ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion
and analysis of the Company’s financial condition and results of operations should be read in conjunction with our audited financial
statements and the notes related thereto which are included in “Item 8. Financial Statements and Supplementary Data” of this
Annual Report on Form 10-K.
Cautionary Note Regarding Forward-Looking Statements
This Annual Report on Form 10-K includes forward-looking statements
within the meaning of Section 27A of the Securities Act, and Section 21E of the Exchange Act. We have based these forward-looking
statements on our current expectations and projections about future events. These forward-looking statements are subject to known and
unknown risks, uncertainties and assumptions about us that may cause our actual results, levels of activity, performance or achievements
to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking
statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,”
“could,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,”
“continue,” or the negative of such terms or other similar expressions. Factors that might cause or contribute to such a discrepancy
include, but are not limited to, those described in our other U.S. Securities and Exchange Commission
(“SEC”) filings.
Overview
We are a blank check company
incorporated in Delaware on September 9, 2020. We were formed for the purpose of effecting a merger, capital stock exchange, asset acquisition,
stock purchase, reorganization or similar Business Combination with one or more businesses or entities.
4
Our Sponsor is 200 Park Avenue
Partners, LLC, a Delaware limited liability company. The registration statement for our Initial Public Offering was declared effective
on January 11, 2021. On January 14, 2021, we consummated our Initial Public Offering of 28,750,000 Units (and the Class A Common Stock
included in the Units being offered, the “Public Shares”), including 3,750,000 additional Units to cover over-allotments,
at $10.00 per Unit, generating gross proceeds of $287.5 million, and incurring offering costs of approximately $6.2 million.
Simultaneously with the closing
of the Initial Public Offering, we consummated the private placement of 777,500 Private Placement Units at a price of $10.00 per Private
Placement Unit to the Sponsor, PA 2 Co-Investment (an affiliate of Cowen and Company, LLC, a representative of the underwriters), and
Craig-Hallum (a representative of the underwriters) and its affiliate, generating proceeds of approximately $7.8 million.
Upon the closing of the Initial
Public Offering and the Private Placement, $287.5 million ($10.00 per Unit) of the net proceeds of the Initial Public Offering and certain
of the proceeds of the Private Placement was placed in a trust account (“Trust Account”), located in the United States with
Continental Stock Transfer & Trust Company acting as trustee, and invested only in U.S. “government securities” within
the meaning of Section 2(a)(16) of the Investment Company Act of 1940, as amended (the “Investment Company Act”) having a
maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company
Act which invest only in direct U.S. government treasury obligations, until the earlier of (i) the completion of the Business Combination
and (ii) the distribution of the Trust Account as described below.
If we are unable to complete
a Business Combination within 24 months from the closing of the Initial Public Offering, or January 14, 2023 (the “Combination Period”),
we will (1) cease all operations except for the purpose of winding up, (2) as promptly as reasonably possible but not more than 10 business
days thereafter, redeem the Public Shares, at a per share price, payable in cash, equal to the aggregate amount then on deposit in the
Trust Account, including interest earned on the funds held in the Trust Account and not previously released to the Company to pay its
franchise and income taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding Public
Shares, which redemption will completely extinguish Public Stockholders’ rights as stockholders (including the right to receive
further liquidating distributions, if any), subject to applicable law; and (3) as promptly as reasonably possible following such redemption,
subject to the approval of the remaining stockholders and the board of directors, dissolve and liquidate, subject in each case to the
Company’s obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law.
Results of Operations
Our entire activity since
inception through December 31, 2020 related to our formation, and the preparation for the Initial Public Offering. We have neither engaged
in any operations nor generated any revenues to date. We will not generate any operating revenues until after completion of our initial
Business Combination. Subsequent to the closing of the Initial Public Offering our activity includes the search for a prospective initial
Business Combination and generation of non-operating income in the form of interest income on cash and cash equivalents. We expect to
incur increased expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as
well as for due diligence expenses.
For the period from September
9, 2020 (inception) to December 31, 2020 we had net loss of approximately $11,000, which consisted solely of general and administrative
expenses.
Liquidity and Capital Resources
As of December 31, 2020, we
had approximately $202,000 in cash and working capital deficit of approximately $325,000.
5
Through December 31,
2020, our liquidity needs were satisfied through the receipt of $25,000 from our Sponsor in exchange for the issuance of the Founder
Shares, the proceeds of the Note (as defined below) from our Sponsor of $300,000, and approximately $13,000 in advances from a
related party. We repaid the Note in full on January 14, 2021 and reimbursed the advances from the related party in full in February
2021. Subsequent to the consummation of the Initial Public Offering and Private Placement, our liquidity needs have been satisfied
with the proceeds from the consummation of the Private Placement not held in the Trust Account. In addition, in order to finance
transaction costs in connection with a Business Combination, our Sponsor, members of our management team or any of their affiliates
or other third parties, may, but are not obligated to, provide us working capital loans.
Based on the foregoing, our
management believes that we will have sufficient working capital and borrowing capacity to meet our needs through the earlier of the consummation
of a Business Combination or one year from this filing. Over this time period, we will be using these funds for paying existing accounts
payable, identifying and evaluating prospective initial Business Combination candidates, performing due diligence on prospective target
businesses, paying for travel expenditures, selecting the target business to merge with or acquire, and structuring, negotiating and consummating
the Business Combination.
