer Identification Number: |
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Address(es): |
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(Including Zip Code) |
Area Code/Phone Number: |
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Date: |
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5
Exhibit 107
Calculation of Filing Fee Tables
Form S-4
(Form Type)
Vivid Seats Inc.
(Exact Name of Registrant as Specified in its Charter)
Table 1Newly Registered and Carry Forward Securities
Security Type |
Security Class Title | Fee Calculation or Carry Forward Rule |
Amount Registered |
Proposed Maximum Offering Price Per Unit |
Maximum Aggregate Offering Price |
Fee Rate |
Amount of Registration Fee |
Carry Forward Form Type |
Carry Forward File Number |
Carry Forward Initial Effective Time |
Filing Fee Previously Paid In Connection with Unsold Securities to be Carried Forward | |||||||||||||
Newly Registered Securities | ||||||||||||||||||||||||
Fees to Be Paid |
Equity | Class A common stock | 457(f) | 4,351,864(1)(2) | $7.43 (3) | $32,334,349.52(3) | $92.70 per $1,000,000 |
$2,997.39 | ||||||||||||||||
Other | Warrants to purchase Class A common stock | | 18,132,766(4) | | | | (5) | |||||||||||||||||
Fees Previously Paid |
||||||||||||||||||||||||
Carry Forward Securities | ||||||||||||||||||||||||
Carry Forward Securities |
||||||||||||||||||||||||
Total Offering Amounts | $32,334,349.52 | $2,997.39 | ||||||||||||||||||||||
Total Fees Previously Paid | | |||||||||||||||||||||||
Total Fee Offsets | | |||||||||||||||||||||||
Net Fee Due | $2,997.39 |
(1) | Represents the maximum number of shares of Class A common stock (the Class A Common Stock), par value $0.0001 per share, of Vivid Seats Inc. (the Company) that may be issued directly to (i) holders of public warrants who tender their public warrants pursuant to the Offer (as defined in the Prospectus/Offer to Exchange) and (ii) holders of public warrants who do not tender their public warrants pursuant to the Offer and who, pursuant to the Warrant Amendment (as defined in the Prospectus/Offer to Exchange), if approved, may receive shares of Class A Common Stock in the event the Company exercises its right to convert the public warrants into shares of Class A Common Stock. |
(2) | Pursuant to Rule 416 under the Securities Act of 1933, as amended (the Securities Act), the Company is also registering an indeterminate number of additional shares of Class A Common Stock issuable by reason of any stock dividend, stock split, recapitalization or other similar transaction. |
(3) | Estimated pursuant to Rule 457(f) under the Securities Act, and solely for the purpose of calculating the registration fee, the proposed maximum offering price is $7.43 per share, which is the average of the high and low prices of the Class A Common Stock on The Nasdaq Global Select Market on May 24, 2022. |
(4) | Represents the maximum number of public warrants that may be amended pursuant to the Warrant Amendment. |
(5) | In accordance with Rule 457(g) under the Securities Act, the entire registration fee for the warrants is allocated to the shares of Class A Common Stock underlying the warrants, and no separate fee is payable for the warrants. |