Management continues to evaluate
the impact of the COVID-19 pandemic on the industry and has concluded that while it is reasonably possible that the virus could have a
negative effect on our financial position, results of our operations and/or our search for a target company, the specific impact is not
readily determinable as of the date of the financial statements. The financial statements do not include any adjustments that might result
from the outcome of this uncertainty.
Related Party Transactions
Founder Shares
In October 2020, our Sponsor
purchased 7,187,500 shares of our Founder Shares for an aggregate price of $25,000. The initial stockholders agreed to forfeit up to 937,500
Founder Shares to the extent that the over-allotment option was not exercised in full by the underwriters, so that the Founder Shares
would represent 20% of our issued and outstanding shares after the Initial Public Offering (excluding the shares comprising the Private
Placement Units). The underwriter exercised its over-allotment option in full on January 14, 2021; thus, the 937,500 Founder Shares
were no longer subject to forfeiture.
The initial stockholders agreed,
subject to limited exceptions, not to transfer, assign or sell any of the Founder Shares until the earlier to occur of: (A) one year
after the completion of the initial Business Combination or (B) subsequent to the initial Business Combination, (x) if the last
reported sale price of the Class A Common Stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends,
reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days
after the initial Business Combination, or (y) the date following the completion of the initial Business Combination on which the
Company completes a liquidation, merger, stock exchange, reorganization or other similar transaction that results in all of the stockholders
having the right to exchange their shares of Class A Common Stock for cash, securities or other property.
Private Placement
Simultaneously with the closing
of the Initial Public Offering, we consummated the Private Placement of 777,500 Private Placement Units at a price of $10.00 per
Private Placement Unit to the Sponsor, PA 2 Co-Investment, and Craig-Hallum and its affiliate, generating proceeds of approximately $7.8 million.
The Private Placement Units
(including the shares comprising the Private Placement Units and the Private Placement Warrants (as defined below) and shares of Class A
Common Stock issuable upon exercise of such Private Placement Warrants) are not transferable or salable until 30 days after the completion
of the initial Business Combination.
Each whole private
placement warrant underlying the Private Placement Units (the “Private Placement Warrants”) is exercisable for one whole
share of Class A Common Stock at a price of $11.50 per share. A portion of the proceeds from the Private Placement Units has
been added to the proceeds from the Initial Public Offering to be held in the Trust Account. If we do not complete a Business
Combination within the Combination Period, the Private Placement Units and the underlying securities will expire worthless.
6
Our Sponsor, officers and
directors agreed, subject to limited exceptions, not to transfer, assign or sell any of their Private Placement Units until 30 days
after the completion of the initial Business Combination.
Related Party Loans
On October 15, 2020,
our Sponsor agreed to loan us an aggregate of up to $300,000 to cover expenses related to the Initial Public Offering pursuant to a promissory
note (the “Note”). This loan was non-interest bearing and payable upon the completion of the Initial Public Offering. The
Company borrowed $300,000 under the Note as of December 31, 2020 and repaid the Note in full on January 14, 2021. In addition, an affiliate
of our Sponsor advanced approximately $13,000 to cover for certain expenses on behalf of us and we reimbursed the advances from the affiliate
of our Sponsor in full in February 2021.
In addition, in order to finance
transaction costs in connection with a Business Combination, our Sponsor, members of our management team or any of their affiliates or
other third parties may, but are not obligated to, loan us funds as may be required (“Working Capital Loans”). If we complete
a Business Combination, we would repay the Working Capital Loans out of the proceeds of the Trust Account released to us. Otherwise, the
Working Capital Loans would be repaid only out of funds held outside the Trust Account. In the event that a Business Combination does
not close, we may use a portion of proceeds held outside the Trust Account to repay the Working Capital Loans but no proceeds held in
the Trust Account would be used to repay the Working Capital Loans. The Working Capital Loans would either be repaid upon consummation
of a Business Combination or, at the lenders’ discretion, up to $1.5 million of such Working Capital Loans may be convertible
into units of the post-Business Combination entity at a price of $10.00 per unit at the option of the lender. The units would
be identical to the Private Placement Units. Except for the foregoing, the terms of such Working Capital Loans, if any, have not been
determined and no written agreements exist with respect to such loans. To date, the Company had no borrowings under the Working Capital
Loans.
Contractual Obligations
Registration Rights
The holders of Founder Shares,
Private Placement Units and units that may be issued upon conversion of Working Capital Loans (and any Class A Common Stock
issuable upon the exercise of the Private Placement Units and units that may be issued upon conversion of Working Capital Loans and
upon conversion of the Founder Shares) are entitled to registration rights pursuant to a registration rights agreement signed upon the
consummation of the Initial Public Offering. These holders are entitled to make up to certain demands, excluding short form demands, that
we registered such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration
statements filed subsequent to the completion of the initial Business Combination. We will bear the expenses incurred in connection with
the filing of any such registration statements.
Underwriting Agreement
The underwriters were entitled
to an underwriting discount of $0.20 per unit, or approximately $5.8 million in the aggregate, paid upon the closing of the Initial
Public Offering.
Administrative Support
Agreement
Commencing on the date of
the listing of the Units on the Nasdaq Capital Market through the earlier of the consummation of the initial Business Combination or our
liquidation, we will pay the Sponsor $20,000 per month for office space, utilities, general office and secretarial support, and administrative
and support services.
In addition, the
Sponsor, executive officers and directors, or any of their respective affiliates will be reimbursed for any out-of-pocket expenses
incurred in connection with activities on our behalf such as identifying potential partner businesses and performing due diligence
on suitable Business Combinations. Our audit committee will review on a quarterly basis all payments that were made by us to the
Sponsor, executive officers or directors, or the Company's or their affiliates. Any such payments prior to an initial Business
Combination will be made using funds held outside the Trust Account.
7
Recent accounting standards
Management does not believe
that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on our unaudited
condensed financial statements.
Off-balance sheet financing arrangements
We have no off-balance
sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K as of December 31, 2020.
JOBS Act
The Jumpstart Our Business
Startups Act of 2012 (the “JOBS Act”) contains provisions that, among other things, relax certain reporting requirements
for qualifying public companies. We qualify as an “emerging growth company” and under the JOBS Act are allowed to comply with
new or revised accounting pronouncements based on the effective date for private (not publicly traded) companies. We are electing to delay
the adoption of new or revised accounting standards, and as a result, we may not comply with new or revised accounting standards on the
relevant dates on which adoption of such standards is required for non-emerging growth companies. As a result, our
financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company
effective dates.
Additionally, we are in the
process of evaluating the benefits of relying on the other reduced reporting requirements provided by the JOBS Act. Subject to certain
conditions set forth in the JOBS Act, if, as an “emerging growth company,” we choose to rely on such exemptions we may not
be required to, among other things, (i) provide an auditor’s attestation report on our system of internal controls over financial
reporting pursuant to Section 404 of the Sarbanes-Oxley Act, (ii) provide all of the compensation disclosure that may be
required of non-emerging growth public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act,
(iii) comply with any requirement that may be adopted by the PCAOB regarding mandatory audit firm rotation or a supplement to the
auditor’s report providing additional information about the audit and the financial statements (auditor discussion and analysis)
and (iv) disclose certain executive compensation related items such as the correlation between executive compensation and performance
and comparisons of the CEO’s compensation to median employee compensation. These exemptions will apply for a period of five years
following the completion of our Initial Public Offering or until we are no longer an “emerging growth company,” whichever
is earlier.
Critical Accounting Policies
The preparation of financial
statements and related disclosures in conformity with Generally Accepted Accounting Principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of
the financial statements, and income and expenses during the periods reported. Actual results could materially differ from those estimates.
We have not identified any critical accounting policies.
Recent accounting pronouncements
Our management does not believe
that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on our
financial statements.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are a smaller reporting
company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information otherwise required under this
item.
8
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Reference is made to Pages F-1 through F-16 comprising
a portion of this Annual Report on Form 10-K.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE.
None.
ITEM 9A. CONTROL AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Disclosure controls are procedures
that are designed with the objective of ensuring that information required to be disclosed in our reports filed under the Exchange Act,
such as this report, is recorded, processed, summarized, and reported within the time period specified in the SEC’s rules and forms.
Disclosure controls are also designed with the objective of ensuring that such information is accumulated and communicated to our management,
including the principal executive officer and principal financial and accounting officer, as appropriate to allow timely decisions regarding
required disclosure. Our management evaluated, with the participation of our principal executive officer and principal financial and accounting
officers (our “Certifying Officers”), the effectiveness of our disclosure controls and procedures as of December 31, 2020,
pursuant to Rule 13a-15(b) under the Exchange Act. Based upon that evaluation, our Certifying Officers concluded that, as of December
31, 2020, our disclosure controls and procedures were effective.
Management’s Report on Internal Controls
Over Financial Reporting
This Annual Report on Form
10-K does not include a report of management’s assessment regarding internal control over financial reporting or an attestation
report of our independent registered public accounting firm due to a transition period established by rules of the SEC for newly public
companies.
Changes in Internal Control over Financial
Reporting
There were no changes in our
internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the most
recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial
reporting.
ITEM 9B. OTHER INFORMATION
None.
9
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.
Directors and Executive Officers
Our directors and executive officers are as follows:
Name Age Title
Adam Rothstein 49 Executive Chairman, Secretary and Director
Emiliano Calemzuk 47 Chief Executive Officer and Director
Michael Del Nin 50 Chief Financial Officer and Chief Operating Officer
Linda Yaccarino 58 Director
Kelli Turner 50 Director
David Bank 51 Director
Scott Flanders 64 Director
Jon Jashni 57 Director
Adam
Rothstein has served as an executive officer and a member of our board of directors since our inception. Mr. Rothstein has
served as our Executive Chairman since inception and our Secretary since December 2020. Mr. Rothstein also had served as our
President, Chief Executive Officer, Treasurer and Secretary from inception until November 2020. Mr. Rothstein is a Co-Founder and
General Partner of Disruptive Technology Partners, an Israeli technology-focused early-stage investment fund, and Disruptive Growth,
a collection of late-stage investment vehicles focused on Israeli technology, which he co-founded in 2013 and 2014 respectively.
Since 2014, Mr. Rothstein has been the Managing Member of 1007 Mountain Drive
Partners, LLC, which is both a consulting and investment vehicle. Mr. Rothstein is also a sponsor and director of Roth CH
Acquisition II Co. (NASDAQ: ROCC, ROCCW, ROCCU) and Roth CH Acquisition III Co. (NASDAQ: ROCRU), which are special purpose
acquisition companies. Previously, from July 2019 until January 2021, Mr. Rothstein was a director of Subversive Capital Acquisition
Corp. (NEO: SVC.A.U) (OTCQX: SBVCF), a special purpose acquisition company that partnered with Shawn “Jay-Z” Carter and
Roc Nation in January 2021 to acquire CMG Partners Inc. and Left Coast Ventures, Inc. and which now trades as TPCO Holding Corp.
(NEO: GRAM.U) (OTCQX: GRAMF). Additionally, from February 2020 until March 2021, Mr. Rothstein was a director of Roth CH Acquisition
I Co. (NASDAQ: ROCH), a special purpose acquisition company that acquired PureCycle Technologies LLC and which now trades as
PureCycle Technologies, Inc. (NASDAQ: PCT, PCTTW, PCTTU). Mr. Rothstein has over 20 years of investment experience, and
currently sits on the boards of directors of several early- and mid-stage technology and media companies both in the US and in
Israel and is on the Advisory Board for the Leeds School of Business at the University of Colorado, Boulder. Mr. Rothstein
graduated summa cum laude with a Bachelor of Science in Economics from the Wharton School of Business at the University of
Pennsylvania and has a Master of Philosophy (MPhil) in Finance from the University of Cambridge. We believe Mr. Rothstein is
well-qualified to serve as a member of the board due to his business experience, as well as his contacts and relationships.
10
Emiliano Calemzuk
serves as our Chief Executive Officer and a member of our board of directors since November 2020. Mr. Calemzuk is a media
executive and entrepreneur with 20 years of experience in the international media and management space. He currently serves as
the Lead Independent Director and Chairman of the Nominating and Corporate Governance at MercadoLibre, Inc. (Nasdaq: MELI), an
e-commerce and payments platform in Latin America. Mr. Calemzuk was recently Co-Founder and CEO of RAZE, a Los Angeles-based
media venture which produces traditional and social content geared toward a Hispanic and Latin American audience in the United
States. In 2015 and 2016 Mr. Calemzuk
partnered with Time Inc., publisher of Time, Sports Illustrated, People, and other major magazine titles to assist with Time
Inc.’s entry into digital video. In 2013 and 2014 Mr. Calemzuk joined Jeff Sagansky’s and Harry Sloan’s
$400 million special purpose acquisition company, Silver Eagle Acquisition Company, as target company Chief Executive Officer
designate. Mr. Calemzuk had a 14-year career at 21st Century Fox / News Corp in the C-suite. He served as Chief Executive
Officer of Shine Group Americas, a unit of 21st Century Fox, from 2010 to 2012. In this capacity Mr. Calemzuk oversaw scripted
and non-scripted television series. From 2007 to 2010, Mr. Calemzuk served as President of Fox Television Studios. From 2002 to
2007 Mr. Calemzuk was based in Rome, Italy, as President of FOX International Channels Europe where he managed the operation of
the FOX Italian TV group. In addition, Mr. Calemzuk supervised the FOX operation in Spain, France, Germany, Turkey, and Eastern
Europe. Before moving to Rome, Mr. Calemzuk was Vice President and Deputy Managing Director of FOX Latin American Channels. In
2000 Mr. Calemzuk held the post of General Manager of Fox Kids Latin America. Mr. Calemzuk was born in Mar del Plata,
Argentina, and is a cum laude graduate of the University of Pennsylvania. We believe Mr. Calemzuk
is well-qualified to serve as a member of the board due to his business experience, as well as his contacts and relationships.
Michael Del Nin has
served as our Chief Financial Officer and Chief Operating Officer since January 11, 2021. Mr. Del Nin was the Co-Chief Executive
Officer of Central European Media Enterprises Ltd. (Nasdaq: CETV), one of Europe’s leading television broadcasters, from September 2013
until its sale in October 2020, and was a member of its Board of Directors from October 2009 until September 2013. Mr. Del
Nin previously was the Senior Vice President of International and Corporate Strategy at Time Warner Inc. from 2008 until 2013, in which
capacity he helped drive Time Warner Inc.’s global strategy and business development initiatives, with a particular focus on international
operations and investments. From 2006 to 2008, Mr. Del Nin was the Senior Vice President responsible for Mergers and Acquisitions
at Time Warner Inc. Mr. Del Nin’s prior experience includes roles at New Line Cinema, as Senior Vice President, Business Development,
and as an investment banker at Salomon Smith Barney focused on the media industry. Mr. Del Nin holds an undergraduate business degree
from Bocconi University and a law degree from the University of New South Wales.
Linda Yaccarino has
served as a member of our board of directors since January 11, 2021. As Chairman of Global Advertising and Partnerships at NBCUniversal,
Ms. Yaccarino is responsible for managing over $10 billion in revenue annually and stewarding the company’s industry-leading
portfolio of linear networks, digital platforms, distribution partnerships, and client relationships. At NBCUniversal, Ms. Yaccarino,
with the help of her 1,500-person team, connects established and emerging brands to hundreds of millions of viewers. Ms. Yaccarino
also leads a joint Global Advertising & Partnerships team at NBCUniversal, which oversees the company’s One Platform offering
worldwide. Ms. Yaccarino is the Chairman of the World Economic Forum’s Taskforce on Future of Work, and the Vice Chairman of
The Advertising Council. Ms. Yaccarino sits on the Board of Directors of Ascena Retail Group (OTC: ASNAQ) and is a member of the
President’s Council on Sports, Fitness, and Nutrition. Ms. Yaccarino is a graduate of Pennsylvania State University. We believe
Ms. Yaccarino is well-qualified to serve as a member of the board due to her business experience, as well as her contacts and relationships.
11
Kelli
Turner has served as a member of our board of directors since January 11, 2021. Ms. Turner is currently President and
Chief Operating Officer at SESAC, Inc., a music rights licensing company. She is also general partner of RSL Venture Partners. She recently joined the Board of Directors of DoubleVerify, a leading software platform for digital media measurement and analytics, and
was on the Board of Directors of Central European Media Enterprises Ltd. (Nasdaq: CETV), a media and entertainment company operating
in Central and Eastern European markets, until its sale in October 2020. She was previously President and Chief Financial
Officer of RSL Management Corporation from February 2011 to April 2012. Ms. Turner previously was Chief Financial
Officer and Executive Vice President of Martha Stewart Living Omnimedia, Inc., a diversified media and merchandising company, from
2009 to 2011, where she was responsible for all aspects of the company’s financial operations, while working closely with the
executive team in shaping Martha Stewart Living Omnimedia, Inc.’s business strategy and capital allocation process. A lawyer
and a registered certified public accountant with significant experience in the media industry, Ms. Turner joined Martha
Stewart Living Omnimedia, Inc. in 2009 from Time Warner Inc., where she held the position of Senior Vice President, Operations in
the Office of the Chairman and Chief Executive Officer. Prior to that, she served as Senior Vice President, Business Development for
New Line Cinema from 2006 to 2007 after having served as Time Warner Inc.’s Vice President, Investor Relations from 2004 to
2006. Ms. Turner worked in investment banking for years with positions at Allen & Company and Salomon Smith Barney
prior to joining Time Warner Inc. Early in her career, she also gained tax and audit experience as a certified public accountant at
Ernst & Young, LLP. Ms. Turner received her undergraduate business degree and her law degree from the University of
Michigan. We believe Ms. Turner is well-qualified to serve as a member of the board due to her business experience, as well as her
contacts and relationships.
David
Bank has served as a member of our board of directors since January 11, 2021. Mr. Bank is Executive Vice President,
Corporate Development and Strategy for A+E Networks. He was named to the role in July 2019 and is responsible for long-term
strategic and business development plans, including identifying potential partners in the marketplace, and exploring opportunities
that align with the company’s forecasted objectives. Mr. Bank is also member of the board of directors of Johnson Production
Group. Mr. Bank is a veteran analyst and financial professional with expertise in the media and entertainment industry. Prior
to joining A+E Networks, he served as Executive Vice President, Investor Relations at CBS Corp. Previously, Mr. Bank had a
16-year career as a sell-side equity research analyst and Managing Director at RBC Capital Markets where he primarily covered Large
Cap Media and Entertainment Companies. He also served as Associate Director of The US Equity Research Department at RBC Capital
Markets. Mr. Bank began his career as an investment banker focusing on financial institutions at First Boston, then joined
Furman Selz as an Investment Banker focused on Media. He holds a Bachelor of Arts from Williams College and a Master of Business
Administration from The Yale School of Management. We believe Mr. Bank is well-qualified to serve as a member of the board due to
his business experience, as well as his contacts and relationships.
Scott Flanders has
served as a member of our board of directors since January 11, 2021. In his current role as Chief Executive Officer for eHealth, Inc.
(Nasdaq: EHTH), Mr. Flanders has managed the company through vast industry changes. In addition to eHealth, Inc., Mr. Flanders
has served as Chief Executive Officer of The Columbia House Company, Freedom Communications and Playboy Enterprises. Mr. Flanders
holds a Bachelor of Arts in Economics from the University of Colorado, Boulder and a Juris Doctor from Maurer School of Law at Indiana
University. Mr. Flanders is also a Certified Public Accountant. We believe Mr. Flanders is well-qualified to serve as a member of
the board due to his business experience, as well as his contacts and relationships.
Jon
Jashni has served as a member of our board of directors since January 11, 2021. Mr. Jashni is a media investor,
advisor and content executive who provides services through his consulting firm Raintree Ventures. He is currently a Founding
Advisor to Influence Media, a music fund allied with Warner Music, and Sreda Global, a leading Russian TV studio. Mr. Jashni
also serves as a strategic advisor to such entities as Mass Appeal, Bonfire Game Studios, Prometheus Entertainment and Wevr and is a
Founding Partner of Synthesis Entertainment. Over the course of his career, Mr. Jashni has been associated with the creation
and monetization of content that has generated over $7 billion in gross revenue. From 2006 to 2016, Mr. Jashni was
Co-Founder, President and Chief Creative Officer of Legendary Entertainment. During his 10-year tenure at the company he was
integral to establishing and evolving the company into a leading, diversified, multi-platform media company. Comprised of film,
television, digital and comics divisions, Legendary Entertainment is dedicated to owning, producing and delivering mainstream
content to global audiences. Mr. Jashni has been a lead participant in corporate transactions involving such companies as Time
Warner, Comcast NBCUniversal, Fidelity, Waddell & Reed, Softbank and Wanda (which purchased Legendary Entertainment in 2016).
Mr. Jashni has also been involved in the acquisition and scaling of a vanguard applied analytics entity which developed
proprietary methodologies for optimizing media buying, leveraging social media and finely calibrating consumer interactions. Prior
to co-founding and joining Legendary Entertainment, Mr. Jashni was President of Hyde Park Entertainment, President of Irving
Azoff’s Warner Bros-based Giant Pictures, Senior Vice President of Production at 20th Century Fox and Creative Executive at
Columbia Pictures. Mr. Jashni holds a Master of Business Administration in Organizational Behavior from the Anderson School of
Management at the University of California, Los Angeles and a Bachelor of Science in Corporate Finance from the University of
Southern California. We believe Mr. Jashni is well-qualified to serve as a member of the board due to his business experience, as
well as his contacts and relationships.
12
Number and Terms of Office of Officers and Directors
Effective as of January 11,
2021, we have seven directors. Our board of directors is divided into three classes with only one class of directors being elected in
each year and each class (except for those directors appointed prior to our first annual meeting of stockholders) serving a three-year term.
The term of office of the first class of directors, consisting of David Bank and Emiliano Calemzuk, will expire at our first annual meeting
of stockholders. The term of office of the second class of directors, consisting of Scott Flanders and Jon Jashni, will expire at the
second annual meeting of stockholders. The term of office of the third class of directors, consisting of Adam Rothstein, Kelli Turner
and Linda Yaccarino, will expire at the third annual meeting of stockholders. In accordance with Nasdaq corporate governance requirements,
we are not required to hold an annual meeting until one year after our first fiscal year end following our listing on Nasdaq.
Our officers are appointed by the board of directors
and serve at the discretion of the board of directors, rather than for specific terms of office. Our board of directors is authorized
to appoint persons to the offices set forth in our bylaws as it deems appropriate. Our bylaws provide that our officers may consist of
a Co-Chairman of the Board, Executive Chairman, a Chief Executive Officer, a President, a Chief Financial Officer, Vice Presidents, a
Secretary, Assistant Secretaries, a Treasurer and such other offices as may be determined by the board of directors.
Director Independence
Nasdaq rules require that
a majority of our board of directors be independent within one year of our initial public offering. An “independent director”
is defined generally as a person other than an officer or employee of the company or its subsidiaries or any other individual having a
relationship, which, in the opinion of the company’s board of directors, would interfere with the director’s exercise of independent
judgment in carrying out the responsibilities of a director. Effective January 11, 2021, we have five “independent directors”
as defined in the Nasdaq rules and applicable SEC rules prior to completion of our initial public offering. A majority of our board of
directors is comprised of independent directors. Our board has determined that each of Mses. Yaccarino and Turner and Messrs. Bank, Flanders
and Jashni are independent directors under applicable SEC and Nasdaq rules. Our independent directors will have regularly scheduled meetings
at which only independent directors are present.
Audit Committee
Under
the Nasdaq listing standards and applicable SEC rules, we are required to have three members of the audit committee, all of whom must
be independent, subject to the following exception: because we expect to list our securities on Nasdaq in connection with our initial
public offering, we have one year from the effective date of the registration statement of which this prospectus forms a part to have
our audit committee be comprised solely of independent members. The members of our audit committee are David Bank, Jon Jashni and Kelli
Turner. Kelli Turner has agreed to serve as chair of the audit committee.
Each
member of the audit committee is financially literate, and our board of directors has determined that Kelli Turner qualifies as an “audit
committee financial expert” as defined in applicable SEC rules. We have adopted an audit committee charter, which details the principal
functions of the audit committee, including:
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Nominating Committee
We
do not have a standing nominating committee, though we intend to form a corporate governance and nominating committee as and when required
to do so by applicable law or stock exchange rules. In accordance with Rule 5605(e)(2) of the Nasdaq listing rules, a majority of
the independent directors may recommend a director nominee for selection by the board of directors. The board of directors believes that
the independent directors can satisfactorily carry out the responsibility of properly selecting or approving director nominees without
the formation of a standing nominating committee. In accordance with Rule 5605(e)(1)(A) of the Nasdaq listing rules, all such directors
are independent. As there is no standing nominating committee, we do not have a nominating committee charter in place.
Prior to our initial Business
Combination, the board of directors will also consider director candidates recommended for nomination by our stockholders during such
times as they are seeking proposed nominees to stand for election at an annual meeting of stockholders (or, if applicable, a special meeting
of stockholders). Our stockholders that wish to nominate a director for election to the board of directors should follow the procedures
set forth in our bylaws.
Guidelines for Selecting Director Nominees
We have not formally established any specific, minimum
qualifications that must be met or skills that are necessary for directors to possess. In general, in identifying and evaluating nominees
for director, the board of directors considers educational background, diversity of professional experience, knowledge of our business,
integrity, professional reputation, independence, wisdom, and the ability to represent the best interests of our stockholders.
Compensation Committee
Effective January 11,
2021, we established a compensation committee of the board of directors. Under the Nasdaq listing standards and applicable SEC
rules, we are required to have a compensation committee comprised entirely of independent directors. The members of our Compensation
Committee are David Bank, Scott Flanders and Linda Yaccarino. Scott Flanders serves as chair of the compensation committee. We have
adopted a compensation committee charter, which details the principal functions of the compensation committee, including:
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· reviewing and approving the compensation of all of our other officers;
· reviewing our executive compensation policies and plans;
The compensation committee
charter provides that the compensation committee may, in its sole discretion, retain or obtain the advice of a compensation consultant,
legal counsel or other adviser and is directly responsible for the appointment, compensation and oversight of the work of any such adviser.
Code of Ethics
Effective January 13, 2021,
we adopted a Code of Ethics applicable to our directors, officers and employees. We have filed a copy of our form of Code of Ethics and
our audit committee charter as exhibits to our registration statement filed pursuant to Rule 424(b)(4) (Registration No. 333-251650).
These documents may be reviewed by accessing our public filings at the SEC’s website at www.sec.gov. We will disclose any amendments
to or waivers of certain provisions of our Code of Ethics in a Current Report on Form 8-K.
ITEM 11. EXECUTIVE COMPENSATION
Executive Compensation
None of our officers or directors
has received any cash compensation for services rendered to us. Commencing on the date that our securities were first listed on Nasdaq
through the earlier of consummation of our initial Business Combination and our liquidation, we will pay an affiliate of our sponsor a
total of $20,000 per month, for up to 24 months, for office space, utilities, general office and secretarial support, and administrative
and support services. Our founders, officers and directors, or any of their respective affiliates, will be reimbursed for any out-of-pocket
expenses incurred in connection with activities on our behalf such as identifying potential target businesses and performing due diligence
on suitable Business Combinations. Our audit committee will review on a quarterly basis all payments that were made to our founders, officers,
directors or our or any of their affiliates.
Any such payments prior to
an initial Business Combination have been, and will continue to be made from funds held outside the Trust Account. Other than quarterly
audit committee review of such reimbursements, we do not expect to have any additional controls in place governing our reimbursement payments
to our directors and executive officers for their out-of-pocket
expenses incurred in connection with our activities on our behalf in connection with identifying and consummating an initial Business
Combination. Other than these payments and reimbursements, no compensation of any kind, including finder’s and consulting fees,
have been paid by the company to our founders, executive officers and directors, or any of their respective affiliates, prior to completion
of our initial Business Combination.
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After the completion of our
initial Business Combination, directors or members of our management team or advisors who remain with us may be paid consulting, management
or other compensation from the combined company. All compensation will be fully disclosed to stockholders, to the extent then known, in
the tender offer materials or proxy solicitation materials furnished to our stockholders in connection with a proposed Business Combination.
It is unlikely the amount of such compensation will be known at the time because the directors of the post-combination business will be
responsible for determining executive officer and director compensation. Any compensation to be paid to our officers after the completion
of our initial Business Combination will be determined by a compensation committee constituted solely by independent directors.
We are not party to any agreements
with our executive officers and directors that provide for benefits upon termination of employment. The existence or terms of any such
employment or consulting arrangements may influence our management’s motivation in identifying or selecting a target business, and
we do not believe that the ability of our management to remain with us after the consummation of our initial Business Combination should
be a determining factor in our decision to proceed with any potential Business Combination.
Since our formation, we have
not granted any stock options or stock appreciation rights or any other awards under long-term incentive plans to any of our executive
officers or directors.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The
following table sets forth information regarding the beneficial ownership of our common stock as of January 11, 2021, and as adjusted
to reflect the sale of our common stock included in the units offered by Initial Public Offering prospectus, and assuming no purchase
of units in or following the Initial Public Offering, by:
Unless otherwise indicated,
we believe that all persons named in the table have sole voting and investment power with respect to all shares of common stock beneficially
owned by them. The following table does not reflect record or beneficial ownership of the Private Placement Warrants as they are not exercisable
within 60 days of the date hereof.
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Number of Shares Beneficially Owned Percentage of Outstanding Common Stock
Name and Address of Beneficial Owner1
Craig-Hallum Capital Group LLC4 302,238 4 *
Emiliano Calemzuk — *
Michael Del Nin — *
* Less than one percent.
(1) Unless otherwise noted, the business address
of each of the following entities or individuals is 14 Elm Place, Suite 206, Rye, New York 10580.
(2) Represents 657,500 shares underlying Private
Placement Units and 6,195,040 Founder Shares held of record by our Sponsor. Our Sponsor is controlled by Mr. Rothstein, as manager,
and therefore Mr. Rothstein has voting and dispositive power over such shares and Founder Shares held by our Sponsor and may be deemed
to beneficially own such Founder Shares. In addition, certain of our other officers, directors, and advisors are members of our Sponsor.
(3) Represents 84,000 shares underlying
Private Placement Units and 621,222 Founder Shares held directly by PA 2 Co-Investment. As the sole member of PA 2 Co-Investment,
Cowen Investments II LLC may be deemed to beneficially own the securities owned directly by PA 2 Co-Investment. As the sole member
of Cowen Investments II, RCG LV Pearl, LLC (“RCG”) may be deemed to beneficially own the securities owned directly by PA
2 Co-Investment. As the sole member of RCG, Cowen Inc. may be deemed to beneficially own the securities owned directly by PA 2
Co-Investment. As Chief Executive Officer of Cowen Inc., Mr. Jeffrey Solomon may be deemed to beneficially own the securities owned
directly by PA 2 Co-Investment. The business address is 599 Lexington Avenue, 20th Floor, New York, NY 10022.
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(4) Represents 36,000 shares underlying Private
Placement Units and 266,238 Founder Shares; includes shares held by certain affiliates of Craig-Hallum Capital Group LLC. The Board of
Directors of Craig-Hallum Capital Group LLC (the “CH Board”) controls Craig-Hallum Capital Group LLC. There are 6 members
of the CH Board: Brad Baker, Steve Dyer, William Hartfiel III, Kevin Harris, James Zavoral and Tom Emmel. Each member of the CH Board
has one vote, and majority approval is required to approve an action. Under the so-called “rule of three,” if voting and dispositive
decisions regarding an entity’s securities are made by three or more individuals, and a voting or dispositive decision requires
the approval of a majority of those individuals, then none of the individuals is deemed a beneficial owner of the entity’s securities.
Based upon the foregoing analysis, no individual member of the CH Board controls Craig-Hallum Capital Group LLC or exercises voting or
dispositive control over any of the securities held by Craig-Hallum Capital Group LLC, even those in which he or she holds a pecuniary
interest. Accordingly, none of them is deemed to have or share beneficial ownership of such shares. The business address of each of Craig-Hallum
Capital Group LLC and its affiliates is 222 South Ninth Street, Suite 350, Minneapolis, MN 55402.
(5) Does not include any securities held by 200
Park Avenue Partners, LLC, of which each person is a member.
With
certain limited exceptions, the Founder Shares will not be transferable, assignable or salable by our initial stockholders until the earlier
of (1) one year after the completion of our initial Business Combination and (2) the date on which we consummate a liquidation,
merger, capital stock exchange, reorganization, or other similar transaction after our initial Business Combination that results in all
of our stockholders having the right to exchange their shares of common stock for cash, securities or other property. Notwithstanding
the foregoing, if the last reported sale price of our common stock shares equals or exceeds $12.00 per share (as adjusted for stock splits,
stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing
at least 150 days after our initial Business Combination, the Founder Shares will be released from the lock-up. With certain limited
exceptions, the shares comprising the Private Placement Units, the Private Placement Warrants and the shares of common stock underlying
such Private Placement Warrants, will not be transferable, assignable or salable by our initial stockholders until 30 days after
the completion of our initial Business Combination.
Our executive officers and Sponsor are our
“promoters,” as that term is defined under the federal securities laws.
Equity Compensation
Plans
As
of December 31, 2020, we had no compensation plans (including individual compensation arrangements) under which equity securities of the
registrant were authorized for issuance.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS, AND DIRECTOR INDEPENDENCE.
For a complete discussion
regarding certain relationships and related transactions, see the section titled “Related Party Transactions” contained in
our prospectus dated January 11, 2021, incorporated by reference herein.
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES.
The firm of Marcum LLP, or
Marcum, acts as our independent registered public accounting firm. The following is a summary of fees paid to Marcum for services rendered.
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Audit Fees
Audit fees consist of fees
billed for professional services rendered for the audit of our year-end financial statements, reviews of our quarterly financial statements
and services that are normally provided by our independent registered public accounting firm in connection with statutory and regulatory
filings. The aggregate fees billed by Marcum for audit fees, inclusive of required filings with the SEC for the year ended December 31,
2020 and of services rendered in connection with our Initial Public Offering, totaled $55,000.
Audit-Related Fees
Audit-related fees consist
of fees billed for assurance and related services that are reasonably related to performance of the audit or review of our year-end financial
statements and are not reported under “Audit Fees.” These services include attest services that are not required by statute
or regulation and consultation concerning financial accounting and reporting standards. During the year ended December 31, 2020, we did
not pay Marcum any audit-related fees.
Tax Fees
Tax fees consist of fees billed
for professional services relating to tax compliance, tax planning and tax advice. During the year ended December 31, 2020, we did not
pay Marcum any tax fees.
All Other Fees
All other fees consist of
fees billed for all other services. During the year ended December 31, 2020, we did not pay Marcum any other fees.
Audit Committee Approval
Because our audit committee
was not formed until January 11, 2021, the audit committee did not pre-approve all of the foregoing services, although any services rendered
prior to the formation of our audit committee were approved by our board of directors. However, in accordance with Section 10A(i) of the
Exchange Act, before we engage our independent registered public accounting firm to render audit or non-audit services on a going-forward
basis, the engagement will be approved by our audit committee.
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PART IV
ITEM 15. EXHIBIT AND FINANCIAL STATEMENT SCHEDULES.
(a) The following documents are filed as part of this report:
(1) Financial Statements:
Description
Report of Independent Registered Public Accounting Firm F-2
Financial Statements:
Balance Sheet as of December 31, 2020 F-3
Notes to Financial Statements F-7
(2) Financial Statement Schedules:
None.
(b) The following Exhibits are filed as part of this report:
Exhibit No. Description
3.1 Amended and Restated Certificate of Incorporation of the Company. (1)
3.2 Amended and Restated Bylaws of the Company. (1)
4.1 Specimen Unit Certificate. (2)
4.2 Specimen Class A Common Stock Certificate. (2)
4.3 Specimen Warrant Certificate (included in Exhibit 4.4).
4.5 Description of Securities.
10.10 Form of Indemnity Agreement. (2)
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32 Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
Item 16. FORM 10-K SUMMARY
None.
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